Mar 31, 2023
Jyothy Labs Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTSOPINION
We have audited the standalone financial statements of Jyothy Labs Limited (the "Company") which comprise the standalone balance sheet as at March 31, 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a 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 standalone 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, of the state of affairs of the Company as at March 31, 2023, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
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 Auditor''s Responsibilities for the Audit of the 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 ethical 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 on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 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.
The key audit matter |
How the matter was addressed in our audit |
Revenue Recognition |
Our audit procedures in respect of recognition of revenue |
Refer note 2.2(d) of accounting policies and notes 20 and 42 of standalone financial statements. |
included the following- |
Revenue is recognized when control of the underlying products has been transferred to the customer. |
⢠Assessed the Company''s accounting policies relating to revenue recognition by comparing them with the applicable accounting standards. |
Revenue is a key performance indicator for the Company. There is risk of revenue being fraudulently recognized resulting from pressure to meet external investor/stake-holder expectations. |
⢠Obtained understanding of the process and tested design and operating effectiveness of the Company''s internal controls including general IT controls and key IT application controls over recognition of revenue. |
Accordingly, recognition of revenue throughout the year and at period-end has been considered to be a key audit matter. |
⢠Examined underlying sales invoices and dispatch/ shipping documents for selected samples of revenue recognized throughout the year and as at period end to determine existence of sales throughout the period and |
at the period-end. |
|
⢠Verified authorisations of non-standard journal entries |
|
that affect reported revenue of the Company. |
The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and auditor''s reports thereon. The annual report is expected to be made available to us after the date of this auditor''s report.
Our opinion on the standalone financial statements does not cover the other information and we will 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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
MANAGEMENTS AND BOARD OF DIRECTORS'' RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS
The Company''s Management and Board of Directors are 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 state of affairs, profit/ loss and 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 adequate accounting 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s 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 Company''s financial reporting process.
AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE 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 auditor''s 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 standalone 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 standalone 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 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 in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone 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 auditor''s 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 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 standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s 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.
OTHER MATTER(S)
a. As described in Note 46 to the standalone financial statements, the acquisition of the business of a partnership firm already controlled by the Company has been accounted for by the Company as if it had occurred from the beginning of the preceding period in the financial statements. Accordingly, the
amounts relating to the year ended March 31, 2023 include the impact of the business combination and the corresponding amounts for the previous year ended March 31, 2022, have been restated by the Company after recognising the effect of the acquisition as above. The comparative figures for the year ended March 31, 2022, in so far it pertains to the partnership firm, have been audited by another auditor who had expressed an unmodified opinion on 4 May 2022.
Our opinion is not modified in respect of above matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) Order, 2020 ("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, to the extent applicable.
2 A. 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone 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 of the Company as on March 31, 2023 taken on record by the Board of Directors of the Company , none of the directors of the Company is disqualified as on March 31, 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
B. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations as at March 31, 2023 on its financial position in its standalone financial statements - Refer Note 34 to the standalone 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 has been no delay in transferring amounts, 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 it''s knowledge and belief, as disclosed in the Note 45 to the standalone financial statements, no funds 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 it''s knowledge and belief, as disclosed in the Note 45 to the standalone financial statements, no funds 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 Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) 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), as provided under (i) and (ii) above, contain any material misstatement.
e. The final dividend paid by the Company during the year, in respect of the same declared for the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.
As stated in Note 13B to the standalone financial statements, 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 declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
f. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.
C. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations 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 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) of the Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm''s Registration No.:101248W/W-100022
Sreeja Marar
Partner
Place: Mumbai Membership No.: 111410
Date: May 03, 2023 ICAI UDIN:23111410BGYATU9020
Mar 31, 2022
Jyothy Labs Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTSOPINION
We have audited the standalone financial statements of Jyothy Labs Limited (the â Company"), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a 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 standalone 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, of the state of affairs of the Company as at 31 March 2022, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.
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 Auditor''s Responsibilities for the Audit of the 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 ethical 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 obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 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.
The key audit matter |
How the matter was addressed in our audit |
Revenue Recognition Refer note 2.2(d) of accounting policies and notes 21 and 44 of standalone financial statements. Revenue is recognized when control of the underlying products has been transferred to the customer. Revenue is a key performance indicator for the Company. There is risk of revenue being fraudulently recognized resulting from pressure to meet external investor/stake-holder expectations. Accordingly, recognition of revenue throughout the year and at period-end has been considered to be a key audit matter. |
Our audit procedures in respect of recognition of revenue included the following- ⢠Assessed the Company''s accounting policies relating to revenue recognition by comparing them with the applicable accounting standards. ⢠Obtained understanding of the process and tested design and operating effectiveness of the Company''s internal controls including general IT controls and key IT application controls (by involving our IT specialists) over recognition of revenue. ⢠Examined underlying sales invoices and dispatch/ shipping documents for selected samples of revenue recognized throughout the year and as at period end to determine existence of sales throughout the period and at the period-end. ⢠Assessed appropriateness of non-standard manual journal entries that affect reported revenue of the Company. |
The key audit matter |
How the matter was addressed in our audit |
Impairment assessment of investment in subsidiaries Refer note 2.2(o) of accounting policies and note 4 of standalone financial statements. Investment in subsidiaries are assessed for impairment when triggers are identified. The recoverable amount, being higher of the value in use and fair value less costs of disposal, is compared with the carrying value to identify any impairment. Value in use is usually derived from discounted future cash flows. The discounted cash flow model uses several assumptions. These include estimates of future sales volumes, prices, operational and selling costs, terminal value growth rates, and the weighted average cost of capital. Considering the inherent uncertainty and judgment involved and the significance of the value of these investments, impairment assessment of investments in subsidiaries has been considered as a key audit matter. |
Our audit procedures in respect of assessment of impairment of investments in subsidiaries included the following- ⢠Obtained understanding of the process and tested the design and operating effectiveness of key controls over impairment assessment including approval of forecasts and valuation models used. ⢠Assessed the valuation methodology used by the Company (by involving our valuation specialists) and tested the mathematical accuracy of the impairment models. ⢠Evaluated the assumptions used including discount rates and terminal growth rates by involving our valuation specialists. ⢠Compared the inputs with the historical growth trends, evaluated the forecast used in prior year models to its actual performance of the business, agreed current forecast to the board of directors / management approved plans as well as our own assessment based on our knowledge of the entity. ⢠Challenged business assumptions used such as sales growth and costs. ⢠Performed sensitivity analysis of key assumptions. This includes revenue growth rates, forecasted cash flows, costs and the discount rates applied in the valuation models. |
The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone 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 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 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.
MANAGEMENT''S AND BOARD OF DIRECTORS'' RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS
The Company''s Management and Board of Directors are 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 state of affairs, profit/loss and 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 adequate accounting 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s 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 Company''s financial reporting process.
AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE 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 auditor''s 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 standalone 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 standalone 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 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 in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone 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 auditor''s 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 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 standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s 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 (Auditor''s Report) Order, 2020 ("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, to the extent applicable.
2. (A) 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account
d) In our opinion, the aforesaid standalone 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 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 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 financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) 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 as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 35 to the standalone 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 has been no delay in transferring amounts, 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 it''s knowledge and belief, as disclosed in the note 47 to the standalone financial statements, no funds 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 it''s knowledge and belief, as disclosed in the note 47 to the standalone financial statements, no funds 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; and
(iii) Based on such audit procedures as 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 (d) (i) and (d) (ii) contain any material mis-statement.
e) The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Companies Act 2013 to the extent it applies to payment of dividend.
As stated in note 14B to the financial statements, 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 declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
(C) With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations 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 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) of the Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm''s Registration No: 101248W/W-100022
Sreeja Marar
Partner
Mumbai Membership No: 111410
May 24, 2022 UDIN-22111410AJMMLA2629
Mar 31, 2019
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
OPINION
We have audited the standalone financial statements of Jyothy Laboratories Limited (âthe Companyâ), which comprise the standalone balance sheet as at 31 March 2019, the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the 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 standalone financial statements give the information required by the Companies Act, 2013 (âActâ) 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, its profit (including other 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 SAs are further described in the Auditorâs Responsibilities for the Audit of the 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 ethical 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 judgment, were of most significance in our audit of the 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.
Key audit matter |
How the matter was addressed in our audit |
Revenue recognition â Refer note 2.2(d) of accounting policies and notes 22 and 46 of standalone financial statements. - Revenue is recognised when control of the underlying products have been transferred to the customer. Sales contracts with customers have a variety of terms relating to recognition of revenue, entitlement to sales rebates, right of return and price adjustments. We have identified the recognition of revenue from sale of products as a key audit matter because
- Revenue is a key performance indicator of the Company and there is risk of revenue being overstated due to fraud resulting from pressure to achieve targets, earning expectations or incentive schemes linked to performances for a reporting period. - Establishing an appropriate accrual towards rebate, discounts, returns and other adjustments requires estimation by management and changes in this estimate can have a significant financial impact. |
Our audit procedures in respect of the recognition of revenue included the following-
- Assessed the appropriateness of the Companyâs revenue recognition accounting policies, including those relating to trade spends by comparing with applicable accounting standards.
- Performed a combination of control testing and substantive testing in respect of selected samples of revenue recorded during the year and verified the underlying documents including external evidence.
- Due to high reliance for revenue recognition on IT, we evaluated design, implementation and operating effectiveness of overall general IT controls and key IT application controls over revenue recognition.
- Tested sales transactions to its underlying documentation recorded either side of the year as well as credit notes issued after the year end to determine whether the revenue is recorded in the correct period.
- Assessed manual journal entries to revenue for unusual or irregular items.
- Tested operating effectiveness of controls over calculation and monitoring of trade spends
|
Key audit matter |
How the matter was addressed in our audit - Tested samples of trade spends to the supporting documentation. - Performed retrospective review to identify any management bias while making estimation of provision for trade spends. - Evaluated adequacy of disclosures given in note 46 to the standalone financial statements. |
uncertain tax positions and utilisation of Mat credit Refer note 2.2(f) of accounting policies and notes 8 and 20 of standalone financial statements. - The Company operates in a complex tax jurisdiction with various tax exemptions and is subject to periodic challenges by tax authorities leading to protracted litigations. There are open income tax, indirect tax and transfer pricing matters under litigation with tax authorities over a number of years. - Judgment is required in assessing the requirement to make provisions towards current tax, deferred tax and uncertain tax positions and relevant disclosure of contingent liabilities that reflects managementâs best estimate of the most likely outcome based on the facts available. - Significant judgment is required in forecasting the future tax liabilities and utlisation of MAT credit within the eligible period - Uncertain tax positions has been identified as a key audit matter considering the complexity of the underlying tax laws and the extent of management judgement involved in developing these estimates. |
Our audit procedures in respect of the uncertain tax positions and utilisation of MAT credit included the following- - For uncertain tax positions, we read and analysed select key correspondences, reviewed managementâs judgment regarding the eventual resolution of matters with various tax authorities, assessment of third-party opinions, and the use of past experience, where available, with the tax authorities in the respective jurisdiction - Our tax specialists assessed the status of the ongoing tax litigations and their most likely outcome, basis their expertise, industry outcomes and companyâs own past outcomes in respect of similar matters. - Challenged management by performing sensitivity analysis considering a reasonably possible change in key assumptions used and evaluated the impact on MAT credit utilisation. - Evaluated the adequacy of financial statement disclosures in respect of the tax provision. |
carrying value of intangible assets and investment in subsidiaries Refer note 2.2(l) of accounting policies and notes 3c and 4 of standalone financial statements - The carrying amount of intangible assets (goodwill and brands) and investment in subsidiaries aggregate to Rs. 33,589.83 lacs as at 31 March 2019. - The recoverable amount of these intangibles assets and investment in subsidiaries have been determined based on certain assumptions and estimates of future performance. - The recoverable amounts so determined have been used for the impairment evaluation. Due to the significance of the amount, 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. |
Our audit procedures in respect of impairment of intangible assets and investments in subsidiaries included the following- - Assessed the valuation methodology used by management and tested the operating effectiveness of controls over the review of the impairment analysis done by management. - Evaluated the reasonableness of the valuation assumptions, such as discount rates and terminal growth rate used by management. - Evaluated and challenged the appropriateness of the business assumptions made by management such as sales growth forecasts by comparing them with the historical growth trends, agreeing the forecast used in prior year models to its actual performance of the business and management approved future plans. - Challenged these assumptions by performing sensitivity analysis considering reasonably possible reductions in growth rates and forecasted cash flows to evaluate the impact. - Evaluated the adequacy of financial statements disclosures in respect of the intangibles(brands), investment in subsidiaries and goodwill , including disclosures of key assumptions, judgments and sensitivities |
Other Information
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorsâ report thereon.
Our opinion on the standalone 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 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 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 STANDALONE FINANCIAL STATEMENTS
The Companyâs management and Board of Directors are 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 state of affairs, profit/loss and 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 adequate accounting 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companyâs 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 Companyâs financial reporting process.
AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE 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 auditorâs 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 standalone 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 standalone 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 made by management.
- Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone 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 auditorâs 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 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 standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorsâ 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 (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(A) 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone 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 financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the other matters to be included in the Auditorsâ 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 standalone financial statements - Refer Note 35(C) to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. The disclosures in the standalone 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 financial statements since they do not pertain to the financial year ended 31 March 2019.
(C) With respect to the matter to be included in the Auditorsâ Report under section 197(16):
In our opinion and according to the information and explanations 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 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.
ANNEXURE - A
TO THE INDEPENDENT AUDITORSâ REPORT - 31 MARCH 2019
(Referred to in our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification 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, as disclosed in Note 3(a) to the Standalone Ind AS financial statements, are held in the name of the Company, except as noted below:
Particulars |
Freehold land |
Buildings |
Number of cases |
1 |
1 |
Gross block as at |
33.23 |
644.78 |
31 March 2019 |
||
(Rs. in Lacs) |
||
Net block as at |
33.23 |
540.33 |
31 March 2019 |
||
(Rs. in Lacs) |
(ii) The inventory, except goods-in-transit and stock lying with third parties, has been physically verified by the management during the year. For inventory lying with third parties at the year-end, written confirmations have been obtained. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been appropriately dealt with in the books of accounts.
(iii) 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 Act. Accordingly, paragraphs 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 of the Act during the year. The Company has complied with the provisions of Section 186 of the Act, in respect grant of loans, making investments and providing guarantees and securities, as applicable.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public in accordance with the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.
(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub-section 1 of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.
(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 Provident Fund, Employeesâ State Insurance, Income-Tax, Goods and Service Tax, Duty of Customs, Cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-Tax, Sales-Tax, Service Tax, Goods and Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues were in arrears as at 31 March 2019 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of Income-tax, Sales tax, Service tax, Duty of customs, Duty of excise, Goods and Service tax and Value added tax as at 31 March 2019, which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Enclosure I to this report.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company does not have any loans or borrowings from financial institutions and Government, nor has it issued any debentures during the year.
(ix) According to the information and explanation given to us, the term loans have been applied by the Company during the year for the purpose for which they were obtained. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year
(x) According to the information and explanations given to us, no material fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/ provided for managerial remuneration for the year ended 31 March 2019 in accordance with the requisite approvals mandated by the provisions of and Section 67 of the Companies (Amendment) Act 2017 read with Schedule V of the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company as prescribed under section 406 of the Act. Accordingly, paragraph 3(xii) of the Order 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, transactions with the related parties are in compliance with the provisions of Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable Indian Accounting Standards.
(xiv) According to the information and explanations given 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. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
(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 transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.
ENCLOSURE I TO ANNEXURE A TO THE INDEPENDENT AUDITORSâ REPORT - 31 MARCH 2019
Name of the |
Nature of |
Period |
forum where dispute is pending (Amount in Lacs) |
|||
Statue |
Dues |
Commissioner & Appellate |
High Court |
Tribunal |
Grand Total |
|
The Central Excise Act, 1944 |
Excise |
1998-00 |
10 |
10 |
||
2007-18 |
817 |
- |
- |
817 |
||
2011-17 |
- |
3,111 |
- |
3,111 |
||
The Central Sales Tax Act, 1956 and Value Added Tax |
Sales Tax and VAT |
1999-00 |
4 |
4 |
||
2000-01 |
5 |
- |
- |
5 |
||
2001-04 |
903 |
10 |
130 |
1,043 |
||
2004-09 |
1,391 |
106 |
278 |
1,775 |
||
2009-16 |
318 |
256 |
675 |
1,249 |
||
2016-18 |
115 |
- |
- |
115 |
||
The Income Tax Act, 1961 |
Income Tax |
AY 2009-10 |
- |
- |
1,999 |
1,999 |
AY 2010-11 |
- |
- |
1,981 |
1,981 |
||
AY 2011-12 |
- |
- |
1,482 |
1,482 |
||
AY 2012-13 |
- |
- |
326 |
326 |
||
AY 2013-14 |
- |
- |
188 |
188 |
||
AY 2014-15 |
- |
- |
93 |
93 |
||
AY 2015-16 |
- |
- |
* |
* |
||
Grand Total |
3,563 |
3,483 |
7,152 |
14,198 |
* Indicates amount less than Rs. 0.50 lacs
ANNEXURE - B
TO THE INDEPENDENT AUDITORSâ REPORT ON THE STANDALONE FINANCIAL STATEMENTS OF JYOTHY LABORATORIES LIMITED FOR THE YEAR ENDED 31 MARCH 2019
REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE AFORESAID STANDALONE FINANCIAL STATEMENTS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013
(Referred to in paragraph âfâ under âreport on other legal and regulatory requirementsâ section of our report of even date)
OPINION
We have audited the internal financial controls with reference to financial statements of Jyothy Laboratories Limited (âthe Companyâ) as of 31 March 2019 in conjunction with our audit of the standalone 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 31 March 2019, 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 âGuidance Noteâ).
MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Companyâs 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 companyâs 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 (hereinafter referred to as âthe Actâ).
AUDITORSâ RESPONSIBILITY
Our responsibility is to express an opinion on the Companyâs 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 auditorâs judgement, including the assessment of the risks of material misstatement of the standalone 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 Companyâs internal financial controls with reference to financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
A companyâs 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 companyâs 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 companyâs 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 B S R & Co. LLP
Chartered Accountants
Firmâs Registration No: 101248W/W-100022
Sreeja Marar
Mumbai Partner
7 May 2019 Membership No: 111410
Mar 31, 2018
Independent Auditor''s Report
To the Members of Jyothy Laboratories Limited
REPORT ON THE AUDIT Of THE STANDALONE IND AS FINANCIAL statements
We have audited the accompanying standalone Ind AS financial statements of Jyothy Laboratories Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and summary of the significant accounting policies and other explanatory information (herein after referred to as "standalone Ind AS financial statements").
managements responsibility FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit (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) prescribed under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS 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, management is responsible for assessing the Company''s 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.
auditors responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone 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 Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We are also responsible to conclude on the appropriateness of management''s 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 entity''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor''s report. However, future events or conditions may cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 of the state of affairs of the Company as at 31 March 2018, its profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
emphasis of matter
Without qualifying our report and as more fully described in Note 34 of the standalone Ind AS financial statements, we draw attention to managerial remuneration paid/provided by the Company for the year ended 31 March 2017 in excess of limits prescribed under the Companies Act, 2013. As informed to us, the Company has filed revised application with the Central Government for approval of such excess remuneration. Pending approval no adjustments are considered necessary in these standalone Ind AS financial statements. Our conclusion is not modified in respect of this matter.
other matters
Corresponding figures for the year ended 31 March 2017 have been audited by another auditor who expressed an unmodified opinion dated 18 May 2017 on standalone Ind AS financial statements of the Company for the year ended 31 March 2017. Our opinion is not modified in respect of these matter.
report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("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.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 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 with reference to 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 Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 35(B) to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. The disclosures regarding details of specified bank notes held and transacted during 08 November 2016 to
30 December 2016 has not been made since the requirement does not pertain to financial year ended 31 March 2018.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification 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, as disclosed in Note 3(a) to the Standalone Ind AS financial statements, are held in the name of the Company, except as noted below:
particulars |
Freehold land |
Buildings |
Number of cases |
1 |
1 |
Gross block as at 31 March 2018 ('' in lacs) |
33.23 |
610.15 |
Net block as at 31 March 2018 ('' in lacs) |
33.23 |
534.36 |
(ii) The inventory, except goods-in-transit and stock lying with third parties, has been physically verified by the management during the year. For inventory lying with third parties at the year-end, written confirmations have been obtained. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been appropriately dealt with in the books of accounts.
(iii) 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 Act. Accordingly, paragraphs 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company.
(iv) I n our opinion and according to the information and explanations given to us, the Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 of the Act during the year. The Company has complied with the provisions of Section 186 of the Act, in respect grant of loans, making investments and providing guarantees and securities, as applicable.
(v) I n our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public in accordance with the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.
(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub-section 1 of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.
(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 Provident Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Service Tax, Goods and Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Service Tax, Goods and Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues were in arrears as at 31 March 2018 for a period of more than six months from the date they became payable.
(viii) I n our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company does not have any loans or borrowings from financial institutions and Government, nor has it issued any debentures during the year.
(b) According to the information and explanations given to us, there are no dues of Income-tax, Sales tax, Service tax, Duty of customs, Duty of excise, Goods and Service tax and Value added tax as at 31 March
2018, which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned, are as follows :
Name of the Statue |
Nature of |
period |
forum where dispute is |
pending (Amount in Lacs) |
||
Dues |
Commissioner & Appellate |
High Court |
Tribunal |
Grand Total |
||
The Central Excise Act, 1944 |
Excise |
1998-00 |
10 |
- |
- |
10 |
2000-15 |
222 |
- |
32 |
254 |
||
2011-16 |
2,618# |
- |
- |
2,618 |
||
2016-17 |
- |
493# |
- |
493 |
||
The Central Sales Tax Act, 1956 and Value Added Tax |
Sales Tax and VAT |
1999-00 |
4 |
- |
- |
4 |
2000-04 |
1,020 |
10 |
126 |
1,156 |
||
2004-05 |
86 |
- |
1 |
87 |
||
2005-06 |
316 |
- |
213 |
529 |
||
2006-09 |
871 |
313 |
387 |
1,571 |
||
2008-13 |
95 |
147 |
- |
242 |
||
2009-16 |
- |
1,132 |
- |
1,132 |
||
2010-14 |
279 |
33 |
- |
312 |
||
2014-17 |
75 |
- |
- |
75 |
||
The Finance Act, 1994 |
Service Tax |
2005-06 |
7 |
- |
- |
7 |
The Income Tax Act, 1961 |
Income Tax |
AY 2009-10 |
1,999 |
- |
- |
1,999 |
AY 2010-11 |
1,981 |
- |
- |
1,981 |
||
AY 2011-12 |
1,482 |
- |
- |
1,482 |
||
AY 2014-15 |
326 |
- |
- |
326 |
||
AY 2015-16 |
* |
- |
- |
* |
||
Grand Total |
11,390 |
2,128 |
759 |
14,277 |
* Indicates amount less than '' 0.50 lacs
# A stay order has been obtained against the amount disputed and not been deposited.
(ix) According to the information and explanation given to us, the term loans have been applied by the Company during the year for the purpose for which they were obtained. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year.
(x) According to the information and explanations given to us, no material fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/ provided for managerial remuneration for the year ended 31 March 2018 in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act. However, as more fully described in Note 34 of the standalone Ind AS financial statements, we report that managerial remuneration for the year ended 31 March 2017 is in excess of the limits applicable under section 197 of the Act, read with Schedule V thereto. We are informed by the management that the Company has filed a revised application with the Central Government, seeking approval of excess remuneration paid. Our report includes an Emphasis of Matters in this respect.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company as prescribed under section 406 of the Act. Accordingly, paragraph 3(xii) of the Order 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, transactions with the related parties are in compliance with the provisions of Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable Indian Accounting Standards.
(xiv) According to the information and explanations given 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. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
(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 transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.
report on the internal financial controls under clause (I) of sub-section 3 of section 143 of THE CompANIES ACT, 2013 ("THE ACT")
We have audited the internal financial controls with reference to financial statements of Jyothy Laboratories Limited ("the Company") as of 31 March 2018 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 Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control 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". 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 company''s 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.
auditors'' responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statements based on 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 with reference to financial statements 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 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 internal financial controls with reference to financial statements, 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 auditor''s 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 Company''s internal financial controls system with reference to financial statements.
MEANING of INTERNAL FINANCIAL controls with reference to FINANCIAL STATEMENTS
A company''s internal financial control 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 company''s internal financial control with reference to financial statements 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 company''s 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 with reference to financial statements, 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 control 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.
opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31 March 2018, based on the internal control 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.
For B S R & Co. LLp
Chartered Accountants
Firm''s Registration No: 101248W/W-100022
Sreeja Marar
Mumbai Partner
16 May 2018 Membership No: 111410
Mar 31, 2017
To The Members of Jyothy Laboratories Limited
Report on the Standalone Ind AS financial statements
We have audited the accompanying standalone Ind AS financial statements of Jyothy Laboratories Limited (âthe Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Ind AS financial statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Act") with respect to the preparation of these standalone 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 in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting 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 the design, implementation and maintenance of adequate internal financial control 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone 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 accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone 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, of the state of affairs of the Company as at March 31, 2017, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
Without qualifying our report and as more fully described in Note 35 to the financial statements, we draw attention to managerial remuneration paid/provided by the Company for the year ended March 31. 2017 in excess of the limits prescribed under the Companies Act, 2013. As informed to us, the Company has filed a revised application with the Central government for approval of such excess remuneration. Pending approval no adjustments are considered necessary in these standalone Ind AS financial statements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 (âthe 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 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. 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 purpose 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, 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 âAnnexure 2" to this report;
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 36(C) to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in Note 42 to the standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.
Annexure 1 referred to in our report of even date on the standalone Ind AS financial statements
Re: Jyothy Laboratories Limited (the Company)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.
(b) All Property, Plant and Equipment have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regards to size of the Company and nature of its assets. No material discrepancies were identified on such verification.
(c) According to information and explanations given by the management the title deeds of immovable properties included in Note 3(a) to the financial statements are held in the name of the Company, except as noted below:-
- In respect of two immovable properties (freehold land) aggregating to ''2.21 lacs as at March 31, 2017, the title deeds were not available with the Company and hence we are unable to comment on the same.
- In respect of the following, the immovable properties are not held in the name of the Company. The same is held in the name of the erstwhile entities which have been merged with the Company.
Total Number of Cases |
Nature |
Gross block (Rs. in lacs) |
Net Block (Rs. in lacs) |
2 |
Freehold land and building |
2,734.68 |
2,661.05 |
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) 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. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, the Company has not advanced loans to directors / to a Company in which the Director is interested to which provisions of section 185 of the Companies Act 2013 apply and hence not commented upon. In our opinion and according to the information and explanations given to us, provisions of section 186 of the Companies Act 2013 in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of products of the Company, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) Undisputed statutory dues including
provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax,
wealth-tax, service tax, customs duty, excise duty, value added tax and cess that have not been deposited on account of any dispute, are as follows:
Matter |
Year |
Forum where dispute is pending (Amounts in Lacs) |
|||
Commissioner and Appellate |
Tribunal |
High Court |
Grand total |
||
Excise |
1998-00 |
10 |
- |
- |
10 |
2006-15 |
120 |
1 |
- |
121 |
|
Sales Tax |
1999-00 |
4 |
- |
- |
4 |
2000-04 |
516 |
52 |
640 |
1,208 |
|
2004-05 |
100 |
1 |
- |
101 |
|
2005-06 |
413 |
213 |
- |
625 |
|
2006-09 |
1,045 |
788 |
996 |
2,829 |
|
2009-10 |
127 |
128 |
663 |
917 |
|
2010-12 |
254 |
- |
1,148 |
1,402 |
|
2012-13 |
322 |
- |
139 |
461 |
|
2013-14 |
52 |
- |
- |
52 |
|
2014-15 |
32 |
- |
- |
32 |
|
2015-16 |
26 |
- |
- |
26 |
|
2016-17 |
21 |
- |
- |
21 |
|
Service Tax |
2005-06 |
7 |
- |
- |
7 |
2011-12 |
51 |
- |
- |
51 |
|
Income Tax |
AY 2011-15 |
3,173 |
- |
- |
3,173 |
Grand Total |
6,272 |
1,182 |
3,586 |
11,040 |
(viii) I n our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a financial institution, bank, debenture holders or government.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of debt instruments (debentures) for the purposes for which they were raised. According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer / further public offer / term loans.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanation given by the management and as more fully described in Note 35 of the standalone Ind AS financial statements, we report that managerial remuneration for the year ended March 31, 2017 is in excess of the limits applicable under section 197 of the Act, read with Schedule V thereto. We are informed by the management that the Company has filed a revised application with the Central Government, seeking approval of excess remuneration paid. Our report includes an Emphasis of Matter in this respect.
(xii) In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the reporting requirements under clause 3(xiv) are not applicable to the Company and not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of the Companies Act, 2013.
(xvi)According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 2 referred to in our report of even date on the standalone Ind AS financial statements
Re: Jyothy Laboratories Limited (the Company)
Report on the Internal Financial Controls 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 Jyothy Laboratories Limited (âthe Company") as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s 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 the Company''s 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Note") and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent 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 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 auditor''s 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 internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s 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 company''s 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 company''s 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.
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, 2017, 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.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Vikram Mehta
Place : Mumbai Partner
Date: May 18, 2017 Membership No: 105938
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Jyothy Laboratories Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding 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 the design,
implementation and maintenance of adequate internal financial control
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing, issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company''s Directors, as well as evaluating the
overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial
statements.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at March 31, 2016, its profit, and its cash flows for the year ended on
that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s report) Order, 2016 ("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 1 a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. 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
purpose 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, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors
as on March 31, 2016 , and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2016 , 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 2" to this
report;
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 33 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE 1 TO INDEPENDENT AUDITOR''S REPORT
on even date on the Standalone Financials Statements of Jyothy
Laboratories Limited
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regards to
size of the Company and nature of its assets. No material discrepancies
were identified on such verification.
(c) According to information and explanations given by the management
the title deeds of immovable properties included in Note 12 to the
financial statements are held in the name of the Company, except as
noted below:-
In respect of two immovable properties (freehold land) aggregating to
Rs. 2.21 lacs as at March 31, 2016, the title deeds were not available
with the Company and hence we are unable to comment on the same.
In respect of the following, the immovable properties are not held in
the name of the Company. The same is held in the name of the erstwhile
entities which have been merged with the Company.
Total Nature Gross block Net Block
Number of (Rs. in lacs) (Rs. in lacs)
Cases
2 Freehold land 4,974 4,497
and building
(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year and no material discrepancies were
noticed on such physical verification.
(iii) (a) The Company has granted loan to one Company covered in the
register maintained under section 189 of the Companies Act, 2013. In
our opinion and according to the information and explanations given to
us, the terms and conditions of the loan are not prejudicial to the
Company''s interest.
(b) The Company has granted loans that are re-payable on demand, to a
Company covered in the register maintained under section 189 of the
Companies Act, 2013. We are informed that the Company has not demanded
repayment of any such loan and interest during the year, and thus,
there has been no default on the part of the parties to whom the money
has been lent.
(c) There is no amount of loans granted to Companies, firms or other
parties listed in the register maintained under section 189 of the
Companies Act, 2013 which are outstanding for more than ninety days.
(iv) In our opinion and according to the information and explanations
given to us, the Company has not advanced loans to directors / to a
Company in which the Director is interested to which provisions of
section 185 of the Companies Act 2013 apply and hence not commented
upon.
In our opinion and according to the information and explanations given
to us, provisions of section 186 of the Companies Act 2013 in respect
of loans and advances given, investments made and, guarantees, and
securities given have been complied with by the Company.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 148(1) of the Companies Act,
2013, related to the manufacture of products of the Company, and are of
the opinion that prima facie, the specified accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the same.
(vii) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees'' state insurance, income- tax, sales-tax, service tax, duty
of custom, duty of excise, value added tax, cess and other material
statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees''
state insurance, income- tax, service tax, sales-tax, duty of custom,
duty of excise, value added tax, cess and other material statutory dues
were outstanding, at the year end, for a period of more than six months
from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, value added tax and cess that have not been deposited on account
of any dispute, are as follows:
Matter Year Forum where dispute is pending
(Amounts in Lacs)
Commis
sioner Tribunal High Supreme Grand
Court Court total
and
Appellate
Excise 1998-2000 10 - - - 10
2006-2014 134 1 - - 135
Service
Tax 2005-2006 7 - - - 7
2010-2012 91 - - - 91
Sales Tax 1999-2001 18 4 - - 22
2001-2009 54 - - - 54
2001-2004 352 153 200 - 705
2004-2005 18 293 - - 311
2005-2006 334 213 - - 547
2006-2007 537 181 52 - 770
2006-2011 31 - - - 31
2007-2008 204 23 8 - 235
2008-2010 373 39 - - 412
2009-2010 108 128 108 - 344
2010-2011 217 - - 168 385
2010-2012 17 - - - 17
2010-2013 40 - - - 40
2011-2012 60 - - - 60
2011-2013 44 - - - 44
2011-2014 - - - - -
2012-2013 69 - - - 69
2012-2014 4 - - - 4
2013-2014 78 - - - 78
2014-2015 17 - - - 17
Income
Tax AY 2008-2013 5,177 95 - - 5,272
Total 7,994 1,130 368 168 9,660
(viii) In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in repayment of
dues to a financial institution, bank, debenture holders or government.
(ix) According to the information and explanations given by the
management, the Company has not raised any money by way of initial
public offer / further public offer / debt instruments and term loans.
Hence, reporting under clause (ix) is not applicable to the Company and
hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and
according to the information and explanations given by the management,
we report that no fraud by the Company or on the Company by the
officers and employees of the Company has been noticed or reported
during the year.
(xi) According to the information and explanations given by the
management, the managerial remuneration has been paid / provided in
accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi Company. Therefore,
the provisions of clause 3(xii) of the order are not applicable to the
Company and hence not commented upon.
(xiii) According to the information and explanations given by the
management, transactions with the related parties are in compliance
with section 177 and 188 of Companies Act, 2013 where applicable and
the details have been disclosed in the notes to the financial
statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on
an overall examination of the balance sheet, the Company has not made
any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year under review.
Accordingly, the reporting requirements under clause 3(xiv) are not
applicable to the Company and not commented upon.
(xv) According to the information and explanations given by the
management, the Company has not entered into any non-cash transactions
with directors or persons connected with him as referred to in Section
192 of the Companies Act, 2013.
(xvi) According to the information and explanations given to us, the
provisions of section 45-IA of the Reserve Bank of India Act, 1934 are
not applicable to the Company.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/ E300003
per Vikram Mehta
Partner
Membership Number: 105938
Place of Signature: Mumbai
Date: May 23, 2016
Mar 31, 2014
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Jyothy
Laboratories Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 ("the Act"),
read with General Circular 8/2014 dated 4 April 2014 issued by the
Ministry of Corporate Affairs. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
EMPHASIS OF MATTER
Without qualifying our report and as more fully described in Note 41 to
the financial statements, we draw attention to managerial remuneration
paid/provided by the Company for the year ended March 31. 2013 in
excess of the limits prescribed under the Companies Act, 1956. As
informed to us, the Company has filed an application with the Central
government for approval of such excess remuneration.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) 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;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards notified under
the Companies Act, 1956, read with General Circular 8/2014 dated 4
April 2014 issued by the Ministry of Corporate Affairs;
(e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to in our report of even date Re: Jyothy Laboratories
Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the management
during the year but there is a regular program of Verification which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such Verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of Verification is
reasonable. Inventories lying with outside parties have been conformed
by them as at year end.
(b) The procedures of physical Verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company is maintaining proper records of inventory.
Discrepancies noted on physical Verification of inventories were not
material, and have been properly dealt with in the books of account.
(iii) (a) The Company has granted loan to two subsidiaries covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs. 53,463 lacs and the
year-end balance of loans granted to such parties was Rs. 53,463 lacs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(c) The loans granted are either re-payable on demand or after a
stipulated period of time for all subsidiaries. Interest is payable on
demand. We are informed that the Company has not demanded repayment of
any such loan or interest during the year, and thus, there has been no
default on the part of the parties to whom the money has been lent.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956.
(e) According to information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)
(e) to (g) of the Order are not applicable to the Company and hence not
commented upon.
(iv) (a) In our opinion and according to the information and
explanations given to us, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. The activities of the Company do not involve rendering
of services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the same.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including employees'' state
insurance, income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise duty, cess and other material statutory dues applicable to
it. There are no amounts due in respect of investor education and
protection fund.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, there are no dues of
wealth tax, customs duty and cess which have not been deposited on
account of any dispute. According to the records of the Company, the
dues outstanding of income tax, sales tax, service tax and excise duty
on account of any dispute, are as follows:
Forum where dispute is pending (Rs. in Lacs)
Matter Year Commiss
ioner Tribunal High
Court Supreme
court Grand
Total
and
Appell
ate
Excise 1998-00 5 - - - 5
2000-04 35 - - - 35
2004-05 - 6 - - 6
2005-06 34 3 - - 37
2008-12 225 1 - - 226
Sales
tax 1998-02 129 - - - 129
2002-05 869 11 - - 880
2005-06 322 213 - 44 579
2006-07 346 168 13 112 639
2006-10 358 - - - 358
2007-08 463 123 - - 586
2008-09 451 39 - 165 655
2009-11 374 - - 355 729
2012-13 3 - - 25 28
Income
Tax AY
2011-12 1,283 - - - 1,283
Service
Tax 2005-10 31 - - - 31
2010-11 101 - - - 101
TOTAL 5,029 564 13 701 6,307
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by subsidiaries from banks,
the terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has made preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956. In our opinion, the price at which
shares have been issued is not prejudicial to the interest of the
Company.
(xix) According to the information and explanations given to us, the
Company had issued 4,650 Secured Redeemable Non- Convertible Debentures
of Rs. 1,000,000 each, during the period covered by our audit report. The
Company has created security in favour of the debenture trust for the
period the debentures are outstanding.
(xx) The Company has not raised money through public issue during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S. R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W
per Vikram Mehta
Place: Mumbai Partner
Date: May 22, 2014 Membership Number: 105938
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Jyothy
Laboratories Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2013, and the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement. An audit involves performing procedures to
obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor''s
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal
control relevant to the Company''s preparation and fair presentation of
the financial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
Without qualifying our report, we draw attention to Note 41 to the
financial statements regarding managerial remuneration amounting to Rs
1,113 lacs paid / provided during the year of which Rs 921 lacs is in
excess of the limits prescribed under Schedule XIII of the Companies
Act, 1956. As informed to us, the Company has filed an application with
the Central government and is in the process of obtaining necessary
approval from shareholders for approval of such excess remuneration.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) 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;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
(e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 1 of section "Report on Other Legal
and Regulatory Requirements" of our report of even date
Re: Jyothy Laboratories Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, material
discrepancies were identified on such verification. These have been
properly dealt with in the books of accounts.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable except at one unit where physical verification was conducted
only at year end.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory.
Discrepancies noted on physical verification of inventories were
material, and have been properly dealt with in the books of account.
(iii) (a) The Company has granted loan to two subsidiaries covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs. 37,478 lacs and the
year- end balance of loans granted to such parties was Rs. 36,925 lacs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(c) The loans granted are either re-payable on demand or after a
stipulated period of time for all subsidiaries. In respect of one
subsidiary, the interest is payable on demand. We are informed that the
Company has not demanded repayment of any such loan or interest during
the year, and thus, there has been no default on the part of the
parties to whom the money has been lent. In respect of the other
subsidary, the payment of interest has been regular.
(d) There is no overdue amount of loans granted to subsidiary companies
listed in the register maintained under section 301 of the Companies
Act, 1956.
(e) According to information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Accordingly, the provisions of clause
4(iii)(e) to (g) of the Order are not applicable to the Company and
hence not commented upon.
(iv) (a) In our opinion and according to the information and
explanations given to us, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. The activities of the Company do not involve rendering
of services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time
except in respect of sale of goods of Rs. 386 lacs to a subsidiary
which are of specialized nature, where in the absences of the
comparable prices, we are unable to comment whether the transactions
were made at prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business
except in respect of the erstwhile Jyothy Consumer Products Limited
business where scope and coverage needs to be significantly enlarged.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the same.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including employees'' state
insurance, income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise duty, cess and other material statutory dues applicable to
it. There are no amounts due in respect of investor education and
protection fund.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales- tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, there are no dues of
wealth tax, customs duty and cess which have not been deposited on
account of any dispute. According to the records of the Company, the
dues outstanding of income tax, sales tax, service tax and excise duty
on account of any dispute, are as follows:
(Rs. in lacs)
Matter Year Commissionerate
and appellate
authorities
Sales Tax 1998-02 131
2002-05 918
2005-06 535
2006-07 349
2007-08 625
2008-09 609
2009-11 709
2006-10 358
2011-12 170
2012-13 3
Excise duty 1999-00 5
2000-04 35
2004-05
2005-06 34
2008-12 225
Income Tax AY 2011-12 80
Service Tax 2005-10 31
2010-11 101
Total 4,917
Matter Forum where dispute is pending
Tribunal High Court Supreme Total
Court
Sales Tax 131
11 929
213 44 792
168 13 112 642
123 748
39 165 813
355 1,064
358
170
25 28
Excise duty 5
35
6 6
3 37
225
Income Tax 80
Service Tax 31
101
Total 563 13 701 6,195
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Order are not applicable to the Company.
(xiv) In ouropinion, theCompany is not dealing in ortrading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii)The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Companies Act, 1956.
(xix) According to the information and explanations given to us, the
Company had issued 500 secured redeemable non-convertible debentures of
Rs 1,00,000/- each during the period covered by our audit report. The
Company has created a security in favour of the debenture trust for the
period the debentures are outstanding.
(xx) The Company has not raised money through public issues during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W
per Vikram Mehta
Partner
Membership No.: 105938
Place of Signature: Mumbai
Date: May 22, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of Jyothy Laboratories
Limited ('the Company') as at March 31, 2012 and also the Statement of
profit and loss and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes 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, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, statement of profit and loss
and cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
v. On the basis of the written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2012;
b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date
Re: Jyothy Laboratories Limited ('the Company')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable. Inventories lying with outside parties have been confirmed
by them as at year end.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory.
Discrepancies noted on physical verification of inventories were not
material, and have been properly dealt with in the books of account.
(iii) (a) The Company has granted loan to three subsidiaries covered in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs 53,697 lacs and the
year- end balance of loans granted to such parties was Rs 51,012 lacs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(c) The loans granted are re-payable on demand for all subsidiaries. In
respect of one subsidiary, the interest is payable on demand. We are
informed that the Company has not demanded repayment of any such loan
or interest during the year, and thus, there has been no default on the
part of the parties to whom the money has been lent. In respect of the
other two subsidiaries, the payment of interest has been regular.
(d) There is no overdue amount of loans granted to subsidiary companies
listed in the register maintained under Section 301 of the Companies
Act, 1956.
(e) According to information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act, 1956. Accordingly, the provisions of Clause
4(iii)(e) to (g) of the Companies (Auditors' Report) Order, 2003 (as
amended) are not applicable to the Company and hence not commented
upon.
(iv) (a) In our opinion and according to the information and
explanations given to us, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. The activities of the Company do not involve rendering
of services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under Section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time
except in respect of sale of goods oft 1,086.84 lacs and purchase of
material oft 519.50 lacs from a non wholly owned subsidiary, where in
the absence of comparable prices, we are unable to comment whether the
transactions were made at prevailing market prices at the relevant
time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees' state insurance, income-tax, sales-tax, wealth-tax, service
tax, customs duty, excise duty, cess and other material statutory dues
applicable to it. There are no amounts due in respect of investor
education and protection fund.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, there are no dues of
income tax, wealth tax, customs duty and cess which have not been
deposited on account of any dispute. According to the records of the
Company, the dues outstanding of sales tax, service tax and excise duty
on account of any dispute, are as follows:
Matter Year Forum where the dispute is pending
Commissioner Tribunal
ate and appellate
authorities
Sales Tax 2001-05 48 -
2005-09 1,171 -
2009-11 104 -
The Central
Excise Act, 1944 1999-00 - 9
2001-02 - 3
2004-05 3 2
2005-06 - -
2006-08 5 -
2008-11 139 1
Service Tax
Act, 1994 2005-10 42 -
2010-11 76 -
2011-12 24 -
Total 1,612 15
Matter Forum where the dispute is pending
High Court Supreme Court Total
Sales Tax - - 48
60 175 1,406
- 353 457
The Central
Excise Act, 1944 - - 9
- - 3
- - 5
- - -
- - 5
- - 140
Service Tax
Act, 1994 - - 42
- - 76
- - 24
Total 60 528 2,216
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. However, during
the year, the Company has temporarily invested surplus funds in units
of mutual funds. In our opinion and according to the information and
explanations given to us, proper records have been maintained of the
transactions and contracts and timely entries have been made therein.
The investments have been held by the Company, in its own name.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) According to the information and explanations given to us, the
Company had issued unsecured debentures during the period covered by
our audit report. The Company had created a security or charge in
favour of the debenture trust for the period the debentures were
outstanding.
(xx) The Company has not raised money through public issues during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S. R. BATLIBOI & ASSOCIATES
Firm Registration Number: 101049W
Chartered Accountants
per Vikram Mehta
Partner
Membership No.: 105938
Mumbai
Date: May 23, 2012
Mar 31, 2011
1. We have audited the attached balance sheet of Jyothy Laboratories
Limited ('the Company') as at March 31, 2011 and also the profit and
loss account and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes 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, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
v. On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2011;
b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date Re:
Jyothy Laboratories Limited ('the Company')
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) All fixed assets have not been physically verified by the management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. As informed, no material discrepancies
were noticed on such verification.
c) There was no disposal of a substantial part of fixed assets during
the year
ii) a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable. Inventories lying with outside parties have been confirmed
by them as at year end.
b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
c) The Company is maintaining proper records of inventory.
Discrepancies noticed on physical verification of inventories were not
material, and have been properly dealt with in the books of account.
iii) a) The Company has granted unsecured loan and advance to a
subsidiary company covered in the register maintained under section 301
of the Companies Act, 1956. The maximum amount involved during the year
was Rs.2,965.25 lacs and the year- end balance of loan granted to the
party was Rs.2,871.70 lacs.
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
c) The loans granted along with interest are re-payable on demand. As
informed, the Company has not demanded repayment of any such loan or
interest during the year, thus, there has been no default on the part
of the parties to whom the money has been lent.
d) There is no overdue amount of loan granted to the subsidiary company
in the register maintained under section 301 of the Companies Act,
1956.
e) According to information and explanations given to us, the Company
has not taken any loans, secured or unsecured from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Accordingly, provisions of clause 4(iii) (e)
and (g) of the Order, are not applicable to the Company and hence not
commented upon.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
During the course of our audit, we have not observed any major weakness
or continuing failure to correct any major weakness in the internal
control system of the company in respect of these areas.
v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public.
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
ix) a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees' state insurance, income-tax, sales-tax, wealth-tax, service
tax, customs duty, excise duty, cess and other material statutory dues
applicable to it. There are no amounts due in respect of investor
education and protection fund.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act 1956,
we are not in a position to comment upon the regularity or otherwise of
the Company in depositing the same.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales- tax, customs duty, excise duty, cess
and other material statutory dues were outstanding, at the year end,
for a period of more than six months from the date they became payable.
c) According to the records of the Company, there are no dues of
income-tax, wealth tax, customs duty, employees' state insurance, and
cess which have not been deposited on account of any dispute. According
to the records of the Company, the dues outstanding of sales-tax,
service tax, excise duty, provident fund and cess on account of any
dispute, are as follows:
Amount Rs. in Lacs
Name of the
statute
(Nature of
dues) Forum where the dispute is pending
Period to
which Commissionerate Appelate High Court Total
Amount
the
amount Authorities
relates & Tribunal
Sales Tax
(Tax/
Penalty
/Interest) 2001-02 to 24 - - 24
2002-03
2003-04 to 72 - - 72
2004-05
2005-06 213 - 44 257
2006-07 to 544 - 355 899
2009-10
2010-11 49 - 148 197
The Central
Excise Act,
1944 (Tax/
Penalty) 1999-00 to - 12 - 12
2000-01
2004-05 to 6 8 - 14
2005-06
2006-07 1 - - 1
2009-10 to 110 - - 110
2010-11
Employee
State
Insurance
(Tax/
Penalty) 2002-08 10 - - 10
Provident
Fund (Tax) 1997-98 0.5 - - 0.5
2007-08 5 - - 5
Service
Tax (Tax) 2005-06 13 - - 13
2007-08 3 - - 3
2008-09 to 64 - - 64
2010-11
Others 2003-04 - - 4 4
Total 1,114.50 20 551 1,685.50
x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a
financial institution or bank. The Company has not issued any
debentures.
xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. However, during
the year, the Company has temporarily invested surplus funds in units
of mutual fund and debentures. In our opinion and according to the
information and explanations given to us, proper records have been
maintained of the transactions and contracts and timely entries have
been made therein. The investments have been held by the Company, in
its own name.
xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from bank or
financial institutions, the terms and conditions whereof in our opinion
are not prima-facie prejudicial to the interest of the Company.
xvi) The Company did not have any term loans outstanding during the
year.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
xviii) The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Companies Act, 1956.
xix) The Company did not have any outstanding debentures during the
year.
xx) The Company has not raised money through public issues during the
year.
xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S. R. Batliboi & Associates
Firm Registration Number: 101049W
Chartered Accountants
per Vikram Mehta
Partner
Membership No.: 41870
Mumbai
Date: May 30, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Jyothy Laboratories
Limited (Ãthe CompanyÃ) as at March 31, 2010 and also the profit and
loss account and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the CompanyÃs management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure, a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes 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, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
v. On the basis of the written representations received from the
directors, as on March 31, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2010;
b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date Re:
Jyothy Laboratories Limited (Ãthe CompanyÃ)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted unsecured loan and advances to a
subsidiary company covered in the register maintained under section 301
of the Companies Act, 1956. The maximum amount involved during the year
was Rs. 1,216.55 lacs and the year end balance of loans granted to such
parties was Rs. 1,216.55 lacs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(c) The loan granted along with the interest is repayable on demand. As
informed, the Company has not demanded repayment of any amount during
the year, thus, there has been no default on the part of the party to
whom the money has been lent.
(d) There is no overdue amount of loan granted to the subsidiary
company listed in the register maintained under section 301 of the
Companies Act, 1956.
(e) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties
covered in the register maintained under section 301 of the Companies
Act, 1956. Accordingly, provisions of paragraphs 4(iii) (f) and (g) of
the Companies (AuditorÃs Report) Order, 2003 (as amended) are not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
During the course of our audit, no major weakness has been noticed in
the internal control system in respect of these areas. During the
course of our audit, we have not observed any continuing failure to
correct major weakness in internal control system of the Company.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be
entered into the register maintained under section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
income-tax, sales-tax, wealth-tax, customs duty, excise duty and there
are a few instances of insignificant delays in deposit of service tax
and employeesà state insurance. The provision of investor education
and protection fund is currently not applicable to the Company.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the Company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employeesÃ
state insurance, income-tax, wealth-tax, service tax, sales-tax,
customs duty, excise duty and other undisputed statutory dues were
outstanding, at the year end, for a period of more than six months from
the date they became payable.
(c) According to the records of the Company, there are no dues of
income-tax, wealth tax, customs duty, employeesà state insurance and
cess which have not been deposited on account of any dispute. According
to the records of the Company, the dues outstanding of sales tax,
service tax, excise duty, provident fund and cess on account of any
dispute, are as follows:
Amount Rs in lacs
Forum where the dispute is pending
Name of Statute Period Commissi Appellate High Total
Nature of Dues to which onerate Authorities Amount
the amount &Tribunal
relates
Sales Tax (Tax/Penalty
/Interest) 2002-03 to
2003-04 58 39 - 97
2004-05 to
2005-06 53 158 - 211
2006-07 to
2007-08 77 169 - 246
2008-09 to
2009-10 - 483 - 483
The Central Excise Act, 1944 1999-00 to
(Tax/Penalty) 2001-02 - 12 - 12
2004-05 to
2005-06 6 8 - 14
2006-07 1 - - 1
Employee State Insurance
(Tax/Penalty) 2002-08 10 - - 10
Provident Fund (Tax) 2007-08 5 - - 5
Service Tax (Tax) 2007-08 3 - - 3
Total 136 777 169 1,082
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a bank. The Company
has not taken any loan from the financial institutions. The Company has
not issued any debentures.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (AuditorÃs Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Companies (AuditorÃs Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from bank or
financial institutions, the terms and conditions whereof in our opinion
are not prima-facie prejudicial to the interest of the Company.
(xvi) The Company did not have any term loans outstanding during the
year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii)The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised money through public issues during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S.R. Batliboi & Associates
Firm Registration Number: 101049W
Chartered Accountants
per Sudhir Soni
Partner
Membership No.: 41870
Mumbai
Date: May 25, 2010
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