The Members of CHOKSI LABORATORIES LIMITED
Report on the Financial Statements :
We have audited the accompanying financial statements of CHOKSI LABORATORIES LIMITED("the Company") which comprise the Balance Sheet as at March 31 2016 andthe Statement 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 is 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 read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating 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.
Auditors Responsibility :
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 there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompanys preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances but not forthe purpose of expressing an opinion on whether the Company has in place an adequateinternal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made byCompanys Directors as well as evaluating the overall presentation of the financialstatements.
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 March31 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 issued by theCentral Government of India in terms of subsection (11) of section 143 of the Act(hereinafter referred to as "the Order") and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act we report that:
a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) in our opinion proper books of account as required by law have been kept by theCompany so far as 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 Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014
e) on the basis of the written representations received from the directors as on March31 2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of section 164(2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B" and;
g) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us :
i. The Company does not have any pending litigation which would impact its financialposition.
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.
ANNEXURE A TO INDEPENDENT AUDITORS REPORT ON THE FINANCIAL STATEMENTS
Referred to in Paragraph 1 of the Report on Other Legal & Regulatory Requirementsof Independent Auditors Report of Choksi Laboratories Limited of Even date On thebasis of such checks as we considered appropriate and according to the information andexplanation given to us during the course of our audit we report to the extent:
i. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
b. Fixed assets have been physically verified by the management at reasonableintervals; no material discrepancies were noticed on such verification. In our opinionthe frequency of verification is reasonable. c. In respect of immovable property titledeeds of all the immovable properties are in the name of the Company.
ii. This being a service rendering Company there are no Manufacturing/TradingActivities in the Company the only inventory for the Company is Chemicals which is used& consumed for testing purposes. Since its inception the Company follows the practiceof charging to revenue the purchases of chemicals in the year of purchase itself. Due tothis reason and considering the nature of volatility of the item as per the explanationsgiven to us no inventory register is maintained for the same. Hence we are unable toexpress our opinion on Clause ii of the Order.
iii. The Company has not granted loans secured or unsecured to Companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013. Consequently our comments on clauses iii a and iii b of the order are NIL. Howeverthe Company has given an interest free rent deposit of Rs.20 Lacs for building to one suchparty.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.
v. The Company has not accepted any deposits from the public covered under theprovision of Section 73 to 76 of the Companies Act 2013 and the rules framed there underto the extent notified. vi. The Central Government has not prescribed maintenance of costrecords pursuant to the Companies (Cost Records and Audit) Rules 2014 as amended by subSection (1) of Section 148 of the Companies Act 2013.
vii. (a) According to the information & explanations given to us and the records ofthe Company examined by us in our opinion undisputed statutory dues including ProvidentFund Employees State Insurance Income Tax Custom Duty Excise Duty Cess and anyother material statutory dues to the extent applicable have been generally regularlydeposited with the appropriate authorities except Service Tax dues of Rs. 9898675/- fromDec. 2015 to March 2016 which is still due to be paid.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were outstanding as at March 31 2016 for aperiod of more than six months from the date they become payable;
(c) According to the information and explanations given to us there are no statutorydues which have not been deposited on account of disputes.
viii. Based on our audit procedures and on the information and explanations given bythe management we are of the opinion that the Company has not defaulted in repayment ofloans or borrowings to financial institutions banks and government. The Company has notissued debentures.
ix. According to the records of the Company examined by us and the information andexplanations given to us the Company has not raised money by way of initial public offeror further public offer (including debt instruments) and term loan.
x. Based on the audit procedures performed and the information & explanations givento us we report that no fraud by the Company and no material fraud on the Company by itsofficers or employees has been noticed or reported during the year.
xi. In our opinion and according to the information and explanations given to ushaving regard to legal opinions obtained by the Company the Company has paid/ providedmanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act 2013.
xii. The Company is not a Nidhi Company.
xiii. According to the records of the Company examined by us and the information andexplanations given to us all transactions with the related parties are in compliance withSection 177 and 188 of the Companies Act 2013 and the details have been disclosed in thefinancial statements as required by the applicable accounting standards.
xiv. According to the records of the Company examined by us the Company has not madeany preferential allotment or private allotment of shares or fully or partly convertibledebenture during the year.
xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him.
xvi. The Company is not required to be registered under Section 45-I of the Reservebank of India Act 1934.
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING UNDER CLAUSE (i) OFSUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")
We have audited the internal financial controls over financial reporting of ChoksiLaboratories Limited March ("The Company") as of 31st 2016 in conjunctionwith our audit of the standalone financial statements of the Company for the year thenended.
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 controlsstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (" the Guidance Note") issued by the Institute of CharteredAccountants of India.
These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the Companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note issued by the Institute of Chartered Accountants of India and theStandards on Auditing prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlsystem over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial controlsover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompanys 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 override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2016 based on the internalcontrols over financial reporting criteria established by the Company considering theessential components of internal controls stated in the Guidance Note issued by theInstitute of Chartered Accountants of India.
| ||For Prateek Jain & Co. |
| ||Chartered Accountants |
| ||(Firm Registration No.009494C) |
| ||Prateek Jain |
| ||Proprietor |
|Indore dated : 28th May 2016 ||(Membership No.079214) |