| 1 . We have audited the accompanying financial statements of Godavari
Drugs Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2015, the statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
2. The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation and presentation 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
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting 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 adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit.
4. We have 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 provisions of the act and rules made there
under.
5. We conducted our audit in accordance with the 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.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's 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 auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view, in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
7. 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.
Opinion
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements 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, of the state of affairs of the Company as
at March 31, 2015 and its Profit and its Cash Flows for the year ended
on that date.
Emphasis of Matter
9. We draw attention to Note No. 2.32 to the financial statements,
which describes that the confirmation of balances of trade payable,
trade receivable, debit and credit to the parties are subject to
reconciliation, review and adjustment thereof. Our opinion is not
qualified in this respect.
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 sub-section (11) of
section 143 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 in the Annexure a statement on the
matters specified in the paragraph 3 and 4 of the Order, to the extent
applicable.
11. 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 best of 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 the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(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 the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on March 31, 2015, 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 Section 164 (2) of the
Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and 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 as on
March 31, 2015 on its financial position in its financial statements;
ii. The Company has made provision, as required under the applicable
law or Accounting Standards, for material foreseeable losses, if any,
on long term contracts. The Company neither entered into any derivative
contract during the year nor have any outstanding derivative contract
at the end of the year;
iii. There was no amount required to be transferred to the Investor
Education and Protection Fund by the Company during the year ended
March 31, 2015.
Annexure to the Independent Auditors' Report
Referred to in paragraph 10 of the Independent Auditors' Report of even
date to the members of Godavari Drugs Limited on the financial
statements as of and for the year ended March 31, 2015
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management during
the year and there is regular program of verification which, in our
opinion, is reasonable having regard to the size of the Company and the
nature of its assets.
(ii) (a) The inventory has been physically verified by the management
during the year. In respect of inventory lying with the parties, these
have substantially been confirmed by them. In our opinion, the
frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
(iii) The Company has not granted any loans secured or unsecured to
Companies, firms or other parties covered in the registers maintained
under Section 189 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
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. Further, on the basis of our examination of
the books and records of the Company, and according to the Information
and explanations given to us, we have neither come across, nor have
been informed of, any continuing failure to correct major weaknesses in
the aforesaid internal control system.
(v) The Company has not accepted any deposits from the public within
the meaning of Sections 73 and 74 of the Act and the rules framed there
under to the extent notified.
(vi) According to the information and explanations given to us, the
Central Government has not prescribed the maintenance of cost records
under section 148(1) of the Act, in respect of goods traded by the
company.
(vii) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion the company
is regular in depositing undisputed statutory dues, including provident
fund, employees' state insurance, Income tax, Sales tax/CST, Wealth
Tax, Service tax, duty of customs, duty of excise, cess, value added
tax and other material statutory dues as applicable to it, with
appropriate authorities.
According to the information and explanations given to us, there are no
material dues of Income tax, Sales tax/CST, Wealth Tax, Service tax,
duty of customs, duty of excise, cess were in arrears, as on March 31,
2015 for a period of more than six months from the date they became
payable.
(b) According to the information and explanations given to us and the
records of the company examined by us, the particulars of dues of sales
tax including value added tax, duty of customs and duty of excise as at
March 31, 2015 which have not been deposited on account of a dispute
are as follows:
Sl. Name of the Nature of Amount Period to
No. Statute Dues (Rs. In Lakhs) which the
amount
relates
1 Central Excise Excise Duty 16.30 2008-09 to
Act, 1944 2013-14
2 Customs Customs Duty 6.96 2000-01
Act, 1962
Total 23.26
Name of the Statute Forum where Amount
the dispute Deposited
is pending (Rs. In Lakhs)
Central Excise Act 1944 Commissioner 0.41
(A)-Nagpur)
Customs Act 1962 CESTAT- Mumbai 2.50
Total 2.91
(c) There are no amount required to be transferred to Investor
Education and Protection Fund in accordance with the provisions of the
Companies Act, 1956 and the rules made there under.
(viii) The company has accumulated losses at the close of the year and
are not more than 50% of its net worth. The company has not incurred
cash losses during the financial year ended on that date and in the
immediately preceding financial year.
(ix) According to the records of the examined by us, the Company has
not defaulted in repayment of dues to financial institutions, banks and
bond holders during the current financial year. There are no overdue as
on March 31, 2015.
(x) In our opinion and according to the information given to us, the
company has not obtained any term loan from financial institutions/
banks.
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied on an overall basis for
the purposes for which they were obtained.
(xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit nor have been informed of such case by the
Management.
For S Daga & Co.
Chartered Accountants
(ICAI FRN: 000669S)
(Shantilal Daga)
M. No. 011617
Partner
Place: Hyderabad
Date: 30.05.2015
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