Shukra Pharmaceuticals Limited
We have audited the accompanying standalone financial statements of Shukra Pharmaceuticals Limited (the Company) which comprise the Balance Sheet as at March 31 2019 the Statement of Profit and Loss the statement of change in Equity and the Statement of Cash Flows for the year ended on that date and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the standalone financial statements).
In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone financial statements give the information required by the Companies Act 2013 (the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended (Ind AS) and other accounting principles generally accepted in India of the state of affairs of the Company as at March 31 2019 the profit and total comprehensive income changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made there under and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment where of most significance in our audit of the standalone financial statements of the current year. These matters where addressed in the contacts of our audit of the stand alone statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on this matters.
|SrNo ||Key Audit Matters ||Auditor'sresponse|
|1 ||Assessment of litigation and related disclosures of contingent liabilities||Our audit procedure included among others|
|Use of estimate and critical accounting judgments provisions and contingent liabilities note 26 to the stand alone financial statements contingencies and other significant litigations.||-||Assessing the procedure is implemented by the company to identify and gather the risk it is. |
|As at March 31 2019 the company has exposure towards litigations relating to various matters as set out in the aforesaid notes||-||Exposed to obtaining and understanding of the risk analysis perform by the company with relating supporting documents where applicable.|
|Significant management judgment is required to assist such matters to determine the probability of occurrence of material outflow of economic resources and whether a provision should be recognized or a disclosure should be made the management judgment is also supported with legal advice in certain cases as considered appropriate||-||Discussion with the management on the development in these litigations during the year ended March 31 2019.|
|-||Enquiring from company's legal personnel and study the responses as received from them.|
|-||Verification that the accounting and / or disclosure as the case may be in the financial statements made by the company is in accordance with the assessment of legal counsel or management.|
|As the ultimate outcome of the matters are uncertain and the position taken by the management are based on the application of their best judgment related legal advice including those relating to interpretation of laws regulations it is considered to be a key audit matter||-||Obtaining representation letter from the management and the assessment of these matters.|
Responsibility of Management for the standalone Financial Statements
The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation of these financial statements that give a true and fair view of the financial position financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the company's financial reporting process.
Auditor's Responsibility for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the standalone 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's report. However future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalone financial statements including the disclosures and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that individually or in aggregate makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The Company's Board of directors is responsible for the other information. The other information comprises the information in the intefrated report Board's report alongwith its Annexures and financial highlights included in the company's annual report but does not include the financial statements and our auditor's report thereon.
Our opinion with our audit of the standalone financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to report that fact.
We have nothing to report in this regard.
Report on other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 issued by the Central Government of India in term of sub-section (11) of section 143 of the Companies Act 2013 we give in the Annexure B statement on the matters specified in the paragraphs 3 and 4 of the Order to the extent applicable.
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 best of 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 the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.
c) The Balance Sheet the Statement of Profit and Loss the statement of change in equity and Cash Flow Statement dealt with by this Report are in agreement with the books of accounts and the returns received from the branches not visited by us.
d) In our opinion the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
e) On the basis of written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors none of the directors is disqualified as on 31 March f) 2019 from being appointed as a director in terms of Section 164(2) of the Act. However company failed to pay dividend within prescribed time limit under the Company Act 2013 which will attract provisions of company act with respect of disqualification of director.
g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure A. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.
h) With respect to the other matters included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinion and to our best of our information and according to the explanations given to us :
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements Refer Note 26 to the financial statements ;
ii. The Company has made provision as required under the applicable law or accounting standards for material foreseeable losses if any on long-term contracts including derivative contracts;
iii. There were no amounts which required to be transferred to the Investor Education and Protection Fund;
|For B.J.Trivedi& Associates|
|Firm Regn No- 111042W|
|Membership No - 39595|
The Annexure A referred to in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2019 we report that:
REPORTON INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of SHUKRA PHARMACEUTICALS LIMITED (the Company) as of March 31 2019 in conjunction with our audit of the financial statements 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note) and the Standards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to the extent applicable to an audit of internal financial controls both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that
1. Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company'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 financial reporting including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and not be detected. Also projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31 2019 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
|For B.J.Trivedi & Associates|
|Firm Regn No- 111042W|
|Place: Ahmedabad||Bharat Trivedi|
|Membership No- 39595|
The Annexure B referred to in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2019 we reportthat: i) Fixed Assets [Clause 3(i)]:
a) The Company is maintaining proper records showing full particulars including quantitative details and situation of its fixed assets. Necessary records in this regard for the year under consideration are under updating.
b) All the assets have not been verified by the management during the year but there is a regular program of verification which in our opinion is reasonable having regard to size and the nature of its assets. No material discrepancies were noticed on such verification.
c) In reference to the title deeds of immovable properties all documents are held in the name of the company.
ii) Inventory [Clause 3(ii)]:
a) The inventory has been physically verified during the year by the management. In our opinion the frequency of verification is reasonable.
b) The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.
c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.
iii) Loan given by Company [Clause 3(iii)]:
a) The Company has granted loans secured or unsecured to companies firms Limited liability partnerships or other parties to bodies corporate covered in the register maintained under section 189 of the Companies Act 2013 (`the Act'). In our opinion and according to the information and explanations provided to us the terms and conditions of the grant of such loans are prima facie prejudicial to the Company's interest.
b) The schedule of repayment of principal and payment of interest has not been stipulated for the loans granted.
C)The Principal and interest are not overdue in respect of loans granted to companies firms or other parties listed in the register maintained under section 189 of the Companies Act 2013 which are overdue for more than ninety days.
iv) Loans to Directors and investment by Company [Clause 3(iv)]
In our opinion and according to information and explanations given to us the Company has complied with the provisions of section 185 and 186 of the Companies Act 2013 in respect of loans and investments made and guarantee and security provided by it as applicable. v) Deposits [Clause 3(v)]
The company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provision of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules2015 with regards to the deposits accepted from the public are not applicable.
vi) Cost Records [Clause 3(vi)]
The provisions of Section 148 (1) are not applicable to the company for the FY 2018-19.In this context the company has maintained cost records in pursuant to Companies (Cost records and Audit) Rules 2014 for internal control purpose.
vii) Statutory Dues [Clause 3(vii)]
a) During the FY 2018-19 the company was not regular in payment of statutory dues.
b) There are disputed statutory dues payable at the end of the year under consideration.
However company has preferred appeal before the Income tax Tribunal and disclosed vide Note no. forming part of notes on accounts as a contingent liabilities and no provision is made in the accounts. c) According to the records of the company the dues outstanding on account of any dispute are as follows:
|Name of the statute||Nature of dues||Amount claimed||Period to which the amount relates||Forum where dispute is pending|
|Income tax Act 1961||Income tax Penalty||1413340/-||F.Y 2005-06 ||Income tax Tribunal|
viii) Repayment of Loans [Clause 3(viii)]
During the FY 2018-19 the company has not defaulted in repayment of loans or borrowing to a financial institution bank and Government as mentioned under note no: 10.
ix) Utilization of IPO and further Public Offer [Clause 3(ix)] Company has not raised any moneys by way of Initial Public Offer or further public offer during the F.Y. 2018-19.
x) Reporting of Fraud [Clause 3(x)] During the year there is neither any fraud by the company nor any fraud on the company by its officers or employees has been noticed or reported.
xi) Approval of Managerial Remuneration [Clause 3(ix)]
According to the information and explanations given to us and based on our examination of the records of the company the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii) Nidhi Company [Clause 3(xii)]
As the company is not a nidhi company so this clause is not applicable to company. xiii) Related Party Transactions [Clause 3(xiii)] All the transactions with the related parties are in compliance with sections 177 and 188 of Companies Act 2013 where applicable and details have been disclosed in note no: 24 in accordance with accounting standard 18.
xiv) Private Placement or Preferential Issues [Clause 3(xiv)]
During the year under consideration the company has not made any kind of private placement or preferential issues of shares or fully or partly convertible debentures.
xv) Non cash Transactions [Clause 3(xv)]
During the year under consideration company has not entered into any non cash transactions with directors or persons connected with him for which provisions of Section 192 of Companies Act 2013 will be applied. Accordingly the provision of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.
xvi) Register under RBI Act 1934 [Clause 3(xvi)]
The company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. And accordingly the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.
|For B.J.Trivedi & Associates|
|FirmRegn No- 111042W|
|MembershipNo - 39595|