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Concord Drugs Limited
Report on the Ind AS Financial Statements
We have audited the accompanying Ind As financial statements of Concord Drugs Limited (" The company"), which comprise the balance sheet as at 31 March 2018, the statement of Profit and loss including other comprehensive income, the statement of cash flows and the statement of changes in equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (here in after referred to as the "Ind AS financial statements").
Managements responsibility forthelndAS financial statements
The Companys Board of directors is responsible for the matters stated in section 134(5) of the Companies Act (the Act) with respect to the preparation of these Ind AS financial statements that give a true and fair View of the financial position, financial performance including other comprehensive income, cash flows and changes n equity of the company in accordance with the accounting principles generally accepted in India, including the Indian Accounting standards (Ind AS) prescribed under section 133 of the Act, read wit relevant rules there under.
This responsibility also includes maintenance of Adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company 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 designed , 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.
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the Accounting and the Auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made there under.
We conducted our audit in accordance with the standards on Auditing specified under section 143(10) of the Act and other applicable authoritative pronouncements issued by the institute of chartered Accountants of India.
The standards and pronouncements require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
Auditors responsibility (Continued):
An audit involves performing procedure to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedure selected depend on the auditors judgement, including the assessment of the Risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considered the internal financial control relevant to the companys preparation of the Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the companys directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence that we have obtained is sufficient and appropriate to provide basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanations given to us, the afore said Ind AS 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 including the Ind AS, of the financial position of the company as at 31- 03-2018,and its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter paragraph:
1. Company has unsecured loans of Rs.355.98 lakhs as outstanding balance as on balance sheet date of which Rs.241.69 Lakhs received from other than directors. Out of the balance amount from directors of Rs. 114.29 Lakhs Rs. 80.75 has been classified as other Equity during the year.
2. The stock of Raw materials, work in progress , finished goods and packing material worth of Rs.1,861.94 Lakhs are subject to management confirmations
Report on other Legal and regulatory requirements
1. 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 the "Annexure- A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by the 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 where necessary for the purpose ofouraudit;
(b) In our opinion, proper books of accounts as required by the 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 including other comprehensive Income, the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of Account
The balance sheet, the statement of profit and loss including other comprehensive Income, the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of Account
(d) In our opinion , the afore said Ind AS financial statements complied with the accounting standards specified under section 133 of the Act, read with relevant rules issued there under;
(e) on the basis of the written representative received from the directors as on 31st March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018 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 over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"; and
(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 on its financial position in its Ind AS financial statements-Refer note 2.4 of the IND AS financial statements;
(ii) The company has long-term contracts other than derivative contracts, for which there were no material foreseeable losses;
(iii) There were no amounts which were required to be transferred to the investor Education and Protections Fund by the company; and
For N G Rao & Associates Chartered Accountants Firm Registration No.:009399S
(N Nageswara Rao) Partner
Membership No: 207300
Place: Hyderabad Date: 30-05-2018
Annexure-A to the Auditors Report
The Annexure-A referred to in our Independent Auditors Report to the members of the Company on the financial statements for the Year ended 31 March 2018, we reportthat:
i. (a) The Company has not maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The title deeds of the immovable property are held in the name of the company.
(c) The management has not performed physical verification of the Fixed assets during the year.
ii. The physical verification of the inventory excluding stocks with third parties has not been conducted at reasonable intervals by the management.
iii. The Company has not granted any loans to bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 (theAct).
iv. 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 Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
v. The Company has not accepted any deposits from the public within the meaning of section 73,74,75 and 76 of the Act and Rules framed there underduring the year.
vi. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.
vii. a. According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Excise duty, sales tax, wealth tax, service tax, GST, Customs Duty, value added tax, cess and other material statutory dues except as reported below have been regularly deposited during the year. The company has not complied with the provisions in respect of Provident fund, Employees State Insurance and TDS. However provision in the books of accounts has been made on adhoc basis.
However, no undisputed amounts payable in respect of Provident fund, Income Tax, Sales Tax, Value Added Tax, Service Tax, GST, and material statutory dues were in arrears as at 31-03-2018 for a period more than six months from the date they became payable. This is as per the information and explanations given to us.
|Financial Year||Section under which TDS due||Amount|
b. According to the information and explanations given to us and on the basis of our examinations of records of the company, there are no dues of sales tax, Service tax, GST and value added tax, which have not been deposited on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, have not been deposited by the Company on account of disputes:
|Particulars||Demand U/s||Period to which the amount relates||Forum where the dispute is pending||Amount in Rs.||Previous year 16-17|
|Income Tax Act, 1961||148||A.Y. 2006-07||Commissioner of income Tax (Appeals)-ll||1,19,87,841||1,19,87,841|
|Income Tax Act, 1961||148||A.Y.2007-08||Commissioner of income Tax (Appeals)-ll||22,44,779||22,44,779|
|Income Tax Act, 1961||148||A.Y.2008-09||Commissioner of income Tax (Appeals)-ll||16,06,275||16,06,275|
|Income Tax Act, 1961||143(1)a||A.Y.2010-11||Jurisdictional AO||16,77,610||16,77,610|
|Income Tax Act, 1961||250||A.Y.2011 -12||Commissioner of income Tax (Appeals)-ll||2,58,82,270||3,81,28,810|
|Income Tax Act, 1961||143(1)a||A.Y.2013-14||Jurisdictional AO||11,83,700||11,83,700|
|Income Tax Act, 1961||143(3)||A.Y.2014-15||Commissioner of income Tax (Appeals)-ll||3,90,64,488||3,93,84,045|
|Income Tax Act, 1961||Others||A.Y.2015-16||Jurisdictional AO||12,63,500||12,63,500|
viii. According to the records of the Company examined by us and on the basis of information and explanation given to us, the Company has delayed in repayment of loans or borrowings to the bank in some instances. The Company has neither issued debentures nor taken loans from financial institutions and Government during the year.
ix. The company has not raised any money by way of initial public offer or further public offer (including debt instruments) and terms loans during the year.
x. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the company or on the company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management.
xi. The company has paid/ provided managerial remuneration in accordance with requisite approvals mandated by the provisions of section 197 read with schedule V to the act.
xii. The company is not Nidhi Company and the Nidhi Rules, 2014 not applicable to it. Accordingly the provisions of Clause 3(Xii) of order not applicable to the company.
xiii. The company has entered into transactions with related parties which are in compliance with the provisions of 177 and 188 of the Act. The details of such related party transactions have been disclosed in the IND AS financial Statements as required under IND AS 24, Related party Disclosures Specified under section 133 of the Act, read with Rule 7 of the companies (Accounts) rules, 2014.
xiv. During the year, the Company has made any preferential allotment or private placement of shares. Requirements of Section 42 of the companies Act, 2013 regard to the issue has been complied with. The company has not issued any fully or partly convertible debentures and hence reporting under clause 3(xiv) of the Order with respect to debentures is not applicable to the Company.
Number of shares issued under private placement of 6,18,000 shares @ Rs.48 (including Rs.38 of security Premium)
|S. Nagi reddy||3,10,000||1,48,80,000|
xv. 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 any non-cash transaction with the directors or persons connected with him as contemplated underthe provisions of section 192 of the Act. Accordingly, Clause 3(XV) of the order is not applicable to the company.
xvi. The company is not required to be registered under section 45-IAof the Reserve Bank of India Act, 1934.Accordingly , clause 3(xvi) of the order is not applicable to the Company.
For N G RAO & ASSOCIATES., Chartered Accountants FRNo.: 009399S
|G. Nageswara Rao|
|Date: 30th May, 2018||Membership No. 207300|
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF CONCORD DRUGS LIMITED
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of CONCORD DRUGS LIMITED ("the Company") as of March 31, 2018 in conjunction with our audit of the standalone 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 issued by the Institute of Chartered Accountants of India". 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 underthe Companies Act, 2013.
Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on my / our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 overfinancial reporting and theiroperating 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 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 overfinancial 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 reflect 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
(3) 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 overfinancial 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, 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 March 31,2018, based on "the internal control overfinancial 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 Accou ntants of I nd i a".
For N G RAO & ASSOCIATES.
Date: 30th May, 2018
G. Nageswara Rao
Membership No. 207300