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Godavari Drugs Ltd.

BSE: 530317 Sector: Health care
NSE: N.A. ISIN Code: INE362C01012
BSE 00:00 | 21 Jan 66.15 -1.05
(-1.56%)
OPEN

66.20

HIGH

67.60

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65.10

NSE 05:30 | 01 Jan Godavari Drugs Ltd
OPEN 66.20
PREVIOUS CLOSE 67.20
VOLUME 6624
52-Week high 83.60
52-Week low 38.10
P/E 10.10
Mkt Cap.(Rs cr) 50
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 66.20
CLOSE 67.20
VOLUME 6624
52-Week high 83.60
52-Week low 38.10
P/E 10.10
Mkt Cap.(Rs cr) 50
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Godavari Drugs Ltd. (GODAVARIDRUGS) - Auditors Report

Company auditors report

ON THE AUDIT OF THE FINANCIAL STATEMENTS

To the Members of Godavari Drugs Limited Hyderabad Telangana.

Opinion

We have audited the financial statements of Godavari Drugs Limited ("theCompany") which comprise the balance sheet as at March 31 2021 and the statementof profit and loss and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the Indian Accounting Standards prescribed under section 133 of the Companies Act2013 read with Companies (Indian Accounting Standards) Rules 2015 as amended (Ind AS)and other accounting principles generally accepted in India of the state of affairs ofthe Company as at March 31 2021 and its profit and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the 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.

Sl. No. Key Audit Matter Auditor's Response
1. Disputed Tax Demands
The company is in dispute in respect of demands from revenue authorities viz. Service Tax and Central Excise to the extent of Rs.20.28 lakhs (Previous Year Rs.27.24 Lakhs) The matter is in appeal before the appellate/ judicial authorities The company has made a payment of part of the amount pending outcome of the appeal and the same is accounted for as an advance (Current Assets).This position involves uncertainty about the possible outcome of these disputes and consequent recovery of the part payments so made. We have obtained and considered an expert opinion on the matters involved in these appeals and also the judicial precedents. We have evaluated the same to assess whether there should be a change in the management's position on the sustainability and recoverability of the amounts paid against the disputed demands

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's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.

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 the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained duringthe course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

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 financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the accounting Standards specified undersection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the 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.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also: a. Identify and assessthe risks of material misstatement of the financial statements whether due to fraud orerror design and perform audit procedures responsive to those risks and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control. b. Obtain an understanding ofinternal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 weare also responsible for expressing our opinion on whether the company has adequateinternal financial controls system in place and the operating effectiveness of suchcontrols. c. Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management. d.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 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. e. Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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

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 ‘A' 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

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

(e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164(2) of the Act. (f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(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. theCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements – Refer Note 1. (8) to the financial statements; ii. the Companydid not have any long-term contracts including derivative contracts for which there wereany material foreseeable losses iii. there were no amounts which were required to betransferred to the Investor Education and Protection Fund by the Company.

For V.Sridhar& Co.
Chartered Accountants
FRN: 006206S
Vemulapati Sridhar
Proprietor
ICAI Membership No. 202337.
Secunderabad. June 16 2021.
UDIN : 21202337AAAACY8751

Reg: Godavari Drugs Limited year ended March 31 2021. ANNEXURE "A" TO THEINDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 of the Report of even date under the heading Report onOther Legal and Regulatory Requirements)

1. (a) Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) Fixed assets have been physically verified by the management during the year and nomaterial discrepancies between the book records and the physical inventory have beennoticed. In our opinion the frequency of verification is reasonable.

(c) The title deeds of immovable properties are held in the name of the company.

2 (a) The physical verification of inventory excluding stocks with third parties havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Inour opinion the frequency of verification is reasonable.

(b) On the basis of our examination of the inventory records the company ismaintaining proper records of inventory. The discrepancies noticed on physicalverification of inventory as compared to book records have been properly dealt with by thecompany.

3. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the registers maintained under Section 189 of the Act. Thusparagraph 3(iii) of the Order is not applicable.

4. The company has not granted any loan to directors or made investments provided anyguarantees and securities and paragraph 3(iv) of the Order are not applicable. As suchthe non-compliance of Section 185 and 186 of the Companies Act 2013 does not arise.

5. The Company has taken unsecured loans from relatives of Directors to avail thefacility of working capital from bank and as such the company has to comply with theprovisions of Sections 73 to 76 of Companies Act 2013 and the rules and notificationsframed there under to the extent notified.

6. We have broadly reviewed the books of accounts maintained by the Company pursuant tothe rules made by the Central Government for maintenance of cost records under sub-section(1) of Section148 of the Act in respect of its products and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. However we havenot carried out detailed examination of the records with a view to determine whether theseare accurate or complete.

7. (a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax sales tax value added tax wealth tax service tax custom duty excise duty cessand other material statutory dues as applicable to it with appropriate authorities. Thereare no undisputed statutory dues payable for a period of more than six months from thedate they became payable as at March 31 2021 (b) According to the information andexplanations given to us and the records of the company examined by us there are no duesof income tax wealth tax service tax customs duty and cess as at March 31 2021 whichhas not been deposited on account of a dispute except as under:

Rs. In lakhs.
Sl. Name of No. the Statute Nature of the due Amount Claim period Authority before whom Dispute pending Deposit made against the disputed amount
1. Customs Act 1962 Customs Duty 16.30 2008-09 to 2013-14 CESTAT- Mumbai 2.50
2. Central Excise Act Service Tax 3.98 2014-15 CESTAT – Mumbai 0.18

8. According to the information and explanations given to us and records of the companyexamined by us the company has not defaulted in repayment of dues to any financialinstitution or bank or debenture holders as at the Balance Sheet date.

9. The Company has not raised any moneys by way of initial public offer further publicoffer (including debt instruments) and term loans. Accordingly the provisions of Clause3(ix) of the Order are not applicable to the Company.

10 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 its officers or employeesnoticed or reported during the year.

11 The company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

12. As the company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the company.

13. The company has entered into transactions with related parties in compliance withthe provisions of Section 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required by the relevantAccounting Standards.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause3(xiv) of the Order are not applicable to the Company.

15. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company. 16. The Company is not required to be registered underSection 45-IA of the Reserve Bank of India Act 1934. Accordingly the provisions ofClause 3(xvi) of the Order are not applicable to the Company.

For V. Sridhar & Co.
Chartered Accountants
FRN: 006206S
Vemulapati Sridhar
Proprietor
ICAI Membership No. 202337.
Secunderabad. June 16 2021.
UDIN : 21202337AAAACY8751

Reg: Godavari Drugs Limited year ended March 31 2021. ANNEXURE "B" TO THEINDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2(f) of the report of even date under the heading‘Report on Other Legal and Regulatory Requirements') Report on the Internal FinancialControls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act") We have audited the internal financial controlsover financial reporting of GODAVARI DRUGS LIMITED ("the Company") as of March31 2021 in conjunction with our audit of the financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe internal financial controls system over financial reporting of the Company.

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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

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 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 March 31 2021 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.

For V.Sridhar& Co.
Chartered Accountants
FRN: 006206S
Vemulapati Sridhar
Proprietor
ICAI Membership No. 202337.
Secunderabad. June 16 2021.
UDIN : 21202337AAAACY8751

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