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Vaidya Sane Ayurved Laboratories Ltd.

BSE: 535434 Sector: Health care
NSE: MADHAVBAUG ISIN Code: INE0JR301013
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Vaidya Sane Ayurved Laboratories Ltd. (MADHAVBAUG) - Auditors Report

Company auditors report

To the Members of Vaidya Sane Ayurvedic Laboratories Ltd (Erstwhile known as VaidyaSane Ayurvedic Laboratories Pvt. Ltd.) Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Vaidya Sane AyurvedicLaboratories Ltd (Erstwhile Vaidya Sane Ayurvedic Laboratories Pvt Ltd) (‘theCompany') which comprise the Balance Sheet as at 31st March 2022 the Statementof Profit and Loss and the Cash Flow Statement for the year then ended and notes to thefinancial statements including a summary of the significant accounting policies and otherexplanatory information.

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 theCompanies Act 2013 (‘Act') in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India including theAccounting Standards prescribed under Section 133 of the Act read with rule 7 of theCompanies (Accounts) Rules 2014 (as amended) of the state of affairs of the Company asat 31st March 2022 and its profit/loss and its cash flows for the year endedon that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Companies Act 2013. Our responsibilities under thosestandards are further described in the Auditor's 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 (‘ICAI') together with the ethical requirements that are relevant to our auditof the financial statements 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.

Information other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the other information. Otherinformation does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

ln connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

If based on the work we have performed on the other information obtained prior to thedate of this auditor's report we conclude that there is a material misstatement of thisother information we are required to report that fact. Reporting under this section isnot applicable as no other information is obtained at the date of this auditor's report.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards prescribed under Section 133 of the Act read with rule7 of the Companies (Accounts) Rules 2014 (as amended). This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

ln 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.

The 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 withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

As part of an audit in accordance with Standards on Auditing (SAs) we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

b. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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.

c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management and by Board of Directorsin the terms of the requirement specified under Regulation 33 of the Listing Regulation.

d. Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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.

e. 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

As required by the Companies (Auditor's Report) Order 2020 ("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 thematters specified in paragraph 3 & 4 of the Order to the extent applicable.

As required by Section 143(3) of the Act we report that:

We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.

a) 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;

b) 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;

c) 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 (as amended);

d) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors are disqualified as on 31 March2022 from being appointed as a director in terms of Section 164(2) of the Act;

e) in our opinion and to the best of our information and according to the explanationsgiven to me the provisions of Section 143(3)(i) for reporting on the adequacy of internalfinancial controls over financial reporting and the operating effectiveness of suchcontrols of the Company refer to our separate Report in "Annexure B"

f) with respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. the Company does not have any pending litigation which would impact its financialposition as at 31st March 2022

ii. the Company did not have any long-term contracts including derivative contracts forwhich there are any material foreseeable losses as at 31st March 2022;

iii. there are no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended 31st March2022;

For A A Mohare and Co.

Chartered Accountants (FRN 114152W)

Amit Mohare

Partner

Membership No.: 148601 Place : Thane

Date : 04/05/2022

UDIN : 22148601AIJKLZ3349

(Referred to in paragraph 2 under Report on Other Legal and Regulatory Requirements'section of our report to the Members

of Vaidya Sane Ayurvedic Laboratories Ltd (Erstwhile known as Vaidya Sane AyurvedicLaboratories Pvt. Ltd) of even date

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

(i) (a) The Company has maintained proper records showing particulars quantitativedetails and situation of property plant

and equipment and intangible assets.

(b) The property plant and equipment have been physically verified by the managementduring the year and no material discrepancies are noticed on such verification. ln ouropinion the frequency of verification of the property plant and equipment is reasonablehaving regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds/ registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.

Relevant line item in the Balance sheet Description of item of property Gross carrying value Title deeds held in the name of Whether title deed holder is a promoter director or relative# of promoter* /director or employee of promoter/ director Property held since which date Reason for not being held in the name of the company **
Land At Kodhali 3235000 Company Company 02-03-2011 NA
Building At Kondhali 44245188 Company Company 12-07-2011 NA
Building Flat at Pune 5795900 Company Company 03-07-2010 NA
Building At Khopoli 42959406 Company Company 18-05-2020 NA

(d) The company has not revalued its Property Plant and Equipment (including Right ofUse assets) or intangible assets or both during the year as such valuation by RegisteredValuer is not applicable for the year.

(e) No proceedings have been initiated or are pending against the company for holdingany benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made thereunder as such this clause is not applicable to the company for the year.

(ii) (a) Physical verification of inventory has been conducted at reasonable intervalsby the management and in our opinion the

coverage and procedure of such verification by the management is appropriate; We havenot found any discrepancies of 10% or more in the aggregate for each class of inventory.

(b) During any point of time of the year the company has not been sanctioned anyworking capital limits in excess of five crore rupees in aggregate from any banks orfinancial institutions on the basis of security of current assets;

(iii) The company has made investment of 99.00% in share capital of Joint HealingServices Private Limited on 23/03/2022. As such Joint Healing Services Private Limited isbecome subsidiary of the company. However company has not given loans or advances in thenature of loans secured or unsecured to companies firms Limited Liability Partnershipsor any other parties if so-

(a) During the year the company has not provided any loans or provided any advances inthe nature of loans or stood guarantee or provided security to any other entity.

(b) The investments made guarantees provided security given and the terms andconditions of the grant of all loans and

advances in the nature of loans and guarantees provided are not prejudicial to thecompany's interest;

(c) As company has not given any loans this clause is not applicable for the year.

(d) As company has not given any loans this clause is not applicable for the year.

(e) As company has not given any loans this clause is not applicable for the year.

(Referred to in paragraph 3 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members

of Vaidya Sane Ayurvedic Laboratories Ltd. (Erstwhile known as Vaidya Sane AyurvedicLaboratories Pvt Ltd) of even date).

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act").

We have audited the internal financial controls over financial reporting of VaidyaSane Ayurvedic Laboratories Ltd. (Erstwhile known as Vaidya Sane Ayurvedic LaboratoriesPvt Ltd) ("the Company") as of March 31 2022 in conjunction with our auditof the Financial Statements of the Company for the financial 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 the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

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 as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 judgement 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 financial reporting includes those policiesand procedures that

(1) pertains 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2022 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For A A Mohare and Co.

Chartered Accountants (FRN 114152W)

Amit Mohare

Partner

Membership No.: 148601 Place : Thane

Date : 04/05/2022

UDIN : 22148601AIJKLZ3349

(f) Company has given advance against the salary and for the expenses to the employeesof the company which are covered under the definition of Sec 2(76) of the Companies Act2013. Details of which are as follows

Nature of transaction Name of the related party Balance as on 31.03.2022 (' In Lakhs)
Advance given for Expenses Mr. Vishwas Walavalkar 0.25
Mr. Shripad Upasani 7.13
Advance Salary Mr. Shripad Upasani 10.00

(iv) In respect of loans investments guarantees and security provisions of sections185 and 186 of the Companies Act have been complied with by the company. Company has notgiven any loans in violation of section 185 and 186 of the Companies Act 2013.

(v) Company has not accepted any amounts which are deemed to be deposits and theprovisions of sections 73 to 76 or any other relevant provisions of the Companies Act andthe rules made thereunder

(vi) Company is not require to maintain cost records as specified by the CentralGovernment under subsection (1) of section 148;

(vii) (a) There are no dues in respect of income-tax GST that have not been depositedwith the appropriate authorities on

account of any dispute. However in case of Value added tax below are the details ofdemand received under section 32 of Maharashtra Value Added Tax 2002 for various years.The Company has filed separate appeals against the assessment orders. The appellantauthorities have granted stay on these demands and the matter is sub-judice :

Financial Year Amount under dispute Act
2011-12 1570026 MVAT
2012-13 2576926 MVAT
2013-14 1422371 MVAT
2014-15 3064412 MVAT
2015-16 2845931 MVAT
2016-17 2954986 MVAT
2015-16 1812 CST

(b) No statutory dues referred to in sub-clause (a) have not been deposited on accountof any dispute during the year.

(viii) No any transactions recorded in the books of account have been surrendered ordisclosed as income during the year in the tax assessments under the Income Tax Act 1961(43 of 1961) as there was no previously unrecorded income has been recorded in the booksof account during the year;

(ix) (a) The company has not defaulted in repayment of loans or other borrowings or inthe payment of interest thereon to any

lender or bank during the year.

(b) The company is not declared as wilful defaulter by any of the bank or financialinstitution or other lender;

(c) During the year company has not applied for any term loans as such this clause ofutilization of term loan for the same purpose does not apply to the company.

(d) Company has not utilized any funds raised on short term basis but utilized for longterm purposes;

(e) The company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries associates or joint ventures;

(f) The company has not raised loans during the year on the pledge of securities heldin its subsidiaries joint ventures or associate companies.

(x) (a) Company has raised money by way of initial public offer or further public offer(but not including debt instruments)

during the year were applied for the purposes for which those are raised Following arethe details of shares issued during the year by the company. The Company converted intopublic limited vide revised incorporation certificate dated 25/11/2021.

Date of issue No. of Shares Type of Issue Constitution
21-09-2021 6930000 Bonus Issue Private Limited
09-10-2021 767250 Right Issue Private Limited
18-02-2022 2771200 Initial Public Issue Public Limited

(b) The company has not made any preferential allotment or private placement of sharesor convertible debentures (fully partially or optionally convertible) during the year.

(xi) (a) No fraud by the company or on the company has been noticed or reported duringthe year;

(b) whether any report under sub-section (12) of section 143 of the Companies Act hasbeen filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Auditand Auditors) Rules 2014 with the Central Government;

(c) whether the auditor has considered whistle-blower complaints if any receivedduring the year by the company;

(xii) (a) This is not the Nidhi Company as such this clause is not applicable to thecompany.

(b) This is not the Nidhi Company As such this clause of maintaining ten per centunencumbered term deposits as specified in the Nidhi Rules 2014 to meet out the liabilityis not applicable to the company;

(c) This is not the Nidhi Company As such any default in payment of interest ondeposits or repayment thereof for any period and if so the details thereof is notapplicable to this company;

(xiii) All the transactions with the related parties are in compliance with sections177 and 188 of Companies Act wherever applicable and the details have been disclosed inthe financial statements etc. as required by the applicable accounting standards;

(xiv) (a) The company has an internal audit system commensurate with the size andnature of its business; Company has

appointed internal auditor on 18th Feb 2022 for the audit to be covered forthe year.

(b) The reports of the Internal Auditors for the period under audit were considered bythe statutory auditor;

(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him as such the provisions of section 192 of Companies Act havebeen complied with;

(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 (2 of 1934) as the nature of the business is not of banking andfinance;

(xvii) The company has not incurred any cash losses in the financial year and in theimmediately preceding financial year and there is no cash loss incurred during the yearand immediately preceding year;

(xviii) No statutory auditors has resigned during the year as such this clause is notapplicable.

(xix) on the basis of the financial ratios ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements the auditor's knowledge of the Board of Directors and managementplans it is of the opinion that there is no material uncertainty exists as on the date ofthe audit report that company is capable of meeting its liabilities existing as on thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date;

(xx) (a) As CSR activities are not mandatory to the company and company is notfulfilling any criteria given in section 135(1) of

the Act this section is not applicable to the company.;

(xxi) There are no qualifications or adverse remarks by the respective auditors in theCompanies (Auditor's Report) Order (CARO)

For A A Mohare and Co.

Chartered Accountants (FRN 114152W)

Amit Mohare

Partner

Membership No.: 148601 Place : Thane

Date : 04/05/2022

UDIN : 22148601AIJKLZ3349

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