The Members of
M/s SHARON BIO-MEDICINE LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of SHARON BIO-MEDICINE LTD.("the Company") which comprise the Balance Sheet as on 9 months for the periodended March 31 2016 and the Statement of Profit and Loss for the period then ended anda summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Management and Board of Directors of the Company are responsible forthe mattersstated in Section 134(5) of the Companies Act 2013 ('the Act') with respect to thepreparation of these financial statements that give a true and fair view of the financialposition and financial performance 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 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;design implementation and maintenance of adequate internal financial controls that areoperating 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.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under. We have 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.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. 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. In making those risk assessments the auditorconsiders 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 controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company's Management and Board of Directors as wellas evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
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
a. In the case of the Balance Sheet of the state of affairs of the Company as at March31 2016 and
b. In the case of Statement of Profit & Loss of the loss for the period ended onthat date and cash flows for the period ended on that date.
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 Act we give in the Annexure a statement on the matters specified in paragraphs 3 and4 of the 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 purpose 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 and Statement of Profit and Loss dealt with by this Report are inagreement with the books of account.
d. In our opinion the aforesaid financial statements comply with the applicableAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e. On the basis of written representations received from the directors as on March312016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of Section164(2) of the Act.
f. In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:
i. The Company has pending litigations on its financial position.
ii. The Company did not have any long-term contracts including derivative contracts; assuch the question of commenting on any material foreseeable losses thereon does not arise.
| ||For Shyam C. Agrawal & Co. Chartered Accountants |
| ||Firm Registration No.110243W |
| ||Sd/- |
| ||Shyam C. Agrawal |
|Place : Navi Mumbai ||Proprietor |
|Date : 30/05/2016 ||Membership No. 031774 |
Annexure to the Independent Auditors' Report
(Reffered to in paragraph lunderthe heading "Report on other legal and Regulatoryrequirements" of our report of even date on account of SHARON BIO-MEDICINEUMITED.(the COMPANY") forthe period ended 31st March 2016.
1) a) The Company has maintained records showing particulars including quantitativedetails and situation of fixed assets. However there are some assets where fullparticulars are not maintained never the less Company is in process of updating therecords.
b) As explained to us fixed assets have been physically verified by the management atregular intervals; as informed to us no material discrepancies were noticed on suchverification;
2) In respect of company's inventories:
a) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and nature of its business.
b) The company has maintained proper records of inventories. As explained to us therewas no material discrepancies noticed on physical verification of inventory as compared tothe book records. The inventories which are returned by customers due to quality issueshave been written off.
3) (a) As per information furnished the Company has not granted interest freeunsecured loans to wholly owned subsidiary company during the year. The Maximum amountoutstanding during the year was Rs. 8.39 Lacs and the year end balance of such loan wasRs. 8.39 Lacs and same has been written off.
(b) In our opinion other terms and conditions on which loans have been granted towholly owned subsidiary company are not prime facie prejudicial to the interest of thecompany.
(c) In the case of loans granted to wholly owned subsidiary company where stipulationhave been made the borrower has not been regular in repaying the principal amounts asstipulated. However subsidiary operations have been closed due to losses during theperiod.
(d) There is no overdue amount of more than Rupees One Lacs in respect of loan grantedto parties covered in the register maintained under section 189 of the companies Act 2013
(e) As per information furnished the Company has taken Interest Free unsecured loanfrom parties covered under section 189 of the companies Act 2013 during the year. TheMaximum amount outstanding during the year was Rs. 4057.86 Lacs and the year-end balanceof such loan was Rs. 958.09 Lacs.
(f) In our opinion other terms and conditions on which loans have been taken fromparties covered in the register maintained under section 189 of the companies Act 2013prime facie are not prejudicial to the interest of the company.
(g) The Company has been regular in repaying the principal amount as stipulatedwherever stipulation exists.
4) In our opinion and according to the information and explanations given to us thereis adequate internal control system commensurate with the size of the Company and thenature of its business for the purchase of inventories fixed assets and for the sale ofservices. Further on the basis of our examination of the books and records of the Companyand according to the information and explanations given to us no major weakness has beennoticed or reported.
5) The Company has not accepted any deposits from the public covered under theprovision of section 73 to 76 of the Companies Act 2013 and the rules made there under.Therefore Clause 3 (v) of the Companies (Auditor's Report) order 2016 is not applicable tothe company.
6) We have broadly reviewed the books of accounts maintained by the Company pursuant tothe rules prescribed by the Central Government for maintenance of cost records undersection (1) of section 148 of the Companies Act 2013 in relation to productsmanufactured and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. We have not however made a detailed examinationof the records.
7) a. According to the information and explanations given to us and based on therecords of the company examined by us undisputed statutory dues including provident fundemployee's state insurance sales-tax wealth tax service tax custom duty excise dutycess have generally been regularly deposited with the appropriate authorities though therehas been a slight delay in a few cases. However in case of Statutory dues pertaining todividend distribution tax of Rs. 64.58 Lacs have remained outstanding for the last 2years never the less the company has claimed refund in subsequent years and same can beadjusted against the refund. b. According to information and explanation given to us andbased on the records of the company examined by us there are no dues of income tax whichhave not been deposited on account of any disputes.
8) Based on our Audit procedures and the information and explanation given bymanagement the company has not borrowed funds from financial institutions banks andmoney raised through the issue of debentures during the period under review.
9) The company has issued 16111000 Convertible warrants of Rs.2/- each at a premiumof Rs.48/- each during the preceding previous year in two stages i.e. 6715400convertible warrants issued on 30/03/2015 and 6651300 convertible warrants issued on10/06/2015. Out of warrants issued at second stage 2744300 convertible warrants ofRs.2/- each is still pending for allotment. However the same is not converted into sharesdue to technical reasons at NSDL.
10) Based upon the audit procedures performed and information and explanations given bythe management we report that we have not come across any instances of fraud by thecompany or any fraud on the company by its officers or employees that have been noticed orreported during the year nor have we been informed of such a case by management.
11) Managerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
12) The Company is not a Chit Fund Company / or Nidhi / Mutual Benefit Fund / Society.
13) All transactions with the related parties are in compliance with sections 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14) The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.
15) The Company has not entered into non-cash transactions covered by Section 192 ofCompanies Act 213 with directors or persons connected with him.
16) As per information and explanation given by the management the Company is notrequired to be registered under section 45-IAof the Reserve Bank of India Act 1934.
| ||For SHYAM C. AGRAWAL & CO. |
| ||Chartered Accountants |
| ||Firm Registration No. 110243W |
| ||Sd/- |
| ||Shyam C. Agrawal |
|Place : Navi Mumbai ||Proprietor |
|Date : 30/05/2016 ||Membership No.031774 |