To The Members of Welcure Drugs & Pharmaceuticals Limited
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Welcure Drugs &Pharmaceuticals Limited ("the Company") which comprise the Balance Sheet asat 31st March 2020 the Statement of Profit and Loss including Other Comprehensive IncomeStatement of Changes in Equity and Cash Flow Statement for the year ended on that dateand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as financialstatements).
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("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards ("Ind AS")prescribed under section 133 of the Act read with Companies (Indian Accounting Standards )Rules 2015 as amended and other accounting principles generally accepted in India of theState of affairs of the Company as at 31st March 2020 its loss changes in equity andits cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statement in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 ouraudit of the financial statements under the provisions of the Act 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.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined that there are no key audit matters to communicate in our report.
Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation.
The other information comprises the information included in the Management Discussionand Analysis Board's Report including Annexures to Board's Report Corporate Governanceand Shareholder's Information but does not include the financial statements and ourauditor'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. In connection with our audit of thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. If based on the work we have performed we conclude thatthere is a material misstatement of this other information; we are required to report thatfact. We have nothing to report in this regard.
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 total comprehensiveincome changes in equity 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 relevant rules issued thereunder. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 statement that givea 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.
The Board of Directors is responsible for overseeing the Company's financial reportingprocess.
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 with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign 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 hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness 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 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.
Evaluate the overall presentation structure and content of 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.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act based on our audit 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 it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome Statement of Changes in Equity and the Cash Flow Statement dealt with by thisreport are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under section 133 of the Act read with relevant rulesissued thereunder.
(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of section164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols with reference to financial statements.
(g) In our opinion and according to the information and explanations given to us themanagerial remuneration for the year ended March 312020 paid by the Company to itsdirectors is in accordance with the provisions of section 197 read with Schedule V to theAct ;
(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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements (refer to Note 5 to the financial statements);
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For V.P. Gupta & Co. Chartered Accountants (Registration No. 000699N)
CA V.P. Gupta Partner M. No. 080557
Place: Delhi Date: 11.05.2020
Annexure "A" referred to in paragraph 1 of "Report on OtherLegal and Regulatory Requirements" of Independent Auditor's Report to the members ofWelcure Drugs & Pharmaceuticals Ltd on its financial statements as of and for the yearended 31st March 2020 we report that:
(i) The Company did not own any fixed assets during the year. Accordingly clause 3(i)of the Companies (Auditor's Report) Order 2016 is not applicable to the Company.
(ii) The Company did not hold any inventory during the year. Accordingly clause 3(ii)of the Companies (Auditor's Report) Order 2016 is not applicable to the Company.
(iii) According to information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies firms limited liabilitypartnership or other parties covered in the register maintained under section 189 of theCompanies Act 2013. In view of this clause 3(iii) of the Companies (Auditor's Report)Order 2016 is not applicable.
(iv) According to the information and explanations given to us the Company has neithergranted any loan nor made any investment or provided guarantee or security during theyear. In view of this clauses 3(iv) of the Companies (Auditor's Report) Order 2016 isnot applicable.
(v) According to the information and explanations given to us the Company has notaccepted deposits as defined in Company (Acceptance of Deposits) Rules 2014. In view ofthis clause 3(v) of the Companies (Auditor's Report) Order 2016 is not applicable.
(vi) According to the information and explanations given to us the clause relating tomaintenance of cost records as specified under section 148(1) of the Companies Act 2013is not applicable to Company as no production activities were carried out by the Companyduring the year.
(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingwith appropriate authorities undisputed statutory dues including income tax and otherstatutory dues applicable to it. According to the information and explanations given tous no amount in respect of above was in arrears as at 31.03.2020 for a period of morethan six months from the date they became payable.
(b) According to the information and explanations given to us and the records of theCompany examined by us in our opinion there are no statutory dues which have not beendeposited on account of any dispute except income tax. The income tax department hadraised a tax demand for an amount of Rs. 32.99 lakhs for the assessment year 2011-12 andthe Company has filed an appeal before Commissioner of Income Tax (Appeals) AlwarRajasthan against the same. The hearing of the appeal is in progress; and as informed bythe management chances of order in favour of the Company are high on merits and legalgrounds.
(viii). According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company has not taken any amount from afinancial institution bank or government nor has issued debenture during the year.Therefore clause 3(viii) of the Companies (Auditor's Report) Order 2016 is notapplicable.
(ix). According to the information and explanation given to us the Company has neitherraised money by way of initial public offer or further public offer (including debtinstruments) nor obtained any term loans during the year. Therefore clause 3(ix) of theCompanies (Auditor's Report) Order 2016 is not applicable.
(x). According to information and explanation given to us no fraud by the Company orany fraud on the Company by its officers or employees has been noticed or reported duringthe year.
(xi). According to information and explanation given to us management remuneration hasbeen paid in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V to the Companies Act 2013.
(xii). In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany.
(xiii). According to information and explanation given to us all transactions with therelated parties are in compliance with sections 177 and 188 of Companies Act 2013 and thedetails have been disclosed in the notes to the financial statements as required by theapplicable accounting standards.
(xiv). According to information and explanation given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Therefore the provisions of clause 3(xiv) of the Companies(Auditor's Report) Order 2016 are not applicable to the Company.
(xv). According to information and explanation given to us the Company has not enteredinto any non-cash transactions with directors or persons connected with them and henceprovisions of section 192 of the Companies Act 2013 are not applicable.
(xvi). According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
For V.P.Gupta & Co.
Chartered Accountants (Registration No. 000699N)
M. No. 080557
Annexure "B" to the independent auditor's report of even date on thefinancial statements of Welcure Drugs & Pharmaceuticals Ltd
Report on the Internal Financial Controls under Clause (i) of sub section 3 of Section143 of the Companies Act 2013 ("the Act") as referred to in paragraph2(f) of "Report on Other Legal and Regulatory Requirements" section:
We have audited the internal financial controls with reference to financial statementsof Welcure Drugs & Pharmaceuticals Limited ("the Company") as of 31stMarch 2020 in conjunction with our audit of the financial statements of the Company forthe 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India ("ICAI").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing asspecified under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to financial statements both applicable to anaudit of Internal Financial Controls and both issued by the "ICAI". ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand 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 with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 withreference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A Company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorisations 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 with reference to financialstatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to financial statement and such internal financialcontrols were operating effectively as at 31st March 2020 based on the internal financialcontrols with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the"ICAI".
For V.P.Gupta & Co.
Chartered Accountants (Registration No. 000699N)
CA V. P. Gupta
M. No. 080557