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JHS Svendgaard Laboratories Ltd.

BSE: 532771 Sector: Consumer
NSE: JHS ISIN Code: INE544H01014
BSE 11:08 | 18 May 22.25 0.05
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22.25

HIGH

22.95

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21.70

NSE 10:59 | 18 May 22.05 -0.10
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22.00

HIGH

23.10

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21.95

OPEN 22.25
PREVIOUS CLOSE 22.20
VOLUME 7730
52-Week high 33.30
52-Week low 9.06
P/E 16.73
Mkt Cap.(Rs cr) 143
Buy Price 21.80
Buy Qty 455.00
Sell Price 22.25
Sell Qty 850.00
OPEN 22.25
CLOSE 22.20
VOLUME 7730
52-Week high 33.30
52-Week low 9.06
P/E 16.73
Mkt Cap.(Rs cr) 143
Buy Price 21.80
Buy Qty 455.00
Sell Price 22.25
Sell Qty 850.00

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 JHS SvendgaardLaboratories Limited ("the Company") which comprise the balance sheet as at 31March 2020 and the statement of Profit and Loss (including other comprehensive income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand 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 31 March 2020 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 evidencewe have 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.

Sr. No Key Audit Matter Auditor's Response
1 Revenue Recognition Principal Audit Procedures
Revenue from the sale of goods (hereinafter Our audit approach was a combination of test of internal controls
referred to as "Revenue") is recognised when and substantive procedures including:
the Company performs its obligation to its Assessing the appropriateness of the Company's revenue
customers and the amount of revenue can recognition accounting policies in line with Ind AS 115
be measured reliably and recovery of the ("Revenue from Contracts with Customers") and testing
consideration is probable. The timing of such thereof.
Evaluating the design and implementation of Company's
recognition in case of sale of goods is when
controls in respect of revenue recognition.
the control over the same is transferred to the
Testing the effectiveness of such controls over revenue cut
customer which is mainly upon delivery. The off at year-end.
timing of revenue recognition is relevant to We performed substantive testing by selecting samples of
the reported performance of the Company. revenue transactions recorded during the year by verifying
The management considers revenue as a key the underlying documents which included goods dispatch
measure for evaluation of performance. notes and shipping documents.
Performing analytical procedures on current year revenue
Refer Note 2(a) to the Standalone Financial based on monthly trends and where appropriate conducting
Statements - Significant Accounting Policies 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'sReport Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the Director'sReport including Annexures Management Discussion and Analysis Corporate GovernanceReport and other company related information (but does not include the standalonefinancial statements and our auditor's report thereon) These reports are expected tobe made available to us after the 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 mattersstated in Section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken 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 the 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.

Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances but not for thepurpose 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 theCompany to 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. consider quantitative materiality and qualitative factors in (i) planning thescope of our audit work and in evaluatingspecified under Section 133 of the Act; theresults of our work; and (ii) to evaluate the effect of any identified misstatements inthe financial 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 publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would 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) Order2016 ("the Order") issued by the Central Government of India in terms ofsub-section (11) of Section 143 of the Act we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

2. As required by Section 143(3) of the Act based on our auditwe report 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

Flow dealt with by this Report are in agreement with the books ofaccount;

(d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards

(e) On the basis of the written representations received from thedirectors as on 31 March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2020 from being appointed as a director in termsof 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 theAuditor's Report in accordance with the requirements of Section 197(16) of the Actas 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 theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements Refer Note 37 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.

For S.N. Dhawan & Co LLP
Chartered Accountants
Firm Registration No.: 000050N/N500045
per S.K. Khattar
Partner
Place: New Delhi Membership No.: 084993
Date: 23 June 2020 UDIN 20084993AAAACA7251

Annexure "A"

1. Referred to in paragraph 1 under ‘Report on Other Legaland Regulatory Requirements' section of the Independent Auditor's Report of evendate to the members of JHS Svendgaard Laboratories Limited on the standalone Ind ASfinancial statements as of and for the year ended 31 March 2020.

(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 andequipment and other 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 arenot prima 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 subsection (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 usthe Company is regular in depositing undisputed statutory dues including provident fundemployees' state insurance income-tax sales-tax service tax duty of customs dutyof excise value added tax cess goods and services tax and other material statutorydues as applicable to the appropriate authorities though there has been a slight delayin a few cases. Further no undisputed amounts payable in respect thereof were outstandingat the 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 Lakhs) Amount paid under Protest (Rs. In Lakhs) Period to which the amount relates Forum where dispute is pending
Sales Tax Act Sales tax (VAT/ 76.32 4.50 2009-10 & 2011-12 Additional Excise & taxation
CST) Commissioner Cum Appellate
Authority (SZ)

(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) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures.Accordingly provisions of clause3 (xiv) of the order are not applicable.

(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.

For S.N. Dhawan & Co LLP
Chartered Accountants
Firm Registration No.: 000050N/N500045
per S.K. Khattar
Partner
Place: New Delhi Membership No.: 084993
Date: 23 June 2020 UDIN 20084993AAAACA7251

Annexure B

Independent Auditor's report on the Internal Financial Controlswith reference to financial statements under Clause (i) of Sub-section 3 of Section 143 ofthe Companies Act 2013 ("the Act")

1. We have audited the internal financial controls with reference tofinancial statements of JHS Svendgaard Laboratories Limited ("the Company") asof 31 March 2020 in conjunction with our audit of the standalone financial statements ofthe Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishingand maintaining 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 effcient conduct of the company's businessincluding 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 Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on theCompany's internal financial controls with reference to financial statements based onour audit. We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting (the "Guidance Note") andthe Standards on Auditing issued by the Institute of Chartered Accountants of India(ICAI) and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI..

Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wereestablished and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain auditevidence about the adequacy of the internal financial controls system with reference tofinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to financial statements included obtaining an understanding ofinternal financial controls with reference to financial statements 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 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 referenceto financial statements is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (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 timely detection ofunauthorised acquisition use or disposition of the company's assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference toFinancial Statements

7. Because of the inherent limitations of internal financialcontrols with reference to financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and 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 respectsadequate internal financial controls system with reference to financial statements andsuch internal financial controls with reference to financial statements were operatingeffectively as at 31 March 2020 based on the internal financial control with reference tofinancial statements.

For S.N. Dhawan & Co LLP
Chartered Accountants
Firm Registration No.: 000050N/N500045
per S.K. Khattar
Partner
Place: New Delhi Membership No.: 084993
Date: 23 June 2020 UDIN 20084993AAAACA7251

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