Lactose (India) Ltd.
|BSE: 524202||Sector: Health care|
|NSE: N.A.||ISIN Code: INE058I01013|
|BSE 00:00 | 24 Sep||40.85||
|NSE 05:30 | 01 Jan||Lactose (India) Ltd|
Lactose (India) Ltd. (LACTOSEINDIA) - Auditors Report
Company auditors report
To the Members of
Lactose India Limited
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Lactose IndiaLimited ("the Company") which comprises the balance sheet as at 31st March2020 and the statement of Profit and Loss (Including Other Comprehensive Income)statement of cash flows and statement of changes in equity 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 true andfair view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (Ind AS) specified under Section 133 of theAct of the state of affairs of the Company as at March 31 2020 and its profit and othercomprehensive income its cash flows and changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance 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 opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined that there are no key audit matters to be communicatedin our report.
The Company's management and Board of Directors is responsible forthe other information. The other information comprises the information included in theCompany's Annual report but does not include the financial statements and ourauditor's report thereon. Our opinion on the financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated. 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.
Management's Responsibility for the Financial Statements
The Company's management and Board of Directors are responsiblefor the matters stated in section 134(5) of the Companies Act 2013 ("the Act")with respect to the preparation of these financial statements that give a true and fairview of the state of affairs profit / loss (including other comprehensive income)changes in equity and cash flows of the company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; 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 thefinancial statements management and Board of Directors are 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 is also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the FinancialStatements
1. 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 Standards on Auditing will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements
2. As part of an audit in accordance with Standards on Auditing weexercise professional judgment 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 the auditin order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)
(i) of the Companies Act 2013 we are also responsible for expressingour opinion on whether the company has adequate internal financial controls system inplace and 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 thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company 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.
3. 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.
4. We also provide those charged with governance with a statement thatwe have 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.
5. 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 of such be expected to outweigh the public interest benefitscommunication.
We draw attention to Note no. 38 to the Financial Statements whichdescribes the uncertainties due to the outbreak of SARS-CoV-2 virus (COVID-19). In view ofthese uncertainties the impact on the Company's financial statements issignificantly dependent on future developments. Our opinion is not modified in respect ofthis matter.
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 Section 143(11) of the 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. Further to our comments in Annexure A as required by Section 143(3)of the Act we report 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 have beenkept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit & Loss (includingother comprehensive income) the statement of changes in Equity and the Statement of CashFlows dealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid Ind AS financial statements complywith the Indian Accounting Standards prescribed under Section 133 of the Act read withrelevant rules issued thereunder.
e) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2020 from being appointed as a director interms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls withreference to financial statement of the Company and the operating effectiveness of suchcontrols 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 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 litigation on itsfinancial position in its financial statements (refer note no 31 of the 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
3. In our opinion and according to the information and explanationsgiven to us the remuneration paid by the Company to its directors during the current yearis in accordance with the provisions of Section 197 of the Act. The remuneration paid toany director is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us
For C A S & Co (Formely known as K.M. Tulsian & Associates)Chartered Accountants FRN. 111075W
Annexure "A" to Independent Auditor's Report
(i) a) The company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
b) As explained to us the fixed assets have been physically verifiedby the management in accordance with a phased programme of verificationwhich in ouropinion is reasonable considering the size of the company and the nature of its assets.In accordance with this program certain fixed assets were verified during the year. Thefrequency of verification is reasonable and no discrepancies have been noticed on suchphysical verification.
c) According to the information and explanations given to us and on thebasis of our examination of the records of the company the title deeds of immovableproperties included in the Property plant & equipment' are held in thename of the Company.
(ii) The inventories have been physically verified by the managementduring the year. In our opinion the frequency of such verification is reasonable. Thecompany has maintained proper records of inventory. Discrepancies noticed on physicalverification of inventories as compared to book records were not material and have beenproperly dealt with in the books of account.
(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly the provisions of clause 3(iii) (a) (b) and
(c) of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanationgiven to us Section 185 & 186 of the Companies Act 2013 is not applicable since thecompany has not granted any loan made any investment and provided any guarantee orsecurity.
(v) In our opinion and according to the information and explanationgiven to us the Company has not accepted any deposit with in the meaning of Section 73 to76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provision of clause 3(v) of the order are not applicable.
(vi) According to the information and explanation given to us theCentral Government has not prescribed the maintenance of cost record under Section 148 ofthe Act for the company.
(vii) a)According to the information and explanations given to us andon the basis of our examination of the records of the Company amount deducted / accruedin the books of account in respect of undisputed statutory dues including Provident fundEmployees' State Insurance Income-tax Goods and Services tax duty of Customs Cessand other material statutory dues have generally been regularly deposited during the yearby the Company with the appropriate authorities.According to the information andexplanations given to us no undisputed amounts payable in respect of Provident fundEmployees' State Insurance Income tax Goods and Services tax duty of Customs Cessand other material statutory dues were in arrears as at 31 March 2020 for a period ofmore than six months from the date they became paya\ble.
b) According to the information and explanations given to us there areno dues of Income-tax or Sales tax or Service tax or Goods and Services tax or duty ofCustoms or duty of Excise or Value added tax which have not been deposited by the Companyon account of disputes except for the following:
(viii) According to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to banks and financialinstitution.
(ix) The Company did not raise moneys by way of initial public offer orfurther public offer (including debt instruments). In our opinion the term loan wereapplied for the purposes for which they were raised.
(x) To the best of our knowledge and according to the information andexplanations given to us no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the course of our audit.
(xi) In our opinion and according to the information and explanationsgiven to us and based on examination of the records of the Company the Company haspaid/provided managerial remuneration in accordance with the requisite approvals mandatedby the provisions of Section 197 read to with Schedule V to the Act.
(xii) According to the information and explanations given to us in ouropinion the Company is not a Nidhi Company.
Accordingly paragraph 3(xii) of the Order is not applicable to theCompany
(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company all transactions with the relatedparties are in compliance with Sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standard
(xiv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicableto the Company.
. (xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him.
Accordingly paragraph 3(xv) of the Order is not applicable to theCompany.
(xvi) According to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
Annexure "B" to the Independent Auditor's Report on thefinancial statements of Lactose India Limited
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
(Referred to in paragraph 1(A)(f) under Report on Other Legal andRegulatory Requirements' section of our report of even date)
We have audited the internal financial controls with reference to thefinancial statement of Lactose India Limited ("the Company") as of March 312020 in conjunction with our audit of the financial statements of the Company for the yearended on that date.
In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at 31 March 2020 based on theinternal financial controls with reference to financial statements 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 (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management and Board of Directors are responsiblefor establishing and maintaining internal financial controls based on the internalfinancial control with reference to the financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act"
Our responsibility is to express an opinion on the Company'sfinancial controls internal with reference to the financial statements based on our audit.We conducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls with reference to the financial control withreference financial statement. Those Standards and the Guidance Note require thatwe comply 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 whether such controls operated effectivelyin all material respects.
Our audit involves performing procedures to obtain audit controlsevidence about the adequacy of the internal financial operating with reference tofinancial effectiveness. Our audit of internal financial statements included obtaining anunderstanding of internal financial controls assessing the risk that a 49 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 judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to the financial statements.
Meaning of Internal Financial Controls with Reference to FinancialStatements
A Company's internal financial controls with reference tofinancial statement is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany's internal financial control with reference to financial statements includesthose policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect transactions and dispositions of the assets 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 authorizations of management and directors of theCompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference toFinancial Statements
Because of the inherent limitations of internal financial controls withreference to the 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 to internal financial statements may become inadequate because of changesin conditions or that the degree of compliance with the policies or procedures maydeteriorate.