TO THE MEMBERS OF PARAMOUNT PRINTPACKAGING LIMITED
Report on financial statements
We have audited the accompanying financial statements of PARAMOUNT PRINTPACKAGING
LIMITED ("the Company"), which comprise the Balance Sheet as at March 31,
2016, and the Statement of Profit and Loss and Cash Flow Statement for the year then
ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statement
The Company’s Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013("the Act") with respect to the preparation of
these financial statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Accounting Standards specified under
Section 133 of Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules,
2014. 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 design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of
the 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 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 in accordance
with the Standards on Auditing 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 financial statements. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of
the 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 financial statements in order to design audit procedures that are
appropriate in the circumstances. 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 financial statements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Basis for Qualified Opinion
The Opinion has been qualified on the following basis:
(a) Non provision of depreciation in the financial year amounting to Rs.229.92 lacs due
to closure of the factory unit. As a result of which, the loss stated for the quarter/year
ended is also understated to the same extent.
(b) Non provision of interest on loans from the banks and NBFCs as either the accounts
have been classified as NPA and/or Companys request for restructuring / one time
settlement of loans is pending.
(c) Non provision of labour charges as companys operations have been suspended/
closed, as a result labour charges have been accounted to the extent of payments made.
(d) Regarding non reconciliation of Balances of Excise/Cenvat receivable account, and
non confirmation of some of of bank balances, sundry debtors, sundry creditors and loans
& advances.
Qualified Opinion
In our opinion, and to the best of our information and according to the explanations
given to us, the accompanying financial statements give the information required by the
Act except for the effects of the matter described in the "Basis for Qualified
Opinion" paragraph in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India: a) in the
case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016; b)
in the case of the Statement of Profit and Loss Account, of the loss for the year
ended on that date; and c) in the case of the Cash Flow Statement, of the cash flows for
the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor’s Report) Order, 2016, issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter
referred to as the Order), and on the basis of such checks of the books and records of the
Company as we considered appropriate and according to the information and explanations
given to us, we give in the Annexure B a statement on the matters specified in paragraphs
3 and 4 of the Order.
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, and Cash Flow Statement dealt with
by this Report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this report comply with the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of written representations received from the directors as on March 31,
2016, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2016, from being appointed as a director in terms of section 164(2) of the
Act.
f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in Annexure A.
g) With respect to the other matters to be included in the Auditor’s Report in
accordance with Rule 11 of the companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the explanations given to us:
a. the Company did not have any pending litigations;
b. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
c. There were no amounts which were required to be transferred to Investor Education
and Protection
Fund by the Company.
For Laxmikant Kabra & Co.
Chartered Accountants
Firm Registration No: 117183W
Sd/-
Laxmikant Kabra
(Partner)
Membership No : 101839
Date: 30th May, 2016
Annexure A to Independent Auditor’s Report
Referred to the Independent Auditors’ Report of even date to the members of
Paramount Printpackaging Limited on the financial statements as of and for the year ended
31 March 2016
1. (a) The Company is maintaining proper records showing full particulars, including
quantitative details and situation, of fixed assets.
(b) Due to closure of the factory unit, the fixed assets are not physically verified by
the Management according to a phased programme designed to cover all the items over a
period of three years and hence any material discrepancies if any present could not be
determined.
(c) There are no immovable properties held by the Company.
2. The Company does not hold any inventory. Therefore, the provisions of clause 3(ii)
of the said Order are not applicable to the Company.
3. In respect of the loans secured or unsecured, granted by the Company to companies,
firms or other parties covered in the register maintained under section 189 of the
Companies Act, 2013.
a) The company has granted unsecured loan covered in the register maintained under
section 189 of the Act. The company has not received any principal amount and interest
from these parties during the year.
b) In our opinion and according to the information and explanation given to us,
reasonable steps have not been taken by the company for recovery of the principal and
interest amounts from the parties.
4. The Company has not granted any loans or provided any guarantees or security to the
parties covered under section 185 and has not made any investments under section 186 of
the Act.
5. The Company has not accepted any deposits from the public within the meaning of
sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent
notified.
6. The Central Government of India has not specified the maintenance of cost records
under sub-section (1) of section 148 of the Act for any of the products of the Company.
1. (a) Based on verification of the records of the company, we are of the
opinion that the company is not regular in depositing undisputed statutory dues including
Provident fund, Employees’ State Insurance, Income tax, Sales tax, Wealth tax,
Service tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate
authorities. According to the information and explanation given to us, there are no
undisputed amounts payable in respect of such statutory dues which have remained
outstanding as on 31st March, 2016 for a period of more than six months from
the day they became payable except as referred below:-
| Nature of Dues |
Amount (in ) |
| Provident Fund |
66,78,183 |
| Profession Tax |
3,88,675 |
| Maharashtra Value Added Tax |
2,82,248 |
| Central Sales Tax |
56,33,530 |
| Service Tax |
9,57,216 |
| Wealth Tax F.Y.2010-2011 |
45,000 |
| Wealth Tax F.Y.2011-12 |
38,000 |
| Tax Deducted at Source |
73,68,828 |
| Income Tax( F.Y. 2011-2012) – as per Assessment Order |
10,36,980 |
| Income Tax(F.Y. 2008-2009) – as per Assessment Order |
54,820 |
| ESIC |
10,69,276 |
| Excise Duty |
2,06,47,775 |
b)According to information and explanation given to us, the details of disputed sales
tax demand that have not been deposited on account of disputes are given below:-
| Name of Statute |
Nature of dues |
Amount |
Period to which amount relates |
Forum where dispute pending |
| Central Sales Tax Act |
Sales Tax |
28,41,171 |
2006-2007 |
|
| Maharashtra Value Added Tax Act |
Sales Tax |
18,67,876 |
2007-2008 |
|
| Central Sales Tax Act |
Sales Tax |
75,78,883 |
2007-2008 |
|
| Maharashtra Value Added Tax Act |
Sales Tax |
1,49,40,978 |
2008-2009 |
|
| Central Sales Tax Act |
Sales Tax |
30,51,163 |
2008-2009 |
Vide order dated 18.05.2016, Recovery Proceedings have been initiated, however no
appeal is filed as in the opinion of the management, the amounts are disputed. |
| Maharashtra Value Added Tax Act |
Sales Tax |
58,70,471 |
2009-2010 |
|
| Central Sales Tax Act |
Sales Tax |
36,12,175 |
2009-2010 |
|
| Maharashtra Value Added Tax Act |
Sales Tax |
1,31,88,853 |
2011-2012 |
|
| Central Sales Tax Act |
Sales Tax |
16,38,099 |
2011-2012 |
|
| Maharashtra Value Added Tax Act |
Sales Tax |
8,94,452 |
Other sales tax dues |
|
| Central Sales Tax Act |
Sales Tax |
21,63,124 |
Other sales tax dues |
|
c) According to the information and explanations given to us, there are no such
amounts, which were required to be transferred to the investor education and protection
fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and
rules there under has been transferred to such fund within time.
2. On the basis of audit procedures performed by us, and according to the
information, explanation and representation given to us by the management, we state that
the company had defaulted in certain repayment of dues (including interest) of domestic
financial institutions and banks. The default in principal amount and the interest to the
extent provided for, aggregates to .18,28,38,350/- . However upto the date of approval of
the accounts, the company has not paid the principal amount and the interest aggregates
with respect to above stated dues and the Company has not issued any debentures as at
the Balance Sheet date, the provisions of clause 3(viii) of the Order are not applicable
to the Company.
9. The Company has not raised any moneys by way of initial public offer, further public
offer (including debt instruments) and term loans. Accordingly, the provisions of clause
3(ix) of the Order are not applicable to the Company.
10. During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanations given to us, we have neither come across any
instance of material fraud by the Company or on the Company by its officers or employees,
noticed or reported during the year, nor have we been informed of any such case by the
Management.
11. The Company has not paid/provided for managerial remuneration.
12. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable
to it,the provisions of clause 3(xii) of the Order are not applicable to the Company.
13. In our opinion all transactions with the related parties are in compliance with
sections 177 and 188 of the Act, where applicable, and the requisite details have been
disclosed in the financial statements, etc., as required by the applicable accounting
standards.
14. The Company has not made any preferential allotment or private placement of shares
or fully or partly convertible debentures during the year under review. Accordingly, the
provisions of clause 3(xiv) of the Order are not applicable to the Company.
15. The Company has not entered into any non cash transactions with its directors or
persons connected with him. Accordingly, the provisions of clause 3(xv) of the Order are
not applicable to the Company.
16. The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act, 1934 as Non–Deposit accepting NBFC and hence the provisions of
clause 3(xvi) of the Order are not applicable to the Company.
Annexure B to Independent Auditor’s Report
Referred to the Independent Auditors’ Report of even date to the members of
Paramount Printpackaging Limited on the financial statements for the year ended 31 March
2016
Report on the internal financial controls under clause (i) of sub-section 3 of section
143 of the Act
1. We have audited the internal financial controls over financial reporting of
Paramount Limited. (‘the Company’) as of 31 March 2016 in conjunction with our
audit of the financial statements of the Company for the year ended on that date.
Management’s responsibility for internal financial controls
2. 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 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 (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 Act.
Auditors’ responsibility
3. Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We 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 deemed to be prescribed
under section 143(10) of the Act to the extent applicable to an audit of internal
financial controls, both applicable to an audit of internal financial controls and both
issued by the ICAI. 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.
4. 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 the risks of
material misstatement of the financial statements, whether due to fraud or error.
5. 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
6. A companys internal financial control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A companys internal financial control over
financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and 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 expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent limitations of internal financial controls over financial reporting
7. 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
8. In our opinion, 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 31 March 2016,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 Laxmikant Kabra & Co.
Chartered Accountants
Firm Registration No: 117183W
Sd/-
Laxmikant Kabra
(Partner)
Membership No.:101839
Place: Thane
Date: 30th May, 2016.
+91-9892691696
