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Independent Auditors' Report
Ind–Swift Laboratories Limited,
Report on the Financial Statements
1. We have audited the accompanying financial statements of M/s Ind–Swift Laboratories Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit & Loss and Cash Flow Statement of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.
Management's Responsibility for the Financial Statements
2. The Company's Board of Directors is responsible for matters in section 134(5) of the Companies Act 2013 with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act, read with Rules 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal inancial control that were operating effectively for ensuring the accuracy and completeness of accounting records, relevant to the preparation and presentation of the inancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3. Our responsibility is to express an opinion on these financial statements based on our audit. We taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provision of the Act and Rules made there under. We conducted our audit in accordance with Standards on Auditing specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal financial control relevant to the Company's preparation of the financial statement that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
6. In our opinion, and to the best of our information, and according to the explanations given to us, the aforesaid financial statements, read together with the "Emphasis of Matter" section below, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;
(b) In the case of the Statement of Profit and Loss, of the loss of the year ended on that date; and
(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.
Emphasis of Matter
Without qualifying our opinion, we draw attention to the following matters in the notes:
7. The provisions of the Companies Act, 1956 (further amended to Companies Act, 2013), where the Company has got its Fixed Deposit Scheme restructured vide order No. C.P 27/01/2013, Dated 30.09.2013 of Hon'ble Company Law Board. The Company has been granted extension of time in repayment of these deposits. Few of the FD holders have however approached the courts for the repayment of their Fixed Deposits. (Refer to Note No. V of financial statements)
8. Two members of the CDR group namely Catholic Syrian Bank and State Bank Of Travancore have transferred their balances to Asset Reconstruction Company.
Further, the Company's Account has been declared as NPA by banks mentioned therein.
(Refer to Note No. IV of the financial statement)
9. The Company has introduced a new accounting policy of writing off of Debtors exceeding three years on cut–off date of Balance Sheet, other than balances of related parties and disputed debtors.
(Note No. XLV, policy no.16 of the financial statements)
Report on Other Legal and Regulatory Requirements
10. As required by 'the Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of Section 143 (11) of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
11. As required by Section 143(3) of the Act, we report that:
(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;
(b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purpose of audit;
(c) The Balance sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account and returns;
(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act read with Rule 7 of Companies (Accounts) Rules, 2014.
(e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section164(2) of the Companies Act, 2013.
(f) The company has adequate internal financial controls system in place and are operating effectively.
(g) With respect to the other matters included in the audit report with accordance with Rule 11 of Companies (Audit & Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us–
I. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note XIX to the financial statements
II. The Company has made provision, as required under the applicable law or accounting standards for material foreseeable losses, if any or long term contracts including derivative contracts.
III. There has been no delay in transferring amounts, required to be transferred, to the investor education and protection fund by the Company.
(Referred to in paragraph 1 of our report of even date)
I. In respect of its fixed assets:
a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b) According to the information and explanations given to us, the company has a system of physical verification of all its fixed assets over a period of four years. In our opinion having regard to the size of the company and the nature of its assets, the program of verification is reasonable. No material discrepancies have been noticed in respect of assets physically verified.
II. In respect of its inventories:
a) The inventory was physically verified during the year by the management. In our opinion, frequency of verification is reasonable.
b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company is maintaining proper records of its inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.
III. According to the information and explanations given to us, the company has granted unsecured loans during the year & the amounts outstanding at the year end is Rs. 5133.31 Lacs (Prev. Year Rs. 3221.16) to two parties covered in the register maintained under section 189 of the Companies Act 2013.
a) Receipt of the principal is irregular and no interest is being charged.
b) No reasonable steps have been taken by the company for the recovery of the principal and interest even though the overdue amount is more than rupees one lac
IV. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our Audit, we have not observed any continuing failure to correct major weaknesses in Internal Control System.
V. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 73 to 76 of the Companies Act 2013 and the rules framed there under and the directives issued by the Reserve Bank of India, with regard to the deposits accepted from the public. except the company has not maintained the Liquid Assets ( i.e. 15% of Deposits maturing next financial year ) as a statutory requirement under the Companies ( Acceptance of Deposit ) Rules, 2014. For the relaxation of the above statutory requirement, company had iled the application to the Central Government ( Ministry of Company Affairs ) which has been rejected by Central Government vide its letter dated 23/3/2015. However, the Company has got its Fixed Deposit Scheme restructured vide order No. C.P 27/01/2013, Dated 30.09.2013 through Hon'ble Company Law Board.
VI. The Company is required to maintain cost records under section 148(1) of the Companies Act, 2013 for the products of the company and according to the information and explanation given to us, the company has maintained proper records as prescribed by the Central Government.
VII. According to the information and explanations given to us in respect of Statutory and other dues :
a) The company is regular in depositing undisputed statutory dues, including Provident Fund, Value Added Tax , Employees' State Insurance, Income Tax, Sales Tax, wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities during the year.
b) As per the information and explanation given to us, there is no amount of Income tax/sales tax/ custom duty/ wealth tax/excise duty/Value Added Tax/service tax/Cess which have not been deposited on account of any dispute.
c) Amount required to be transferred to investor education and protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under, have been transferred to such Funds within time.
VIII. The Company have no accumulated losses at the end of the year and has incurred no cash losses during the current financial year and in preceding financial year.
IX. The Company has made following defaults in repayment of dues to Banks, Financial Institutions and Debenture holders
X. According to the information and explanations given to us, the company has given corporate guarantee for loans taken by others from banks or financial institutions and in our opinion, the same are not prejudicial to the interest of the Company.
XI. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtained.
XII. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.
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