The Members of
Makers Laboratories Limited
Report on the Audit of the Financial Statements Opinion
We have audited the Financial Statements of Makers Laboratories Limited ("theCompany") which comprise the Balance Sheet as at March 31 2020 and the Statementof Profit and Loss (including Other Comprehensive Income) Statement of Changes in Equityand Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of Significant Accounting Policies and other explanatoryinformation. (hereinafter referred to as "the Financial Statements"). In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid Financial Statements give the information required by the Companies Act2013 ("the Act") in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2020 the profit (including other comprehensiveincome) changes 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) 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 theFinancial 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 together with the ethical requirements that are relevant to our audit of theFinancial Statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on the financialstatements.
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 that there are no key audit matters to be communicated in our report.
Information Other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the Other Information. The otherinformation comprises the information included in the Board's report including theDirectors Report Chairman's Statement Management Discussions and Analysis SummarizedFinancial Information Corporate Governance and Shareholder's Information but does notinclude the Financial Statements and our Independent Auditors' Report thereon. Our opinionon the Financial Statements does not cover the Other Information and we do not and willnot express any form of assurance or conclusion thereon.
In connection with our audit of the Financial Statements our responsibility is to readthe Other Information identified above and in doing so consider whether the OtherInformation is materially inconsistent with the Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed on the other information that we obtained priorto the date of this auditor's report we conclude that there is a material misstatement ofthis Other Information we are required to report that fact. We have nothing to report inthis regard.
Responsibilities of Management and those Charged with Governance for the FinancialStatements
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 changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified 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 is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.
The Board of Directors is 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 weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
1. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
4. Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 as agoing concern.
5. 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.Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate make it probable that the economic decisions of a reasonablyknowledgeable user of the financial statements may be influenced. We consider quantitativemateriality and qualitative factors in (i) planning the scope of our audit work and inevaluating the results of our work; and (ii) to evaluate the effect of any identifiedmisstatements in the 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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the KeyAudit Matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits 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 Companies Act 2013 we give in the attached Annexure "A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d. In our opinion the aforesaid Financial Statements comply with the AccountingStandards 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 March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
Our report expresses an unmodified opinion on the adequacy and operating effectivenessof the Company's internal financial controls over financial reporting. g. With respect tothe other matters to be included in the Auditor's Report in accordance with therequirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid 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 in our opinionand to 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 financial statements Refer Note 33 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were material foreseeable losses; iii. There has been no delay in transferringamounts required to be transferred to the Investor Education and Protection Fund by theCompany.
To the Independent Auditors' Report on the Financial Statements of Makers LaboratoriesLimited
(i) a. The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of its fixed assets. b. Fixed assets havebeen physically verified by the management during the year and no material discrepancieswere identified on such verification. c. We have verified the title deeds of immovableproperties forming part of Fixed Assets produced before us by the management and based onsuch verification we confirm that the same are held in the name of the company.
(ii) The management has conducted physical verification of inventory at reasonableintervals during the year. The discrepancies noticed between the book stock and thephysical stocks were not material and they have been properly dealt with in the books ofaccounts.
(iii) The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained u/s 189 of the Companies Act 2013 andhence the sub clauses (a) and (b) of clause 3(iii) of the Companies (Auditor's Report)Order2016 is not applicable.
(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013with respect to loans investments guarantees and security given.
(v) The Company has not accepted any deposit from the public pursuant to sections 73 to76 or any other relevant provisions of the Companies Act 2013 and rules framedthereunder. As informed to us there is no order that has been passed by Company Law Boardor National Company Law Tribunal or Reserve Bank of India or any Court or any otherTribunal in respect of the said sections.
(vi) As informed to us the maintenance of the cost records under the sub-section (1)of section 148 of the Companies Act 2013 has been prescribed and we are of the opinionthat prima facie the prescribed accounts and records have been maintained. We have nothowever carried out a detailed examination of the records to ascertain whether they areaccurate or complete.
(vii) a. The Company has been regular in depositing undisputed statutory dues includingProvident fund Employees State Insurance Income Tax Sales Tax Service Tax CustomDuty Excise Duty Cess Goods & Services Tax and other statutory dues with theappropriate authorities during the year. According to the information and explanationsgiven to us no undisputed amount payable in respect of the aforesaid dues wereoutstanding as at March 31 2020 for a period of more than six months from the date ofbecoming payable. b. According to the information and explanations given to us there areno dues of Sales Tax Income Tax Service Tax Duty of Customs or Duty of Excise or ValueAdded Tax which have not been deposited on account of any dispute except as given below:
|Name of statute ||Nature of dues ||Amount (Rs in Lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax ||Order under section 143(3) r/w section 147 ||11.64 ||2009-10 ||CIT (Appeals) |
|Income Tax ||Order under section 143(3) r/w section 147 ||57.46 ||2010-11 ||CIT (Appeals) |
|Income Tax ||Order under section 143(3) r/w section 147 ||11.26 ||2011-12 ||CIT (Appeals) |
|Income Tax ||Order under section 143(3) r/w section 147 ||11.17 ||2012-13 ||CIT (Appeals) |
|Income Tax ||Order under section 143(3) r/w section 147 ||12.02 ||2013-14 ||CIT (Appeals) |
|Income Tax ||Order under section 143(3) r/w section 147 ||21.64 ||2014-15 ||CIT (Appeals) |
| ||Total ||125.19 || || |
(viii) According to the information and explanations given to us and based on thedocuments and records produced to us the Company has not defaulted in repayment of duesto the financial institution or banks. Further the company has not obtained anyborrowings by way of debentures. (ix) The company has not raised any money by way ofpublic issue / follow-on offer (including debt instruments). On the basis of the documentssubmitted to the bankers and the other records perused by us we have to state that theterm loan for purchase of fixed assets taken during the year have been applied for thepurpose for which the loan was obtained.
(x) According to the information and explanations given to us and to the best of ourknowledge and belief no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year.
(xi) The managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V to theCompanies Act 2013.
(xii) The Company is not a Nidhi Company. Hence clause 3(xii) of Companies (AuditorsReport) Order 2016 is not applicable to the Company.
(xiii) All transactions with the related parties are in compliance with sections 177and 188 of the Companies Act 2013 in so far as our examination of the proceedings of themeetings of the Audit Committee and Board of Directors are concerned. The details ofrelated party transactions have been disclosed in the Financial Statements as required bythe applicable Accounting Standard.
(xiv) The company has not made any preferential allotment / private placement of sharesor fully or partly convertible debentures during the year under review and hence theclause 3(xiv) of the Companies (Auditors Report) Order 2016 is not applicable to theCompany.
(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him and hence the clause 3(xv) of the Companies (Auditors Report)Order 2016 is not applicable to the Company.
(xvi) The nature of business and the activities of the Company are such that theCompany is not required to obtain registration under section 45-IA of the Reserve Bank ofIndia Act 1934.
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls with reference to Financial Statements underClause (i) of Subsection 3 of Section 143 of the Companies Act 2013 ("the Act")We have audited the internal financial controls with reference to Financial Statements ofMakers Laboratories Limited ("the Company") as of March 31 2020 in conjunctionwith our audit of the Financial Statement of the Company for the year ended 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 an 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 and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to Financial Statements wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system with reference to Financial Statementsand their operating effectiveness. Our audit of internal financial controls with referenceto Financial 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'sjudgment 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 control 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)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial Controls with reference to FinancialStatements.
Because of the inherent limitations of Financial controls with reference to FinancialStatements including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls with reference toFinancial Statements to future periods are subject to the risk that the internal financialcontrol with reference to Financial Statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to Financial Statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2020 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.
| ||For Natvarlal Vepari & Co. |
| ||Chartered Accountants |
| ||Firm Registration No- 106971W |
| ||N Jayendran |
| ||Partner |
|Mumbai ||M. No. 40441 |
|Dated: June 15 2020 ||UDIN: 20040441AAAAAL8718 |