To the Members of Brooks Laboratories Limited Report on the Financial Statements
We have audited the accompanying Financial Statements of Brooks Laboratories Limited("the Company") which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information
Managements Responsibility for the Financial Statements
The Companys Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act) with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of Companies (Accounts) Rules 2014. Thisresponsibility includes maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that areoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror
Our responsibility is to express an opinion on these Financial Statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Financial Statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe Financial Statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the Financial Statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Financial Statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Financial Statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection143 of the Act we give in the "Annexure A" a statement on thematters Specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act we further report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;
d) In our opinion the aforesaid Financial Statements comply with the applicableAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014
e) On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2016 from being appointed as a director in terms of Section164(2) of the Act.
f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer ourseparate report in "Annexure B"; and
g) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditors Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Financial Statements. (Refer Note no. 28 of Financial Statements)
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For S G C O & Co.
Firm Reg. No 112081W
Mem. No. 44739
Date : 27th May 2016
Annexure to Auditors Report
Annexure "A" to Independent Auditors Report
Annexure referred to in Paragraph 1 of "Report on Other Legal and RegulatoryRequirements" of our Report of even date on the accounts of Brooks LaboratoriesLimited for the year ended 31st March 2016. As required by the Companies(Auditors Report) Order 2016 and according to the information and explanations given tous during the course of the audit and on the basis of such checks of the books and recordsas were considered appropriate we report that:
(i) a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
b) As explained to us the fixed assets have been physically verified by the managementin accordance with a phased programme of verification which in our opinion is reasonableconsidering the size of the Company and the nature of its assets. In accordance with thisprogram certain fixed assets were verified during the year. The frequency of verificationis reasonable and no discrepancies have been noticed on such physical verification.
c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the title deeds of immovable properties are held inthe name of the Company.
(ii) The inventories have been physically verified by the management during the year atreasonable intervals. Discrepancies noticed on physical verification of inventories ascompared to book records were not material and have been properly dealt with in the booksof account.
(iii) a) During the year the Company has not granted any Loan secured or unsecured toany party covered in the registered maintained under section 189 of the Companies Act2013.
b) In view of our comments in para (iii) (a) above clauses 3 (iii) (a) (b) and (c) ofthe said Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanation given to ussection 185 of the Companies Act 2013 is not applicable since the Company has notgranted any loan during the year. With regards to investments in securities of other bodycorporates the Company has complied with the provisions of section 186 of the CompaniesAct 2013.
(v) The Company has not accepted any deposits from the public
(vi) As per explanation & information given to us the Company has maintainedproper cost records pursuant to the rules prescribed by the Central Government for themaintenance of cost records under section 148 (1) of the Companies Act 2013. However thesame have not been reviewed by us.
(vii) a) According to the records of the Company amount deducted/accrued in the booksof accounts in respect of the undisputed statutory dues including Provident FundEmployees State Insurance Income tax Sales tax Service tax Duty of Customs Dutyof Excise Value Added Tax Cess and other Statutory Dues to the extent applicable to theCompany have been regularly deposited with the appropriate authorities. According to theinformation and explanations given to us there are no undisputed amount payable inrespect of such statutory dues which have remained outstanding as at 31st March 2016 fora period more than six months from the date they became payable.
b) According to the information and explanations given to us disputed dues of IncomeTax Sales Tax Service Tax Duty of Custom Duty of Excise and Value Added Tax whichhave not been deposited on account of disputes with the related authorities are as under.
|Nature of Liability ||Amount in (Rs.lacs) ||Period to which matter pertains ||Forum at which dispute is pending |
|Income Tax ||1400.72 ||A.Y 2012-13 ||Commissioner of Income Tax Appeals |
|Income Tax ||339.51 ||A.Y 2013-14 ||Commissioner of Income Tax Appeals |
(ix) In our opinion and according to the information and explanation given to us theCompany had raised money by way of initial public offer in the FY 2011-12 and has appliedthe money raised by way of initial public offer and term loans for the purpose they wereraised.
(x) According to the information & explanations given to us no fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with requisite approvals mandated by the provisions of section197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3 (xii) of the Order is notapplicable.
(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with section 188 and 177 of Companies Act 2013 wherever applicable and thedetails have been disclosed in the financial statements as required by the"Accounting Standard 18" Related Party disclosure specified under section133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year.
(xv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with the directors or persons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable.
(xvi) In our opinion and according to the information and explanation given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
For S G C O & Co.
Firm Reg. No. 112081W
Mem No : 44739
|Place ||: Mumbai. |
|Date ||: 27th May 2016 |
Annexure "B" to the Independent Auditors Report of even date on thefinancial statements of Brooks Laboratories Limited for the year ended 31stMarch 2016. Report on the Internal Financial Controls under Clause (I) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of BrooksLaboratories Limited ("the Company") as of March 31 2016 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to companys policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143 (10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that We comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Companys internal financial controls system over financialreporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management over ride ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
According to the information and explanation given to us and based on our audit thefollowing material weakness has been identified in the operating effectiveness of theCompanys internal financial controls over financial reporting as at 31st March 2016:
The documentation in respect of specific policies and procedures and the IT Controlspertaining to internal financial controls over financial reporting are not adequate andneeds to be further strengthened. This may potentially result in the risk of overriding ofthese controls and misstatement in recording of transaction.
A "material weakness" is a deficiency or a combination of deficiencies ininternal control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the Companys annual or interim financial statementswill not be prevented or detected on a timely basis. In our opinion except for thepossible effect of the material weakness described above on the achievement of theobjectives of the control Criteria the company has maintained in all material respectsan adequate internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as at March 312016 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India. We have considered the material weaknessesidentified and reported above in determining the nature timing and audit tests applied inour audit of the financial statements of the Company and these material weaknesses abovedoes not affect our opinion on the financial statements of the Company.
ForS G C O&Co.
FirmsReg. No. 112081W
Mem. No. 44739
Date : 27th May 2016