TO THE BOARD OF DIRECTORS AND MEMBERS OF VARDHAMAN LABORATORIES LIMITED
We have audited the accompanying financial statements of VARDHAMAN LABORATORIES LIMITED("the Company") for the year ended March 31 2018 ("the Statement")being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. This Statement whichis the responsibility of the Company's Management and approved by the Board of Directorshas been prepared on the basis of related financial statements which is in accordance withaccounting standards prescribed under Section 133 of the Companies Act 2013 asapplicable and other accoutring principles generally accepted in India. Our responsibilityis to express an opinion on the Statement.
Management's Responsibility for the Financial Statements
The Company s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules! 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
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 thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose of expressingan opinion on whether the Company has in place an adequate internal financial controlssystem over financial reporting and the operating effectiveness of such controls. An auditalso includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion 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 of the state of affairs of the Company as at March31 2018 and its loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order") asamended issued by the Central Government of India in terms of Section 143(11) of the Actwe give in the "Annexure B" a statement on the matters specified inparagraph 3 and 4 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 purposes of our audit.
(b) The Statement is presented accordance with the requirements of Regulation 33 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
(c) 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.
(d) 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.
(e) 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.
(f) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in termsof Section 164(2) of the Act.
(g) 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".
(h) 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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
"Annexure A" to the Independent Auditor's
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 VardhamanLaboratories Limited ("the Company") as of March 31 2018 in conjunctionwith 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 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial 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 2017 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.
| ||For Agrawal Naredi & Co. |
| ||Chartered Accountants |
| ||FRN:- 122480W |
| || |
| ||PARTNER |
| ||Membership No. 118336 |
|Place: Pune || |
|Date: 30/05/2018 || |
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date to the members of Vardhaman Laboratories Limited forthe year ended 31st March 2018)
(i) According to the information and explanations given to us The Company does not haveany fixed assets. So maintenance of proper records and showing full particulars includingquantitative details and situation of fixed assets and physical verification of atreasonable intervals is not applicable.
(ii) According to the information and explanations given to us and having regard to thenature of the Company's business the Company does not have any inventories as at thebalance sheet date and therefore the question of reporting on whether; physicalverification has been carried out at reasonable intervals; procedures of physicalverification of inventories were reasonable and adequate; and discrepancies noticed onphysical verification were material does not arise.
(iii) According to the information and explanations given to us the company does nothave granted any loans secured or unsecured to companies firms or other parties coveredin the Register maintained under Section 189 of the Companies Act 2013.
(iv) In our opinion and according to the information and explanations given to usduring the period under review the company does not have entered into any transactionwith provisions of section 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and security; So adequate internal control system with regard topurchases of Materials and fixed assets and the sale of goods and services not applicable.
(v) According to the information and explanations given to us the company does not haveaccepted any deposits whether the directives issued by the Reserve Bank of India and theprovisions of Sections 73 to 76 or any other relevant provisions of the Companies Act andthe rules framed thereunder.
(vi) According to the information and explanations given to us maintenance of costrecords has been specified by the Central Government under sub-section (1) of Section 148of the Companies Act is not applicable to the company.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesapplicable to it with the appropriate authorities. Having regard to the nature of theCompany's business / activities / results statutory dues in respect of Excise Duty arenot applicable to the Company.
(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income tax Sales Tax Wealth Tax Service Tax Customs Duty Value Addedtax and other material statutory dues in arrears as at March 31 2018 for a period of morethan six months from the date they became payable.
(c) There are no amounts that are due to be transferred to the Investor Education andProtection Fund in accordance with the relevant provisions of the Companies Act 2013 andRules made thereunder.
(viii) The accumulated losses i.e. deficit in the Statement of Profit and Loss of theCompany at the end of the financial year are less than fifty percent of its net worth andthe Company has incurred cash losses during the current financial year as well as cashloss during the immediately preceding financial year.
(ix) The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe order is not applicable.
(x) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of paragraph 3 (ix) of the Order is not applicable to the Company.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid/provided formanagerial remuneration. Therefore clause (xi) of paragraph 3 is not applicable.
(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofparagraph 3 (xii) of the Order is not applicable to the Company.
(xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
(xiv) According to the information and explanation given to us and based on ourexamination of the record of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and our examination ofthe records of Company the Company has not entered into non- cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) of Order is notapplicable.
(xvi) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.
|For Agrawal Naredi & Co. |
|Chartered Accountants |
|RADHESHAM AGRAWAL |
|Membership No. 118336 |
|Place: Pune |
|Date: 30/05/2018 |