INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF
PAZEL INTERNATIONAL LIMITED
(FORMERLY RUTRON INTERNATIONAL LIMITED)
REPORT ON THE IND AS FINANCIAL STATEMENTS
We have audited the accompanying Ind AS financial statements of PAZEL INTERNATIONAL LIMITED (FORMERLY RUTRON INTERNATIONAL LIMITED) (“the Company”), which comprise the Balance Sheet as at 31st March 2018, Statement of Profit and Loss, including the statement of Other comprehensive Income, the Cash Flow Statement and the Statement of changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “Ind AS Financial Statements”).
MANAGEMENT’S RESPONSIBILITY FOR THE IND AS FINANCIAL STATEMENTS
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with respect to preparation of these Ind AS Financial Statements that give a true and fair view of the state of affairs (Financial Position), Profit or Loss (Financial Performance including Other comprehensive Income), Cash Flows and the changes in Equity of the Company in accordance with the Accounting Principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on these Ind AS Financial Statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the Ind AS Financial Statements in accordance with the Standards specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the Ind AS Financial Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the Ind AS Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS Financial Statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at 31st March, 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. 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 of the Companies Act, 2013, we give in the Annexure (A), a statement on the matters specified in paragraphs 3 and 4 of “the Order” to the extent applicable.
2. 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 best of our knowledge and belief were necessary for the purpose of our audit.
b. In our opinion proper books of account as required by law have been kept by the company so far as appears from our examination of those books.
c. The Balance Sheet, statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account.
d. In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, Companies (Indian Accounting Standards) Rules, 2015, as amended.
e. On the basis of written representations received from the directors as on 31 March 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018, from being appointed as a director under sub section (2) of section 164 of the Act.
f. With respect to adequacy of the internal financial control system over financial reporting of the Company and the operating effectiveness of such Controls, refer to our separate report in Annexure (B). Our report expresses the unmodified opinion on the adequacy and operating effectiveness of Company's internal finance control over financial reporting.
g. With respect to the other matters included in the Auditor’s Report in accordance with the rule 11 of Companies ( Audit and Auditors) Rule 2014 as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial position in its Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses in its financial statements.
iii. There were no amounts, which were required to be transferred, to the Investor Education and Protection Fund by the Company.
OTHER MATTER
The comparative financial information of the Company for the year ended 31st March, 2017 and the transition date opening Balance Sheet as at 01st April, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31st March, 2017 and 31st March, 2016 dated 26th May, 2017 and 27th May, 2016 respectively expressed an unmodified opinion on those Ind AS financial statements.
Our opinion is not modified in respect of above matter.
(Referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements” of our report of even date on account of Pazel International Limited (Formerly Rutron International Limited)("the Company”) for the year ended 31st March 2018.
(i) In Respect of the Fixed Assets:
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets in computerized fixed assets register.
(b) As informed and represented to us by the management of the company, fixed assets have been physically verified by the management during the period under review and no material discrepancies noticed during such physical verification of fixed assets.
(c) According to the information and explanation given to us, the company does not hold any immovable properties in its own name during the period under review.
(ii) In Respect of Inventories:
(a) The management had conducted the physical verification of inventory at reasonable intervals.
(b) The Discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.
(iii) According to the information and explanation given to us, during the period under review, the Company has not granted any loans whether secured or unsecured to companies, firms, Limited Liability Partnerships or other parties listed in the register maintained under section 189 of the Companies Act, 2013. Therefore details under Sub Clause (a), (b) & (c) of Clause 3 (iii) of the Companies (Auditor’s Report) Order, 2016 are not applicable to the company.
(iv) During the period under review, the Company has not directly or indirectly advanced any loan to any of the directors or to any other person in whom the directors are interested or given any guarantees or provided any securities in connection with the loan taken by them or such other person pursuant to the provisions of section 185 nor made any investments pursuant to the provisions of section 186 of Companies Act 2013. Hence the details thereof are not applicable as required under clause 3 (iv) of the Companies (Auditor’s Report) Order, 2016.
(v) The Company has not accepted any deposits from public, covered under the provisions of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under, during the period under review. Therefore, clause 3 (v) of the Companies (Auditor’s Report) Order, 2016 is not applicable to the company.
(vi) As per information and explanation given by the management, provisions in relation to maintenance of cost records as specified by the central Government under sub section (1) of section 148 of the Companies Act, 2013 are not applicable to the Company. Therefore, clause 3 (vi) of the Companies (Auditor’s Report) Order, 2016 is not applicable to the company.
(vii) In Respect of Statutory Dues:
(a) According to information and explanation given to us and on the basis of the records of the Company, undisputed statutory dues including provident fund, Employees’ State Insurance, profession tax, income-tax, service tax, Duty of customs, Duty of excise, Value added tax, GST, cess and any other statutory dues have been regularly deposited with the appropriate authorities.
According to the information and explanation given to us, there are no undisputed amounts payable in respect of provident fund, Employees’ State Insurance, profession tax, income-tax, service tax, duty of customs, duty of excise, value added tax, GST, cess and any other statutory dues were in arrears as at 31st March 2018, for a period of more than six months from the date they became payable.
(b) According to the records of the Company and explanation given to us, there are no material dues of provident fund, Employees’ State Insurance, profession tax, income-tax, service tax, Duty of customs, Duty of excise, Value added tax, GST, cess and any other statutory dues on account of dispute which have not been deposited with the appropriates authorities on account of any disputes as on 31st March, 2018, other than the details which are given below :
|
Name of Statute
|
Nature
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Forum where dispute
|
Period for which the
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Amount
|
|
of Due
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is pending
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amount relates
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(in Lacs)
|
|
The Income Tax Act, 1961
|
Income
Tax
|
Commissioner of Income Tax (Appeals)
|
AY-2012-13
|
Rs. 204.22
|
|
The Income Tax Act, 1961
|
Income
Tax
|
Commissioner of Income Tax (Appeals)
|
AY-2015-16
|
Rs. .1.54
|
(viii) Based on our audit procedures and the information and explanation given by management, the company has not borrowed funds from financial institutions, banks nor money raised through the issue of debentures during the period under review. Therefore details required to be disclosed under clause 3 (viii) of the Companies (Auditor’s Report) Order, 2016 is not applicable to the company.
(ix) According to the records of the Company and explanation given to us, the company has not raised money by way of Initial Public Offer(IPO)or further public offer(including debt instruments)and term loans during the period under review, therefore, clause 3(ix) of the Companies (Auditor’s Report) Order, 2016 is not applicable to the company
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Ind AS financial statements and as per information and explanation given by the Management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.
(xi) Based upon the audit procedures performed and the information and the explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) As per information and explanation given by the management, the company is not a Chit Fund, Nidhi or Mutual Benefit Fund/ Society. Therefore, clause 3(xii) of the Companies (Auditor’s Report) Order, 2016 is not applicable to the company.
(xiii) As per information and explanation given by the management, all transaction switch the related parties are incompliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details of such transactions have been disclosed in the standalone financial statements etc., as required by the applicable accounting standards.
(xiv) As per information and explanation given by the management, the company has not made any preferential allotment or private place mentor shares or fully or partly convertible debentures during the period under review, hence requirement of section 42 of the Companies Act, 2013 are not applicable to the company. Therefore, details under clause 3(xiv) of the Companies (Auditor’s Report) Order, 2016 are not applicable to the company
(xv) As per information and explanation given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Therefore, compliance pursuant to the provisions of section 192 of Companies Act 2013 is not applicable. Therefore, details under clause 3 (xv) of the Companies (Auditor’s Report) Order, 2016 are not applicable to the company.
(xvi) As per information and explanation given by the management, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Therefore, clause 3 (xvi) of the Companies (Auditor’s Report) Order, 2016 is not applicable to the company
(Referred to in paragraph 2(f) under the heading “Report on other legal and regulatory requirements” of our report of even date on account of Pazel International Limited (Formerly Rutr on International Limited) (“the Company”)for the year ended 31st March 2018, Report on the Internal Financial Controls under Clause (i) of Sub section 3 of section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Pazel International Limited (Formerly Rutron International Limited) (“the Company”) as of 31st March, 2018 in conjunction with our audit of the Ind AS financial statements of the company for the year ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR THE INTERNAL FINANCIAL CONTROLS
The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essentials components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the Safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITORS' RESPONSIBILITY
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We have conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by the Institute of Chartered Accountants of India and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes policies and procedures that :
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditure of the Company are being made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, to the best of our information and according to the explanation given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the “Guidance Note”on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For MNNY & Associates
Chartered Accountants FRN: 114018W
Sd/-
CA Natwarlal D. Trivedi
Partner
Membership no.: 047161
Place: Mumbai
Date: 30th May, 2018
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