The Members of
Shukra Pharmaceuticals Limited Opinion
We have audited the accompanying standalone financial statements of ShukraPharmaceuticals Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss the statement of change in Equity andthe Statement of Cash Flows for the year ended on that date and a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "the standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis for QualifiedOpinion section of our report the aforesaid financial statements give the informationrequired by the Companies Act 2013 in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of the stateof affairs of the company as at March 31st 2020 and its profit change in equity and itscash flows for the year ended on that date.
Basis for Qualified Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013 (the Act). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Results section of our report. We are independent of the Companyin accordance 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 results 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.
Basis for Qualified Opinion
1. The company had made interest free loans and advances to related parties. In ouropinion and according to the information and explanations provided to us the terms andconditions of the grant of such loans are prima facie prejudicial to the Company'sinterest.
2. The company had repaid the loans and liabilities to the tune of Rs 1100000/- by saleof property. While contrary to this sales deed for the said property produced before uswhich reflects payment of sales consideration by bank cheque to the company for which noaccounting is done in the books of accounts.
3. The company has not complied with the mandatory requirement of section 203 of theCompanies Act 2013 regarding appointment of Chief Financial Officer.
4. The company had not paid the dividend distribution tax for the dividend declaredduring the last year and for the payment of dividend the financial instrument has beenissued but the same has not been presented to bank for the clearance.
Key Audit Matters
Key audit matters are those matters that in our professional judgment where of mostsignificance 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 statementsas a whole and in forming our opinion thereon and we do not provide a separate opinionon this matters.
|Sr No Key Audit Matters ||Auditor's response |
|1 The company has availed interest free loans payable on demand from its director compliance with the provisions of the Companies Act and also confirmation of the said balances outstanding as at the year end. The above loans were taken to meet the business needs of the company. ||The compliance with the provisions of the Companies Act were verified by us. The company has complied with the relevant statutory requirements provided for the acceptance of loans from directors. - The company has not obtained confirmation of balances and declaration from the said directors. |
Responsibility of Management for the standalone Financial Statements
The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating 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 Responsibility for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act 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.
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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements 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 with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
The Company's Board of directors is responsible for the other information. The otherinformation comprises the information in the intefrated report Board's report alongwithits Annexures and financial highlights included in the company's annual report but doesnot include the financial statements and our auditor's report thereon.
Our opinion 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 in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation 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 CentralGovernment of India in term of sub-section (11) of section 143 of the Companies Act 2013we give in the Annexure B statement on the matters specified in the paragraphs 3 and 4 ofthe 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 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 appears from our examination of those books and proper returns adequatefor 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 inequity and Cash Flow Statement dealt with by this Report are in agreement with the booksof accounts and the returns received from the branches not visited by us.
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 written representations received from the directors as on 31 March2020 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2020 from being appointed as a director in terms of Section 164(2) of theAct. However company failed to pay dividend within prescribed time limit under theCompany Act 2013 which will attract provisions of company act with respect ofdisqualification of director.
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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g) With respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinionand 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 financialposition in its financial statements - Refer Note 26 to the financial statements ;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
iii. There were no amounts which required to be transferred to the Investor Educationand Protection Fund;
The Annexure A referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31 March 2020 we reportthat:
REPORT ON INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SHUKRAPHARMACEUTICALS LIMITED ("the Company") as of March 31 2020 in conjunction withour 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 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2. Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
3. Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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.
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 20120 wereport that:
i) Fixed Assets [Clause 3(i)]:
a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of its fixed assets. Necessary records in this regardfor the year under consideration are under updating.
b) All the assets have not been verified by the management during the year but there isa regular program of verification which in our opinion is reasonable having regard tosize and the nature of its assets. No material discrepancies were noticed on suchverification.
c) In reference to the title deeds of immovable properties all documents are held inthe name of the company.
ii) Inventory [Clause 3(ii)]:
a) The inventory has been physically verified during the year by the management. In ouropinion the frequency of verification is reasonable.
b) The procedure of physical verification of inventory followed by the management isreasonable 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 onverification 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 Limitedliability partnerships or other parties to bodies corporate covered in the registermaintained under section 189 of the Companies Act 2013 (the Act'). In our opinionand according to the information and explanations provided to us the terms and conditionsof 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 beenstipulated for the loans granted.
C) The Principal and interest are not overdue in respect of loans granted to companiesfirms or other parties listed in the register maintained under section 189 of theCompanies 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 Companyhas complied with the provisions of section 185 and 186 of the Act in respect of the loansand investments made and guarantees 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 directivesissued by the Reserve Bank of India and the provision of sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules2015 withregards 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 2019-20.In this context the company has maintained cost records in pursuant to Companies (Costrecords and Audit) Rules 2014 for internal control purpose.
vii) Statutory Dues [Clause 3(vii)]
a) During the FY 2019-20 the company was not regular in payment of statutory dues.
b) There are disputed statutory dues payable at the end of the year underconsideration. However company has preferred appeal before the Income tax Tribunal anddisclosed vide Note no. forming part of notes on accounts as a contingent liabilities andno provision is made in the accounts.
c) According to the records of the company the dues outstanding on account of anydispute 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 2019-20 the company has not defaulted in repayment of loans or borrowingto 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 publicoffer during the F.Y. 2019-20.
x) Reporting of Fraud [Clause 3(x)]
During the year there is neither any fraud by the company nor any fraud on the companyby 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 examinationof the records of the company the company has paid / provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of Section 197 readwith 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 and188 of Companies Act 2013 where applicable and details have been disclosed in note no: 24in 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 privateplacement 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 noncashtransactions with directors or persons connected with him for which provisions of Section192 of Companies Act 2013 will be applied. Accordingly the provision of clause 3 (xv) ofthe 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 ofIndia Act 1934. And accordingly the provisions of clause 3 (xvi) of the Order are notapplicable to the Company and hence not commented upon.
|Place: Ahmedabad ||For B.J.Trivedi & Associates |
|Date: 30.07.2020 ||Chartered Accountants |
| ||Firm Regn No- 111042W |
| ||Bharat Trivedi |
| ||Proprietor |
| ||Membership No- 3959 |
| ||UDIN: 20039595AAAABV51715 |