Choksi Laboratories Ltd Auditors Report.
To the Members of
Choksi Laboratories Limited
Report on the Audit of the Ind AS financial statements
1. We have audited the accompanying Ind AS financial statements of Choksi Laboratories Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2019, and the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the Ind AS financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Ind AS financial statements").
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Companies Act, 2013 ("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 31 March 2019, and profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the Ind AS financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Ind AS financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
4. Key audit matters (KAM) are those matters that, in our professional judgment, were of most significance in our audit of the Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
5. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Ind AS financial statements.
|The key audit matters||How our audit addressed the key audit matter|
|a) Information Technology (IT) System & Control Impacting Financial Reporting|
|The IT Environment of the Company is complex & involves a large number of Independent & Inter Dependent IT System used in the operation of the Company for processing and recording a long volume of Transaction at numerous location. As a result there is a high degree of reliance & dependency on such IT System for the Financial Reporting Process of the Company. Appropriate IT General control and application are requested to ensure that such IT System are able to process the data, as required completely, accurately and consistently for reliable Financial Reporting. The accuracy & reliability of the Financial Reporting Process depends on the IT System and the related control environment including||In assessing the integrity of the IT System we involved our IT Expert to obtain an understanding of the IT Infrastructure & IT System relevant to the Companys Financial Reporting Process of evaluation and testing of IT general control and IT Automated Control exist in such IT System. We also assessed the operating effectiveness of control over removal and periodical review of access right. We further tested segregation of duties including preventive contract to ensure that access to change application on the operating system or database in the Production Environment were granted only to the authorized persons. We also evaluated the design and tested the operating effectiveness of key automated control within various business processes. This included testing the irregularity of the system interfaces the completeness and accuracy of data feeded and automated calculation.|
| IT general control over use access management and change management accrued application network database and operating system.|
| IT Automated application control.|
| Due to the importance of the impact of the IT System and related control environment on the Companys Financial Reporting Process we have identified testing of such IT System and related control environment as a key Audit Matter for the Current Year Audit.|
|b) Identification & Provision for Bad & Doubtful Debts|
|The identification of Bad & Doubtful Debts & provision is made in accordance with non-payment by debtors for the long period. Based on our Risk Assessment, the following are significant in Assessment of Bad & Doubtful Debt Provision.||We tested the design and operating effectiveness of key control including IT Based Control focusing on the following :|
| Recognition of default further Company is also requested to apply judgment to determine the Bad & Doubtful Debts. Considering the significance of the above matter to the Financial Statement the significant Auditor attention required. We have identified this as key Audit Matter for the Current Year Audit.|| Identification & classification of bad and doubtful debts in line with certain qualitative aspects, periodic internal review of Assets, Quality Assessment of Adequacy of Bad Debts Provision.|
| Periodic valuation of Debtors.|
| To test the identification of Debtors with defaulting events and other triggers we selected a sample of performing debts and independently assessed as to whether there was a need to classify as bad debt we assessed the appropriate debts and adequacy of disclosure against the relevant accounting standards.|
|c) Provisions & Contingent Liabilities.|
|As at 31st March 2019, the Company has ongoing Tax Cases & Guarantee issued by the Bank on behalf of Company. These indicate that a significant degree of Management Judgment is involved in determining the appropriateness of Provision and related disclosures.||Our Audit Procedure tested the design and operating effectiveness, key control over the estimation, monitoring and disclosure of Provisions and contingent liabilities in respect of Taxation Matters. We involved our Tax Specialist to gain an understanding of the current status of the outstanding Tax Litigations including understanding of various Order/ Notice received by the Company and the Management. Grounds of Appeal before the relevant Appellate Authority and critically evaluated the Management. Assessment of the likelihood of the liability devolving upon the Company in accordance with the principle of AS-29 for the significant provisions made we understood assessment and challenged the adequacy of provisions recognized by the management. We also reviewed the historical accuracy of the Provision recognized to determine the efficiency of the process of estimation by the Management. Further we assessed whether the disclosure related to significant Taxation matters were fairly processed. As on March 31st 2019, the company has a TDS Demand of Rs. 108000/- which is under dispute and pending at CIT(A). Bank has issued guarantee of amount Rs. 1959075/- on behalf of company.|
|Significant Management Judgment is needed in determining whether an obligation exists and whether a provision should be recognized as at the reporting date. In accordance with Accounting Criteria set under Accounting Standard 29, Provision Contingent Liabilities and Contingent Assets or whether it needs to be disclosed as Contingent Liabilities. Further Significant Judgments are also involved in measuring such obligations the most significant of which are assessment of Liability Judgment is involved in the determination of whether any outflow in respect of identified material matters are probable and can be estimated reliably.|
|Adequacy of Provision the appropriateness of Assumption and Judgment used in the estimation of significant provision and Adequacy of Disclosure of Provision for Liabilities & charges and Contingent Liabilities considering the significance of the above matter to the Financial Statement and significant Auditors attention required to test such estimate, we have identified this as a key Audit matter for Current Year Audit.|
|d) Ind AS 115, Revenue from Contracts with Customers|
|See note (VIII) of the significant accounting policies to the Ind AS financial statements.|
|The Company has adopted Ind AS 115, Revenue from Contracts with Customers, starting 1 April 2018. The adoption of the new revenue accounting standard involves application of certain key principles relating to identification of performance obligations, determination oftransaction price of the identified performance obligations, the timing of transfer of control for recognition of revenue or the appropriateness of the basis used to measure revenue recognized over a period. Additionally, new revenue accounting standard contains new disclosures.||Our audit procedures included the following:|
| We considered the Companys revenue recognition accounting policies based on the principles in Ind AS 115.|
| We evaluated the design, implementation and effective operation of the internal controls relating to implementation of the new revenue accounting standard.|
| We selected samples of continuing and new contracts and performed the following procedures:|
| Read, analyzed and identified the distinct performance obligations in these contracts.|
| Compared these performance obligations with that identified and recorded by the Company.|
| Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue.|
| Evaluated management assessment of point of recognition of revenue based on transfer of control or satisfaction of obligations over time.|
| We evaluated the adequacy of financial statement disclosures, pursuant to new revenue accounting standard.|
|e) Ind AS 16, Property, Plant and Equipment|
|See note (XV)of the significant accounting policies to the Ind AS financial statements.|
|The carrying amount of PPE represents 62.35% of the total assets of the company. The values in use of these PPE have been determined based on certain assumptions and estimates of future performance.||In view of the significance of the matter our procedures in this area included the following :|
|The value in use so determined of each Cash Generating Unit (CGU) identified by the management has been used for the impairment evaluation of the PPE. Due to the significance of the value of the PPE, the inherent uncertainty and judgment involved in forecasting performance and the estimates involved in discounting future cash flows, we have considered these estimates to be significant to our overall audit strategy and planning.|| Testing the design, implementation and operating effectiveness of key controls over the impairment review process including the review and approval of forecasts and review of valuation models;|
| Assessing the valuation methodology used by management and testing the mechanical accuracy of the impairment models;|
| Evaluating the reasonableness of the valuation assumptions, such as discount rates, used by management through reference to external market data;|
| Challenging the appropriateness of the business assumptions used by management, such as sales growth and the probability of success of new products;|
| Evaluating the past performances where relevant and assessing historical accuracy of the forecast produced by management;|
| Enquiring with respect to and challenging the management on the commercial strategy associated with the products to ensure that it was consistent with the assumptions used in estimating future cash flows;|
| Considering whether events or transactions that occurred after the balance sheet date but before the reporting date affect the conclusions reached on the carrying values of the assets and associated disclosures;|
| Performing sensitivity analysis of key assumptions, including future revenue growth rates, costs and the discount rates applied in the valuation models;|
| Evaluating the adequacy of the disclosures made in the consolidated financial statements.|
|f) Evaluation of uncertain tax positions|
|See Note 30 to the Ind AS financial statements.|
|Refer note (XII) and (XIV) of the significant accounting policies to the Ind AS financial statements.|
|The Company operates in multiple jurisdictions and is subject to periodic challenges by local tax authorities on arranging of tax matters during the normal course of business including indirect tax matters. These involve significant management judgment to determine the possible outcome of the uncertain tax positions, consequently having an impact on related accounting and disclosures in the standalone financial statements.||With the support of tax specialists, we assessed the appropriateness of the provisions for uncertain tax positions and carrying value of deferred tax assets and MAT credit by performing the following audit procedures:|
|In addition, recognition of deferred tax assets and minimum alternate tax credits (MAT credit) is dependent on the assessment of future utilization/ recoverability as estimated by the management based on projected performance involving significant judgment.|| Testing the design and operating effectiveness of the Companys controls over provision for current tax,deferred tax and uncertain tax positions;|
| Assessing and challenging the completeness of UTPs in conjunction with our internal tax specialists by considering changes to business and tax legislations through discussions with management and review of correspondences with authorities where relevant;|
| Assessing and challenging the key assumptions used by management in estimating tax provisions;|
| Assessing and challenging the assessment of the possible outcome of disputed matters as estimated by the management;|
| Assessing and challenging managements estimate of utilization of MAT credit and deferred tax assets;|
| Evaluating adequacy of disclosures given.|
Information other than the financial statements and Auditors Report thereon
6. The Companys management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companys annual report, but does not include the Ind AS financial statements and our auditors report thereon.Our opinion on the Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Managements Responsibility for the Ind AS financial statements
7. The Companys management and Board of Directors are responsible for the matters stated in Section 134(5) ofthe Act with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs, profit / loss (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the Ind AS financial statements, management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Board of Directors is also responsible for overseeing the Companys financial reporting process.
Auditors Responsibilities for the Audit of the Ind AS financial statements
9. Our objectives are to obtain reasonable assurance about whether the Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influencethe economic decisions of users taken on the basis of these Ind AS financial statements.
10. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design 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 has adequate internal financial controls with reference to Ind AS financial statements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Ind AS 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the Ind AS financial statements, including the disclosures, and whether the Ind AS financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
11. We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
14. The Balance Sheet and the Profit & Loss Account have been drawn up in accordance with the provision of Section 133 of the Act read with rule 7 of the Companies Rules, 2014 (as amended).
15. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
16. With respect to the matter to be included in the Auditors Report under section 197(16), we report that, In our opinion and according to the information and explanation given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to directors is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
17. 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 and the Statement of Profit and Loss (including other comprehensive income) dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Ind AS financial statements comply with the Ind AS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to Ind AS financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
(g) With respect to the other matters to be included in the Auditors 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 at 31 March 2019 on its financial position in its Ind AS financial statements - Refer Note 36 to the Ind AS 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 Refer Note 16, 17 and 22 to the Ind AS financial statements;
iii. There were no amounts which were required to be transferred to the investor education & protection fund by the company.
iv. The disclosures in the Ind AS financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these Ind AS financial statements since they do not pertain to the financial year ended 31 March 2019.
|For SUBHASH CHAND JAIN ANURAG & ASSOCIATES|
|Date : 30th May, 2019||PARTNER|
|Place : Indore||M.NO. 072062|
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 15, under Report on Other Legal and Regulatory Requirements section of our Report of even date)
1. In respect of its fixed assets:
The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.
According to the information and explanations given to us and the record examined by us and based on the examination of the conveyance deeds provided to us, we report that, the title deeds, comprising of the immovable properties of land and building which are free hold and lease hold, are in the name of the company as at the balance sheet dated except freehold land situated at 4/3, Manoramaganj, Indore whose title is still in the name of Director Shri Sunil Choksi having carrying value of Rs. 10 Lacs & Premises on the said land having carrying value of Rs. 76.14 Lacs and the deferred lease assets premises of Vapi property taken on lease for 10 years whose fair market value as per Ind As is Rs. 309.33 Lacs, the lease deed is not registered.
As explained to us the inventories have been physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
3. Loan given by company
According to the information and explanations given to us, the company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 ("the Act") in during the year.
4. Loan to directors and investment by the company
In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities.
According to the information and explanations given to us, the Company has not accepted any deposits under sections 73 & 76 or any other relevant provision of companies act ("the act") and the rule framed there under. Therefore, the provisions of Clause (v) of paragraph 3 of the Order is not applicable to the Company.
6. Cost records
The Central Government has not prescribed maintenance of cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended by sub section (1) of Section 148 of the Companies Act, 2013.
7. Statutory dues
According to the information and explanations given to us, there were no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income tax, Goods & Service Tax, Customs Duty, Cess and other material statutory dues which have remained outstanding as at 31st March 2019 for a period of more than six months from the date they became payable.
According to the books of accounts and records examined by us and according to generally accepted auditing practices in India, in our opinion, the company has been regular in depositing statutory dues.
According to the information and explanations given to us, there are no Statutory dues which have not been deposited as on March 31, 2019 on account of disputes except as under
|Particulars||Period related||Amount (in Rs.)||Forum where dispute is pending|
|TDS DEMAND||A.Y. 2014-15||108000/-||CIT (A) on 15.03.2019 vide Ack. No. 434456621150319|
8. Repayments of loans
According to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions or banks. The Company does not have any loans from Government and has not issued any debentures during the year.
9. Utilization of funds
During the year, The Company has not raised money by way of initial public offer or further public offer (including debt instruments). The Term Loans availed were applied for the purposes for which they are raised.
10. Reporting of frauds
According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year under audit.
11. Approvals of managerial remuneration
According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
12. Nidhi company
In our opinion, the company is not a chit fund or a Nidhi mutual benefit fund/ society. Therefore, the provisions of clause (xii) of Para 3 of the said order are not applicable to the company.
13. Related party transaction
According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
14. Private Placement or preferential allotment
According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year
15. Non cash transaction
According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with its directors or persons connected with him.
16. Registration of Reserve Bank of India (RBI) act 1934
The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
|For Subhash Chand Jain Anurag & Associates|
|S. C. Jain|
|Place : Indore||M No : 072062|
|Date : 30th May, 2019|
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 17 (f) under Report on Other Legal and Regulatory Requirements of our report of even date)
REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING UNDER CLAUSE (i) OF SUB SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 ("THE ACT")
We have audited the internal financial controls over financial reporting of Choksi Laboratories Limited ("the Company") as of 31st March, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly respect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the companys 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on audit of internal financial controls over financial reporting issued by the institute of chartered accountants of India ("ICAI") .
|For Subhash Chand Jain Anurag& Associates|
|S. C. Jain|
|Place : Indore||Partner|
|Date : 30-05-2019||M No : 072062|