TO THE MEMBERS OF FREDUN PHARMACEUTICALS LIMITED
Report on the Financial Statements
1) We have audited the accompanying financial statements of Fredun PharmaceuticalsLimitedwhich comprise the Balance Sheet as at 31 st March 2016the Statement of Profitand Lossthe Cash Flow Statement for the year then ended on that dateand a summary ofsignificant accounting policies and other explanatory informationwhich we have signedunder reference to this report
Managements Responsibility for the Financial Statements
2) The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial positionfinancialperformance and cash flow of the Company in accordance with the accounting principlesgenerally accepted in Indiaincluding the Accounting Standards specified under Section 133of the Actread with Rule 7 of the Companies (Accounts) Rules2014.This responsibilityalso includes the maintenance of adequate accounting records in accordance with theprovision of the Act for safeguarding of the assets of the Company and for preventing anddetecting the frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesignimplementation and maintenance of internal financial controlthat were operatingeffectively for ensuring the accuracy and completeness of the accounting recordsrelevantto the preparation and presentation of the financial statements that give a true and fairview and are free from material misstatementwhether due to fraud or error.
3) Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.We have taken into account the provisions of the Actthe accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder.
4) We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act.Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
5) An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements.The procedures selected depend on theauditor's judgmentincluding the assessment of the risks of material misstatement of thefinancial statementswhether due to fraud or error.In making those risk assessmentstheauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances.An audit also includes evaluating the appropriatenessof accounting policies used and the reasonableness of the accounting estimates made byCompany's Directorsas well as evaluating the overall presentation of the financialstatements.
6) We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
7) In our opinion and to the best of our information and according to the explanationsgiven to usthe aforesaid financial statementsgive the information required by the Act inthe manners required and give a true and fair view in conformity with the accountingprinciples generally accepted in India;
a) In the case of the Balance Sheetof the state of affairs of the Company as at March312016;
b) In the case of the Statement of Profit and Lossof the profit for the year ended onthat date; and
c) In the case of the Cash Flow Statementof the cash flows for the year ended on thatdate.
Emphasis of Matter
8) In our opinion & to the best of our information & according to theexplanations given to usattention is drawn to the followingin respect of these financialstatements
a) Cost Audit is not applicable to the companyas per provisions of section 148( 1) ofthe Act.
b) In accordance with the requirements for disclosure of amounts due to SSI unitsasper "MicroSmall and Medium Enterprises Development Act2006" the company hasnot complied the list of its sundry creditors who satisfy this criterion.Our opinion isnot qualified in respect of these matters.
Report on other Legal and Regulatory Requirements
9) As required by the companies (Auditor's Report) 0rder2003as amended by 'theCompanies (Auditor's Report) (Amendment) Order 2004Issued by the Central Goverment ofIndia in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to asthe "Order")and on the basis of such checks of books of accounts and the recordof the company as we considered appropriate and according to the information andexplanation given to uswe give in Annexure a statement of the matters specified in theparagraphs 4 and 5 of the Order.
10) As required by section 227(3) of the Actwe 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 appears from our examination of those books
c) The Balance Sheetthe Statement of Profit and Lossand Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
d) In our opinionthe aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Actread with Rule 7 of theCompanies(Accounts) Rules2014.
e) On the basis of written representations received from the directors as on 31March2016taken on record by the Board of Directorsnone of the directors is disqualifiedas on 31 st March2016from being appointed as a director in terms of Section 164(2) ofthe Act.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 8 of the Our Report under "Report on Other Legal &Regulatory Requirements" section of our report of even dateyear ended 31st March2016.)
(I) In respect of Fixed Assets:
(a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) As explained to usfixed assets have been physically verified by the management atreasonable intervals no material discrepancies were noticed on such verification.
(c) Some of the immovable properties are mortgaged with banks against which securedloans are availed.The details of the same are attached herewith.Rest of the properties areheld in the name of the company.
(II) In respect of its Inventory:
(a) As explained to us inventories of finished goodswork in processand raw materialshave been physically verified during the year by the management at reasonable intervals.
(b) In our opinion and on the basis of our examination of the records of inventorythecompany is generally maintaining proper records of its inventories.The discrepanciesnoticed on physical verification of stock by the managements as compared to book recordswere not material.
(III) Reporting on repayment of loans granted by the Company
During the year the company has obtained any loans from companiesfirms or otherparties covered under register maintained under section 189 of the companiesAct2013.Accordingly a resolution is passed in a general meeting and the conditions asprescribed in the rules are duly complied with.
(IV) Internal Control System
In our opinion and according to the information and explanations given to usthere isgenerally an adequate internal control procedure commensurate with the size of the companyand the nature of its business for purchase of inventories & fixed assets and paymentfor expenses & for sale of goods during the course of our audit no major instance ofcontinuing failure to correct any weaknesses in the internal controls has been noticed.
(V) Acceptance of Deposits
In our opinion and according to the information and explanations given to usthecompany has not accepted any public depositsand hence the directives issued by theReserve Bank of India and the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act and the rules framed there underare not applicable to thecompany.
(VI) Cost Records
In our opinion and according to the information and explanations given to usthecompany is not covered under cost audit.Howeverthe company has maintained cost records asspecified by central Government under sub-section (I) of section 148 of the Companies Act.
(VII) Payment of Applicable Taxes
(a) According to the records of the company undisputed statutory dues includingProvident FundInvestor Education and Protection FundEmployees State InsuranceIncome -tax.Sales - tax.Custom DutyExcise Dutycess to the extent applicable and any otherstatutory dues have generally been regularly deposited with the appropriate authorities.
(b) According to the Information and explanations given to us there were no outstandingstatutory dues as on 31 st of March 2015for a period of more than six months from thedate they became payable.
(c) According to the information and explanations given to us there is no amountspayable in respect of income taxwealth tax.Service taxSales taxcustoms duty and exciseduty which have not been deposited on account of any disputes.
(VIII) Accumulated Losses:
The Company does not have any accumulated losses at the end of the financial year andhas not incurred any cash losses during the financial year covered by audit and theimmediately preceding financial year.
(IX) Default in Re-payment of Dues:
Based on our audit Procedures and on the information and explanations given by themanagementwe are of the opinion that the company has not defaulted in repayment of duesto a financial institutionbank or debenture holders.
(X) Guarantee for Loan Taken
In our opinion and according to the information and explanations given to usthecompany has not given any guarantee for loans taken by others from bank or financialinstitutions.
(XI) Applicability of Term Loan
In our opinion and according to the information and explanations given to usthe termloans borrowed by the company were applied for the purpose for which the loans wereobtained.Further we would also like to report that the company has ended the loan availedat high rate and instead availed a loan from another bank at low rate.Accordingly companyhas paid pre closure charges of about Rs.6.33Lakhs
(XII) Reporting of Fraud
Based on the audit Procedures performed and the information and explanations given touswe report that no fraud on or by the company has been noticed or reported during theyearnor have we been informed of such case by the management.
FOR SAVLA & ASSOCIATES
Kinjal Rishabh Sawla