To the Members of
ORTIN LABORATORIES LIMITED
Report on the Financial Statements:
We have audited the accompanying financial statements of ORTIN LABORATORIES LIMITED("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss and the cash flow statement for the period then ended and asummary of significant 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 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 of 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; andthe design implementation and maintenance of adequate internal financial control thatwere operating 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 conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act issued by the Institute of Chartered Accountants of India.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.
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 and fair presentation of the financial statements that give true and fair viewin order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by management 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 financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
a) In the case of the Balance Sheet of the state of affairs of the Company as at March31 2017; and
b) In the case of the Profit and Loss Account of the profit for the period ended onthat date.
c) In the case of the cash flow statement of the Cash Flows for the period ended onthat 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) ofsection 143 and on the basis of such checks of the books and records of the company as weconsidered appropriate and according to the information and explanation given to us wegive Annexure A a statement on the matters specified in the paragraphs 3 and 4 of theOrder to the extent applicable to the company.
2. As required by section 143(3) of the Act we report that:
a. we have obtained all the information and explanations which to the best of ourknowledge 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 and Statement of Profit and Loss dealt with by this Report are inagreement with the books of account;
d. In our opinion the Balance Sheet and Statement of Profit and Loss comply with theAccounting Standards specified under section 133 of the Companies Act 2013 read with rule7 of the Companies (Accounts) Rules 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 section 164(2) ofAct.
f. In our opinion and to the best of our information and according to the explanationsgiven to us we are of the opinion that the company has adequate internal financialcontrols system in place and the operating effectiveness of such controls. Refer to ourseparate report in "Annexure B".
g. With respect to the other matters to be included in auditors report inaccordance with Rule 11 of Companies (Audit and Auditors)Rules 2014 in our opinion andto the best of our information and according to the explanation given to us;
i. The Company has disclosed the impact of pending litigation of its financial positionin its financial statements.
ii. In our opinion and as per the information and explanations provided to us thecompany not entered into any long term contracts including derivate contracts requiringunder applicable laws or accounting standards for material foreseeable losses and
iii. There has been no delay in transferring to the Investor Education and ProtectionFund by the Company.
iv. With reference to Note No. 51 the company has provided requisite disclosures in itsfinancial statements as well as dealings in Specified Bank Notes during the period from8th November 2016 to 30th December 2016 and these are in accordance with the books ofaccount maintained by the company.
| ||For MATHESH & RAMANA |
| ||CHARTERED ACCOUNTANTS |
| ||Sd/- |
|Place: Hyderabad. ||B.V. RAMANA REDDY |
|Date: 30/05/2017 ||M. No. 026967 Partner |
ANNEXURE TO INDEPENDENT AUDITOR'S REPORT
Re: ORTIN LABORATORIES LIMITED
Referred to in Paragraph 1 under section (Report on other Legal and RegulatoryRequirements of our Report of even date)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) (a) The Management has conducted physical verification of inventory (excludingstocks lying with third parties) at reasonable intervals. In respect of inventory lyingwith third parties these have substantially been confirmed by them. In our opinion thefrequency of verification is reasonable.
(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 nature of its business.
(c) The Company is generally maintaining proper records of inventory. The discrepanciesnoticed on verification between physical stock and book records were not material inrelation to the operations of the Company and the same have been properly dealt with inthe books of account.
(iii) (a) The company has not granted loans to the parties covered in the registermaintained under section 189 of the Companies Act 2013
(b) The company is regular in recovering the principal amounts as stipulated and hasbeen regular in the receiving of interest.
(c) There were no overdue amounts of loans granted to companies firms or other partieslisted in the register maintained under section 189 of the Companies Act 2013.
(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 Act with respectto the loans and investments made.
(v) According to the information and explanations given to us the Company has notaccepted any deposits in terms of directives issued by Reserve Bank of India and theprovisions of Sections 73 to 76 or any other relevant provisions of the Companies Act andthe rules framed there under.
(vi) In our opinion and according to the information and explanations given to us thecompany is maintaining proper cost records as been prescribed by the Central Governmentunder sub section (1) of section 148 of the Companies Act 2013 for the activities of theCompany.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income-taxsales tax value added tax duty of customs service tax cess and other materialstatutory dues have been regularly deposited during the year by the Company with theappropriate authorities. As explained to us the Company did not have any dues on accountof employees state insurance and duty of excise. According to the information andexplanations given to us no undisputed amounts payable in respect of provident fundincome tax sales tax value added tax duty of customs service tax cess and othermaterial statutory dues were in arrears as at 31 March 2017 for a period of more than sixmonths from the date they became payable.
(b) According to the information and explanations given to us there are no materialdues of duty of customs which have not been deposited with the appropriate authorities onaccount of any dispute. However according to information and explanations given to usthe following dues of income tax sales tax duty of excise service tax and value addedtax have not been deposited by the Company on account of disputes: 1. Service Tax UnderRCM on Sitting Fee Rs. 2472/- 2. Sales Tax payable (Mumbai Br.) Rs. 115702/- 3. ValueAdded Tax Payable 2012-13 Rs. 16164/- 4. Service Tax of Rs. 5646811/-
(c) According to the information and explanation given to us there are no dues ofsales tax income tax and excise duty which have not been deposited on account of anydispute.
(viii) The Company has not defaulted in repayment of any loans or borrowings from anyfinancial institution banks government or debenture holders during the year.
(ix) The our opinion and according to the information and explanations given to usmoney raised by way of Initial Public offer or Further public offer (including debtinstruments) and term loans were applied for the purposes for which those are raised.
(x) According to the information and explanations given to us no material fraud wascommitted by the Company or on the Company by its officers or employees has been noticedor reported during the course of our audit.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 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 explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him referred in section 192 of theCompanies act 2013. Accordingly paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For Mathesh & Ramana |
| ||Chartered Accountants |
| ||Firm Reg. No. 002020s |
| ||Sd/- |
| ||B.V. Ramana Reddy |
|Place: Hyderabad ||Partner |
|Date: 30.05.2017 ||Membership No. 026967 |
ANNEXURE B TO INDEPENDENT AUDITOR'S REPORT
Re: ORTIN LABORATORIES LIMITED
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 OrtinLaboratories Limited ("the Company") as of 31st March 2017 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
Management's 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 (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 companys policies the safeguardingof its 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.
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 controls 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 judgment 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 controlssystem over 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 policies and procedures that
(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 controlover 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|Place: Hyderabad. ||For MATHESH & RAMANA |
|Date : 30.05.2017 ||CHARTERED ACCOUNTANTS |
| ||Sd/- |
| ||B. V. RAMANA REDDY |
| ||M. No. 026967 |
| ||Partner |