The members of
AURO LABORATORIES LIMITED
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of AURO LABORATORIESLIMITED ("the Company") which comprise the balance sheet as at 31stMarch 2019 the statement of profit and loss (Including Other Comprehensive Income)statement of changes in equity statement of cash flows for the year then ended and notesto the financial statements including a summary of significant accounting policies andother explanatory information. (Herein after referred to as "the Ind AS FinancialStatements") In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2019 its profit changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the Financial Statements in accordance with the Standards onAuditing specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance 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 Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
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.
|S. No. ||Key Audit matters ||Auditors response |
|1. ||Recognition measurement presentation and disclosures of revenues in view of IND AS 18 ||Our audit approach consisted of testing effectiveness Revenue of internal control on process to identify the impact of same revenue accounting standard. We have selected some future samples with relevant information with terms of sales benefits contract including customers acceptance subsequent invoicing and historical trend of dispute |
| ||Recognition and the accounting treatment of the Revenue is recognized when it is probable that economic benefits will flow to the entity and these can be measured reliably.. || |
|2. ||IND AS 115 revenue contract with customers ||The company has evaluated the impact of IND AS 115 on financial statement which is not material same has been assessed by us that there is no impact on financial position. |
|3. ||Evaluation of tax position ||Obtained details of completed income tax assessment and demand till assessment year 2016-17 which are not significant and estimated provision has been made for the year ended 31st March2019 |
|4. ||Internal Audit || |
| ||As per section 138 of Indian Companies Act 2013 read with Rule 13 Of Companies (Accounts) Rules 2014 appointment of Internal Auditor ||The company has appointed a firm of Chartered Accountants to carried out Internal Audit function as per section 138 of Companies Act 2013 has submitted their report to the company. |
|5. ||Indirect tax Recoverability || |
| ||As at 31st March 2019 short terms loans and advances includes exports incentive Rs.51.54 lakhs VAT credit Rs.25.69 lakhs and GST credit Rs.166.51 lakhs. Refer note no.8 to the financial statement ||We have involved our expert team on taxation to review the nature of amounts recoverable the sustainability and the likelihood recoverability upon final resolution. |
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 of Director's Report including Annexure to Director'sReport Business responsibility report corporate governance and shareholder'sInformation but does not include the financial statements and our auditor's reportthereon.
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 thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. If based on the work we have performed as records availableto us and upon reading if we conclude that there is material misstatement thereon we arerequired and shall communicate the matter to those charged with governance. We havenothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the IND ASFinancial Statements
The Company's Board of Directors are 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 changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under section 133 (IND AS) of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the IND AS financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so. That Board of Directors are also responsiblefor overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the IND AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the IND AS 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 IND AS financial statements. A further description of auditor'sresponsibilities for the audit of the IND AS financial statements is included inAnnexure A. This description forms part of our auditor's report.
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 Companies Act 2013 we give in the Annexure B a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
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 the Statement of Profit and Loss the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account. d) In our opinion the aforesaid IND AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure C".
g) In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197(16) 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 in our opinionand to the best of our information and according to the explanations given to us:
i. There is nothing to disclose the impact of pending litigations on its financialposition in its Ind As financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For KHURDIA JAIN & CO
Firm Regn. No. 120263W
Date : 23rd May 2019
Annexure "A" of the Independent Auditor's Report to the Members of AUROLABORATORIES LIMITED on the financial statements for the year ended 31stMarch 2019.
Responsibilities for audit of Ind AS Financial statement
As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism 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 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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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.
For KHURDIA JAIN & CO
Firm Regn. No. 120263W
Date : 23rd May 2019
Annexure "B" of the Independent Auditor's Report to the Members of AUROLABORATORIES LIMITED on the financial statements for the year ended 31stMarch 2019.
We have prepared this annexure on the basis of the Books of Account examined andinformation and explanations obtained by us during the course of our Audit. Further inour opinion and to the best of our knowledge we report that
i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.
b) As explained to us the fixed assets are being physically verified under a phasedprogramme of verification which in our opinion is reasonable and no materialdiscrepancies have been 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 sale deed provided to us we report that the titledeeds comprising all the immovable properties of land and buildings which are freeholdare held in the name of the Company as at the balance sheet date. In respect of immovableproperties of land and building that have been taken on lease and disclosed as fixedassets in the financial statements the lease agreements are in the name of the Company.
d) The company has not disposed off substantial part of fixed assets during the yearunder review to affect its going concern.
ii) a) Inventories have been physically verified during the year by management atreasonable intervals.
b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the company and nature of its business.
c) The company is maintaining proper records of its inventories as required in thenormal course of business. The discrepancies noticed on verification between physicalstocks and book records were not material.
iii) In our opinion and according to the information and explanations given to us theCompany has not given any loans made investments and provided any guarantees andsecurities hence provisions of Sections 185 and 186 of the Companies Act 2013 does notapply to the Company and hence not commented upon.
iv) In our opinion and according to the information and explanation given to us thecompany has not accepted deposits from public within the meaning of section 73 and 76 ofthe Act and the rules framed there under to the extent notified.
vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the order made by the Central Government for maintenance of cost records prescribedunder Sub- Section (1) of section 148 of the Act and are of the opinion that prima faciethe prescribed accounts have been made and maintained. We have however not made adetailed examination of the said records with a view to determining whether they areaccurate or complete.
vii) a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company we are of the opinion that the Company has beengenerally regular in depositing undisputed statutory dues including Provident FundInvestors Education and protection fund Employees' State Insurance Income Tax CustomDuty and Goods and Services tax (GST) material statutory dues with the appropriateauthorities and there are no outstanding unpaid amounts as at the balance sheet date for aperiod of more than six months from the date they became payable.
b) According to the information and explanations given to us there are no undisputeddues in respect of Income Tax Custom Duty and Goods and Services tax (GST) for the year.
viii) In our opinion the Accumulated losses of the company at the end of the financialyear are not more than fifty per cent of its net worth. The company has not incurred cashlosses during the financial year covered by our audit as well as in the immediatelypreceding financial year.
ix) In our opinion according to the information and explanation given to us thecompany has not defaulted in repayment of dues to financial institutions or banks.
x) According to the records of the company examined by us and the information andexplanation given to us managerial remuneration has been paid/ provided by the company inaccordance with the requisite approval mandated by the provisions of section 197 read withschedule V to the companies Act.
xi) According to the information and explanation given to us and on overall examinationof the balance sheet of the company the Company has applied the term loans for thepurpose for which the loans were obtained.
xii) According to the information and explanation given to us no fraud on or by theCompany has been noticed or reported during the course of our audit.
xiii) According to information and explanation given to us and based on our examinationof the records of the company the company has not entered into non-cash transaction withdirectors or person connected with him
xiv) According to information and explanation given to us and based on our examinationof the records of the company the company has not made any preferential allotment orprivate placement of share or fully or partly convertible debenture during the year.
xv) The company is not a nidhi / chit fund company hence our comment as required underclause 3(xii) of the order not given.
xvi) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 where everapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.
xvii) The Company is not required to be registered under section 45-lA of the ReserveBank of India 1934.
For KHURDIA JAIN & CO
Firm Regn. No. 120263W
Date : 23rd May 2019
Annexure "C" to the Independent Auditor's Report to the Members of AUROLABORATORIES LIMITED on the financial statements for the year ended 31st March 2019.
Report on the Internal Financial Control under Clause (i) of Sub section 3 of section143 of the companies Act 2013 (the Act)
We have audited the internal financial control over financial reporting of AuroLaboratories Limited ("the company") as of 31st March 2019 inconjunction with our audit of the standalone financial statement of the company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial control based on the internal control over financial reporting criteriaestablish by the Company considering the essential components of the internal controlstated in the guidance note on Audit of Internal financial control over financialreporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial control that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our Responsibility is to express an opinion on the company's Internal Financial controlover financial reporting based on our audit. We conducted our audit in accordance with theguidance note on audit of Internal Financial control over financial reposting (theGuidance Note") and the standards on auditing issued by ICAI and deemed to beprescribed under section 143 (10) of the companies act 2013 to the extent applicable to anaudit of internal financial control both applicable to an audit of internal financialcontrol and both issued by the institute of chartered accountant of India. That standardand the guidance note required that we comply with ethical requirement and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialreporting was establish and maintained and if such controls operated effectively in allmatters respect.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control systems over financial reporting and their operatingeffectiveness. Our audit of internal financial control over financial reporting includedobtaining an understanding of internal financial control 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 risk of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis formy/our audit opinion on the company internal financial control systems over financialreporting.
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 purpose in accordance with generallyaccepted accounting principal. 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 transaction anddispositions of the assets of the company; (2) provide reasonable assurance thattransaction are recorded as necessary to permit preparation of financial statement inaccordance with generally accepted accounting principles and that receipts andexpenditure 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 acquisitions use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitation of Internal Financial Control over financial reporting
Because of the inherent limitation 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. Alsoprojection of any evaluation of the internal financial control over financial reporting tofuture periods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance 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 March 31 2019 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.
For KHURDIA JAIN & CO
Firm Regn. No. 120263W
Date : 23rd May 2019