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JHS Svendgaard Laboratories Ltd.

BSE: 532771 Sector: Consumer
NSE: JHS ISIN Code: INE544H01014
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VOLUME 5270
52-Week high 33.40
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Mkt Cap.(Rs cr) 143
Buy Price 0.00
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OPEN 21.50
CLOSE 21.60
VOLUME 5270
52-Week high 33.40
52-Week low 19.45
P/E
Mkt Cap.(Rs cr) 143
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

JHS Svendgaard Laboratories Ltd. (JHS) - Auditors Report

Company auditors report

To the Members of

JHS Svendgaard Laboratories Limited

Report on the Audit of the standalone Financial statements

Opinion

We have audited the Standalone Financial Statements of JHssvendgaard Laboratories Limited ("the Company") which comprise the balancesheet as at 31st March 2021 and the statement of Profit and Loss (including othercomprehensive income) statement of changes in equity and statement of cash flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2021 and profit and Total comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 ("the ICAI") together with the ethical requirements that are relevant toour audit of the financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

We have determined the matter described below to be the key auditmatters to be communicated in our report.

Key Audit Matter Auditor's response
1 Revenue Recognition Principal Audit procedures
Revenue from the sale of goods (hereinafter referred to as "Revenue") is recognized when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer which is mainly upon delivery. The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance. Our audit approach was a combination of test of internal controls and substantive procedures including:
Refer Note 2(a) to the Standalone Financial Statements - Significant Accounting Policies • Assessing the appropriateness of the Company's revenue recognition accounting policies in line with Ind AS 115 ("Revenue from Contracts with Customers") and testing thereof.
• Evaluating the design and implementation of Company's controls in respect of revenue recognition.
• Testing the effectiveness of such controls over revenue cut off at year- end.
• We performed substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents which included goods dispatch notes and shipping documents.
• Performing analytical procedures on current year revenue based on monthly trends and where appropriate conducting further enquiries and testing.
Based on the above procedure performed the recognition and measurement of revenue from sale of goods are considered to be adequate and reasonable.

Information Other than the Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the Director's Report includingAnnexures Management Discussion and Analysis Corporate Governance Report and otherCompany related information (but does not include the standalone financial statements andour auditor's report thereon) These reports are expected to be made available to us afterthe date of this auditor's report.

Our opinion on the standalone financial statements does not cover theother information and we do not and will not express any form of assurance conclusionthereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read the other information if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance and take appropriate action if required.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these 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 accounting principles generally accepted in India including the Indian AccountingStandards specified under Section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the 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.

Those Board of Directors are also responsible for overseeing thecompany's financial reporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF FINANCIAL STATEMENTS

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

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances butnot for the purpose of expressing an opinion on the effectiveness of the entity's internalcontrols. Under Section 143(3)(i) of the Act we are also responsible for expressing ouropinion on whether the Company has adequate internal financial controls system in placeand the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• 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.

Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the resultsof our work; and

(ii) to evaluate the effect of any identified misstatements in thefinancial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act based on our audit wereport to the extent applicable that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss (includingOther Comprehensive Income) Statement of Changes in Equity and the Statement of Cash Flowdealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act;

(e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of Section 197(16) of the Act as amended

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of Section 197 of the Act.

(i) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 36 to the standalone financialstatements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

Annexure "A"

Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirements' section of the Independent Auditor's

Report of even date to the members of JHS Svendgaard LaboratoriesLimited on the standalone Ind AS financial statements as of and for the year ended 31stMarch 2021.

(i) (a) The Company has maintained proper records showing fullParticulars including quantitative details and situation of fixed assets {comprising ofproperty plant and equipment and other intangible assets}.

(b) The fixed assets comprising of (property plant and equipment andother intangible assets ) are physically verified by the management according to a phasedprogramme designed to cover all items over a period of three years which in our opinionis reasonable having regard to the size of the Company and the nature of its assets.Pursuant to the programme a portion of the fixed assets has been physically verified bythe management during the year and no material discrepancies have been noticed on suchverification.

(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed providedto us we report that the title deeds of all the freehold immovable properties which areincluded under the head 'fixed assets'{comprising of property plant and equipment andother intangible assets} are held in the name of the Company.

(ii) The management has conducted physical verification of inventory atreasonable intervals during the year According to the information and explanations givento us no material discrepancies were noticed on the aforesaid verification.

(iii) According to the information and explanations given to us theCompany has granted interest free Unsecured loans to companies covered in the registermaintained under Section 189 of the Act; and with respect to the same:

(a) in our opinion the terms and conditions of grant of such loans arenotprima facie prejudicial to the company's interest;

(b) no repayment schedule has been specified and accordingly thequestion of regularity in repayment of principal amount does not arise. Further as statedabove these loans are interest free and repayment of interest does not arise.

(c) in the absence of stipulated schedule of repayment of principal andpayment of interest we are unable to comment as to whether there is any amount which isoverdue for more than 90 days and whether reasonable steps have been taken by the Companyfor recovery of the principal amount and interest.

(iv) In our opinion and according to the information and explanationsgiven to us Company has complied with the provisions of Sections 185 and 186 of the Actin respect of loans investments guarantees and security.

(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits during the year and had nounclaimed deposits at the beginning of the year within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.

(vi) According to the information and explanations given to us theCentral Government has not specified maintenance of cost records under sub-section (1) ofSection 148 of the Act in respect of Company's products/ services. Accordingly theprovisions of clause 3(vi) of the Order are not applicable.

(vii (a) According to the information and explanations given to us theCompany is regular in depositing undisputed statutory dues including provident fundemployees' state insurance income-tax sales-tax service tax duty of customs duty ofexcise value added tax cess goods and services tax and other material statutory duesas applicable to the appropriate authorities though there has been a slight delay in afew cases. Further no undisputed amounts payable in respect thereof were outstanding atthe year-end for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us the duesoutstanding in respect of income-tax sales-tax service tax duty of customs duty ofexcise value added tax and goods and services tax on account of any dispute are asfollows.

Name of the statute Nature of dues Amount (Rs. in Lacs) Amount paid under Protest (Rs. in Lacs) Period to which the amount relates Forum where dispute is pending
Sales Tax Act Sales tax (VAT/ CST) 4.20 0.50 2009-10 Additional Excise & Taxation Commissioner Cum Appellate Authority (SZ) Shimla

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans to banks and financialinstitution. The Company does not have any loans or borrowings from any government ordebenture holders during the year.

(ix) In our opinion and according to the information and explanationsgiven to us the Company did not raise moneys by way of initial public offer or furtherpublic offer (including debt instruments) and did not have any term loans outstandingduring the year. Accordingly the provisions of clause 3(ix) of the Order are notapplicable.

(x) To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the period covered by our audit.

(xi) In our opinion and according to the information and explanationsgiven to us managerial remuneration has been provided by the Company in accordance withthe requisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act.

(xii) The Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us all transactions with the related parties are in compliance with Sections 177and 188 of Act where applicable and the requisite details have been disclosed in thefinancial statements etc. as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us duringthe year the Company has made preferential allotment or private placement of shares byway of conversion of warrants. In respect of the same in our opinion the Company hascomplied with the requirement of Section 42 of the Act and the Rules framed thereunder.Further in our opinion the amounts so raised have been used for the purpose for whichthe funds were raised.

(xv) In our opinion and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with the directorsor persons connected with them covered under Section 192 of the Act. Accordinglyprovisions of clause3 (xv) of the order are not applicable.

(xvi) The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly provisions of clause3 (xvi) of theorder are not applicable.

Annexure "B"

Independent Auditor's report on the Internal Financial Controls withreference to financial statements under Clause (i) of

Sub-section 3 of section 143 of the companies Act 2013 ("theAct")

1. We have audited the internal financial controls with reference tofinancial statements of JHS Svendgaard Laboratories Limited ("theCompany") as of 31st March 2021 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing andmaintaining internal financial controls based on internal financial controls withreference to financial statements. These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of the company's businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by the Institute of Chartered Accountants of India (ICAI) and deemed tobe prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI.. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements were established and maintained and if such controls operated effectively inall material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial 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 judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to FinancialStatements

6. A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference toFinancial Statements

7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequateinternal financial controls system with reference to financial statements and suchinternal financial controls with reference to financial statements were operatingeffectively as at 31st March 2021 based on the internal financial control with referenceto financial statements.

For S.N. Dhawan & Co LLP
Chartered Accountants
Firm Registration No.: 000050N/N500045
per surinder Kr. Khattar
Partner
Place: New Delhi Membership No: 084993
Date: 22nd June 2021 UDIN: 21084993AAAACU2360

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