To The Members of
M/s Mesco Pharmaceuticals Limited
Report on the Audit of the Standalone Financial Statements'
We have audited the standalone financial statements of Mesco Pharmaceutical Limited("the Company") which comprise the balance sheet as at 31st March2020 and the statement of Profit and Loss statement of changes in equity and statementof cash flows for the year then ended and notes to the financial statements including asummary of significant accounting policies and 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 the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the states of affairs of the Companyas at March 31 2020 and loss (changes in equity) and its cash flows for the year endedon that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Audition (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditors' 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 Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw your attention to Note no. 28 to the Standalone Financial Statements whichexplains the management's assessment of the financial impact due to the lock-down andother restrictions and conditions related to the COVID - 19 pandemic situation for whicha definitive assessment of the impact in the subsequent period is highly dependent uponcircumstances as they evolve. Our opinion is not modified in respect of this matter.
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. Asper our judgment there are no key audit matter.
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.
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
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 standalone financial statement that give a true and fair view of
the financial position financial performance (changes in equity) and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the accounting standards specified under section 133 of the Act. 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible 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 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.
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 Annexure-A a statement on the matters specified inparagraphs 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) There is no branch office of the Company;
d) The Balance sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with thisreport are in agreement with the books of account;
e) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under section 133 of the Act;
f) In our opinion there are no adverse observations and comments on the financialtransactions or matters which have any adverse effect on the functioning of the Company;
g) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in termsof section 164(2) of the Ac;.
h) 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".
i) In our opinion there are no qualifications reservation or adverse remark relatingto the maintenance of accounts and other matters connected therewith
j) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 1 1 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 as at 31stMarch 2020 on its financial position in its financial statements;
ii. The Company did not have any long-term contracts including derivative contracts asat 31st March 2020.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Sangram Paul & Co.
Firm Registration No.:308001E
Membership No.: 013015
Place: New Delhi
Dated: 31st July 2020
The Annexure referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' section of our report to the Members of M/s Mesco PharmaceuticalsLimited of even date
We report that:
(i) In respect of the Company's fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) These fixed assets have been physically verified by the management at reasonableintervals; and no material discrepancies were noticed on such verification.
c) According to the information and explanations given to us the records examined byus and based
on the examination of the conveyance deeds provided to us we report that the titledeeds comprising all the immovable properties of land and buildings which are freeholdare held in the name of the Company as at the balance sheet date.
(ii) The Company does not have any physical inventories. Accordingly reporting underclause 3 (ii) of the Order is not applicable to the Company.
(iii) According to the information and explanation given to us the Company has notgranted any secured or unsecured loans to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Consequently clause 3 (iii) of the Order is not applicable.
(iv) According to the information and explanation given to us in respect of loansinvestments guarantees and security provisions of section 185 and 186 of the CompaniesAct 2013 have been complied with.
(v) The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2020 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.
(vi) There were no manufacturing activities during the year under considerationtherefore reporting under clause 3(vi) of the Order is not applicable to the Company.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales- Tax ServicesTax Goods and Service tax Duty of Customs Duty of Excise Value Added Tax Cess and anyother material statutory dues applicable to it with the appropriate authorities and thereare no arrears of outstanding statutory dues as on 31st of March 2020 for aperiod of more than six months from the date they became payable;
(b) There are no dues of income tax or sales tax or service tax or duty of customs orduty of excise or value added tax which have not been deposited on account of any dispute.
(viii) The Company has no dues to a financial institution or bank or Government ordebenture holders. Hence Lender wise details of banks and financial institutions are notnecessary consequently clause 3(viii) of the Order is not applicable.
(ix) The Company has not raised money either from public offer or from further publicoffer or from any term loan during the year; hence clause 3(ix) of the Order is notapplicable to the Company.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or any fraud on the Company by its officers oremployees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany has not paid any managerial remuneration during the year. Hence the provisions ofclause 3(xi) of the Order are not applicable to the Company.
(xii) The Company is not a Nidhi Company and hence reporting under clause 3 (xii) ofthe Order is not applicable to the Company.
(xiii) In our opinion and according to the information and explanations given to usall transactions with the related parties are in compliance with sections 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable accounting standards;
(xiv) During the year the Company has not made any preferential allotment/ privateplacement of shares or fully or partly paid convertible debentures during the year underreview. Consequently Clause 3 (xiv) of Order is not applicable.
(xv) The Company has not entered into any non-cash transactions with the directors orpersons connected with the director. Hence Section 192 of the Companies Act 2013 is notapplicable to the Company consequently clause 3 (xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-1A of the ReserveBank of India Act 1934.
For Sangram Paul & Co.
Firm Registration No.:308001E
Membership No.: 013015
Place: New Delhi
Dated: 31st July 2020
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act) referred toin our report of even date of M/s Mesco Pharmaceuticals Limited
We have audited the internal financial controls over financial reporting of M/s MescoPharmaceuticals Limited ("the Company") as of March 312020 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Board of Director's of the Company' is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria 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. 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 over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants ofIndia and the Standards on Auditing prescribed under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls both applicableto an audit of Internal Financial Controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements 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 systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations 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 Over Financial Reporting
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 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Sangram Paul & Co.
Chartered Accountants Firm Registration No.:308001E
Membership No.: 013015 UDIN: 20013015AAAAAM3866
Place: New Delhi Dated: 31st July 2020