To the Members of Praxis Home Retail Limited
Report on the Financial Statements
We have audited the financial statements of praxis Home Retail Limited("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) statement of changesin equity and statement of cash flows for the year then ended and notes to the financialstatements significant accounting policies and other explanatory information (hereinafterreferred to as "the financial statements"). In our opinion and to the best ofour information and according to the explanations given to us the aforesaid financialstatements give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019its loss statement of changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (sas) specified143(10) of the Companies Act 2013 ("the Act"). Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancialstatements under the provisions of the Act and the Rules thereunder and we havefulfilledour a summary of other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financialstatements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be Key undersection Audit Matters to becommunicated in our report.
|Sr. No. ||Risk ||Our Response |
|1 ||Valuation of Inventory : ||Obtained Store/Warehouse wise list of the item from the management as At March 31 2019. |
| ||As at March 31 2019 the Company has An Inventory of र 19771.05 lakhs which Is representing 52% of total assets of The Company. For accounting principles and relevant Accounting policy on inventory refer Note 2.13 to the financial statement. ||Obtained the Physical Verification report done by the stock auditor of the Company for different location for various cut off periods. |
| || ||We attended the inventory counts at selected inventory locations to Observe the condition of the Inventory on a sample basis. |
| || ||We evaluated the appropriateness of the basis and processes used by the Management in determining the net realisable value of inventories. |
| || ||We obtained inventory reports for calculation of the shrinkage provision Of various stores /warehouse from management performed by the stock Auditor and attended stock counts where we witnessed the controls in Place around recording the volume of shrinkage. |
| || ||We also evaluated the assumptions and estimates used by the management |
| || ||In determining the provision for slow and non-moving inventory. |
| || ||We reviewed the adequacy of disclosures on inventory as stated in Note 2.13 to the financial statements. |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's Report including Annexuresto Board's Report and Shareholder's Information and Corporate governance Report but doesnot include the financial statements and our audit report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon. In connection with our audit of thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with saswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with sas we exercise financial professional judgmentand maintain professional performance skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the
Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and the content of the financialdisclosures and whether the financial represent the underlying transactions and events ina manner that achieves fair presentation. We communicate with those charged withgovernance regarding among other matters the planned scope s findingandtimingoftheauditandsignificant audit including any significant deficiencies in internalcontrol that we identify during our audit. We also provide those charged with governancewith a statement that we have complied with relevant ethical requirements regardingindependence and to communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence and where applicable relatedsafeguards. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable. As required by Section 143(3)of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) The Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;
d) In our opinion the aforesaid financialstatements comply with the Indian AccountingStandards prescribed under section 133 of the Act with Rule 7 of the Companies (Accounts)Rules 2014;
e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164(2) of theAct;
f) With respect to the adequacy of the internal financialcontrols with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B";
g) With respect to the other matters to be included in the Audit's Report in accordancewith the requirements of Section 197(16) of the Act as amended: In our opinion and to thebest of our information and according to the explanations given to us the remunerationpaid by the Company to its directors during the year is in accordance with the provisionsof section 197 of the Act.
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations as at March 31 2019 onits financial position in its financial Refer Note 39 on Contingent Liabilities to thefinancial statements;
ii) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
Iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2019.
Annexure A to Independent Auditors' Report
Referred to in Independent Auditors' Report of even date to the members of Praxis HomeRetail Limited on the financial statements as of and
(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) As informed to us the fixed assets are by the Management physicallyverified duringthe year and no material discrepancies between the book records and the physical inventoryhave been noticed.
(c) The Company does not have any immovable property; hence the clause is notapplicable to the Company.
(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. As informed the discrepanciesnoticed on physical verification of inventory as compared to book records were notmaterial.
(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to any company firm limitedliability partnerships or other party covered in the register maintained under Section 189of the Act. Accordingly the provisions stated in paragraph 3(iii) (a) (b) & (c) ofthe Order are not applicable.
(iv) The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186 of the Act.Accordingly the provisions of Clause 3(iv) of the said Order are not applicable to theCompany. (v) In our opinion and according to the information and explanations given to usthe Company has not accepted any deposits from the public within the provisions ofSections 73 to 76 of the Act and the rules framed there under.
(vi) In our opinion and according to the information given to us no cost records havebeen prescribed by the Central Government of India under sub section (1) of section 148 ofthe Act.
(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingthe undisputed statutory dues including provident fund employees' state insurance goodsand service tax customs duty excise duty cess and other material statutory dues asapplicable with the appropriate authorities.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax customsduty sales tax value added tax excise duty goods and service tax cess and othermaterial statutory dues as applicable were outstanding at the year end for a period ofmore than six months from the date they became payable.
(c) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income-tax goods and service tax sales taxcustoms duty excise duty and value added tax as at March 31 2019 which have not beendeposited on account of a dispute.
(viii) According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to any financial institution or bank. The Company did not have any loans orborrowings from government and did not availed any debentures during the year.
(ix) During the year the Company has not raised money by way of initial public offer orfurther public offer (including debt instruments) and term loans hence the reportingrequirements under paragraph 3(ix) of the Order is not applicable.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the provisions ofSection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and accordingly the provision of the clause 3(xii) of theOrder is not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions entered into by the Company withthe related parties are in compliance with Sections 177 and 188 of the Act whereapplicable. The details of related party transactions as required under Ind AS 24 RelatedParty Disclosures specified under Section 133 of the Act have been disclosed in thefinancial statements.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe period. Accordingly paragraph 3(xiv) of the Order is not applicable.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its Directors.
(xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
Annexure B to Auditor's Report
Annexure to the Independent Auditor's Report referred under the heading "Report onother legal and regulatory requirements" of our report of even date on the financialstatements of Praxis Home Retail Limited
Report on the Internal Financial Controls under
Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls with reference to financial statementsof Praxis Home Retail Limited ("the Company") as of March 31 2019 inconjunction with our audit of the financial of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference statements criteriaestablished by the to financial Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively efficient forensuringtheorderlyandbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the information as timelypreparation of reliable financialrequired under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements reporting based on our audit. We conductedour audit in accordance with the Guidance Note on Audit of Internal Financial ControlsOver Financial Reportingstatements includes those(the "Guidance Note") and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls bothapplicable to an audit of Internal Financial Controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements was established and maintained and if such controls operated effectively in allmaterial respects. Statements Our audit involves performing procedures to obtain auditevidence about the adequacy of the internal financial controls system with reference tofinancial statements and their operating effectiveness. Controls with referenceOurauditofinternal financial to financial statements understanding of internal financialcontrols with reference assessingto the financial risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial
Meaning of Internal Financial Controls with reference to the Financial Statements controlwith reference Acompany'sinternal financial to financialstatements is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A control with reference company's internal financial andtofinancial procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe Company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of management and directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.
Inherent Limitations of Internal Financial Controls with reference to the FinancialStatements
Because of the inherent limitations of internal financial controls over financial thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls with reference to financial statementsto future periods are subject to the risk that the internal financial control withreference to financial statements may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial system with reference to financial statements and such internalfinancialcontrols with respect to financialstatements were operating effectively as atMarch 31 2019 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.
For Pathak H. D. & Associates
Firm Registration No.: 107783W
Vishal D. Shah
Membership No.: 119303
Date: May 23 2019