TO THE MEMBERS OF M/s PHAARMASIA LIMITED HYDERABAD
Report on the Financial Statements
We have audited the accompanying financial statements of "M/s PHAARMASIALIMITED" which comprise the Balance Sheet as at March 31st 2016 theStatement of Profit and Loss Cash Flow Statement for the year ended and a summary ofsignificant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The management and Board of Directors of the Company are responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance and Cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with rule 7 of Companies (Accounts)Rules2014. This responsibility includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
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 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 but not for the purposeof expressing an opinion on whether the Company has in place an adequate internalfinancial controls system over financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of the accounting estimates made by the Companysmanagement and Board of Directors as well as evaluating the overall presentation of thefinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
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: a. In the case of the Balance Sheet of the stateof affairs of the Company as at 31st March 2016; b. In the case of the Statement ofProfit and Loss of the Profit for the year ended on that date; c. In the case of the CashFlow Statement of the Cash Flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
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 of the Act we give in the Annexure a statement on the matters Specified inparagraphs 3 and 4 of the Order.
As required by section 143(3) of the Act we further report that: a. We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit; b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as appears from ourexamination of those books; c. The Balance Sheet Statement of Profit and Loss and Cashflow statement dealt with by 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 31st2016 and 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 A".
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 does not have any pending litigations 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 has not been an occasion in case of the Company during the year under reportto transfer any sums to the Investor Education and Protection Fund. The question of delayin transferring such sums does not arise.
Annexure - A to INDEPENDENT AUDITORS REPORT Report on the Internal FinancialControls 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 M/sPHAARMASIA LIMITED ("the Company") as on 31st March 2016 inconjunction with our audit of the standalone Financial Statements of the Company for theyear 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 (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 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 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 2016 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.
ANNEXURE-B TO INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements section of our report of even date)
(i) In respect of its Fixed Assets:
a. The company has maintained proper records showing full particulars includingquantitative details and situations of Fixed Assets.
b. As per the information and explanation given to us the Fixed Assets of the companyhave been physically verified by the management according to the phased programme whichis designed to cover all the Fixed Assets at reasonable intervals and the said programmeis considered reasonable and no material discrepancies were noticed on such verification.
(ii) In respect of its Inventories:
a. As explained to us inventories have been physically verified by the management atregular intervals during the year.
b. In our opinion and according to the information and explanation 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.
(iii) According to the information and explanation given to us the Company has notgranted any loans secured or unsecured to companies firms limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act; therefore the provisions of sub clauses (a) (b) and (c) of clause 3 (iii)of CARO 2016 are not applicable to the Company;
(iv) According to information given to us the company has not given any loans has notdone any investment not given any guarantees and provided securities which are coveredu/s 185 and 186 of the companies Act 2013. Hence this clause is not applicable.
(v) According to the information and explanation given to us the company has notaccepted deposits within the meaning of the provisions of sections 73 to 76 of theCompanies Act and the rules framed there under; therefore the provisions of this clause isnot applicable to the Company;
(vi) As informed to us maintenance of cost records has not been specified by theCentral Government under sub-section (1) of section 148 of the Companies Act.
(vii) (a) The company is regular in depositing undisputed statutory dues includingprovident fund employees state insurance income-tax sales-tax wealth taxservice tax duty of customs duty of excise value added tax cess and any otherstatutory dues with the appropriate authorities.
(b) According to the information and explanation given to us there are no dues payableon account of income tax or sales tax or wealth tax or service tax or duty of customs orduty of excise or value added tax or cess pertaining to any dispute with the relevantauthorities other than those mentioned in the notes to accounts.
(viii) According to the information and explanation given to us the Company has notdefaulted in repayment of dues to a financial institution or bank Government or dues todebenture holders.
(ix) According to the information and explanation to us the company has no moneysraised by way of public offers (including debt instruments) no has the company taken anyterm loan.
(x) Based on the audit procedures applied and according to the information andexplanation given to us we report that no fraud on or by the company has been noticed orreported during the year under audit.
(xi) The Managerial Remuneration is paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct.
(xii) The company is not a Nidhi Company.
(xiii) According to information given to us all transactions with the related partiesare in compliance with sections 177 and 188 of Companies Act 2013 where applicable andthe details have been disclosed in the Financial Statements etc. as required by theapplicable accounting standards;
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For K.S.Ramakrishna & Co. |
| ||Chartered Accountants |
| ||Firm Regn No. 002888S |
| ||Sd/- |
| ||(K.Rama Rao) |
|Place: Hyderabad ||Partner |
|Date: 27-05-2016 ||M.No. 206039 |