The shareholders of Choksi Laboratories Limited Indore Report on the FinancialStatements
We have audited the accompanying financial statements of Choksi Laboratories Limited("the Company") which comprise the Balance Sheet as at March 31 2018 and theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information (hereinafterreferred to as " Ind AS financial statements")
Management's Responsibility for the IND AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS Financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed undersection 133 of the Act read with the companies (Indian accounting standards) rule 2015asamended and other accounting principles generally accepted in India.
This responsibility also 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; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of Ind AS 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 Ind AS financial statements basedon our audit.
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 thereunder.
We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the IndAS financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Ind AS financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Board of Directors aswell as evaluating the overall presentation of the Ind AS financial statements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the Ind AS financial statements
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the statement of affairs of theCompany as at March 31 2018 and its profit total comprehensive income its cash flowsand the changes in equity for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by Section 143(3) of the Act based on our Audit Report we report tothe Extent applicable 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 the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act read with relevant rulesissued thereunder.
e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 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". Our Report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's Internal Financial Control overFinancial Reporting.
g) 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:
h) 1) The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements. Refernote 35 to the Ind AS financialstatements.
2) The Company deed not have any long term contract including derivatives contract forwhich there were any material foreseeable losses.
3) There were no amount which were required to be transferred to the investor education& protection fund by the company.
2 As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under Report on Other Legal and RegulatoryRequirements' of our report of even date)
REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING UNDER CLAUSE (I)OFSUB SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")
We have audited the internal financial controls over financial reporting of ChoksiLaboratories Limited ("the Company") as of 31st March 2018 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information 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 and the Standards on Auditing prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. 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 auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly respect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2018 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on audit of internal financialcontrols over financial reporting issued by the institute of chartered accountants ofIndia ("ICAI") .
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF CHOKSI LABORATORIES LIMITED
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our Report of even date)
1. In respect of its fixed assets:
The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets .
As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable having regardto the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.
According to the information and explanations given to us and the recordsexamined by us and based on the examination of the conveyance deeds provided to us wereport that the title deeds comprising of the immovable properties of land and buildingwhich are free hold and lease hold are in the name of the company as at the balance sheetdate except freehold land situated at 4/3 Manoramaganj Indore whose title is still inthe name of Director Shri Sunil Choksi having carrying value of Rs. 10 Lacs & Premiseson the said land having carring value of Rs. 82.39 Lacs.
As explained to us the inventories have been physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalverification.
3. Loan given by company
According to the information and explanations given to us the company has not grantedany loans secured or unsecured to companies firms limited liability partnerships orother parties covered in the register maintained under Section 189 of the Companies Act2013 ("the Act") in during the year.
4. Loan to directors and investment by the company
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.
According to the information and explanations given to us the Company has not acceptedany deposits under sections 73 & 76 or any or any other relevant provision ofcompanies act ("the act")and the rule framed there under. Therefore theprovisions of Clause (v) of paragraph 3 of the Order is not applicable to the Company.
6. Cost records
The Central Government has not prescribed maintenance of cost records pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended by sub section (1) of Section148 of the Companies Act 2013.
7. Statutory dues
a) According to the books of accounts and records examined by us and according togenerally accepted auditing practices in India in our opinion the company has beenregular in depositing undisputed statutory dues.
b) According to the information and explanations given to us there were no undisputedamounts payable in respect of Provident Fund Employees State Insurance Income tax SalesTax Customs Duty Excise Duty Service Tax Cess and other material statutory dues whichhave remained outstanding as at 31st March 2018 for a period of more than six months fromthe date they became payable.
c) According to the information and explanations given to us there are no Statutorydues which have not been deposited as on March 31 2018 on account of disputes except TDSdefault on Traces to the tune of Rs. 5245/-.
8. Repayments of loans
According to the information and explanations given to us the company has notdefaulted in repayment of dues to financial institutions or banks. The Company does nothave any loans from Government and has not issued any debentures during the year.
9. Utilization of funds
During the year The Company has not raised money by way of initial public offer orfurther public offer (including debt instruments). The Term Loans availed were applied forthe purposes for which they are raised.
10. Reporting of frauds
According to the information and explanations given to us no material fraud on or bythe Company has been noticed or reported during the year under audit.
11. Approvals of managerial remuneration
According to the information and explanations give to us and based on our examinationof the records of the Company the Company has paid/provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.
12. Nidhi Company
In our opinion the company is not a chit fund or a Nidhi mutual benefit fund/ society.Therefore the provisions of clause (xii) of Para 3 of the said order are not applicableto the company.
13. Related party transaction
According to the information and explanations given to us and based on our examinationof the records of the Company transactions with the related parties are in compliancewith sections 177 and 188 of the Act where applicable and details of such transactionshave been disclosed in the financial statements as required by the applicable accountingstandards.
14. Private Placement or preferential allotment
According to the information and explanations give to us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year
15. Non cash transaction
According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into non-cash transactions withits directors or persons connected with him. Accordingly paragraph 3(xv) of the Order isnot applicable.
16. Registration of Reserve Bank of India ( RBI) act 1934
The Company is not required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934.