To The Members of Parnax Lab Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying Standalone financial statements of Parnax LabLimited ("the Company") which comprises the Balance Sheet as at March 312019 and the Statement of Profit and Loss (Including Other Comprehensive Income) theCash Flow Statement and the Statement of Change in Equity for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("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 March 31 2019 and loss its cash flows and theStatement of Change in Equity for the year ended on that date
Basis of Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the 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 together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
5. We have determined that there are no key audit matters to communicate in our report.
Information other than the financial statements and auditors' report thereon
6. The Company's Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon. The Annualreport is expected to be made available to us after the date of this auditor's report.
7. Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
8. In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. When we read the Annual Report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance.
Management's Responsibility for the Standalone Financial Statements
9. The Company's management and Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance and cash flows and the Statement of Change in Equity 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 the maintenance of adequate accounting records in accordance with the provisionof the Act for safeguarding the assets of the Company and for preventing and detecting thefrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
10. In preparing the standalone financial statements management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors is alsoresponsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
11. Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
12. 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrols.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
13. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
14. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on other Legal and Regulatory Requirements
16. As required by section 197(16) of the Act we report that the Company has not paidany remuneration to its directors during the year hence the provisions of and limits laiddown under section 197 read with Schedule V to the Act is not applicable to the Company.
17. 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" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
18. 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 Cash Flow Statement and theStatement of Change in Equity dealt with by this Report are in agreement with the books ofaccount.
d) 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.
e) On the basis of 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 ofSection 164(2) of the Act.
f) 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".
g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of Companies (Audit and Auditors) Rules 2014 in our opinion andto the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financialposition in note no. 34 of its standalone financial statements;
ii) The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses; and
iii) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
Annexure A to Independent Auditor's Report
Referred to as 'Annexure A' in paragraph 17 of the Independent Auditors' Report of evendate to the members of Parnax Lab Limited on the standalone financial statements for theyear ended on 31st March 2019 we report that:
(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management during the yearunder a regular program of verification which in our opinion is reasonable having regardto the size of the company and the nature of its assets. No discrepancies were noticed onsuch verification.
(c) According to the information and the explanation given to us and the recordsexamined by us we report that the title deeds of immovable properties are held in thename of the Company as at the Balance Sheet date.
(ii) As explained to us the inventories were physically verified during the year bythe management at reasonable intervals and no material discrepancies were noticed onphysical verification.
(iii) The Company has not granted any secured or unsecured loan to Companies FirmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013 ('the Act'). Accordingly paragraph 3(iii) of theOrder is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) In our opinion and according to the information given to us the company has notaccepted deposits and hence compliance with the directives issued by Reserve Bank ofIndia and the provisions of sections 73 to 76 or any other relevant provisions of the Actand the rules framed there under with regard to the deposits accepted is not applicable.
(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act in respect of Company's products/services and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.However we have not made a detailed examination of the records with a view to determinewhether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the company is regular in depositing withappropriate authorities applicable undisputed statutory dues including employee stateinsurance income tax sales tax service tax duty of custom duty of excise value addedtax cess.
(b) According to the information and explanation given to us no undisputed amountspayable in respect of employee state insurance income tax sales tax service tax dutyof custom duty of excise value added tax or cess were in arrears as at 31st March 2019for a period of more than six months from the date they became payable.
(c) According to the information and explanation given to us details of employee stateinsurance income tax sales tax service tax duty of custom duty of excise value addedtax or cess which have not been deposited as on 31st March 2019 on account of any disputeare as given below:
|Name of Statute ||Nature of the dues ||Amount (in Lacs) ||Period for which the amount relates (Assessment Year) ||Forum where dispute is pending |
|Central Excise Act 1944 ||Excise Duty & Penalty ||5.50 ||April 2003 to March 2005 ||Commissioner (Appeals) |
|Central Excise Act 1944 ||Excise Duty & Penalty ||0.26 ||April 2003 to Jan. 2006 ||Commissioner (Appeals) |
|Central Excise Act 1944 ||Excise Duty & Penalty ||0.43 ||Oct. 2001 to Oct. 2003 ||Custom Excise Service Tax Appellate Tribunal |
|Central Excise Act 1944 ||Excise Duty & Penalty ||0.82 ||June 2001 to Feb 2003 ||Commissioner (Appeals) |
|Central Excise Act 1944 ||Excise Duty & Penalty ||56.16 ||Jan. 2005 to Dec. 2006 ||Commissioner (Appeals) |
(viii) In our opinion and according to the information and explanation given to us thecompany has not defaulted in the repayment of loans or borrowings to banks or financialinstitutions. The Company does not have any borrowings from government and has not issuedany debentures.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) or term loans during the year; hence clause3(ix) of the Companies (Auditors' Report) Order 2016 are not applicable to the Company.
(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 case by theManagement.
(xi) According to the information and explanation given to us and based on ourexamination of the records of the Company the company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with the 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; hence clause 3(xii) of the Companies (Auditors' Report)Order 2016 is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with the sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone Ind AS financial statements in note no42 as required under Indian Accounting Standard (Ind AS) 24 Related Party Disclosurespecified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rule2014.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year hence; clause 3(xiv) ofthe Companies (Auditors' Report) Order 2016 are not applicable to the Company.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with the directors or the persons connected to its directors; hence clause3(xv) of the Companies (Auditors' Report) Order 2016 is not applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934
Annexure B to Independent Auditor's Report
Referred to as 'Annexure B' in paragraph 18(f) of the Independent Auditors' Report ofeven date to the members of Parnax Lab Limited on the standalone financial statements forthe year ended on 31st March 2019.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting of ParnaxLab Limited ("the Company") as on 31st March 2019 in conjunction with our auditof the standalone Ind AS financial statements of the Company for the year ended and as onthat date.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing and maintaining internalfinancial controls 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 ("the Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
3. 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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls over financial reporting. Those Standards and theGuidance Note require that we comply with the ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.
5. 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
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standaloneInd AS financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. 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 controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
8. In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial 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.
| ||For Ladha Singhal & Associates |
| ||Chartered Accountants |
| ||(Firm Registration No. 120241W) |
| ||Sd/- |
| ||Vinod Ladha |
|Place: Mumbai ||(Partner) |
|Dated: 30th May 2019 ||M. No. 104151 |