The Members of
Concord Drugs Limited
Report on the Ind AS Financial Statements
We have audited the accompanying Ind As financial statements of Concord Drugs Limited(" The company") which comprise the balance sheet as at 31 March 2018 thestatement of Profit and loss including other comprehensive income the statement of cashflows and the statement of changes in equity for the year then ended and a summary of thesignificant accounting policies and other explanatory information (here in after referredto as the "Ind AS financial statements").
Management's responsibility forthelndAS financial statements
The Company's Board of directors is responsible for the matters stated in section134(5) of the Companies Act (the Act) with respect to the preparation of these Ind ASfinancial statements that give a true and fair View of the financial position financialperformance including other comprehensive income cash flows and changes n equity 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 wit relevant rules there under.
This responsibility also includes maintenance of Adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the company forpreventing and detecting frauds and other irregularities selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and designed 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 the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due 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 the Auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the rules made there under.
We conducted our audit in accordance with the standards on Auditing specified undersection 143(10) of the Act and other applicable authoritative pronouncements issued by theinstitute of chartered Accountants of India.
The standards and pronouncements require that we comply with the ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether the Ind ASfinancial statements are free from material misstatement.
Auditors responsibility (Continued):
An audit involves performing procedure to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedure selected depend on theauditors judgement including the assessment of the Risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considered the internal financial control relevant to thecompany's preparation of the Ind AS financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the company's directors as well asevaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence that we have obtained is sufficient and appropriateto provide basis for 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 afore said 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 including the Ind AS of the financialposition of the company as at 31- 03-2018and its profit including other comprehensiveincome its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter paragraph:
1. Company has unsecured loans of Rs.355.98 lakhs as outstanding balance as on balancesheet date of which Rs.241.69 Lakhs received from other than directors. Out of the balanceamount from directors of Rs. 114.29 Lakhs Rs. 80.75 has been classified as other Equityduring the year.
2. The stock of Raw materials work in progress finished goods and packing materialworth of Rs.1861.94 Lakhs are subject to management confirmations
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 section 143(11) of the Act we givein the "Annexure- A" a statement on the matters specified in paragraphs 3 and 4of the Order.
2. As required by the 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 where necessary for the purpose ofouraudit;
(b) In our opinion proper books of accounts as required by the law have been kept bythe company 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 statement of cash flows and the statement of changes in equity dealt with bythis Report are in agreement with the books of Account
The balance sheet the statement of profit and loss including other comprehensiveIncome the statement of cash flows and the statement of changes in equity dealt with bythis Report are in agreement with the books of Account
(d) In our opinion the afore said Ind AS financial statements complied with theaccounting standards specified under section 133 of the Act read with relevant rulesissued there under;
(e) on the basis of the written representative received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 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 over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B"; and
(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 in our opinionand to the best of our information and according to the explanations given to us:
(i) The company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements-Refer note 2.4 of the IND AS financialstatements;
(ii) The company has long-term contracts other than derivative contracts for whichthere were no material foreseeable losses;
(iii) There were no amounts which were required to be transferred to the investorEducation and Protections Fund by the company; and
For N G Rao & Associates Chartered Accountants Firm Registration No.:009399S
(N Nageswara Rao) Partner
Membership No: 207300
Place: Hyderabad Date: 30-05-2018
Annexure-A to the Auditors' Report
The Annexure-A referred to in our Independent Auditors' Report to the members of theCompany on the financial statements for the Year ended 31 March 2018 we reportthat:
i. (a) The Company has not maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) The title deeds of the immovable property are held in the name of the company.
(c) The management has not performed physical verification of the Fixed assets duringthe year.
ii. The physical verification of the inventory excluding stocks with third parties hasnot been conducted at reasonable intervals by the management.
iii. The Company has not granted any loans to bodies corporate covered in the registermaintained under section 189 of the Companies Act 2013 ('theAct').
iv. 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 Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
v. The Company has not accepted any deposits from the public within the meaning ofsection 737475 and 76 of the Act and Rules framed there underduring the year.
vi. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
vii. a. According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Excise duty sales tax wealthtax service tax GST Customs Duty value added tax cess and other material statutorydues except as reported below have been regularly deposited during the year. The companyhas not complied with the provisions in respect of Provident fund Employees StateInsurance and TDS. However provision in the books of accounts has been made on adhocbasis.
However no undisputed amounts payable in respect of Provident fund Income Tax SalesTax Value Added Tax Service Tax GST and material statutory dues were in arrears as at31-03-2018 for a period more than six months from the date they became payable. This is asper the information and explanations given to us.
|Financial Year ||Section under which TDS due ||Amount |
|2014-15 ||194J ||210000 |
|2014-15 ||194C ||3964 |
|2015-16 ||194J ||62800 |
|2015-16 ||194C ||1036 |
|2016-17 ||194J ||296400 |
|2016-17 ||194C ||27900 |
b. According to the information and explanations given to us and on the basis of ourexaminations of records of the company there are no dues of sales tax Service tax GSTand value added tax which have not been deposited on account of any dispute. Howeveraccording to information and explanations given to us the following dues of income taxhave not been deposited by the Company on account of disputes:
|Particulars ||Demand U/s ||Period to which the amount relates ||Forum where the dispute is pending ||Amount in Rs. ||Previous year 16-17 |
|Income Tax Act 1961 ||148 ||A.Y. 2006-07 ||Commissioner of income Tax (Appeals)-ll ||11987841 ||11987841 |
|Income Tax Act 1961 ||148 ||A.Y.2007-08 ||Commissioner of income Tax (Appeals)-ll ||2244779 ||2244779 |
|Income Tax Act 1961 ||148 ||A.Y.2008-09 ||Commissioner of income Tax (Appeals)-ll ||1606275 ||1606275 |
|Income Tax Act 1961 ||143(1)a ||A.Y.2010-11 ||Jurisdictional AO ||1677610 ||1677610 |
|Income Tax Act 1961 ||250 ||A.Y.2011 -12 ||Commissioner of income Tax (Appeals)-ll ||25882270 ||38128810 |
|Income Tax Act 1961 ||143(1)a ||A.Y.2013-14 ||Jurisdictional AO ||1183700 ||1183700 |
|Income Tax Act 1961 ||143(3) ||A.Y.2014-15 ||Commissioner of income Tax (Appeals)-ll ||39064488 ||39384045 |
|Income Tax Act 1961 ||Others ||A.Y.2015-16 ||Jurisdictional AO ||1263500 ||1263500 |
viii. According to the records of the Company examined by us and on the basis ofinformation and explanation given to us the Company has delayed in repayment of loans orborrowings to the bank in some instances. The Company has neither issued debentures nortaken loans from financial institutions and Government during the year.
ix. The company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and terms loans during the year.
x. 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 anyinstance of material fraud by the company or on the company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.
xi. The company has paid/ provided managerial remuneration in accordance with requisiteapprovals mandated by the provisions of section 197 read with schedule V to the act.
xii. The company is not Nidhi Company and the Nidhi Rules 2014 not applicable to it.Accordingly the provisions of Clause 3(Xii) of order not applicable to the company.
xiii. The company has entered into transactions with related parties which are incompliance with the provisions of 177 and 188 of the Act. The details of such relatedparty transactions have been disclosed in the IND AS financial Statements as requiredunder IND AS 24 Related party Disclosures Specified under section 133 of the Act readwith Rule 7 of the companies (Accounts) rules 2014.
xiv. During the year the Company has made any preferential allotment or privateplacement of shares. Requirements of Section 42 of the companies Act 2013 regard to theissue has been complied with. The company has not issued any fully or partly convertibledebentures and hence reporting under clause 3(xiv) of the Order with respect to debenturesis not applicable to the Company.
Number of shares issued under private placement of 618000 shares @ Rs.48 (includingRs.38 of security Premium)
|Particulars ||No.of Shares ||Amount |
|S. Nagi reddy ||310000 ||14880000 |
|S.Koni reddy ||172000 ||8256000 |
|S.Manoj reddy ||136000 ||6528000 |
xv. 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 any non-cashtransaction with the directors or persons connected with him as contemplated undertheprovisions of section 192 of the Act. Accordingly Clause 3(XV) of the order is notapplicable to the company.
xvi. The company is not required to be registered under section 45-IAof the ReserveBank of India Act 1934.Accordingly clause 3(xvi) of the order is not applicable to theCompany.
For N G RAO & ASSOCIATES. Chartered Accountants FRNo.: 009399S
| ||Sd/- |
| ||G. Nageswara Rao |
|Place: Hyderabad ||Partner |
|Date: 30th May 2018 ||Membership No. 207300 |
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF CONCORD DRUGS LIMITED
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of CONCORDDRUGS LIMITED ("the Company") as of March 31 2018 in conjunction with our auditof the standalone 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 Reportingissued by the Institute of Chartered Accountants of India". 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 underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on my / our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 overfinancial reporting and theiroperatingeffectiveness.
Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement 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 Company's internal financial controls systemoverfinancial 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 reflect 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 authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting Because ofthe inherent limitations of internal financial controls overfinancial reporting includingthe possibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting to futureperiods 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 312018 based on"the internal control overfinancial 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 Accou ntants of I nd i a".
For N G RAO & ASSOCIATES.
Date: 30th May 2018
G. Nageswara Rao
Membership No. 207300