To the Members of Morepen Laboratories Limited
Report on the Audit of Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Morepen
Laboratories Limited (“the Company”), which comprise the Balance Sheet as at
March 31, 2023, 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
summary of significant accounting policies and other explanatory information (hereinafter
referred to as “the standalone financial statements”).
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone 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 Indian Accounting Standards prescribed under section
133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended, (“Ind AS”) and other accounting principles generally accepted in India,
of the state of affairs of the Company as at March 31, 2023, the profit and total
comprehensive income, changes in equity and its cash flows for the year ended on that
date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Act. Our responsibilities under those Standards are further
described in the “Auditors Responsibilities for the Audit of standalone 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 independence requirements that are relevant to our audit of the standalone
financial statements under the provisions of the Act and the rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of standalone financial statements of the current period. These
matters were addressed in the context of our audit of the standalone financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters. We have determined the matters described below to be the key audit
matters to be communicated in our report.
| S. No. |
Key Audit Matter |
Auditors Response |
| 1 |
In the Scheme of Arrangement & Compromise under Section 391 of the Companies Act,
1956 as approved by the Honble High Court of Himachal Pradesh vide its Order dated August
4, 2009, the Company allotted 9,24,90,413 Equity Shares to the fixed deposit holders in
settlement of their dues. The Honble NCLT vide its th judgment dated 12 March 2018
dismissed the Companys petition seeking approval of the Scheme and stated that the order
will not affect the allotment of the shares to the FD holders who have traded the shares
to the third parties or transferred the allotted shares and to the balance FD holders
(eligible FD holders), the company shall pay the outstanding amount as per the scheme
approved by the Company Law Board (CLB). The appeal preferred by the company against the
said order of NCLT, is dismissed by Honble National Company Law Appellate Tribunal
(NCLAT). |
Principal Audit Procedures |
|
Pursuant to implementation of Honble National Company Law Tribunal (NCLT), Chandigarh
Order dated 12.03.2018, out of 3,85,65,810 Equity Shares of 2/- each issued at a premium
of 9.32 per share belonging to eligible FD holders, the company has paid Fixed Deposit
dues in respect of 50,38,983 Equity Shares received for cancellation with the company till
31.03.2022. |
We collected and analyzed the Scheme approved by the Company Law Board (CLB)
dated19.08.2003, Judgment of th Honble NCLT dated 12 March 2018, order of Honble
National Company Law Appellate Tribunal (NCLAT), Communication with ROC and Stock
Exchanges in this regard and other relevant documents in this regard produced for our
verification. |
|
(Refer Note No. 13G to the standalone financial statements) |
The payment to pending eligible FD holders may impact financials of the company in the
coming year/years. |
Information Other than the Standalone Financial
Statements and Auditors Report thereon
The Companys Board of Directors is responsible for preparation of the other
information. The other information comprises the information included in Annual Report,
but does not include the standalone financial statements and our auditors report thereon.
Our opinion on financial statement does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial statements or our knowledge
obtained during the course of our audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is 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 Standalone
Financial Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these standalone financial statements
that give a true and fair view of the financial position, financial performance, total
comprehensive income, changes in equity and cash flows of the company in accordance with
applicable Ind AS and other accounting principles generally accepted in India.
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 judgements 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 standalone
financial statement that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for
assessing the companys ability to continue as going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
the Board of Directors either intends to liquidate the company or to cease the operations,
or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the companys financial reporting
process.
Auditors Responsibilities for the Audit of standalone financial statements
Our objectives are to obtain reasonable assurance about whether the standalone
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 aggregate,
they could reasonably be expected to influence the economic decisions of users taken on
the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgement and
maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedure 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 financial controls 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 system 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 standalone financial statement 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 standalone financial
statements, including the disclosures, and whether the standalone financial statements
represent the underlying transaction and events in a manner that achieves fair
presentation.
Materiality is the magnitude of misstatements in the standalone financial statements
that, individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the financial statements may be influenced. We consider
quantitative materiality and qualitative factor in (i) planning the scope of our audit
work and in evaluating the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
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.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the standalone 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 disclosures 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
1. As required by the Companies (Auditors Report) Order, 2020 (“the Order”),
issued by the Central Government 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.
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 best
of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of accounts 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 (including other comprehensive
income), Statement of Changes in Equity and the Statement of Cash Flows dealt with by this
report are in agreement with the books of accounts.
d) In our opinion, the aforesaid standalone financial statements comply with the Indian
Accounting Standards prescribed under section 133 of the Act read with relevant rules
issued thereunder.
e) On the basis of the written representations received from the directors as on
31stMarch,2023 taken on record by the Board of Directors, none of the directors are
disqualified as on 31st March 2023 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”. Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Companys internal financial controls over
financial reporting.
g) With respect to the other matters to be included in the Auditors Report in
accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations
given to us, the remuneration paid by the company to its directors during the year is in
accordance with the provisions of section 197 of the Act.
h) 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:
a) The Company has disclosed the impact of pending litigations on its financial
position in its standalone financial statements.
b) The Company did not have any long term contracts including derivative contracts.
c) During the year, the company was not liable to transfer any amount to the Investor
Education and Protection Fund.
d) Based on the audit procedures performed that have been considered reasonable and
appropriate in the circumstances, nothing has come to our notice that has caused us to
believe that the representations under subclause (i) and (ii) of Rule 11(e) contain any
material mis-statement. (Refer Note No. 39(f) to the standalone financial statements).
e) The Company has not declared or paid any dividend during the year.
For S.P. Babuta & Associates
Chartered Accountants
F.No. 007657N
|
CA S.P. Babuta |
|
Managing Partner |
|
FCA, AIIA, IP, DISA, CCA |
|
GST Cert, Forensic Auditor |
| Date :16th May, 2023 |
Membership No. : 086348 |
| Place :Gurugram, Haryana |
UDIN : 23086348BGYBEC6052 |
ANNEXURE “A” TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under the heading “Report on Other Legal and
Regulatory Requirements” of our report of even date on the standalone financial
statements of Morepen Laboratories Limited for the year ended 31st March, 2023)
(i) (a) (A) The company is maintaining proper records showing full particulars,
including quantitative details and situation of Property, Plant and Equipment;
(B) The company is maintaining proper records showing full particulars of intangible
assets;
(b) Property, Plant and Equipment have been physically verified by the management at
reasonable intervals and no material discrepancies were noticed on such verification;
(c) The title deeds of all the immovable properties (other than properties where the
company is the lessee and the lease agreements are duly executed in favour of the lessee)
disclosed in the financial statements are held in the name of the company;
(d) The company has not revalued its Property, Plant and Equipment (including Right of
Use assets) or intangible assets or both during the year;
(e) According to the information and explanations given to us, no proceedings have been
initiated or are pending against the company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder;
(ii) (a) As explained to us , physical verification of inventory has been conducted at
reasonable intervals by the management and in our opinion, the coverage and procedure of
such verification by the management is appropriate and no discrepancy of 10% or more in
the aggregate for each class of inventory was noticed;
(b) The company has not been sanctioned working capital limits in excess of five crore
rupees, in aggregate, during the year from banks or financial institutions on the basis of
security of current assets;
(iii) According to the information and explanations given to us and based on audit
procedures performed, we are of the opinion that during the year the company has made
investments of 5.00 lakhs in equity share capital in newly created wholly owned
subsidiary Morepen Rx Limited, but not provided any guarantee or security or granted any
loans or advances in the nature of loans, secured or unsecured, to companies, firms,
Limited Liability Partnerships or any other parties. In our opinion, investment made in
wholly owned subsidiary is not prejudicial to the companys interest;
(iv) According to the information and explanations given to us and based on audit
procedures performed, we are of the opinion that in respect of loans, investments,
guarantees and security, the company has complied with the provisions of section 185 and
186 of the Act;
(v) According to the information and explanations given to us, the company is complying
Honble National Company Law Tribunal (NCLT) order dated 12.03.2018 in the matter of fixed
deposit holders. (Refer Note 13(G) to standalone financial statements);
(vi) According to the information and explanations given to us, maintenance of cost
records has been specified by the Central Government under subsection (1) of section 148
of the Companies Act and as explained to us such accounts and records have been so made
and maintained by the company;
(vii) (a) According to the information and explanations given to us and based on audit
procedures performed, the company is regular in depositing undisputed statutory dues
including Goods and Services Tax, provident fund, employees state insurance, sales-tax,
service tax, duty of customs, duty of excise, value added tax, cess and any other
statutory dues to the appropriate authorities except payment of advance income tax. No
such dues are outstanding as on 31st March 2023 for a period exceeding six months;
(b) According to the records and information and explanation given to us, there are no
dues in respect of Income tax, Sales tax, VAT, Service-tax, Custom duty, cess outstanding
as at March 31, 2023 due to any dispute;
(viii) According to the records and information and explanation given to us, no
transaction/amount has been surrendered or disclosed as income during the year in the tax
assessments under the Income Tax Act, 1961;
(ix) (a) According to the information and explanations given to us by the management,
the company has not made any default in the repayment of loans or other borrowings or
interest to Banks/FIs. The preference shares issued to Banks/FIs have been converted to
Compulsorily Convertible Preference Shares followed by their conversion into Equity
Shares. (Refer Note No. 18 of standalone financial statements) ;
(b) According to the information and explanations given to us by the management, the
company has not been declared willful defaulter by any bank or financial institution or
other lender, during the year;
(c) According to the records and information and explanation given to us, term/car
loans were applied for the purpose for which the loans were obtained;
(d) According to the records and information and explanation given to us, funds raised
on short term basis have not been utilised for long term purposes;
(e) According to the records and information and explanation given to us, the company
has not taken any funds from any entity or person on account of or to meet the obligations
of its subsidiaries, associates or joint ventures;
(f) According to the records and information and explanation given to us, the company
has not raised any loan during the year on the pledge of securities held in its
subsidiaries, joint ventures or associate companies;
(x) (a) During the year, the company has not raised any money by way of initial public
offer or further public offer (including debt instruments);
(b) During the year, the company received 2250.00 lakhs from promoter group entities
against fully convertible warrants and converted 1,20,00,000 no. of fully convertible
warrants into equity shares, wherein full payment was received. Balance 1875.00 Lakhs
against warrants wherein balance amount was not received have been forfeited. (Refer
footnote of Statement of Changes in Equity of standalone financial statements);
(xi) (a) 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 fraud by the company or on the company, noticed or reported during the year,
nor have we been informed of any such case by the Management;
(b) No report under sub-section (12) of section 143 of the Companies Act has been filed
by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and
Auditors) Rules, 2014 with the Central Government;
(c) According to the records and information and explanation given to us, there is no
whistle-blower complaint received during the year by the company;
(xii) The company is not a Nidhi Company and hence this clause is not applicable to the
company;
(xiii) According to the information and explanations given to us and based on our
examination of the records of the company, all transactions with the related parties are
in compliance with sections 177 & 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;
(xiv) (a) The company has an internal audit system commensurate with the size and
nature of its business;
(b) The reports of the Internal Auditors for the period under audit were considered by
us;
(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 directors or person connected with them during the year;
(xvi) (a) The company is not required to be registered under section 45-IA of the
Reserve Bank of India Act, 1934;
(b) The company has not conducted any Non-Banking Financial or Housing Finance
activities during the year;
(c) The company is not a Core Investment Company (CIC) as defined in the regulations
made by the Reserve Bank of India;
(xvii) The company has not incurred cash losses in the financial year and in the
immediately preceding financial year;
(xviii)On expiry of five years term the existing statutory auditors have retired and
new audit firm has been appointed during the year;
(xix) On the basis of the financial ratios, ageing and expected dates of realisation of
financial assets and payment of financial liabilities, other information accompanying the
financial statements, our knowledge of the Board of Directors and management plans, we are
of the opinion that no material uncertainty exists as on the date of the audit report that
company is capable of meeting its liabilities existing at the date of balance sheet as and
when they fall due within a period of one year from the balance sheet date;
(xx) (a) According to the information and explanations given to us and based on our
examination of the records of the company, there is no unspent amount required to be
transferred to a Fund specified in Schedule VII to the Companies Act in respect of other
than ongoing projects as per sub-section (5) of section 135 of the said Act;
(b) According to the information and explanations given to us and based on our
examination of the records of the company, there is no amount remaining unspent under
sub-section (5) of section 135 of the Companies Act which is required to be transferred to
a special account in compliance with the provision of sub-section (6) of section 135 of
the said Act;
(xxi) There is no qualification or adverse remarks by the respective auditors in the
Companies (Auditors Report) Order (CARO) reports of the companies included in the
consolidated financial statements.
For S.P. Babuta & Associates
Chartered Accountants
F.No. 007657N
|
CA S.P. Babuta |
|
Managing Partner |
|
FCA, AIIA, IP, DISA, CCA |
|
GST Cert, Forensic Auditor |
| Date :16th May, 2023 |
Membership No. : 086348 |
| Place :Gurugram, Haryana |
UDIN : 23086348BGYBEC6052 |
ANNEXURE “B” TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2(f) under the heading “Report on Other Legal and
Regulatory Requirements” of our report of even date on the standalone financial
statements of Morepen Laboratories for the year ended 31st March 2023)
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 Morepen
Laboratories Limited (“the Company”) as of March 31,2023 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 (the “Guidance Note”).
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 Act.
Auditors Responsibility
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 Act, to the extent applicable to an audit of internal financial control. 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 includes
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
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 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.
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.
Opinion
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, 2023, 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.
For S.P. Babuta & Associates Chartered Accountants F.No. 007657N
|
CA S.P. Babuta |
|
Managing Partner |
|
FCA, AIIA, IP, DISA, CCA |
|
GST Cert, Forensic Auditor |
| Date :16th May, 2023 |
Membership No. : 086348 |
| Place :Gurugram, Haryana |
UDIN : 23086348BGYBEC6052 |
+91-9892691696
