You are here » Home » Companies » Company Overview » Kimia Biosciences Ltd

Kimia Biosciences Ltd.

BSE: 530313 Sector: Health care
NSE: N.A. ISIN Code: INE285U01025
BSE 00:00 | 26 Feb 22.05 1.05
(5.00%)
OPEN

22.05

HIGH

22.05

LOW

22.05

NSE 05:30 | 01 Jan Kimia Biosciences Ltd
OPEN 22.05
PREVIOUS CLOSE 21.00
VOLUME 1100
52-Week high 46.45
52-Week low 19.05
P/E 47.93
Mkt Cap.(Rs cr) 102
Buy Price 22.05
Buy Qty 100.00
Sell Price 22.05
Sell Qty 14.00
OPEN 22.05
CLOSE 21.00
VOLUME 1100
52-Week high 46.45
52-Week low 19.05
P/E 47.93
Mkt Cap.(Rs cr) 102
Buy Price 22.05
Buy Qty 100.00
Sell Price 22.05
Sell Qty 14.00

Kimia Biosciences Ltd. (KIMIABIOSCIEN) - Auditors Report

Company auditors report

To the Members of Kimia Biosciences Limited (Formerly known as Laurel Organics Limited)

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of Kimia Biosciences Limited((Formerly known as Laurel Organics Limited ("the Company") which comprises theBalance sheet as at March 31 2019 the Statement of Profit and Loss (including theStatement of Other Comprehensive Income) the Statement of Changes in Equity and the CashFlow Statement for the year then ended and notes to the financial statements including asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind-AS financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 its profit including othercomprehensive income the changes in equityand its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs)as specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the 'Auditor's Responsibilities for the Audit ofthe FinancialStatements'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 Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the financial statements.

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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

We have fulfilled the responsibilities described in the Auditor's responsibilities forthe audit of the financial statements section of our report including in relation tothese matters. Accordingly our audit included the performance of procedures designed torespond to our assessment of the risks of material misstatement of the financialstatements. The results of our audit procedures including the procedures performed toaddress the matters below provide the basis for our audit opinion on the accompanyingfinancial statements.

S.N. 1. Key Audit Matter Valuation of trade receivables Auditor's Response How our audit addressed the key audit matter:
We refer to Note 10and Note 2.17 to the financial statements. We obtained an understanding of the Company's credit policy for trade receivables process of approvals and terms and conditionsand evaluated the process for identifying impairment indicators. We have reviewed and tested the ageing of tradereceivables and management's assessment on the credit worthiness of selected customers for trade receivables.We further discussed with the key management on the adequacy of the allowance for credit losses recorded by the Company and reviewed the supporting documents provided by management in relation to their assessment. We have also reviewed adequacy and appropriateness of allowance for credit losses based on available information.
As disclosed in Notes to the financial statements the Company assesses periodically and at each financial year end the expected credit loss associated with its receivables. When there is expected credit loss impairment the amount and timing of future cash flows are estimated based on historical current and forward-looking loss experience for assets with similar credit risk characteristics.
The carrying amount of trade receivables of the company was Rs. 2912.14 Lakhs as at March 31 2019. We focused on this area because of its significance and the degree of judgement required estimating the expected credit loss and determining the carrying amount of trade receivables as at the reporting date. Our Observation:
Based on our audit procedures performed we found management's assessment of the recoverability of trade receivables to be reasonable and the disclosures to be appropriate.
2. Valuation of inventories
How our audit addressed the key audit matter:
We refer to Note 8 and 2.14 to the financial statements. We have checked and analyzed the ageing of the inventories reviewed the historical trend on whether there were significant inventories written off or reversal of the allowances for inventory obsolescence.
As at March 31 2019 the total carrying amount of inventories was Rs. 1609.91Lakhs. The assessment of impairment of inventories involves significant estimation uncertainty subjective assumptions and the application of significant judgment. We conducted a detailed discussion with the key management and considered their views on the adequacy of allowances for inventory obsolescence considering the current economic environment. We have also reviewed the subsequent selling prices in the ordinary course of business and compared against the carrying amounts of the inventories on a sample basis at the reporting date.
Reviews are made periodically by management on inventories for obsolescence and decline in net realizable value below cost. Allowances are recorded against the inventories for any such declines based on historical obsolescence and slow-moving history. Key factors considered include the nature of the stock its ageing shelf life and turnover rate. Our Observations:
We found management's assessment of the allowance for inventory obsolescence to be reasonable based on available evidence.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe financial statements and our auditor's report thereon. We have obtained all otherinformation prior to the date of this auditor's report.

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 in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Financial Statements

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 read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative 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 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 in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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 Act we give in the "Annexure A"a statement on the matters specified inparagraphs 3 and 4 of the Order.

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 the Statement of Change inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards (Ind AS) read with the Companies (Indian Accounting Standards) Rules2015 as amended specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2013;

(e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company with reference to these financial statements and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB" to this report;

(g) 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 /provided by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

(h) 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:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 35 to the financial statements;

ii. The Company did not have anylong-term contracts including derivative contractswhich have material foreseeable losses;

iii. The Company did not have any amount which is required to be transferred to theInvestor Education and Protection Fund by the Company.

For Singhi & Co.
Chartered Accountants
Firm Reg. No. 302049E
Sd/-
Place: New Delhi B.K. Sipani
Date: May 22 2019 Partner
Membership No. 088926

Annexure A referred to in paragraph 1 of our report of even date on the other legal andregulatory requirements (Re: Kimia Biosciences Limited (Formerly known as Laurel OrganicsLimited)

(i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of propertyplant&equipment.

b. The Company has a regular programme of physical verification of its property plantand equipment by which property plant and equipment are verified in a phased manner overa period of three years which is in our opinion is reasonable having regard to size ofthe company and nature of its Plant Property and Equipment. In accordance with thisprogramme property plant & equipment were physically verifiedduring the year. Nomaterial discrepancies were noticed on such verification.

c. According to information and explanations given by the management the title deedsof immovable properties included in Property Plant & Equipment are held in the nameof the Companyhowever a land having carrying value of Rs. 47.46 Lakhs is registered inthe old name of the Company.

(ii) The management has conducted physical verification of inventories except stock intransit during the year at reasonable interval and no material discrepancies were noticedon such physical verification.

(iii) The Company has not granted any loans to the companiesfirms limited liabilitypartnership or other parties covered in the register maintained under Section 189 of theCompanies Act 2013. Therefore provisions of clause 3(iii) of the Order are notapplicable to the Company.

(iv) The Company has no transaction with respect to loan investment guarantee andsecurity covered under section 185 and 186 of the Companies Act 2013.Therefore theprovisions of clause 3(iv) of the Order are not applicableto the Company.

(v) The Company has not received any deposit during the year as covered under section73 to 76 of the Companies Act 2013. Therefore provisions of clause 3(v) of the Order arenot applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 and are of the opinion that prima facie theprescribed records have been made and maintained. We have however not made a detailedexamination of the said records with a view to determine whether they are accurate orcomplete.

(vii) a. According to the records of the Company the Company is generally regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome-tax goods and service tax sales tax service tax duty of customs duty ofexcise value added tax goods and service tax cess and other material statutory duesdeducted/ accrued in the books with the appropriate authorities.

There were no undisputed outstanding statutory dues as at the yearend for a period ofmore than six months from the date they became payable.

b. According to the records of the Company there are no dues outstanding of incometax sales tax service tax duty of customs duty of excise and value added tax onaccount of any dispute other than the followings:

Name of Statue Nature of Dues Period to which it relates Amount Forum where dispute is pending
(Rs. in Lakhs)
Punjab Value Added Tax
Penalty 22-08-14 11.67 Panchkula Civil Court
Act 2005

(viii) The Company has not defaulted in repayment of dues to bank. The Company did nothave any borrowing from Government and Financial Institution and dues to debentureholders.

(ix) During the year the Company did not raise any money by way of initial publicoffer or further public offer (including debt instruments). Further in our opinion andexplanations given to us term loan raised during the year was applied for the purpose forwhich loan was raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven to us no fraud by the Company or no fraud on the Company by its officers andemployees has been noticed or reported during the year.

(xi) According to the information and explanations given by the management managerialremuneration has been paid /provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theCompanies Act 2013 wherever applicable and the details for the same have been disclosedin the financial statements as required by the applicable Indian accounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Therefore the provisions of clause 3(xiv) of the Order are not applicable tothe Company.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withdirectors. Therefore the provisions of clause 3(xv) of the Order are not applicable tothe Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Singhi & Co.
Chartered Accountants
Firm Reg. No. 302049E
Sd/-
Place: New Delhi B. K. Sipani
Date: May 22 2019 Partner
Membership No. 088926

Report on the Internal Financial controls under Clause (i) of Sub - section 3 ofSection 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof ((Formerly known as Laurel Organics Limited"the Company") as of March 312019 in conjunction with our audit of the financial statements of the Company for the yearended 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 the 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its 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 Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "guidance Note") and the standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to as audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those standards and the Guidance Note require that we comply withethical requirements of and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements 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 systemwith reference to financial statements.

Meaning of Internal Financial controls with reference to financial statements

A Company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorization 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 with reference to financialstatements

Because of the inherent limitations of Internal Financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinionthe Company has in all material respects an adequate internal financialcontrols system with reference to financial statements and such internal financialcontrols with reference to financial statements were operating effectively as at March 312019 based on the internal control over the financial reporting criteria established bythe company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India and however same need to be furtherstrengthened.

For Singhi & Co.
Chartered Accountants
Firm Reg. No. 302049E
Sd/-
Place: New Delhi B. K. Sipani
Date: May 22 2019 Partner
Membership No. 088926