To the Members of
SANDU PHARMACEUTICALS LIMITED
Report on the Financial Statements
1. We have audited the accompanying financial statements of Sandu PharmaceuticalsLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss and Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act') with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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.
3. Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controlssystem over financial reporting and the operating effectiveness of such controls. An auditalso includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
6. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7. 1) As required by the Companies (Auditor's Report) Order 2016 (the Order')issued by the Government of India -Ministry of Corporate Affairs in terms of sub-section(11) of section 143 of the Act we enclose in the "Annexure-A" astatement on the matters specified in paragraphs 3 and 4 of the said Order.
2) As required by Section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance sheet the statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of TheCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2017 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"; and
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rule 2014 in our opinionand to the best of our information and according to the explanation given to us:
i. The Company does not have any pending litigation which would impact its financialposition.
ii. The Company does not have any long-term contracts having material foreseeablelosses.
The Company does not have any derivatives contracts.
iii. The Company is not liable to make any payments towards Investor Education andProtection Fund.
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management Refer Note [16 ofFinancial Statements]
For Dileep & Prithvi
Firm Reg. No. 122290W
M. No. 139559
Date: 30th May 2017
Annexure -A to the Auditor's Report
(Referred to in paragraph 1 under the heading Report on Other Legal andRegulatory Requirements' of our Report of even date on the financial statements for theyear ended on March 31 2017 of Sandu Pharmaceuticals Limited.
(i) (a) The Company has maintained records of fixed assets showing full particularsincluding quantitative details and situation of fixed assets.
(b) According to the information and explanations given to us the fixed assets havebeen physically verified by the management in a phased manner designed to cover all theitems over a period of three years. In our opinion the frequency of verification isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed by the management on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company. In case of leasehold land that have been taken on leaseand disclosed as fixed asset in the financial statements the lease agreement is in thename of the company where the company is the lessee in the agreement.
(ii) According to the information and explanations given to us the inventory has beenphysically verified by the management at reasonable intervals and no materialdiscrepancies were noticed on such verification.
(iii) According to the information and explanations given to us the Company has notgranted unsecured loans to companies firms limited liability partnership or otherparties listed in the register maintained under Section 189 of the Companies Act 2013.Accordingly the provisions of clause 3(iii)(a) to (c) of the order are not applicable tothe Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provision of section 185 & 186 of the Companies Act2013 in respect of loans investments guarantees or securities as applicable.
(v) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of section 73 to 76 of the Act.Therefore the provisions of the clause (v) of paragraph 3 of the Order are not applicableto the company.
(vi) We have been informed that the Company is not required to maintain cost recordsunder subsection (1) of section 148of the Companies Act 2013 which has been relied upon.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees' State Insurance Wealth taxIncome-tax Service tax Sales Tax Custom Duty Excide Duty and other material statutorydues as applicable. Based on our audit procedures and according to the information andexplanations given to us there are no arrears of undisputed statutory dues which remainedoutstanding as at 31st March 2017 for a period of more than six months from the date theybecame payable except dues of Tax Deducted at source aggregating to Rs. 632126/- onaccount of defaults pertains to prior years.
(b) According to the information and explanations given to us and records of theCompany no dues of Income-tax (Previous Year Rs. 283 Lakh which has been deleted onthe basis of favorable decision of Mumbai ITAT) and Service Tax are outstanding in thebooks of the Company on account of any dispute.
(viii) According to the information and explanations given to us the company has notdefaulted in repayment of dues to banks. The Company has not taken any loan either fromfinancial institution or from the Government and has not issued any debentures.
(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and in our opinion the term loans have beenapplied for the purpose for which they were raised.
(x) According to the information and explanations furnished by the management whichhas been relied upon by us there were no frauds on or by the Company noticed or reportedduring the course of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provision of Section197 read with schedule V to the Companies Act 2013.
(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company.
(xiii) According to the information and explanations give to us and based on ourexamination of the records. In our opinion all transactions with related parties are incompliance with sections 177 and 188 of the Companies Act 2013 and the details have beendisclosed in the financial statements as required by the Applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review and henceclause 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations give to us and based on ourexamination of the records the company has not entered into any non-cash transactionswith directors or persons connected with them and hence provisions of section 192 of theAct are not applicable.
(xvi) In our opinion the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
For Dileep & Prithvi
Firm Reg. No. 122290W
M. No. 139559
Date: 30th May 2017
Annexure-B to Auditors report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
1. We have audited the internal financial controls of Sandu Pharmaceuticals Limited ("theCompany") as of 31 March 2017 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that 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'). 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.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols & financial reporting based on our audit. We Conducted our audit inaccordance with the Guidance Note on Audit of internal Financial Controls over FinancialReporting (the 'Guidance. Note.'") issued by ICAI and the Standards onAuditing 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 issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance noterequired that 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.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide basis for our audit opinion on the Company's internal financial control 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 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 Control 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 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 respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established.
9. by the Company considering the essential components of internal control stated inthe Guidance Note on Audit of Internal financial Controls Over Financial Reporting issuedby The Institute of Chartered Accountants of India.
For Dileep & Prithvi
Firm Reg. No. 122290W
M. No. 139559
Date: 30th May 2017