To the Members of,
Samrat Pharmachem Limited
Report on the Audit of Financial Statements Opinion
We have audited the accompanying financial statements of Samrat
Pharmachem Limited (the Company), which comprise the Balance Sheet as at 31st March
2023, the Statement of Profit & Loss (including the Other Comprehensive Income), the
Cash Flow Statement and the Statement of Changes in Equity of the Company for the year
then ended and notes to the financial statements including summary of significant
accounting policies and other explanatory information.
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 Companies Act, 2013 (‘Act) in the manner so required and give a true and
fair view in conformity with the accounting principles generally accepted in India
including Indian Accounting Standards (‘Ind AS) specified under section 133 of
the Act, read with the Companies (Indian Accounting Standards) rules, 2015 as amended, and
other accounting principles generally accepted in India, of the state of affairs
(financial position) of the Company as at 31st March 2023, and its profit (financial
performance including other comprehensive income), its cash flows and the changes in
equity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Our responsibilities under those standards are
further described in the Auditors Responsibilities for the Audit of the 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
(‘ICAI) together with the ethical requirements that are relevant to our audit
of the 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 evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion on financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the current period.
These matters were addressed in the context of our audit of the 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 matter described below to be the key audit
matters to be communicated in our report.
a) Revenue Recognition :
The Company has adopted "Ind-AS 115 - Revenue from Contracts with
Customers" which is the revenue accounting standard. The application and transition
to this accounting standard is complex and is an area of focus in the audit.
• Revenue for the Company consists primarily of sale of
manufactured goods recognized as per the accounting policy described in Note 2.13 to the
accompanying financial statements.
• The Company recognizes revenue from sale of goods when it
satisfies its performance obligation, in accordance with the principles of Ind-AS 115,
Revenue from Contracts with Customers, adopted by the Company from the current year, by
transferring the control of goods to its customers through delivery evidenced by
acknowledgement of receipt of goods by such customers.
• Considering the large volume of revenue transactions near period
end there may be a risk of revenue recognition occurring before the satisfaction of the
performance obligations by the company in accordance with the applicable Incoterms.
• Considering the above factors, revenue recognition was
identified as a key audit matter for the current year audit. Auditors Response:
Principal Audit Procedure
Our audit work included, but was not limited to, the following
procedures:
• Obtained an understanding of the revenue and receivable business
process, and assessed the appropriateness of the accounting policy adopted by the company
for revenue recognition.
• Evaluated design and implementation of the key controls around
revenue recognition including controls around contract approvals, invoice verification,
transporter confirmations and customer acknowledgements.
• Tested operating effectiveness of the above identified key
controls over revenue recognition near period end.
• For samples selected from revenue recorded during specific
period, before and after year end:
o Verified the customer contracts for delivery terms.
o Verified the customer acknowledgements to evidence proof of delivery
for domestic sales at or near period end and
o tracked shipments through bill of lading for export sales
• Tested the appropriateness of the disclosures made in the
financial statements for revenue recorded during the year. Key Observations
• Based on our audit work, we did not identify any evidence of
material misstatement in the revenue recognised in the year ended on 31 March 2023.
b) Litigation, claims and related provisions:
The company is in the pharmaceutical industry which is heavily
regulated, resulting in increased exposure to litigation risk. These provisions are based
on judgement and incorporated accounting estimates by management in determining the
likelihood and magnitude of an unfavorable outcome on the claims.
Auditors response:
Evaluating the design and testing the operating effectiveness of
controls in respect of the recognition and measurement of provisions towards litigation
and claims in compliance with Ind-AS 37 Provisions, Contingent Liabilities and Contingent
Assets.
Corroborating managements assessment by
• making enquiries with the in-house/outsourced legal counsel of
the company;
• verifying correspondence, orders and appeals in respect of open
litigation;
• Obtaining confirmations from external legal counsels where
relevant and/ or evaluating legal opinions obtained by the management.
Information Other than the Financial Statements and Auditors
Report Thereon
The Companys Management and Board of Directors are responsible
for the other information. The other information comprises of Management Reports such as
Boards Report, Management Discussion and Analysis, Corporate Governance Report and
Business Responsibility Report, but does not include the Financial Statements and our
Auditors Report thereon which we obtained prior to the date of this Auditors
Report, and the remaining section of the Companys Annual Report, which are expected
to be made available to us after that date.
Our opinion on the 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 financial statements, our
responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that
we obtained prior to the date of this Auditors Report, 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.
When we read the other sections of Annual Report (other than those
mentioned above), if we conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance and take necessary
actions, as applicable under the applicable laws and regulations.
Managements Responsibility for the Financial Statements
The Companys 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 (including Other Comprehensive Income), Cash
Flows and changes in equity 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, read with relevant rules issued thereunder.
This responsibility also includes the 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.
In preparing the financial statements, the 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 the Board of Directors either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the
Companys financial reporting process.
Auditors Responsibility for the Financial Statements
Our objectives are to obtain reasonable assurance about whether the
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 influence the economic decisions
of users taken on the basis of these financial statements.
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
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 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 in the financial statements
made by the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of
Directors 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 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
financial statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
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 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
1 As required by the Companies (Auditors Report) Order, 2020
("the Order") issued by the Central Government of India in terms of sub-section
(11) of section 143 of the Act, we give in the ‘Annexure A, a statement on the
matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2 As required by section 143 (3) of the Act, we report that:
i. we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the purpose of our audit;
ii. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those books;
iii. the Balance Sheet, the Statement of Profit and Loss (including
other comprehensive income), the Cash Flow Statement and the statement of changes in
equity and dealt with by this Report are in agreement with the books of account;
iv. in our opinion, the aforesaid financial statements comply with the
Indian Accounting Standards prescribed under Section 133 of the Act, read with relevant
rules issued thereunder;
v. On the basis of written representations received from the directors
as on 31st March 2023, and 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.
vi. with respect to the adequacy of the internal financial controls
with reference to financial statements of the Company and the operating effectiveness of
such controls, refer to our separate report in Annexure B; and
vii. 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,
amended:
In our opinion and according to the 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. The remuneration paid
to any director 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.
viii. 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 positions in its financial statements. (Refer to Note 31 to the financial
statements)
b) the Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable losses.
c) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
d) i) The Management has represented that, to the best of its
knowledge and belief, no funds (which are material either individually or in the
aggregate) have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company to or in any other person(s)
or entity(ies), including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall,
directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
ii) The Management has represented, that, to the best of its
knowledge and belief, no funds (which are material either individually or in the
aggregate) have been received by the Company from any person(s) or entity(ies), including
foreign entities ("Funding Parties"), with the understanding, whether recorded
in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries.
iii) Based on the audit procedures that has been considered reasonable
and appropriate in the circumstances, nothing has come to our notice that has caused us to
believe that the representations under sub-clause (i) and
(ii) of Rule 11(e), as provided under (a) and (b) above, contain any
material mis-statement.
e) The final dividend proposed in the previous year, declared and paid
by the Company during the year is in accordance with Section 123 of the Act. The Board of
Directors of the Company have proposed final dividend for the year which is subject to the
approval of the members at the ensuing Annual General Meeting. The dividend proposed is in
accordance with Section 123 of the Act.
Annexure A to the Independent Auditors Report
The annexure referred to in our report to the members of Samrat
Pharmachem Limited (the Company) for the year Ended on 31st March, 2023, we report
that:
(i) According to the information and explanations given to us, in
respect of Property, Plant and Equipment & Intangible Assets.
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of Property, Plant and Equipment. The Company
has maintained proper records showing full particulars of intangible assets.
b) As explained to us, the Company has a program of verification of
Property, Plant and Equipment, so as to cover all the items once every three years which,
in our opinion, is reasonable having regard to the size of the Company and the nature of
its assets.
c) According to the information and explanations given to us and on the
basis of our examination of the records of the Company, the title deeds of immovable
properties (other than immovable 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 any of its Property, Plant and
Equipment including Right of Use Assets and intangible assets during the year.
e) No proceedings have been initiated during the year or are pending
against the Company as at March 31, 2023 for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.
(ii) a) According to the information and explanation given to us, the
inventory has been physically verified by the management during the year. In our opinion,
the frequency of such verification is reasonable and procedures and coverage as followed
by management were appropriate. No discrepancies were noticed on verification between the
physical stocks and the book records that were 10% or more in the aggregate for each class
of inventory.
b) According to the information and explanations given to us, the
Company has been sanctioned working capital limits in excess of ? 5 crores, in aggregate
from banks during the year on the basis of security of Current Assets, Movable &
Immovable Fixed Assets of the Company. The monthly returns/statements are required to
filed by the Company with such banks only in respect of the stock. However, we have not
carried out a detailed examination of the records with a view to determine whether these
are accurate or complete.
(iii) According to the information and explanation given to us and the
records of the company examined by us, during the year:
a) The Company has not made Investments in Companies, firms, Limited
Liability Partnerships or any other parties and hence reporting under clause 3(iii)(a) of
the Order is not applicable.
b) The Company has not provided loans, advances in nature of loans,
guarantee and security to Companies, firms, Limited Liability Partnerships or any other
parties. Therefore, the requirements to report under clause 3(iii) (b) to (f) of the order
are not applicable to the company.
(iv) In our opinion and according to information and explanation given
to us, there are no loans, investments or guarantees and security given in respect of
which provisions of section 185 and 186 of the Act are applicable hence reporting under
paragraph 3(iv) of the Order is not applicable.
(v) In our opinion, the Company has not accepted any deposits from
public within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of
Deposits) Rules 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order
are not applicable.
(vi) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules prescribed by the Central Government for maintenance of cost
records under Section 148(1) of the Act in respect of its manufactured goods and services
provided by it and are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained. However, we have not carried out a detailed
examination of the records with a view to determine whether these are accurate or
complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
a) Undisputed statutory dues, including Goods and Service tax (GST),
Provident Fund, Employees State Insurance, Income-tax, cess and other material
statutory dues applicable to the Company have generally been regularly deposited by it
with the appropriate authorities.
b) There were no undisputed amounts payable in respect of GST,
Provident Fund, Employees State Insurance, Income- tax, cess and other material
statutory dues which were in arrears as at March 31, 2023 for a period of more than six
months from the date they became payable.
c) There were no dues referred in sub clauses (a) above which have not
been deposited on account of disputes as at March 31, 2023, other than following :
| Sr. No. Name of the Statute |
Nature of Dues |
Amount (in Rs.) |
Period to which amount relates |
Forum where dispute is pending |
| 1 Income Tax Act, 1961 |
Income tax |
? 7,15,740 |
A.Y. 2011-12 |
CIT(Appeals), Bharuch |
(viii) According to the information and explanations given to us, no
transactions relating to previously unrecorded income were surrendered or disclosed as
income in the tax assessments under the Income Tax Act, 1961 during the year.
(ix) According to the information and explanations given to us, in
respect of borrowings:
a) The Company has not defaulted in the repayment of loans or other
borrowings or in the payment of interest thereon to any lender during the year.
b) The Company has not been declared wilful defaulter by any bank or
financial institution or government or any government authority.
c) In our opinion, term loans availed by the Company were, applied by
the Company during the year for the purposes for which the loans were obtained.
d) According to the information and explanation given to us and on an
overall examination of the financial statements of the Company, funds raised on short term
basis have, prima facie, not been used during the year for long-term purposes by the
Company.
e) The Company did not have any subsidiary or associate or joint
venture during the year and hence, reporting under clause 3(ix)(e) of the Order is not
applicable.
f) The Company does not have any subsidiary or associate or joint
venture and hence reporting on clause 3(ix)(f) of the Order is not applicable.
(x) a) The Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments) during the year and hence reporting
under clause 3(x)(a) of the Order is not applicable.
b) According to the information and explanations given to us, the
Company has not made any preferential allotment or private placement of shares or
convertible debentures (fully or partly or optionally) during the year and hence reporting
under clause 3(x)(b) of the Order is not applicable.
(xi) a) According to the information and explanations given to us, no
fraud by the Company and no material fraud on the Company has been noticed or reported
during the year.
b) No report under section 143(12) of the Act has been filed in Form
ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the
Central Government during the year and upto the date of this report.
c) As represented to us by the Management, there were no whistle blower
complaints received by the Company during the year.
(xii) The Company is not a Nidhi Company and hence, reporting under
clause 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us, the
Company is in compliance with Section 177 and 188 of the Act, where applicable, for all
transactions with the related parties and the details of related party transactions have
been disclosed in the financial statements, etc. as required by the applicable accounting
standards.
(xiv) a) In our opinion, the Company has an adequate internal audit
system commensurate with the size and the nature of its business.
b) We have considered the internal audit reports of the Company issued
till date for the period under audit.
(xv) According to the information and explanations given to us, during
the year, the Company has not entered into any noncash transactions with its directors or
persons connected with him and hence, provisions of section 192 of the Act are not
applicable.
(xvi) The Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1934. Hence, reporting under clauses 3(xvi) a b c &
d of the order is not applicable.
(xvii) The Company has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
(xviii) There has been no resignation of the Statutory Auditors during
the year. Accordingly, clause 3(xviii) of the order is not applicable.
(xix) On the basis of the financial ratios, ageing and expected dates
of realization of financial assets and payment of financial liabilities, other information
accompanying the financial statements and our knowledge of the Board of Directors and
Management plans and based on our examination of the evidence supporting the assumptions,
nothing has come to our attention, which causes us to believe that any material
uncertainty exists as on the date of the audit report indicating that the Company is not
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. We, however, state that
this is not an assurance as to the future viability of the Company. We further state that
our reporting is based on the facts up to the date of the audit report and we neither give
any guarantee nor any assurance that all liabilities falling due within a period of one
year from the balance sheet date, will get discharged by the Company as and when they fall
due.
(xx) The Company has fully spent the required amount towards Corporate
Social Responsibility (CSR) and there is no unspent CSR amount for the year required to be
transferred to a Fund specified in Schedule VII to the Act or special account in
compliance with the provision of section 135(6) of the said Act. (Refer to Note 29.3 to
the financial Statements)
(xxi) According to the information and explanations given to us, the
Company does not have subsidiary, associate and joint venture. Accordingly, reporting
under clause 3(xxi) of the Order is not applicable.
Annexure B to the Independent Auditors Report
Report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
Opinion
We have audited the internal financial controls with reference to
financial statements of Samrat Pharmachem Limited ("the Company") as of 31st
March, 2023 in conjunction with our audit of the financial statements of the Company for
the year ended on that date.
In our opinion, the Company has, in all material respects, adequate
internal financial controls with reference to financial statements and such internal
financial controls were operating effectively as at 31st March, 2023, based on the
internal financial controls with reference to financial statements 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").
Managements Responsibility for Internal Financial Controls
The Companys Management and the Board of Directors are
responsible for establishing and maintaining internal financial controls based on the
internal financial controls with reference to financial statements criteria established by
the Company considering the essential components of internal control stated in 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 with reference to financial statements 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 controls with reference to financial statements. 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 with reference to financial statements were established and maintained and
whether 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 with reference to financial statements and
their operating effectiveness. Our audit of internal financial controls with reference to
financial statements included obtaining an understanding of such internal financial
controls, 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 judgement, 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 with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial
Statements
A companys internal financial controls with reference to
financial statements 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 controls with reference to financial statements include
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 authorisations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the companys assets that could have
a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to
Financial Statements
Because of the inherent limitations of internal financial controls with
reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk
that the internal financial controls with reference to financial statements may become
inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
| For Shah & Savla LLP |
| Chartered Accountants |
| FRN: 109364W / W100143 |
| Mulesh M Savla |
| Partner |
| Membership No.: 038404 |
| Place: Mumbai |
| Date : 30th May 2023 |
+91-9892691696
