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Arvee Laboratories (India) Ltd.

BSE: 535050 Sector: Health care
NSE: ARVEE ISIN Code: INE006Z01016
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Arvee Laboratories (India) Ltd. (ARVEE) - Auditors Report

Company auditors report

To

The Members of

ARVEE LABORATORIES (INDIA) LIMITED

Ahmedabad

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of ARVEE LABORATORIES (INDIA)LIMITED which comprises the Balance Sheet as on 31st March 2020 the statement ofProfit and Loss Account and statement of cash flows for the year then ended and notes tothe financial statements including a summary of significant accounting policies and otherexplanatory information.

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 theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith accounting principles generally accepted in India of the state of affairs of thecompany as at March 31 2020 its profit and cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.

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 thewssasand we do not provide a separate opinion on these matters.

We have determined that there are no key audit matters to be communicated in our reawt.

Information other than the financial statements and auditors' 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 Board'sReport including Annexures to Board's Report Business Responsibility Report but does notinclude 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 are responsible for the matters stated in Section134(5) of the Companies Act 2013 with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments 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.

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 financial reportingprocess. Auditor's Responsibilities for the audit of the Financial Statements

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 a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud 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 skepticism throughout the audit. We also:

• Identify and assess the risks of materia! 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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 concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa 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 financial statements thatindividually 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 audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financialstatements.

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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

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 in terms of Sub-section (11) of Section 143 of the Actwe give in "Annexure A" a statement on the matters specified in paragraphs 3 and4 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 it appears from our examination of those books;

c) the balance sheet and the statement of profit and loss and cash flows dealt with bythis Report are in agreement with the books of account;

d) in our opinion the aforesaid financial statements comply with the AccountingStandards specified 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 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164 (2) of the Act;

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" to this report; Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting;

g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to 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 does not have any pending litigations which would impact its financialposition;

(ii) The Company did not have any long-term contracts including derivative contractsfor which 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.

FOR KCJM & ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration No.: 121324W

CA KABIR MANSURI

PARTNER

MEM.NO :126585

UDIN : 20126585AAAABC6378

PLACE : AHMEDABAD

DATE : 29-06-2020

ARVEE LABORATORIES (INDIA) LIMITED

Accounting Year: 2019-20

Annexure - A to the Independent Auditor's Report

Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme for physical verification in a phased periodicmanner which in our opinion is reasonable having regards to the size of the Company andthe nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us the records examined byus and based" on the examination of the conveyance deeds/registered sale deedprovided to us we report that the title deeds comprising all the immovable propertiesof land and buildings which are freehold are held in the name of the Company as at thebalance sheet date. In respect of immovable properties of land and building that have beentaken on lease and disclosed as fixed assets in the financial statements the leaseagreements are in the name of the Company.

2. (a) As explained to us Inventories have been physically verified during the year bythe management at reasonable interval.

(b) In our opinion and according to the information and explanation given to us theprocedure of physical verification of inventories followed by the management is reasonableand adequate in relation to size of the company and nature of its business.

(c) In our opinion and on the basis of our examination of the records Company isgenerally maintaining proper records of its inventories. No material discrepancy wasnoticed on physical verification of stock by the management as compared to book records.

3. According to the information and explanations given to us and on the basis of ourexamination of the books of account. The Company has not granted any loans secured orunsecured to companies firms or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Consequently the provisions of clauses (iii) arenot applicable.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

5. According to the information and explanations given to us The Company has notaccepted any deposits the public within the meaning of section 73 to 76 and the companies(Acceptance of Deposit) Rules 2014 (As Amended). Therefore the provisions of the clause(v) of paragraph 3 of the Order are not applicable to the Company.

6. We have broadly reviewed the books of accounts maintained by the company pursuant tothe rules made by the central government for the maintenance of cost records under section148(1) of the Companies Act 2013 related to the manufacturing activities and are of theopinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

7. In respect of statutory dues :

(a) According to the records of the Company undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Goods and Service Tax CustomsDuty Cess and other material statutory dues have been generally regularly deposited withthe appropriate authorities. According to the information and explanation given to us noundisputed amounts payable in respect of the aforesaid dues were outstanding as at March31 2020 for a period of more than six months from the due date of becoming payable.

(b) According to the records of the Company statutory dues including Provident FundEmployees' State Insurance Income Tax Goods and Service Tax Customs Duty Cess andother material statutory dues which have not been deposited on March 31 2020. On accountof any dispute are as follows

Name of the Statue Nature of Dues Amount (In Rs.) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 32560/- 2012-13 Commissioner of Income Tax (Appeals)

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowing to a financial institutionbank or government or dues to debenture holders. The company has not borrowed fromfinancial institution government or debenture holder during the year.

9. In our opinion and according to the information and explanations given to us moneysraised by way of debt instruments and term loans have been applied by the company for thepurposes for which they were raised.

10. In our opinion and according to the information and explanations given to us nomaterial fraud by the company or on the company by its officers or employees has beennoticed or reported during the year.

11. During the period under review the company has paid/provided managerialremuneration in accordance with the requisite approvals mandated by the provision ofsection 197 read with schedule V of the Companies Act 2013.

12. The company is not Nidhi Company and hence reporting under clause (xii) ofparagraph 3 of the order is not applicable.

13. In our opinion and according to the information and explanation given to us thecompany's transaction with its related party are in compliance with section 177 and 188 ofthe Companies Act 2013 where applicable and details of related party transactions havebeen disclosed in the financial statements etc. as required by the applicable accountingstandards.

14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause (xiv) of paragraph 3 of the Order is not applicable to the Company.

15. In our opinion and according to the infer mation and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence reporting under clause (xv) ofparagraph 3 of the order is not applicable to the Company.

16. In our opinion and according to information and explanation provided to us theCompany is not required to be registered under section 15-IA of the Reserve Bank of IndiaAct 1934.

FOR KCJM & ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration No.: 121324W

CA KABIR MANSURI

PARTNER

MEM.NO :126585

UDIN : 20126585AAAABC6378

PLACE : AHMEDABAD

DATE : 29-06-2020

ARVEE LABORATORIES (INDIA) LIMITED

Accounting Year: 2019-20

ANNEXURE B

TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF ARVEELABORATORIES (INDIA) 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 ARVEELABORATORIES (INDIA) LIMITED as of March 31 2020 in conjunction with our audit of thefinancial 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 Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 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 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 internal financial controls system overfinancial reporting of the Company.

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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

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 March 31 2020 with respect tothe transactions of the Company based on the internal control over financial reportingcriteria established by the Bank considering the essential components of internal controlstated in the Guidance Note issued by the ICAI.

FOR KCJM & ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration No.: 121324W

CA KABIR MANSURI

PARTNER

MEM.NO :126585

UDIN : 20126585AAAABC6378

PLACE : AHMEDABAD

DATE : 29-06-2020.

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