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Advik Laboratories Ltd.

BSE: 531686 Sector: Health care
NSE: N.A. ISIN Code: INE537C01019
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NSE 05:30 | 01 Jan Advik Laboratories Ltd
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VOLUME 1036
52-Week high 2.00
52-Week low 0.32
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Mkt Cap.(Rs cr) 1
Buy Price 0.35
Buy Qty 900.00
Sell Price 0.36
Sell Qty 995.00
OPEN 0.35
CLOSE 0.35
VOLUME 1036
52-Week high 2.00
52-Week low 0.32
P/E
Mkt Cap.(Rs cr) 1
Buy Price 0.35
Buy Qty 900.00
Sell Price 0.36
Sell Qty 995.00

Advik Laboratories Ltd. (ADVIKLABS) - Auditors Report

Company auditors report

To the Members of

Advik Laboratories Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying Financial Statements of ADVIK LABORATORIES LIMITED(“The Company”) which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss (including other comprehensive income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matters described in the “Basis forQualified Opinion” section below the aforesaid Financial Statements give theinformation required by the Companies Act 2013 (“the Act”) in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended (“Ind AS”) and other accounting principlesgenerally accepted in India of the state of the affairs of the Company as at 31st March2019 and the profit and total comprehensive income changes in equity and its cash flowsfor the year ended on that date.

Basis for Qualified Opinion

1. Due to default in payments of bank loans the company’s accounts have beenclassified as Non-Performing Assets (NPA) by the bank. Indian Overseas Bank has notcharged interest on Cash credit & Term Loan Limits. During the period under review noprovision has been made for such interest in the books of account of the company and tothat extent bank’s loan liability and total loss is understated by Rs. 552.68 lacsplus penal charges that the bank may charge.

2. The Company has not determined the fair value of Investments in unquoted equityshares of other Companies as per IND AS 113 Fair Value Measurement.

3. Trade Receivables & Trade Payables are subject to confirmation reconciliationadjustments and provisions if any which may arise out of confirmation and reconciliation.

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditor’sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the independence requirements thatare relevant to our audit of the financial statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI’s Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ourqualified opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matter Auditor’s Response
Adoption of “Revenue from contracts with Customers” (‘Ind AS 115’) Our audit procedures on adoption of “Revenue from contracts with Customers” (‘Ind AS 115’) which is the new revenue Accounting Standard replacing the old corresponding applicable Accounting Standard on “Revenue” (Ind AS 18) includes the following inter-alia:
• Evaluated the design and implementation of the processes and internal controls relating to implementation of the new revenue accounting standard;
• Evaluated the detailed analysis performed by those charged with governance and those acting on their directions on revenue streams by selecting samples for the existing contracts with customers and considered revenue recognition policy in the current year in respect of those revenue streams;
• Evaluated the appropriateness of the disclosures provided under the new revenue standard and assessed the completeness and mathematical accuracy of the relevant disclosures. Evaluated the revenue recognized criteria based on the contract entered with customers.
• Evaluated the treatment accorded and disclosures by the company for sales returns trade discounts rate differences volume rebates and other factors having bearing on revenue recognition.
Valuation of Inventory Raw Material Work-in Progress and Finished Goods (IND AS 2) Audit Procedure adopted includes the following inter-alia:
• Evaluated the design and implementation of process and internal controls laid down by the company for valuation of WIP and Finished goods at lower of cost based on weighted average method or net realizable value and also tested the operating effectiveness of the aforesaid controls.
• Evaluated the design and implementation of internal controls laid down by the company for valuation of raw material at lower of cost based on FIFO method or net realizable value and also tested the operating effectiveness of the aforesaid controls.
• Evaluated the design and implementation of internal controls laid down by the company for identifying Net Realisable Value of finished goods and work-in- progress by verifying the contract with customers where applicable or subsequent selling price.
• Evaluated the design and implementation of internal controls laid down by the company for identifying Net Realisable Value of Raw Material with reference to subsequent landed cost.
• Analysed all fixed and variable overheads considered for valuation of Finished Goods and Work-in-Progress.
• Compared the subsequent realization on sample basis to assess the reasonableness of the net realizable value that was estimated and considered by the management.
• Compared the actual costs based on the subsequent sale transaction to assess the reasonableness of the cost to sell that was estimated and considered by the management.
• Assessed the appropriateness of the disclosure in the standalone financial statements in accordance with the applicable financial reporting framework.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board’s Report including Annexures to Board’s ReportBusiness Responsibility Report Corporate Governance and Shareholder’s Informationbut does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

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 Act2013 (“the Act”) with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performance total comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) prescribed under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2015.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany’s ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibility

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However future events or conditions may cause theCompany to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 (“theOrder”) issued by the Central Government in terms of Section 143(11) of the Act wegive in “Annexure A” a statement on the matters specified in paragraphs 3 and 4of the Order.

2. As required by Section 143(3) of the Act based on our audit 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 it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 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”. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.

g) With respect to the other matters to be included in the Auditor’s Report inaccordance with the requirements of Section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of Section 197 of the Act.

h) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Financial Statements- Refer Note No. 24 to the Financial Statements;

ii. The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses and;

iii. According to the information and explanations given to us there was no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company

For M/s. RMA & Associates LLP
Chartered Accountants
Firm Regn. No. 000978N/N500062
Sd/-
Place: New Delhi (Amit Jain)
Dated : 30th May 2019 Partner
Membership No. 503109

ANNEXURE “A” TO THE INDEPENDENT AUDITORS'

The Annexure referred to in our report of even date

1. In respect of Fixed Assets of the Company:

(a) Accordingly to the information and explanations given to us the company hasmaintained proper records showing full particulars including quantitative details andsituation of the fixed assets.

(b) Accordingly to the information and explanations given to us the fixed assets ofthe company have been physically verified by the management at reasonable intervals and nomaterial discrepancies were noticed on such verification as compared to books of accounts.

(c) Accordingly to the information and explanations given to us and on the basis ofexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

2. According to the information and explanation given to us Physical verification ofinventory has been conducted at reasonable intervals by the Management of the Company andno material discrepancies were noticed on physical verification conducted by themanagement

3. Accordingly to the information and explanations 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 2013 during the year. Therefore the provision of clause (iii) of Para 3 ofthe Companies (Auditor’s Report) Order 2016 is not applicable to the company.

4. In our opinion and according to the information and explanations given to us theCompany has not given any loans guarantees and security to any Director or to any otherperson in whom Director is interested in compliance with the section 185 & 186 of theAct.

5. The company has not accepted any deposits. Therefore the provision of clause (v) ofPara 3 of the Companies (Auditor’s Report) Order 2016 is not applicable to thecompany.

6. As per notification no. F.No.1/40/2013-CL-V dated 31.12.2014 maintenance of costrecords has not been prescribed by the Central Government U/s. 148(1) of the CompaniesAct 2013.

7. (a) According to the information and explanations given to us and on the basis ofour examination of the books of account of Company the company is generally regular indepositing undisputed statutory dues including provident fund employees state insuranceincome-tax service tax duty of customs duty of excise value added tax cess and othermaterial statutory dues as applicable with the appropriate authorities.

According to the information and explanation given to us no other undisputed amountsare payable on account of provident fund employees state insurance income-tax servicetax duty of customs duty of excise value added tax as at 31.03.2019 for a period ofmore than six months from the date they become payable.

(b) According to the information’s and explanations given to us there are nopending dues in respect of Sales Tax Wealth Tax Service Tax Value Added Tax Duty ofCustoms and Cess which has not been deposited on account of any dispute.

8. According to information & explanation given to us and based on the documentsand records produced before us the company is not regular in depositing of its dues withtheir banker Indian Overseas bank due to that banker has considered the company accountas NPA.

Sr. No. Principal due Amount in INR Nature of Credit Facility Remarks
1. 374.99 Lacs Term Loan Both Term Loans & Cash Credit Accounts are become NPA since 01.07.2014. Due to that interest
2. 249.52 Lacs Cash Credit Limit of Rs. 552.68 on Term Loan & CC limits as on 31.03.2019 has not been accounted for.

9. According to the information & explanation given to us and the records of theCompany examined by us the Company has not raised any money by way of initial public offeror further public offer (including debt instruments) or term loans during the year.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstances of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year under audit nor have we been informed of any suchcase by the Management.

11. No Managerial Remuneration is paid by the company during the year hence provisionsof Section 197 read with Schedule V to Companies Act 2013 are not applicable.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore the provisions of clause (xii) of Para 3 of theCompanies (Auditor’s Report) Order 2016 are not applicable to the Company.

13. Based upon the Audit procedures performed and according to the information &explanations given to us All transactions with related parties are in compliance withSection 177 and 188 of the Companies Act 2013 where applicable and the details have beendisclosed in the Financial Statements etc. as required by the applicable IND AS.

14. According to the information and explanations given 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.

15. 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. Therefore the provisions ofclause (xv) of Para 3 of the Companies (Auditor’s Report) Order 2016 are notapplicable to the Company.

16. According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For M/s. RMA & Associates LLP
Chartered Accountants
Firm Regn. No. 000978N/N500062
Sd/-
Place: New Delhi (Amit Jain)
Dated : 30th May 2019 Partner
Membership No. 503109

ANNEXURE “B”

To THE INDEPENDENT AUDITOR’S REPORT OF “ADVIK LABORATORIES LIMITED” FORTHE YEAR ENDED 31st MARCH 2019.

Report on the internal Financial Controls under Clause (i) of Sub-Section 143 of theCompanies Act 2013.

Report on the Internal Financial Controls

We have audited the Internal Finance Controls over financial reporting of “ADVIKLABORATORIES LIMITED” (the Company) as of 31st March 2019 in conjunctionwith our audit of the Financial Statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls.

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 Controls overFinancial Reporting issued 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 safeguardingof its the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Companies Act 2013

Auditor’s 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 extent applicableto an audit of internal financial controls both applicable to an audit of internalFinancial Controls and both issued by the institute of Chartered Accounts of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 and 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 risk ofmaterial misstatement of the financial statement where 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s 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 purpose in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial 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 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.

Opinion

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 31st March 2019based on the 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 M/s. RMA & Associates LLP
Chartered Accountants
Firm Regn. No. 000978N/N500062
Sd/-
Place: New Delhi (Amit Jain)
Dated : 30th May 2019 Partner
Membership No. 503109