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Fredun Pharmaceuticals Ltd.

BSE: 539730 Sector: Health care
NSE: N.A. ISIN Code: INE194R01017
BSE 09:49 | 23 Sep 603.90 43.40
(7.74%)
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637.00

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637.00

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590.60

NSE 05:30 | 01 Jan Fredun Pharmaceuticals Ltd
OPEN 637.00
PREVIOUS CLOSE 560.50
VOLUME 36591
52-Week high 637.00
52-Week low 215.00
P/E 55.00
Mkt Cap.(Rs cr) 241
Buy Price 602.05
Buy Qty 5.00
Sell Price 604.30
Sell Qty 3.00
OPEN 637.00
CLOSE 560.50
VOLUME 36591
52-Week high 637.00
52-Week low 215.00
P/E 55.00
Mkt Cap.(Rs cr) 241
Buy Price 602.05
Buy Qty 5.00
Sell Price 604.30
Sell Qty 3.00

Fredun Pharmaceuticals Ltd. (FREDUNPHARMA) - Auditors Report

Company auditors report

TO the Members of FREDUN PHARMACEUTICALS LTD.

Report on the Ind AS Financial Statements

1. Opinion

We have audited the accompanying Financial Statements of FREDUN PHARMACEUTICALSLIMITED ("the Company") which comprise the Balance Sheet as at March31 2020 the Statement of Profit and Loss (including comprehensive income) Cash FlowStatement and the statement of changes in Equity for the year then ended and summary ofsignificant accounting policies and other explanatory information (herein referred to as"Ind AS Financial Statements")

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2020 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on that date

2. Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.

3. Information Other than the Standalone Financial Statements and Auditor's ReportThereon

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's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the Standalone Financial Statements and our auditor's report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress 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 standalone Financial Statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

4. Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. This responsibilitalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Financial Statements management 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

5. Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs specified under section 143(10) we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

i) Identify and assess the risks of material misstatement of the standalone 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.

ii) 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 with reference to financial statements inplace and the operating effectiveness of such controls

iii) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management

iv) Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 Standalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

v) Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Standalone Financial Statements.

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 with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication

II. Report on Other Legal and Regulatory Requirements

A. As required by Section 143(3) of the Act based on our audit we report that:

i. 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

ii. 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.

iii. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account

iv. In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014

v. On the basis of the written representations received from the directors as on March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.

vi. 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 A". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls with reference to financial statements.

vii. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

viii. 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:

a. The Company has disclosed the impact of pending litigations on its financialposition in its Financial Statements

b. The company did not have any long-term contracts including derivatives contracts forwhich there were any material foreseeable losses.

c. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

B. 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 "AnnexureB" a statement on the matters specified in paragraphs 3 and 4 of the Order.

Place: Mumbai For SAVLA & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REG. NO - 109361W
DEEPAK G. SAVLA
(PARTNER)
Date: 29th July 2020 Membership No.: 043901

Annexure A to the Auditors Report

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 FREDUNPHARMACEUTICALS LTD. ("the Company") as of March 312020 in conjunction with ouraudit of the 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 ('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 Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 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 systemover 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 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial 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.

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 31 March 2020 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.

Place: Mumbai For SAVLA & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REG. NO - 109361W
DEEPAK G. SAVLA
(PARTNER)
Date: 29th July 2020 Membership No.: 043901

Annexure B to the Auditors Report

The Annexure as referred in paragraph 1 under ‘Report on Legal and RegulatoryRequirements' of our

Independent Auditors Report to the members of the Company on the financial statementsfor the year ended 31 March 2020 we report that:

(i) Fixed Assets

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of Property Plant and Equipment.
(b) During the year the Property Plant and Equipment of the company have been physically verified by the management as per the regular programme of verification which in our opinion is reasonable having regard to the size of the company and the nature of its assets. As informed no material discrepancies were noticed on such verification.
(c) The title deeds of the immovable properties are partially held by the company and partially mortgage. Details of the same are attached herewith marked as 'Annexure C'

(ii) Inventories

(a) The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable

(b) On the basis of our examination of the records of inventory we are of the opinionthat the company is maintaining proper records of inventory. The discrepancies noticed onverification between the physical stocks and the book records were not material.

(iii) Loans Granted

The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (C) of theOrder are not applicable to the Company and hence not commented upon

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013In respect of loans investments guarantees and security.

(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from public within the meaning of directives issuedby Reserve Bank of India and the provisions of Section 73 to 76 of the Companies Act 2013or any other relevant provisions of Companies Act and the Rules framed there under. Hencethe Companies (Acceptance of Deposit) Rules 2015 with regard to the deposits acceptedfrom the public are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where the maintenance of cost records has been specified by the CentralGovernment under sub - section (1) of Section 148 of the Act and the rules framed thereunder and we are of the opinion that prima facie the prescribed accounts and records havebeen maintained. However we have not made detailed examination of cost records with aview to determine whether they are accurate or complete.

(vii) Statutory Dues

(a) According to the records of the company the company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees' state insurance income-tax Goods and Service tax duty of customs cessand any other material statutory dues applicable to it.

(b) According to the records of the company there are no dues of income tax of salestax or service tax or duty of customs or duty of excise or value added tax Goods andService tax which has not been deposited on account of any dispute.

(viii) Based on our audit procedures and on the information and explanations given bythe management we are of the opinion that the company has not defaulted in repayment ofloans or borrowing to a financial institution bank Government or dues to debentureholders.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) and term loans were applied for the purposes for whichthose are raised.

(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 explanation given to us we have neither come acrossinstance of material fraud or on the company by its officers or employees noticed orreported during the year nor have we been informed of any such instances by themanagement.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct

(xii) In our opinion and according to the information and explanation given to us thecompany is not a chit fund or a nidhi mutual benefit fund/society. Therefore theprovisions of clause 4 (xii) of the Companies (Auditors Reports) Order 2013 are notapplicable to the company.

(xiii) According to the information and explanations given by the management and basedon our examination of records of the company transaction entered into by the company withthe related parties are in compliance with Sections 177 and 188 of the Act whereapplicable.

The details of related party transaction have been disclosed in the financial statementas required under Indian Accounting Standards (Ind AS) 24 Related party Disclosuresspecified under section 133 of the Act read with relevant rules issued thereunder

(xiv) Based on our audit procedures and on the information and explanations given bythe management the company has not made preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.

(xv) Based on our audit procedures and on the information and explanations given by themanagement we are of the opinion that the company has not entered into any non-cashtransactions with directors or persons connected with him.

(xvi) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.

For SAVLA & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REG. NO - 109361W
DEEPAK G. SAVLA
Place: Mumbai (PARTNER)
Date: 29th July 2020 Membership No.: 043901

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