To the Members of Link Pharma Chem Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Link Pharma ChemLimited ("the Company") which comprise the balance sheet as at 31st March2019 and the statement of Profit and Loss (including Other Comprehensive Income) thestatement of Cash Flows and the statement of Changes in Equity for the year 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 the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby Company's Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its profit total comprehensiveincome its cash flows and change in equity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone 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 (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on thestandalone 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 matter described below to be the key audit matter to be communicatedin our report.
Revenue is one of the key profit drives and is therefore susceptible to misstatement.Cut-off is the key assertion in so far as revenue recognition is concerned since aninappropriate cut-off can result in material misstatement of result for the year. Ouraudit procedure with regard to revenue recognition includes testing controls. Automatedand manual around dispatched/ deliveries inventory reconciliations and circularizationof receivables balances substantives testing for cut-offs and analytical reviewsprocedures.
Information other than the financial statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. Theother information comprise the information comprise the information comprise theinformation included in the Management's
Discussion and Analysis reports but does not include the consolidated financialstatements standalone financial statement and our auditor's report thereon.
Our opinion on the standalone financial statement does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statement ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statement orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
We have nothing to report in this regard.
Responsibilities of Management for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue 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.
Those 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 standalonefinancial 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 professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Standalonefinancial 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 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that economic decisions ofreasonably knowledgeable users of the standalone financial statements may be influenced.We consider quantitative materiality and qualitative factors in (i) planning the scope ofour audit work and in evaluating the result of our work; and (ii) to evaluate the effectof any identified misstatements in the standalone financial statements.
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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 Section 143(3) of the Act based on our audit 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 including other comprehensiveincome Cash Flow Statement and the statement of changes in equity dealt with by thisReport are in agreement with the books of account
(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A" our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the company's internal financial controls overthe financial reporting. (g) With respect to the other matters to be included in theauditors' report in accordance with the requirements of section 197(16) of the Act asamended.
In our opinion and to the best of our information and according to the explanationgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provision of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor's Report inaccordance Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion andto the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone financial statements ;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
2. As required by the Companies ( Auditor Report) Order 2016 ( "the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
| ||For Sanjay Soni & Associates |
| ||Charterd Accountamts |
| ||ICAI Firm Registration No. 113251W |
|Date : 30.05.2019 ||CA Sanjay Soni |
|Place : Vadodara ||Partner |
| ||Membership No. 040313 |
ANNEXURE A TO INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1(f) under 'Reports on other Legal and RegulatoryRequirements' Section of our Report of even date)
Report on the Internal Financial Controls over financial reporting under clause ( i )of sub- section 3 of Section 143 of the Companies Act 2013 ( the "Act")
1. We have audited the internal financial controls over financial reporting of LinkPharma Chem Ltd. ( "the Company") As of March 31 2019 in conjunction with ouraudit of the standalone Ind As financial statements of the Company for the year ended onthat date.
Management's responsibility for internal Financial Controls
2. The Company's Management is responsible for establishing and maintaining Internalfinancial controls based on the Internal Control over 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including 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 2013.
3. Our responsibility is to express an opinion on the Company's Internal financialcontrols over financial reporting based on our audit. We conducted our audit accordancewith the Guidance Note on Audit of internal Financial Controls Over Financial Reporting (" the Guidance Note") and the Standards on Auditing prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls bothapplicable to an audit of internal financial controls and both issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
4. Our audit involves performing audit procedures to obtain audit evidence about theadequacy of internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining effectiveness. Our audit of internal financial controls over financialreporting included obtaining and understanding of internal financial controls overfinancial reporting assessing the risk that material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risk of material misstatement of the financial statements whether due tofraud or error.
5. 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 systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) Pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions 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 authorisations ofmanagement and directors of the company; and (3) Provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not to be detected .Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
8. In our opinion the Company has in all material respect an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance note on Audit of Internal FinancialControls over Financial reporting issued by the Institute of Chartered Accountants ofIndia.
| ||For Sanjay Soni & Associates |
| ||Chartered Accountants |
| ||ICAI Firm Registration No. 113251W |
|Place : Vadodara ||CA Sanjay Soni |
|Date : 30.05.2019 ||Partner |
| ||Membership No. 040616 |
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under Reports on other Legal and RegulatoryRequirements' section of our Report of even date)
i) (a) The Company has maintained proper records showing full particulars includingquantitative detail and situation of fixed assets.
(b) The Company has a regular program for verification of property plant and equipmentat regular intervals which in our opinion is reasonable having regard to the size of theCompany and nature of its assets. The property plant and equipments were physicallyverified during the current year in accordance with this program. According to theinformation and explanations given to us no material discrepancies were notice on suchverification.
(c) According to the information and explanation given to us and to the best of ourknowledge and belief the title deeds of the immovable properties are held in the name ofthe Company.
ii) As explained to us the inventories were physically verified during the year by themanagement at reasonable intervals and no material discrepancies were noticed on physicalverification.
iii) The Company has not granted any loans secured or unsecured to any companiesfirms limited liability partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013.
iv) According to the records of the Company examined by us and the information andexplanations given to us. There are no loans investments made or guarantees andsecurities provided by the company as per provisions of section 185 and 186 of theCompanies Act 2013.
v) The Company has not accepted any deposits from public within the meaning of Sections73 74 and 76 of the Act.
vi) The Central Government has been not prescribed the maintenance of cost accounts forthe type of activities of the Company pursuant to the rules made by the Central Governmentof India for the maintenance of cost records under clause (d) of sub section (1) ofsection 148 of the Act .
ii) According to the information and explanations given to us (a) The Company isgenerally regular in depositing with appropriate authorities the undisputed statutory duesincluding provident fund employees' state insurance Income tax Goods and Service TaxSales Tax service tax duty of customs Value Added Tax duty of excise cess and othermaterial statutory dues as applicable to it.
(b) There were no disputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax Custom Duty Excise Duty ValueAdded Tax Goods and Service Tax and other material statutory dues in arrears as at March31 2019 for a period of more than 6 months from the date they become payable Except forProfession Tax Rs 619620 payable notified area authority.
(c) Details of dues of VAT and CST which have not been deposited as on 31st March 2019on account of disputes are given below.
|Nature of statute statue ||Nature of Dues ||Amount (Rs. in lakh) ||Period for which it relates ||Forum where dispute is pending |
|Gujarat Vat Act2004 ||VAT ||132.34 ||2008-09 ||Dy. Commissioner (Appeals) Vadodara |
|Central Sales Tax Act ||CST ||46.86 ||2008-09 || |
There are no dues of Income Tax Service Tax Custom Duty Goods and Service Tax andValue added Tax that has not been deposited as at 31.3.2019 on account of disputes.
viii) According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to Banks. The Company did not have any loans or borrowings from any financialinstitution or Government or debenture during the year.
ix) In our opinion and according to the information and explanation given to us theCompany has not raised money by way of initial public offer/ further public offer (including Debt instruments) and the term loan have been applied by the Company during theyear for the purpose for which they were raised.
x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations give to us we have neither come across anyinstance of material fraud by the Company by its officers or employees noticed orreported during the year nor have we been informed of any such case by the management.
xi) In our opinion and according to the information and explanations given to us thecompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule 5 to the CompaniesAct 2013.
xii) As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii) In our opinion and 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 section 177 and 188 of the Act and details of related partytransactions have been disclosed in the standalone financial statement as required by theapplicable Indian Accounting Standard.
xiv) The Company has not made preferential allotment or private placement of shares ordebentures during the year under review.
xv) The Company has not entered into any non cash transactions with its directors orassociate company or persons connected with them.
xvi) The Company is not required to be registered under Section 45 -IA of The ReserveBank of India Act 1934.
| ||For Sanjay Soni & Associates |
| ||Chartered Accountants |
| ||ICAI Firm Registration No. 113251W |
| ||CA Sanjay Soni |
|Place : Vadodara ||Partner |
|Date : 30.05.2019 ||Membership No. 040616 |