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Kamron Laboratories Ltd.

BSE: 524604 Sector: Health care
NSE: N.A. ISIN Code: INE276T01018
BSE LIVE 12:22 | 23 Nov 7.28 -0.37
(-4.84%)
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7.28

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7.28

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7.28

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 7.28
PREVIOUS CLOSE 7.65
VOLUME 100
52-Week high 21.10
52-Week low 7.28
P/E 728.00
Mkt Cap.(Rs cr) 4
Buy Price 7.27
Buy Qty 300.00
Sell Price 0.00
Sell Qty 0.00
OPEN 7.28
CLOSE 7.65
VOLUME 100
52-Week high 21.10
52-Week low 7.28
P/E 728.00
Mkt Cap.(Rs cr) 4
Buy Price 7.27
Buy Qty 300.00
Sell Price 0.00
Sell Qty 0.00

Kamron Laboratories Ltd. (KAMRONLABS) - Auditors Report

Company auditors report

To

THE MEMBERS OF

KAMRON LABORATORIES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of KAMRON LABORATORIES LTD ("theCompany") which comprise the Balance Sheet as at March 31 2017 the Statement ofProfit and Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's 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 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting 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 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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management aswell as evaluating the overall 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.

BASIS FOR QUALIFIED REPORT:-

1. No provision has been made in the accounts for Sundry Debtors of Rs. 1119774/-considered Doubtful of recovery. In the opinion of the directors sundry debtorsconsidered doubtful have the value at which they are stated in the Balance Sheet ifrealised in the ordinary course of business and therefore no provision has been made inrespect of such debtors. In our opinion non-provision constitutes departure from theaccounting standards referred to in Sec. 133 of the Companies Act 2013. Attention isinvited to note no. 16(1)..

2. The Company's inventories viz. work in progress and finished good are carried in theBalance Sheet at Rs. 3674427/- and Rs. 8867873/- . Management of the company has notstated the inventories at lower of cost and net reliable value but has stated them solelyat cost. The management has adopted the cost on basis of cost statements prepared by themanagement of the company which however is departure from the Accounting Standard 2referred to in Sec. 133 of the Companies Act 2013.

3. The Company has not recomputed the written down value as on 1st April2014 on basis of method/ computation of depreciation provided vide schedule II to theCompanies Act 2013. On basis of computation of depreciation in accordance with provisionsof Schedule II to the Companies Act 2013 the company ought to have made an adjustment ofdepreciation of Rs. 10298505/- in respect of the written down value as on 1stApril 2014. The balance in the statement of Profit and Loss /the balance in the Reservesand Surplus have accordingly been overstated by Rs. 10298505/ - and accordingly thewritten down value of the fixed assets as on 1st April 2014 have beenoverstated by Rs. 10298505/-.

4. The management of the company is of the view that present market value of certainfixed assets viz. the factory buildings non-factory buildings plant and machinery andvehicles are in excess of the written down value as on 31st March 2016 andtherefore the company has not provided for depreciation of Rs. 8869643/- on the saidfixed assets for the financial year ended 31st March 2016. The non-provision ofdepreciation had effect of increasing profit by Rs. 8869643/- having correspondingeffect of overstating the balance in Reserve and Surplus and the written down value of thesaid fixed assets. Attention is invited to note no. 12(3).

5. The Management of the Company during the financial year ended 31st March2014 and 31st March 2016 had transferred expenses of Rs. 9478145/- and Rs.9011859/- respectively and had decided to amortize the expenditure at the rate of 10%per annum. However the company has not amortized any of the expenses during the financialyear under review. The company in view of the decision and policy ought to have amortizedRs. 2719322/- and transferred to the Statement of Profit and Loss. In absence of thetransfer the profit in the Statement of Profit and Loss has been overstated by Rs.2719322/- having corresponding effect on the balance stated in Reserve and Surplus.Attention in this connection is invited to notes no. 20(1) 20(2) and 20(4).

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion Paragraph and Emphasis of Matter Paragraph the financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity 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 atMarch 31 2017;

(b) In the case of Statement of Profit and Loss of the profit for the year ended onthat date ; and

(c) In the case of the Cash Flow Statement of the cash flows for the year ended onthat date

EMPHASIS OF MATTER

We draw attention to the following:-

1 Note no. 20(3) regarding treatment of expenses in aggregate Rs. 12337493/- asdeferred revenue expenses and accordingly reflecting in the balance sheet as againstconsidering the said expenses as of revenue nature and debiting to the statement of Profitand Loss account. The Profit for the year under consideration accordingly stand increasedby Rs. 12337493/- Had the company debited the expenses to the statement of Profit andLoss account the profit of the company would have been lesser by Rs. 12337493/- havingcorresponding effect on the Reserve and Surplus. Attention is also invited to notesno.20(1) and 20(2).

2 Note No.12(2) regarding capitalization of expenses in aggregate of Rs. 3181018/-out of interest on term loan/cash credit account and interest on deposits contending thatexpenses have been utilized for the purpose of acquiring the fixed assets Viz. Plant andMachinery The profit for the year under consideration accordingly stand increased byRs.3181018/-. Had the company not adopted the accounting policy of capitalizing theabove stated expenses and had it followed accounting policy of not capitalizing theprofit for the year under review would have been lower by Rs. 3181018/- havingcorresponding effect on balance in the Statement of Profit and Loss Reserves and Surplusand the written down value of the fixed assets.

3 Note no.12 (4) regarding transfer of expenses of capital nature and advances relatingto the factory building incurred and /or paid in the earlier years and which werereflected as capital work in progress and advances as on 31st March 2016.Attention in this connection is invited to note no. 12(4).

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub section (11) of section 143 ofthe Act we give in the Annexure A attached hereto our comments on the matters specifiedin 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 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 Balance Sheet the Statement of Profit and Loss and the CashFlow Statement dealt with by this report except for the effects of the matters describedin the Basis for Qualified Opinion Paragraph and Emphasis of Matters Paragraph comply withthe Accounting Standards notified under section 133 of the Companies Act 2013 read withRule 7 of the Companies (Accounts) Rule 2014.

e. On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of of sub-section (2) ofsection 164 of the Companies Act 2013.

f. We invite reference to separate report in Annexure B with respect to the adqucy ofthe internal financial controls over financial reporting of the company and the operatingeffectiveness of such control during the year under review:

g. With respect to other matters to be included in the Auditors' Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion:

a) The company according to the explanations and information given to us details ofpending litigation which can have the impact on its financial position in its financialstatement have been stated in note no. 33.

b) The company according to explanations and information's given to us did not haveany long term contracts including derivatives contracts for which there were any materialforeseeable losses.

c) The company did not have any amount which was required to be transferred to theInvestor Education and Protection Fund by the company.

d) The Company has provided requisite disclosures in its financial statement (Note.39)in accordance with books of account as to holding as well as its dealings in specifiedbank notes during the period from 8th November 2016 to 30thDecember 2016.

For DEEPAK SONI & ASSOCIATES
Chartered Accountants
Firm Registration No. 102250W
Place: Ahmedabad Deepak Soni
Date : 30th May 2017 Proprietor
Membership No. 31138

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT

(The Annexure A Referred to in Paragraph 1 of our report of even date)

1. In respect of its fixed assets :

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b. As explained to us the fixed assets have been physically verified by the Managementduring the year in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

c. The Titles of immovable properties are held in name of the Company

2. In respect of its inventory :

a) As explained to us inventories have been physically verified by the management atregular intervals during the year. In our opinion the frequency of verification isreasonable.

b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c) The Company has maintained proper records of inventories as explained to us therewere no material discrepancies noticed on physical verification of inventory as comparedto the book records.

3. According to the information and explanation given to us the company has notgranted any loans secured/unsecured to any company firm or other party covered inregister maintained under section 189 of the Companies Act 2013.

4. According to the information and explanation given to us the Company has notaccepted any deposit from the public within the meaning of sections 73 and 74 of the Actand the rules framed thereunder during the year under review.

5. The Company has not accepted any deposit from the public within the meaning ofsections 73 and 74 of the Act and the rules framed there under during the year underreview.

6. The Central Government (Ministry of Corporate Affairs) has prescribed maintenance ofCost Records under section 148(1) of the Companies Act 2013 in respect of certainmanufacturing activities of the Company and the company has complied with the same. Wehave broadly reviewed the cost records maintained by the Company pursuant to the Companies(Cost Accounting Records and Audit) Rules 2014 and are of the opinion that prima facie theprescribed records have been maintained. We have however not made detailed examination ofthe cost records with a view to determining whether they are accurate or complete.

7. In respect of statutory dues:

a) According to the records of the Company undisputed statutory viz. InvestorEducation and Protection Fund Employees' State Insurance Income tax Sales tax WealthTax Customs Duty Excise Duty Cess and other statutory dues have been generallyregularly deposited with the appropriate authorities.

b) According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were outstanding as at 31st March 2017 for aperiod of more than six months from the date of becoming payable.

c) Details of dues of Income tax Sales Tax Service Tax Custom Duty Excise DutyValue Added Tax and Cess which have not been deposited on 31st March 2017 onaccount of disputes are given below:-

Statue Nature of Dues Forum where the Dispute is pending Period Amt. involved
The Central Excise Act 1944 Excise Duty Commissioner of Appeals 2006-07 Rs. 826339/-
The Value Added Tax Sales Tax Commissioner of Tax 2006-07 Rs.11032991/-

8. Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the Company has not defaulted in repayment of duesto financial institutions and banks. The Company has not issued any debentures.

9. According to the informations and explanations given to us and on basis ofverification conducted by us in our opinion the company has not availed any term loan andneither the company has raised money by way of initial public officer nor further publicoffer during the year under review. Money raised by way of initial public issue in theearlier years have been applied for acquiring the fixed assets which was the purpose ofthe issue as informed and explained to us by the management of the company.

10. In our opinion and according to the information and explanations given to us nofraud on or by the Company has been noticed or reported during the year.

11. The Company has paid managerial remuneration in accordance with the requisiteapprovals mandated by provisions of section 197 read with Schedule V to the Companies Act2013.

12. The Company is not a Nidhi Company.

13. The Company has effected financial transactions by way of payment of managerialremuneration directors' fees and accepting loans from the related parties which in ouropinion are in compliance with sections 177 and 188 of the Companies Act 2013 and detailshave been disclosed as required by the Accounting Standards.

14. The Company has not made any preferential allotment or private placement of theshares or the convertible debentures during the year under review.

15. The Company has not entered into any non cash transactions with directors orpersons connected with them during the year under review.

16. The Company is not required to be registered u/s 45IA of the Reserve Bank of IndiaAct 1934.

For DEEPAK SONI & ASSOCIATES
Chartered Accountants
Firm Registration No. 102250W
Deepak Soni
Place: Ahmedabad Proprietor
Date : 30th May 2017 Membership No. 31138

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of KAMRONLABORATORIES LIMITED ("the Company") as of March 312017 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility of Internal Financial Control

The Company's 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 ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofthe assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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 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 auditor's judgment including the assessment of the risks ofmaterials 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 Company's internal financial controls systemover financial reporting.

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 polices 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 re being made only 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 overridecontrols materials 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 polices or procedures may deteriorate.

Opinion

We invite reference to our observations in paras Basis for Qualified Report andEmphasis of Matters and subject to the said observations and read with the saidobservation in our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2017 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".

For DEEPAK SONI & ASSOCIATES
Chartered Accountants
Firm Registration No. 102250W
Deepak Soni
Place: Ahmedabad Proprietor
Date : 30th May 2017 Membership No. 31138