Mar 31, 2018
INDEPENDENT AUDITOR''SREPORT
To,
The Members of, AAREY DRUGS & PHARMACEUTICALS LIMITED Report on the IndAS Financial Statements
We have audited the accompanying Ind AS Financial Statements of AAREY DRUGS & PHARMACEUTICALS LTD ("the Company"), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management''s Responsibility forthe IndAS Financial Statements The Company''s Board of Directors is responsible forthe matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (IndAS) prescribed under section 133of theAct.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor''s Responsibility
Our responsibility is to express an opinion on these IndAS Financial Statements based on our audit.
In conducting 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 and the Order issued under Section 143(11)of the Act.
We conducted our audit of the IndAS Financial Statements 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 Ind AS Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the 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 financial control relevant to the Company''s preparation of the IndAS Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Ind AS Financial Statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the IndAS 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, of the state of affairs of the Company as at 31st March, 2018, and its profit, total 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 Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, based on our audit, 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 purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report agree with the books of account.
d) In our opinion, the aforesaid Ind AS Financial Statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the Directors as on 31st March, 2018 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 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 B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in theAuditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to 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 financial position in its Ind AS Financial Statements.
ii. The Company did not have any long term contracts including derivative contract for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made since the requirement does not pertain to financial year ended 31 March 2018.
Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report to the members of Aarey Drugs & Pharmaceuticals Limited of even date
On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we report that: -
i. a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.
b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of years
c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are not held in the name of the Company.
ii. a) As explained to us, management has conducted physical verification of inventory at regular intervals during the year.
b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the Management were reasonable and adequate in relation to the size of the Company and nature of its business.
c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
iii. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted loans, 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. Consequently, the provisions of clauses 3(iii) (a), (b) and (c) of the order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provision of section 185 and 186 of the Companies Act, 2013 in respect of loans, investment and guarantees, and securities, as applicable
v. The Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India, provision of Section 73 to 76 of the Act, any other relevant provision of the Act and the relevant rules framed thereunder.
vi. The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 for the business activities carried out by the Company, thus reporting under clause 3(vi) of the order is not applicable to the Company.
vii. a) According to information and explanations given to us and on basis of our examination of
the books of account, and records, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Service Tax, Goods and Service Tax, Custom Duty, Excise Duty, Value Added Tax, cess and any other statutory dues with the appropriate authorities.
b) According to the information and explanations given to us, the following undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Service Tax, Goods and Service Tax, Custom Duty, Excise Duty, Value Added Tax, cess __and other material statutory dues were in arrears as at 31st of March, 2018 for a period more than six months from the date they became payable are as follows: -
Name of statue |
Nature of dues |
Amount (Rs) |
Period to which amount is related |
Forum where dispute is pending |
IncomeTaxAct,1961 |
Income Tax |
67,41,220/- |
A. Y 2007-08 |
CIT(A)MUMBAI |
IncomeTaxAct,1961 |
Income Tax |
25,55,440/- |
A.Y 2011-12 |
CIT(A)MUMBAI |
IncomeTaxAct,1961 |
Income Tax |
9,38,010/- |
A.Y 2012-13 |
CIT(A)MUMBAI |
IncomeTaxAct,1961 |
Income Tax |
2,02,798/- |
A.Y. 2013-14 |
CIT(A)MUMBAI |
IncomeTaxAct,1961 |
Income Tax |
51,32,990/- |
A.Y. 2015-16 |
CIT(A)MUMBAI |
IncomeTaxAct,1961 |
Income Tax |
13,51,570/- |
A.Y. 2016-17 |
CIT(A)MUMBAI |
c) According to the information and explanations given to us, there are no dues in respect of, Income-tax, Service Tax, Goods and Service Tax, Custom Duty, Excise Duty, Value Added Tax, cess that have not been deposited with appropriate authorities on account of dispute.
viii. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of loans or borrowings from banks and debenture holders. The Company has not taken any loans from Government or any Financial Institution
ix. Based on audit procedure and on the basis of information and explanation given by the management, we are of the opinion that money raised by Company by way of term loan have been applied for the purpose for which they were raised. The Company did not raise any money by way of Initial Public offer or further public offer.
x. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company was noticed or reported during the year, although there were some instances of fraud on the Company noticed by the Management, the amounts whereof were not material in the context of the size of the Company and the nature of its business and the amounts were adequately provided for.
xi. According to the information and explanations given to us, we report that 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.
xii. In our opinion and according to the information and explanations given to us, the Company is nota Nidhi Company. Therefore, paragraph 3(xii)of the Order is not applicable.
xiii. According to the information and explanations given to us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable, for all transactions with the related party and the details of related party transactions have been disclosed in the Ind AS Financial Statements as required by the applicable accounting standards.
xiv. During the Year, the Company has not made any preferential allotment or private placement of shares fully or partly paid convertible debentures and hence, reporting under clause 3 (xiv) of the Order is not applicable to the Company.
xv. In Our opinion and according to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or person connected with him. Accordingly, the provision of clause 3 (xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
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 AAREY DRUGS & PHARMACEUTICALS LTD ("the Company") as of March 31, 2018 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
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 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 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 ICAI 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, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 the risks of material misstatement of the 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 the preparation of Financial Statements for external purposes in accordance with generally accepted accounting principles. A company''s 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 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, 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 March 31, 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.
ForDMKH&Co.
CharteredAccountants,
FRN. No. 116886W
CA. MANISH KANKANI Partner
M.No. 158020
Place:Mumbai
Date: 30th May, 2018
Mar 31, 2016
To,
The Members of, AAREYDRUGS & PHARMACEUTICALS LIMITED
Report on the Financial Statements
1 We have audited the accompanying financial statements of AAREY DRUGS & PHARMACEUTICALS LIMITED (''the company''), which comprises Balance Sheet as at 31st Mar 2016, the Statement of Profit and Loss account and Cash Flow Statement for the year then ended, and a Summary of significant accounting policies and other explanatory information.
Managementâs Responsibility forthe Financial Statements
2 The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 the Act, read with Rule 7 of the Companies (Accounts) Rules,2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision 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 materials misstatement, whether due to fraud or error. Auditorâs Responsibility
3 Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provision 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 there under.
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 the disclosures in the financial statements. The procedure 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 assessment, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system and the operating effectiveness of such control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, 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 on the standalone financial statements.
Opinion
4 In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash flow for the year ended on that date.
Report on Other Legal and Regulatory Requirements
5 As required by the Companies (Auditor''s Report) Order, 2016 (the Order) issued by the Central Government in terms of Section 143 (11) of the Act, we enclosed in the annexure a statement on matters specified in paragraph 3 & 4 of the said 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 it appears from our examination of those books.
c) The Balance Sheet and the 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 aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) In our opinion there are no observations or comments on the financial transactions, which may have an adverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors as on 31st Mar 2016 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st Mar 2016 from being appointed as a directors in terms of section 164(2) of the Act.
g) Report on the Internal Financial Controls under Clause (1) of Sub-section 3 of section 143 of the companies Act, 2013 (âthe Actâ)- is enclosed an annexure to this report.
h) 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:
i As informed to us the Company does not have any pending litigations which would impact its financial position
ii The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses
iii There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
Referred to in Paragraph 1 under the heading of âReport on other Legal and Regulatory
Requirementsâ of our report of even date
On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that: -
i. a) The company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.
b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.
c) The title deeds of immovable properties are held in the name of the company.
ii. As explained to us, inventories have been physically verified during the year by the management at reasonable intervals. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.
iii. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, 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. Consequently, the provisions of clauses iii (a), (b) and (c) of the order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, company has complied with the provision of section 185 and 186 of the Companies Act, 2013 In respect of loans, investment, guarantees, and security.
v. The company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provision of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules,2015with regards to the deposits accepted from the public are not applicable.
vi. As per information & explanation given by the management, maintenance of cost records has not been specified by the Central Government under sub-section (1) of section 148of the Companies Act, 2013.
vii a) According to information and explanations given to us and on basis of our examination of the books of account, and records, the company has been generally regular in depositing undisputed statutory dues including Income-tax, Sales-tax, Service Tax, Custom Duty, Excise Duty, value added tax, cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2016 fora period of more than six months from the date they became payable.
b According to the information and explanations given to us, there is no amount payable in respect of income tax, service tax, sales tax, customs duty, excise duty, value added tax and cess whichever applicable, which have not been deposited on account of any disputes other than following :-
Name of the statute |
Nature of the dues |
Amount (Rs.) |
Period to which the amount related |
Forum where dispute pending |
Income TaxAct, 1961 |
Income Tax |
Rs.67,41,220/- |
A.Y. 2007-08 |
CIT(A) Mumbai |
Income TaxAct, 1961 |
Income Tax |
Rs.32,89,260/- |
A.Y. 2008-09 |
CIT(A) Mumbai |
Income TaxAct, 1961 |
Income Tax |
Rs. 2,63,960/- |
A.Y 2009-10 |
CIT(A) Mumbai |
Income TaxAct, 1961 |
Income Tax |
Rs. 16,03,320/- |
A.Y 2010-11 |
CIT(A) Mumbai |
Income TaxAct, 1961 |
Income Tax |
Rs. 25,56,440/- |
A.Y. 2011-12 |
CIT(A) Mumbai |
Income TaxAct, 1961 |
Income Tax |
Rs. 2,84,688/- |
A.Y.2012-13 |
CIT(A) Mumbai |
Income TaxAct, 1961 |
Income Tax |
Rs. 5,04,495/- |
A.Y. 2013-14 |
CIT(A) Mumbai j |
[ viii. In ouropinion and according to the information and explanations given by the management,] we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution or bank. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.
ix Based on our audit procedures and according to the information given by the management, the company has not raised any money by way of initial public offer or further public offer (including debt instruments) or taken any term loan during the year.
x According to the information and explanations given to us, we report that no fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
xi According to the information and explanations given to us, we report that 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.
xii The company is not a Nidhi Company. Therefore clause xii) of the order is not applicable to the company.
xiii According to the information and explanations given to us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc. as required by the applicable accounting standards.
xiv Based upon the audit procedures performed and the information and explanations given by the management, 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 and hence not commented upon.
xv Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or person connected with him. Accordingly, the provision of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.
xvi In our opinion, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. And accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.
Annexure'' B'' REPORT ON INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of AAREY DRUGS PHARMACEUTICALS LIMITED (âthe Companyâ) as of March 31, 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
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. 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 conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI 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, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 the risks of material misstatement of the 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 the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s 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 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, 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 March 31, 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.
ForDMKH&Co.
Chartered Accountants,
FRN.No. 116886W
CA. MANISH KANKANI M.No. 158020
Place:Mumbai
Date: 30/05/2016
Mar 31, 2015
Report on the Financial Statements
We have audited the accompanying financial statements of AAREY DRUGS &
PHARMACEUTICALS LIMITED("the Company"), which comprise the Balance
Sheet as at March 31, 2015, 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 Statements
The 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 principal generally
accepted specified under section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014.This responsibility also includes
the maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding 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 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 standalone
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 there under. 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 misstatements. 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
financial control relevant to the Company's preparation of the
financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for
the Purpose of expressing an opinion on whether the Company has in
place an adequate internal financial controls system over financial
reporting and the operating effectiveness of such controls. An audit
also includes evaluating the appropriateness of accounting policies
used and the reasonableness of the accounting estimates made by the
Company's directors, 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 on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31,2015, and its profit and its cash flows for the year ended
on that date.
OTHER MATTERS
Report on Other Legal and Regulatory Requirements
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
purposes of our audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c) The Balance Sheet, the Profit and Loss Statement, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) In our opinion, the aforesaid standalone financial statements 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 the written representations received from the
directors as on March 31, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015,
from being appointed as a director in terms of Section 164 (2) of the
Act.
f) 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.
I. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements as referred to in Note
No. vii (b) for Annexure to this report to the financial statements.
II. The Company has made provision, as required under the applicable
law or accounting Standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts- Refer Note 8 to
the financial statements;
III. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education And Protection Fund by the
Company.
Referred to in Paragraph 1 under the heading of "Report on other Legal
and Regulatory Requirements" of our report of even date
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we state that: -
i. a) The Company has generally maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) We have been informed that the fixed assets of the Company have been
physically verified by the management during the year and no material
discrepancies have been noticed on such verification.
ii. a) As explained to us, inventories have been physically verified by
the management during the year. In our opinion, the frequency of
verification is reasonable.
b) In our opinion and according to the information and explanation
given to us, the procedure of physical verification of Inventories
referred to in 2(a) above followed by the management, are reasonable
and adequate in relation to the size of the Company and the nature of
its business.
c) In our opinion and according to the information and explanation
given to us, the company has maintained proper records of inventories.
As per the information and explanation provided to us and having regard
to the size of the company, no material discrepancies were noticed on
physical verification of inventory as compared to book records.
iii. a) According to the information and explanations given to us and
on the basis of examination of the books of account by us, the company
has not granted loan to parties covered in the Register maintained
under section 189of the Companies Act, 2013.
b) The Company has not granted any loan, accordingly, the clause (iii)
(b) of the order is not applicable to the company for the year.
iv. In our opinion and according to the information and explanations
given to us there are adequate internal control procedures commensurate
with the size of the Company and the nature of its business with
regards to the purchase of inventory, fixed assets and sale of goods
and services. During the course of our audit, we have neither come
across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
v. The Company has not accepted any Deposits from any party, therefore
following provisions of Companies Act Sec 73to76 and rules made there
under and permission of Reserve Bank of India, the question does not
arise.
vi. The maintenance of cost records is not prescribed for the company
by the central government under sub-section (1) of sec 148 of the
Companies Act, 2013. Therefore the company has not maintained any cost
records during the year.
vii a) According to the information and explanation given to us the
Company is generally regular in depositing with appropriate authorities
undisputed statutory dues including income tax, wealth tax, service
tax, customs duty, excise duty, cess and other material statutory dues
applicable Except in case of deduction and depositing of Professional
tax of Company.
b) According to the information and explanation given to us, no
undisputed amount payable in respect of income tax, customs duty,
wealth tax, service tax, excise duty and cess were in arrears, as at
31st March,2015 for a period of more than six months from the date they
became payable other than following:-
Name of the
statute Nature of Amount (Rs.) Period to
which the Forum where
the dues amount
related dispute
pending
Income Tax
Act, 1961 Income Tax Rs.40,89,668/- A.Y.2000-01 ITAT Mumbai
Income Tax
Act, 1961 Income Tax Rs. 8,25,618/- A.Y.2001-02 ITAT Mumbai
Income Tax
Act, 1961 Income Tax Rs. 2,11,548/- A.Y.2002-03 ITAT Mumbai
Income Tax
Act, 1961 Income Tax Rs.67,41,220/- A.Y.2007-08 CIT(A)
Mumbai
Income Tax
Act, 1961 Income Tax Rs.32,89,260/- A.Y.2008-09 CIT(A)
Mumbai
Income Tax
Act, 1961 Income Tax Rs. 2,63,960/- A.Y.2009-10 CIT(A)
Mumbai
Income Tax
Act, 1961 Income Tax Rs.16,03,320/- A.Y.2010-11 CIT(A)
Mumbai
Income Tax
Act, 1961 Income Tax Rs.25,56,440/- A.Y.2011-12 ITAT Mumbai
c) The amounts required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956(1 of 1956) and rules made there under has been
transferred to such fund within time.
viii. The Company does not have any accumulated loss during the
financial year covered by our audit.
ix The Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
x. According to the information given to us, the company has not given
any guarantee for others for loans taken by them from banks and
financial institutions.
xi. There are no term loans taken by the company, therefore the
question of applying the loans for the purpose for which loans taken
does not arise.
xii Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations 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.
For DMKH & Co.
Chartered Accountants,
FRN. No. 116886W
CA. MANISH KANKANI
Partner
M.No. 158020
Place: Mumbai
Date: 30/05/2015
Mar 31, 2014
We have audited the accompanying financial statements of Aarey Drugs &
Pharmaceuticals Limited ("the Company"), which comprise the Balance
Sheet as at March 31,2014, 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 Statements
Management is responsible for 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 Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("theAct"), read with general circular
No.15/2013 dated 13th September, 2013 of Ministry of Company Affairs in
respect section 133 of the Companies Act, 2013 ("the Act"). This
responsibility includes the design, implementation and maintenance of
internal control 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 conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
b) In the case of the Statement of Profit and Loss, of the Profit 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
i. As required by the Companies (Auditor''s Report) Order, 2003
("theOrder") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
ii. As required by section 227(3) of the Act, we report that:
a) we have 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 comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956 read with
general circular No.15/2013 dated 13th September, 2013 of Ministry of
Company Affairs in respect section 133 of the Companies Act, 2013 ("the
Act"). Except Note No.29 and 30
e) On the basis of written representations received from the directors
as on March 31,2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
Referred to in Paragraph 1 under the heading of "Report on other Legal
and Regulatory Requirements" of our report of even date On the basis of
such checks as we considered appropriate and in terms of the
information and explanations given to us, we state that: -
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
(b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, no fixed asset has been disposed during the year and
therefore does not affect the going concern assumption.
(ii) (a) As explained to us, inventories at site have been physically
verified during the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion and on the basis of our examination of the records,
the Company is generally maintaining proper records of its inventories.
No material discrepancy was noticed on physical verification of stocks
by the management as compared to book records.
(iii) (a) According to the information and explanations given to us,
The Company had given unsecured loans (Interest Free) to three Parties
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum principal amount involved during the year was Rs
1,972,364 and Closing Balance is Rs 1,472,364.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans given by the Company, are not prima facie prejudicial to the
interest of the Company
(c) As explained to us, receipt of principal amount in respect of such
loans during the year has been regular/as perstipulation.
(d) In respect of the said loans, there are no overdue amounts.
(e) According to the information and explanations given to us, the
Company has received unsecured loans(Interest free) from Six Parties
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum principal amount involved during the year was
Rs. 3,633,655 and the balance outstanding at the end of the financial
year from such Parties was Rs. 364,180 Other than the above, the
Company has not taken any loans, secured or unsecured from Companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956.
(f) In our opinion, the rate of interest and other terms and conditions
of the loans taken by the Company, are prima-facie not prejudicial to
the interest of the Company;
(g) The Payments of principal amounts in respect of such loans during
the year has been regular/as per stipulation.
(iv) In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventories & fixed assets and payment
for expenses & for sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control.
(v) (a) On the basis of the audit procedures performed by us, and
according to the information, explanations and representations made to
us, we are of the opinion that, the transactions in which directors
were interested as contemplated under Section 297 and Section 299 of
the Companies Act, 1956 and which were required to be entered in the
register maintained unden Section 301 of the said Act, have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 exceeding the value of Rupees five lacs in
respect of any party during the year, have been made at prices which
are reasonable having regard to market prices prevailing at that time.
(vi) The Company has not accepted any deposits during the year under
the provisions of section 58Aand 58AAof the Companies Act, 1956, and
the rules framed there under are not applicable.
(vii) As explained to us, there is no formal internal audit system.
However, the Company has adequate internal control procedure involving
internal checking of its financial record.
(viii) As per information & explanation given by the management,
maintenance of cost records has not been prescribed by the Central
Government under clause (d) of sub-section (1) of section 209 of the
Companies Act, 1956 and the rules framed there under
(ix) In Respect of statutory dues:
(a) According to the records of the Company, it has been generally
regular in depositing, wherever applicable, undisputed statutory dues
including Investor Education and Protection Fund, Wealth Tax, Custom
Duty, Cess and other statutory dues with the appropriate authorities.
There have been delays during certain months in depositing Income Tax
Deducted at Source, Service Tax and Value Added Tax dues. However,
there were no amounts outstanding at the last day of the financial year
for a period exceeding six months from the date they became payable
Except in case of deduction and depositing of Professional tax of
Company and Service tax payment
(b) On the basis of our examination of documents and records of the
Company, and explanation provided to us, there were no disputed dues in
respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty or Cess, other than the following
Name of the statute Nature of Amount (Rs.) Period to which the
the dues amount related
Income TaxAct, 1961 Income Tax Rs79,83,821/- A.Y.2000-2001
Income TaxAct, 1961 Income Tax Rs.592,527/- A.Y.2001-2002
Income TaxAct, 1961 Income Tax Rs.3,40,729/- A.Y.2002-2003
Income Tax Act, 1961 Income Tax Rs.58,94,180/- A.Y.2003-2004
Income Tax Act, 1961 Income Tax Rs.44,09,110/- A.Y.2004-2005
Name of the statute Forum
dispute pending
Income TaxAct, 1961 ITAT Mumbai
Income TaxAct, 1961 ITAT Mumbai
Income TaxAct, 1961 ITAT Mumbai
Income Tax Act, 1961 ITAT Mumbai
Income Tax Act, 1961 ITAT Mumbai
(x) The Company does not have any accumulated losses as at 31st March,
2014. The company has not incurred cash losses during the financial
year covered by our audit and immediately preceding financial year
(xi) According to the records of the Company examined by us and the
information and explanation given to us, we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions, banks or debenture holders as at the Balance sheet date
(xii) On the basis of the records examined by us and the information
and explanations given to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures or any other securities.
(xiii) The Company is not a chit fund or a nidhi / mutual benefit
fund/society. Therefor the provisions of clause 4(xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company;
(xiv) According to the information and explanations given to us, the
Company is not dealing in or trading in shares, securities, debentures
and other investments. Therefore, the provisions of clause 4(xiv) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
Company;
xv) According to the information and explanations given to us, and the
representations made by the management, the Company has not given any
guarantee for loans taken by others from banks or financial
institutions;
(xvi) The Company has not raise term loans during the year. The term
loans outstanding at the beginning of the year have been applied for
the purposes for which they were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the financial statements of the Company, the
Company has not raised any funds on short-term basis. Accordingly
clause 4(xvii) of the order is not applicable;
(xviii) The Company has not made any preferential allotment of shares
to parties or Companies covered in the register maintained under
section 301 of the Companies Act, 1956;
(xix) On the basis of the records examined by us, we have to state
that, the Company has not issued any debentures;
(xx) The Company has not raised any money through a public issue during
the year;
(xxi) According to the information and explanations given to us, and to
the best of our knowledge and belief, no fraud on or by the Company,
has been noticed or reported by the Company during the year.
For DMKH & Co.
Chartered Accountants,
FRN.No. 116886W
CA. MANISH KANKANI
Partner
M.No. 158020
Place: Mumbai
Date: 30/05/2014
Mar 31, 2012
1. We have audited the attached Balance Sheet of AAREY DRUGS &
PHARMACEUTICALS LIMITED as at 31st March 2012, the statement of Profit
& Loss and also the Cash Flow Statement for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial Statements are free of material misstatements. An audit
includes examining, on test basis, evidence supporting the amounts and
disclosure in the Financial Statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the Management, as well as evaluating the overall Financial
Statement presentation. We believe that our audit provides reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by Companies (Auditor's Report) (Amendment) Order, 2004, issued
by Central Government of India in terms of sub section (4A) of section
227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraph 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to above, we state
that:
i. We have obtained all the information and explanation which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit.
ii. In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books.
iii. The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts.
iv. In our opinion, the Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in subsection (3C)of section 211 of
the Companies Act, 1956.
v. On the basis of written representation received from the directors,
as on March 31, 2012 and taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on March 31, 2012
from being appointed as a Director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
true and fair view in conformity with the accounting principles
generally accepted in India.
(i) In the case of Balance Sheet, of the state of affairs of the
company as at 31st March, 2012,
(ii) In the case of the Statement of Profit & Loss, of the profit for
the year ended on that date, and
(iii) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THEAUDITORS' REPORT
(Referred to in paragraph 3 of Auditors' Report of even date on the
financial statements as at and for the year ended 31st March,2012)
On the basis of such checks as were considered appropriate and
according to the information and explanation given to us during the
course of audit, we state that:-
i a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. The assets have been physically verified by the management in
accordance with the phased programme of verification adopted by the
Company. In our opinion, the frequency of verification is reasonable
having regard to the size of the Company and nature of fixed assets, no
material discrepancies have been noticed in respect of assets
physically verified during the year.
c. No substantial part of the fixed assets has been disposed off during
the year.
ii. a. The inventory has been physically verified by the management at
reasonable intervals during the year.
b. In our opinion, the procedures for physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c. The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
book records were not material.
iii. a. The Company had given unsecured loans to Four Parties covered
in the register maintained under section 301 of the Companies Act, 1956.
The maximum principal amount involved during the year was 106.62 Lacs
and Closing Balance is 59.52 Lacs
b. In Our opinion and according to the information and explanation
given to us, the rate of interest and other terms and conditions on
which the loans have been granted to companies covered in the register
maintained under section 301 of the companies act, 1956 are not prima
facie prejudicial to the interest of the company, at the time when
loans were granted.
c. As explained to us, principal amount and interest are also regular.
d. According to the information and explanation given to us, there is
no overdue amount for more than rupees one lakh.
e. The Company has taken unsecured loan from one parties and Two
Companies covered in register maintained under section 301 of the
Companies Act, 1956. The maximum amount involved was 0.95 Lacs and the
Closing balance is 0.95 Lacs
f. In our opinion the rate of interest and other term and conditions
of loan taken by the company are not prima facie prejudicial to the
interest of the Company.
g. The Payments of principal amounts and interest in respect of such
loans during the year has been regular / as per stipulation.
iv. In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control system
v. In respect of the contracts and arrangements referred to in Section
301 of the Companies Act 1956:
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of the contracts and
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act 1956,have been so entered.
b. In our opinion, and according to the information and explanations
given tous,these contracts or arrangements refened to in (a) above have
been made at prices which are reasonable having regard to the prevailing
market prices at the relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits within the
meaning of section 58A, 58AA or any other relevant provisions of the
Companies Act, 1956 and the rules framed there under.
vii. The Company does not have a formal system of Internal Audit, but
there are adequate checks & controls at all level established by the
management.
viii. According to the information and explanation given to us the
maintenance of cost records has not been prescribed by the Central
Government under clause (d) of sub-section (1) of section 209 of the
Companies Act,1956 for any of the activities of the company.
ix. a. The Company is generally regular in depositing undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other
material statutory dues applicable to the company with the appropriate
authorities. According to the information and explanation given to us,
there are no undisputed amounts payable in respect of the aforesaid
statutory dues were outstanding as at the last day of the financial
year for a period of more than six months from the date they became
payable.
b. According to the records of the Company, there are no dues of Income
Tax, Sales Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty,
Cess which have not been deposited on account of any dispute except the
following:-
Name of the
statute Nature of
the dues Amount (Rs.) Period to which
the amount
related Forum where
dispute pending
Income Tax
Act,1961 Income Tax Rs. 79,83,821/- A.Y.2000-2001 ITAT Mumbai
Income Tax
Act,1961 Income Tax Rs. 592,527/- A.Y.2001-2002 ITAT Mumbai
Income Tax
Act,1961 Income Tax Rs. 3,40,729/- A.Y.2002-2003 ITAT Mumbai
Income Tax
Act,1961 Income Tax Rs. 58,94,180/- A.Y.2003-2004 ITAT Mumbai
Income Tax
Act,1961 Income Tax Rs. 44,09,110/- A.Y.2004-2005 ITAT Mumbai
x. The Company does not have any accumulated losses as at 31st March,
2012. The company has not incurred cash losses during the financial
year covered by our audit and immediately preceding financial year.
xi. According to the records of the Company examined by us and the
information and explanation given to us,we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions, banks or debenture holders as at the Balance sheet date.
xii. Based on our examination of documents and records and according to
the information and explanation given to us, we are of the opinion that
the Company has not granted any loans and / or advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii. In our opinion, the company is not a chit fund or a nidhi/
mutual benefit fund/ society. Therefore, the provisions of clause 4
(xiii) of the Order are not applicable to the Company.
xiv. The Company has maintained proper records of the transactions and
contracts for dealing or trading in shares, securities, debentures and
other investments and timely entries have been made therein. All
shares, securities, debentures and other investment have been held by
the company, in its own name except to the extent of the exemption
granted under section 49 of the Companies Act, 1956, and save for
certain shares which are either lodged for transfer or held with
transfer forms.
xv. In our Opinion, and according to the information and explanations
given to us,the Company has not given any guarantee for loans taken by
others from Banks or Financial Institutions during the year.
xvi. In our Opinion, and according to the information and explanations
given to us, the Company did not have any term loans out standing
during the year.
xvii. According to the information and explanations given to us and on
an overall examination of the cash flow statements and balance sheet of
the company, in our opinion, the funds raised on short-term basis have,
prima facie, not been used for long-term investment.
xviii. During the year the Company has not made any preferential
allotment of shares to the parties covered and recorded in the register
maintained under section 301 of the Companies Act 1956.
xix. According to the information and explanations given to us, during
the period covered by our audit report, the company had not issued any
debentures.
xx. The Company has raised money of Rs. 22.53 Crore on account of
right issue during the period.
xxi. 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
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For DMKH & Co.
Chartered Accountants
Firm Regn.No. :116886W
Place: Mumbai. CA. Om Prakash Somani -Partner
Date: 6th September,2012 Membership No.:123830
Mar 31, 2010
1. We have audited the attached Balance Sheet of AAREY DRUGS &
PHARMACEUTICALS LIMITED ("the company") E-34, MIDC TRAPORE BOISAR,,
THANE, MAHARASTRA. as at 31 st March,2010, the Profit and Loss Account
of the Company and the Cash flow statement (Financial Statement) for
the year ended on that date annexed thereto. These financial statements
are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with auditing and assurance
standards generally accepted in India. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 [as
amended by the Companies (Auditors report) (Amendment) Order, 2004]
issued by the Central Government of India in terms of Sub-section (4A)
of Section 227 of the Companies Act. 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in Paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
Audit ;
(ii) In our opinion, proper books of accounts as required by law have
been kept by the company so far as appears from our examination of
those books ;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts ;
(iv) In our opinion, the aforesaid financial statements dealt with by
this report comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956.
It has been observed that as per the provisions of Accounting Standard
and the Guidance Notes issued by the Institute of Chartered Accountants
of India the Company has to follow the exclusive method of Accounting
for taxes, duties, cess and fees. However, the Company follows the
inclusive method. However, there is no impact on the profitability of
the Company due to this.
(v) On the basis of written representations received from the directors
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that none of the directors is prima facie disqualified as on
31st March, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of the section 274 of the Companies Act, 1956 ;
(vi) In our opinion, and to the best of our information and according
to the explanations given to us, and subject to clause no 4 above, the
aforesaid financial statements read with the statement on significant
accounting policies and notes to the accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India :
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March, 2010 ;and
(ii) in the case of the Profit and Loss Account, of the Profit for the
Period from 1st | April, 2009 till 31st March, 2010.
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Annexure referred to in paragraph 3 of our Report of even date to the
Members of AAREY DRUGS & PHARMACEUTICALS LIMITED
i. (a) In our opinion and according to the information and explanation
given to us, The Company is maintaining proper records showing lull
particulars including quantitative details and situation of fixed
assets
(b) In our opinion and according to the information and explanation
given to us, the fixed assets were physically verified by the
management during the year which in our opinion is reasonable having
regard to the size of the company and nature of its assets No material
discrepancies were noticed on such verification as per management
opinion.
(c) in our opinion and according to the information and explanation
given to us, a substantial part of fixed assets has not been disposed
off by the company during the year.
ii (a) In our opinion and according to the information and explanation
given to us, The inventory has been physically verified during the year
by the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanation
given to us, The procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business
(c) In our opinion and according to the information and explanation
given to us, The Company is maintaining proper records of inventory.
The discrepancies noticed on physical verification of inventory as
compared to book records were not material
iii. (a) According to the information and explanations given to us,
the company has during the year, not granted any loans secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956
(b) In view of clause (iii)(a) above, the clause (iii) (b), (iii)(c)
and (iii)(d) of the order, are not applicable
(c) The Company has taken interest free unsecured loan from six parties
covered in the register maintained under section 301 of the Companies
Act, 1956, totaling to Rs. 4,37,40,918/- and since the terms of
repayment are not available we are unable to comment on the same.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business with
regards to purchase of inventory, fixed assets and with regard to the
sale of goods and services. Further on the basis of our examination of
the books and records of the Company, we have neither come across nor
have been informed of any continuing failure to correct the major
weaknesses in the aforesaid internal control system
v. (a) To the best of our knowledge there are no contracts or
arrangements referred to in section 301 of the Act which need to be
entered in the register maintained under the said section.
(b) In our opinion, and according to the information and explanations
given to us, these contracts or arrangements relerred to in (a) above
have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time. vi. The Company has
accepted Deposits from public as defined In the Acceptance of Deposits
Rules, however, to the best of our knowledge the Company has not
followed the directives issued by the Reserve Bank of India and the
provisions of Sec 58 A, 58 AA of the Companies Act, 1956 has not been
complied with.
vii. In our opinion, the Company has no internal audit system
commensurate with its size and nature of its business.
viii. According to the information and explanations given to us, the
Central Government has not prescribed the maintenance of cost records
under clause (d) of sub-section (1) of section 209 of the Companies
Act, 1956 in respect of business activity being carried out by the
Company.
ix. (a) In our opinion and according to the information and
explanation given to us, the Company is regular in depositing with
appropriate authorities undisputed statutuory dues including Provident
Fund, Investor Education and Protection Fund, Employees State
insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, cess and other statutory dues applicable to it however, i
as at March 31,2010 the company has not paid the income tax liability
amounting to Rs.66,54,546 37
(b) According to the information and explanations given to us, there
are no dues of sales fax, service tax, income tax. custom duty, wealth
tax, excise duty and cess which have not been deposited on account of
any dispute.
x. The Company does not have any accumulated loss as at 31* March,
2010 and has not incurred any cash losses in the financial year ended
on that date or in the immediately preceding previous financial year.
xi Based on our audit procedure and on the information and explanations
given by the management, in our opinion, the Company has not defaulted
in repayment of dues to any financial institution or bank.
xii As per information and explanation produced before me, The Company
has not granted any loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
xiii. The Company is not a chit fund/ or a nidhi/ mutual benefit fund/
society.
xiv. In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments. I
xv. Based on the information and explanations given to us, the company
has not given any guarantee for loans taken by others from banks or
financial institutions.
xvi. Based on the information and explanations given to us, The
Company has not obtained any term loan during the year.
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, in our
opinion, there are no funds raised on a short term basis which have
been used for long term investment.
xviii. According to the information and explanations given to us, The
Company has not made a preferential allotment of shares covered in the
register maintained under section 301 of the Companies Act, 1956 during
the year.
xix. The Company has not issued any debentures which have remained
outstanding at the year end.
xx. According to the information and explanations given to us, The
Company has not raised any money by public issue during the year
xxi. According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For Atul Dave & Co.,
Chartered Accountants
Registration No.: 117880W
Place : Mumbai CA VIPUL R DAVE
Date : 27th August, 2010 Partner
M. No.117242
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