To the Members of Prima Industries Ltd.
Report on the Audit of Standalone Financial Statements
We have audited the accompanying standalone financial statements of Prima IndustriesLtd. ('the Company') which comprise the Balance Sheet as at 31 st March 2019 theStatement of Profit and Loss statement of changes in equity and statement of cash flowsfor the year then ended and the notes to the standalone financial statements a summaryof significant accounting pof icies and other explanatory information (hereinafterreferred to as "the standalone financial statements").
In our opinion and to the Pest of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information required bythe Companies Act2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2019 and its profit changes in equityand its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standard of Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibility under those SAs are further describedin the Auditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor 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 financial statements as a whof e and informing our opinion thereon and we do not provide a separate opinion on these matters.
|Audit Matter ||Auditor's Response |
|Accuracy of recognition measurement presentation and disclosures of revenues in view of the adoption of fnd AS 115 "Revenue from Contracts with ||We assessed the Company's process to identify the impact of adoption of new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
|Customers"(new Accounting Standard). || Evaluated the design of internal controls relating to the implementation of the new revenue accounting standard. |
| || Selected sample of the controls and tested the operating effectiveness of the internal control analysed and identified the distinct performance and obligations in these contracts. |
| || Compared these performance obligation with that identified and recorded by the company. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditor isreport thereon.
Our opinion on the standalone financial statements does not cower the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report the fact. We have nothing to report in this regard.
Management's responsibility for the standalone financial statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance changes in 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 statements thatgive a true and fairview and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative butte do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whof e 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 of 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 lo influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve of conclusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controf s system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably bethought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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.
Emphasis of Matters
1 The company has advanced a short term interest free unsecured loan to two associatecompanies during the year amounting to Rs.9468223.00 which are not in compliance withthe requirement of section 185 of Companies Act 2013. Our opinion is not modified inrespect of these matters.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2018 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure A a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143 (3) of the Act we report that:
1 We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.
2 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.
3 The company does not have any branches and so provisions of section 143(8) are notapplicable to the company.
4 The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
5 In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
6 On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
7 With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in 'Annexure B'. Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
With respect to the other matters to he Included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanation given to us:
1 The Company does not have any pending litigations which would impact its financialposition;
2 The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
3 There were no amounts which were required to be transferred to the Investor Educationand Protection Fund by the Company;
4 The disclosure in the standalone financial statements regarding holding as well asdealing in specified bank notes during the period from 3rd November 2016 to 30th December2016 have not been made in these standalone financial statements since they do not pertainto the financial year ended 31st March 2019.
In our Opinion and according to the information and explanations given to us theremunerations paid by the company to its directors during the current year is inaccordance with the provisions and is not in excess of limit laid down in section 197 ofthe Act. The Ministry of Corporate Affairs has not prescribed other details under section197(16) which are required to be commented upon by us.
|For J.Krishnan& Associates |
|Chartered Accountants |
|Firm Regn No.001523S |
|Nishanth Sebastian Jose |
|M. No.218068 Place; Kochi |
|Date: 30/05/2019 |
ANNEXURE A TOTHE INDEPENDENT AUDITORS'REPORT
(I) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. As explained to us the fixed assets have been physically verified by the managementat reasonable intervals; no material discrepancies were noticed on such verification.
c. As per the information and explanations provided to us title deeds of immovableproperties are held in the name of the company.
(ii) As explained to us inventories have beer physically verified during the year bythe management at reasonable intervals. In our opinion and on the basis of examination ofthe records no material discrepancies were noticed on physical verification of inventoryby the management as compared to the book records.
(iii) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has granted loans secured or unsecuredto companies firms Limited Liability Partnerships or other parties listed in theregister maintained section 189 of the Companies Act.
a. The Company has granted interest free unsecured loans to certain parties which inour opinion are prima facie prejudicial to the interest of the Company.
b. The terms of repayment for the above loans have not been stipulated but the sameare stated to be reapayable on demand. Since the Company is stated to have not raised anydemand for repayment of the above loans there has been no default.
c. There are no overdue amounts of loan or interest.
(iv) Based on our audit procedures and on the information given by the management wereport that the Company has not complied with the provisions of section 185 and 186 whileextending unsecured interest free short term loan of Rs.9419135 to an associate concern.
(v) The Company has not accepted any deposit from public within the meaning of sections73 to 76 or any other relevant provisions of the Companies Act and the rules framedthereunder.
(vi) As per information and explanation given by the management maintenance of costrecords has been prescribed by the Central Government under clause (d) of sub-section (1)of section 148 of the Companies Act and we are of the opinion that prima facie theprescribed accounts and records have been made and maintained.
(vii) (a) According to the records of the Company undisputed statutory dues includingprovident fund employees' state insurance income tax sales tax wealth tax servicetax. customs duty excise duty cess to the extent applicable and any other statutory dueshave generally been regularly deposited with the appropriate authorities. According to theinformations and explanations given to us there were no statutory dues on the last day ofthe financial yea r outstanding for a period of more than six months is from th e datethey became payable.
(vii) (b) According to the information and explanations given to us there is noamounts payable in respect of income tax wealth tax Service tax Sales tax Customs dutyand Excise duty which have not been deposited on account oi any disputes.
(viii) The company has not taken any loan or borrowing from financial institutionsbanks or Government The company has not issued any debentures till date.
(ix) Based on our audit procedures and or the information given by the management wereport that the Company has not raised any moneys byway of initial orfurther public offeror anyterm loans during the year.
(x) Based on the audit procedures performed and the information and explanation givento us we report that no fraud on or by the Company has been noticed or reported duringthe year nor have we been informed of such case by the management.
(xi) The managerial remuneration paid is in accordance with the requisite approvalsmandated by the provisions of section 197 read with schedule V of Act. (xii) The Companyis not a Nidhi Company. Therefore the provisions of clause 3 (Xii) of the Order is notapplicable to the Company. (xiii) All transactions with related parties are in compliancewith section 177 and 188 of Companies Act 2013 and the details have been suitablydisclosed in the Financial Statements as required bythe accounting standards.
(xiv) Based on the audit procedures performed and the information and explanationsgiven to us bythe management we report that the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review.
(xv) Based on the audit procedures performed and the information and explanation givento us we report that the company has not entered into any non-cash transactions with itsdirectors/director of the company or associate company/a person connected with theDirector during the year. (xvi) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934.
|For J. Krishnan & Associates |
|Chartered Accountants |
|FirmRegn. No001523S |
|Nishanth Sebastian Jose Partner |
|Place: Kochi |
|Date: 30/05/2019 |
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF PRIM A INDUSTRIES LTD.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of PrirnaIndustries Ltd.("the Company") as of 31st March 2019 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controf s based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial control s thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Com panics Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements 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 systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting 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 company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the irrartcial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial control s over financialreporting to future periods are subject the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|Ford. Krishnan & Associates |
|Chartered Accountants |
|Nishanth Sebastian Jose Partner M.No.218068 |
|Place; Kochi |
|Date; 30/05/2019 |