Auditor Report of Morepen Laboratories Ltd.
Mar 31, 2023
Independent Auditorâs Report
To the Members of Morepen Laboratories Limited
Report on the Audit of Standalone Financial Statements
Opinion
We have audited the accompanying standalone
financial statements of Morepen Laboratories Limited
("the Company"), which comprise the Balance Sheet as
at March 31, 2023, the Statement of Profit and Loss
(including Other Comprehensive Income), Statement of
Changes in Equity and Statement of Cash Flows for the
year then ended, and summary of significant
accounting policies and other explanatory information
(hereinafter referred to as "the standalone financial
statements").
In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone financial statements give the information
required by the Companies Act, 2013 ("the Act") in the
manner so required and give a true and fair view in
conformity with the Indian Accounting Standards
prescribed under section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015,
as amended, ("Ind AS") and other accounting principles
generally accepted in India, of the state of affairs of the
Company as at March 31, 2023, the profit and total
comprehensive income, changes in equity and its cash flows
for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described
in the "Auditor''s Responsibilities for the Audit of standalone
financial statements" section of our report. We are
independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of
India together with the independence requirements that are
relevant to our audit of the standalone financial statements
under the provisions of the Act and the rules thereunder, and
we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
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 transaction and events in a manner that
achieves fair presentation.
Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or in
aggregate, makes it probable that the economic
decisions of a reasonably knowledgeable user of the
financial statements may be influenced. We consider
quantitative materiality and qualitative factor in (i)
planning the scope of our audit work and in evaluating
the results of our work; and (ii) to evaluate the effect of
any identified misstatements in the financial statements.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to
communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related
safeguards.
From the matters communicated with those charged
with governance, we determine those matters that were
of most significance in the audit of the standalone
financial statements of the current period and are
therefore the key audit matters. We describe these
matters in our auditor''s report unless law or regulation
precludes public disclosures about the matter or when,
in extremely rare circumstances, we determine that a
matter should not be communicated in our report
because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest
benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report)
Order, 2020 ("the Order"), issued by the Central
Government in terms of section 143(11) of the Act,
we give in Annexure A, a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the
extent applicable.
2. As required by Section 143(3) of the Act, based on our
audit, we report that:
a) We have sought and obtained all the information
and explanations which to the best of our knowledge
and belief were necessary for the purposes of our
audit.
b) In our opinion, proper books of accounts as required
by law have been kept by the company so far as it
appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss
(including other comprehensive income), Statement
of Changes in Equity and the Statement of Cash
Flows dealt with by this report are in agreement with
the books of accounts.
d) In our opinion, the aforesaid standalone financial
statements comply with the Indian Accounting
Standards prescribed under section 133 of the Act
read with relevant rules issued thereunder.
e) On the basis of the written representations received
from the directors as on 31stMarch,2023 taken on
record by the Board of Directors, none of the
directors are disqualified as on 31st March 2023
from being appointed as a director in terms of
section 164(2) of the Act.
f) With respect to the adequacy of the internal financial
controls over financial reporting of the company and
the operating effectiveness of such controls, refer to
our separate report in "Annexure B".Our report
expresses an unmodified opinion on the adequacy
and operating effectiveness of the Company''s
internal financial controls over financial reporting.
g) With respect to the other matters to be included in the
Auditor''s Report in accordance with the requirements
of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and
according to the explanations given to us, the
remuneration paid by the company to its directors
during the year is in accordance with the provisions
of section 197 of the Act.
h) With respect to the other matters to be included in the
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 on its financial position in its
standalone financial statements.
(Referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our
report of even date on the standalone financial statements of Morepen Laboratories Limited for the year ended
31st March, 2023)
(i) (a) (A) The company is maintaining proper
records showing full particulars,
including quantitative details and
situation of Property, Plant and
Equipment;
(B) The company is maintaining proper
records showing full particulars of
intangible assets;
(b) Property, Plant and Equipment have been
physically verified by the management at
reasonable intervals and no material
discrepancies were noticed on such
verification;
(c) The title deeds of all the immovable properties
(other than properties where the company is
the lessee and the lease agreements are duly
executed in favour of the lessee) disclosed in
the financial statements are held in the name
of the company;
(d) The company has not revalued its
Property, Plant and Equipment (including
Right of Use assets) or intangible assets or
both during the year;
(e) According to the information and
explanations given to us, no proceedings
have been initiated or are pending against the
company for holding any benami property
under the Benami Transactions (Prohibition)
Act, 1988 (45 of 1988) and rules made
thereunder;
(ii) (a) As explained to us , physical verification of
inventory has been conducted at reasonable
intervals by the management and in our
opinion, the coverage and procedure of such
verification by the management is
appropriate and no discrepancy of 10% or
more in the aggregate for each class of
inventory was noticed;
(b) The company has not been sanctioned
working capital limits in excess of five crore
rupees, in aggregate, during the year from
banks or financial institutions on the basis of
security of current assets;
(iii) According to the information and explanations
given to us and based on audit procedures
performed, we are of the opinion that during the
year the company has made investments of ''5.00 lakhs
in equity share capital in newly created wholly owned
subsidiary Morepen Rx Limited, but not provided any
guarantee or security or granted any loans or advances
in the nature of loans, secured or unsecured,
to companies, firms, Limited Liability Partnerships or any
other parties. In our opinion, investment made in wholly
owned subsidiary is not prejudicial to the company''s
interest;
(iv) According to the information and explanations given to
us and based on audit procedures performed, we are of
the opinion that in respect of loans, investments,
guarantees and security, the company has complied
with the provisions of section 185 and 186 of the Act;
(v) According to the information and explanations given to
us, the company is complying Hon''ble National
Company Law Tribunal (NCLT) order dated 12.03.2018
in the matter of fixed deposit holders. (Refer Note 13(G)
to standalone financial statements);
(vi) According to the information and explanations given to
us, maintenance of cost records has been specified by
the Central Government under subsection (1) of section
148 of the Companies Act and as explained to us such
accounts and records have been so made and
maintained by the company;
(vii) (a) According to the information and explanations
given to us and based on audit procedures
performed, the company is regular in depositing
undisputed statutory dues including Goods and
Services Tax, provident fund, employees'' state
insurance, sales-tax, service tax, duty of customs,
duty of excise, value added tax, cess and any other
statutory dues to the appropriate authorities except
payment of advance income tax. No such dues are
outstanding as on 31st March 2023 for a period
exceeding six months;
(b) According to the records and information and
explanation given to us, there are no dues in
respect of Income tax, Sales tax, VAT, Service-tax,
Custom duty, cess outstanding as at March
31,2023 due to any dispute;
(viii) According to the records and information and
explanation given to us, no transaction/amount
has been surrendered or disclosed as income during
the year in the tax assessments under the Income Tax
Act, 1961;
(xix) On the basis of the financial ratios, ageing and
expected dates of realisation of financial assets
and payment of financial liabilities, other
information accompanying the financial
statements, our knowledge of the Board of
Directors and management plans, we are of the
opinion that no material uncertainty exists as on
the date of the audit report that company is
capable of meeting its liabilities existing at the date
of balance sheet as and when they fall due within a
period of one year from the balance sheet date;
(xx) (a) According to the information and
explanations given to us and based on our
examination of the records of the company,
there is no unspent amount required to be
transferred to a Fund specified in Schedule VII
to the Companies Act in respect of other than
ongoing projects as per sub-section (5) of section
135 of the said Act;
(b) According to the information and explanations
given to us and based on our examination of the
records of the company, there is no amount
remaining unspent under sub-section (5) of section
135 of the Companies Act which is required to be
transferred to a special account in compliance with
the provision of sub-section (6) of section 135 of the
said Act;
(xxi) There is no qualification or adverse remarks by the
respective auditors in the Companies (Auditor''s Report)
Order (CARO) reports of the companies included in the
consolidated financial statements.
For S.P Babuta & Associates
Chartered Accountants
F.No. 007657N
CA S.P Babuta
Managing Partner
FCA, AIIA, IP, DISA, CCA
GST Cert, Forensic Auditor
Date :16th May, 2023 Membership No. : 086348
Place :Gurugram, Haryana UDIN : 23086348BGYBEC6052
Mar 31, 2018
Independent Auditors'' Report
To, The Members of Blue Coast Hotels Limited Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of Blue Coast Hotels Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements")
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 ("the 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 the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with relevant rules issued thereunder.
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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting 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 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 believe that the audit evidence obtained by us 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 March 31, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
Without qualifying our opinion, we draw attention to the folio wing notes on the financial statements:
1. Refer Note No. 17 (B)
The Company has filed a Review Petition before the Hon''ble Supreme Court of India against the judgement dated 19.03.2018 setting aside the order of the Hon''ble High Court of Bombay dated 23.03.2015 and thereby upholding the sale of the hotel property at Goa . The Review Petition is pending for disposal before the Hon''ble Supreme Court of India. The outcome may have the material impact as a going concern. The Hotel Property continues to be operated under the brand "Park Hyatt Goa Resort & Spa" and maintained under the management agreement with Hyatt International.
2. Refer Note 2 (ii)
Capital Works in Progress includes amounts incurred by the Company for the Delhi Aerocity Hotel Project (Rs 3449.67 Lakh) and Chandigarh Hotel Project (Rs 846.95 Lakh)
3. Refer Note 3(i)
During the year, Silver Resort Hotel India Private limited, the subsidiary of the Company, has filed an appeal before the Hon''ble High Court of Delhi challenging the alleged termination of the Development Agreement and Infrastructure Development Services Agreement. Pursuant to the Arbitral Tribunal Award, DIAL has deposited a sum of Rs 7698.66 Lakh with the Hon''ble High Court of Delhi in a representative suit filed by the unit holders of the Aerocity Hotel Project. Further, DIAL has also filed a winding up petition against the Company for recovery of Rs 9588.97 Lakh towards the licence fee, advance development cost and interest etc thereon which was challenged by the Company before the Hon''ble High Court and the Hon''ble High Court was pleased to grant a stay in an appeal filed by the Company against the Order of the Single Judge. Pending the disposal of the Appeals, no provision for licence fee and interest on overdue payments has been made after the date of alleged termination.
4. Refer Note 3(iii)
The shareholding held by the Company in Joy Hotel & Resorts Private Limited is pledged with the bank & financial institution which has extended the credit facilities the funds for implementing the Chandigarh hotel project.
5. Refer Note 4 & 20
The outcome of the pending litigation in the subsidiary company Golden Joy Hotel Resort Private Limited with respect to Amritsar Hotel Project may have an impact on investment made by the Company.
6. Refer Note 11 (B)
The ownership in equity shares held by Northern Projects Limited, Morgan Ventures Ltd and Praveen Electronics Pvt Ltd and is in dispute and the matter is pending adjudication at different foras.
7 Refer Note 11 (C)
During the year, the tenure for the redemption of cumulative redeemable preference shares of Rs 41,50,00,000/- ( Rs Forty One Crore Fifty Lakh) has been extended upto fifteen years i.e. upto the year 2032 pursuant to the resolution passed by way of Postal Ballot Sept 20, 2017 . A minority shareholder has taken an ex-parte order against the above resolution which the company is contesting.
8. Refer Note 17
The Company is contesting the suit filed by the Debenture holder and in view of the pending litigation, no debenture redemption reserve is created,
9. Refer Note 20 (i)
The company has given a guarantee of Rs. 6500 Lakh to Banks / Financial institutions for loan taken by Joy Hotel Private Limited for setting up a five-star hotel project at Chandigarh which has achieved a One Time Settlement with its secured lenders which had initiated recovery proceedings against it under SARFAESI Act, 2002. Further, the Hon''ble High Court was pleased to stay the auction of the hotel plot by the Estate Office which had resumed it.
10. Refer Note 20 (ii)
The financial institution from which the company had taken term loan had also invested in the equity share capital of the subsidiary of the company Silver Resort Hotel India (P) Limited (setting up a five star hotel project near International Airport, Delhi) to the tune of Rs. 8500.00 Lakh. The company had executed Buy-back agreements on joint & several basis with the erstwhile directors. Till the buy back of entire equity is completed, IFCI Limited has a first charge basis on the hotel property at Goa.
11. Refer Note 25
Finance cost includes provision for dividend on cumulative redeemable preference shares for the year. Further in view of the pending litigations, no provision for interest or any other charges has been made on secured borrowings from financial institution, bank and debentures.
In view of the above, the assumption of the going concern is dependent upon realisation of the various initiatives undertaken by the Company, outcome of the Review Petition before the Hon''ble Supreme Court of India and other court cases and / or ability of the Company to raise requisite finances / generate cash flows in future to meet its obligations including financial support to its subsidiary companies.
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, based on our audit we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of 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 including 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 Indian Accounting Standards prescribed under section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31,2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
(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, as amended, 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 the respective schedules in its 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;
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For Dewan and Gulati |
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Chartered Accountants |
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(Firm''s Registration No. 03881N) |
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CA. (Dr.) Sunil Gulati |
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Place: New Delhi |
Partner |
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Date: 29th May, 2018 |
(Membership No. 082929) |
Annexure "a" to the Independent Auditor''s Report Blue Coast Hotels Limited
The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statement for the year ended 31st March 2018
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records of the Company, the title deeds of the immovable properties are held in the name of the company.
(ii) According to the information and explanations furnished to us, the inventory has been physically verified at reasonable intervals by the management & no material discrepancies were noticed by the management.
(iii) According to the information and explanations furnished to us, the company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnership or other parties during the year covered in the register maintained under Section 189 of the Act.
(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investment made, and guarantees and security provided by it during the year.
(v) According to the information & explanations given to us the company has not accepted deposits from the public within the meaning of section 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified during the year. Hence, the provisions of this clause are not applicable.
(vi) The Central Government has not prescribed cost records for the company under section (1) of section 148 of the Act. Hence, the provisions of this clause are not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
a) According to the information and explanations given to us and on the basis of our examination of the records of the company, the company, in general, is regular in depositing 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 statutory dues due to the appropriate authorities.
b) According to the information & explanations given to us, there are no dues payable in respect of Sales-tax, Value Added Tax, Service-tax, Income Tax, Customs duty, cess, central excise which have not been deposited with the appropriate authorities on account of any dispute.
viii) Based on our audit procedures and according to the information and explanation given to us by the management, the company has defaulted in repayment of dues to the financial institution and debenture holders as under:
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S.No. |
Name |
Nature of dues |
Principal Amount (Rs. in lacs) |
Period of default |
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1 |
IFCI Ltd. |
Term Loan |
11,368.91 |
Up to 6 years |
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2 |
PACL Ltd. |
Debentures principal amount |
10,000.00 |
Up to 5 years |
(ix) According to the information and explanations given to us and based on our examination of the records of the company, the company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the order is not applicable.
(x) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the company or on the company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
(xi) According to the information and explanations given to us and based of our verification of books of accounts of the company, the company has not paid/provided any amount of Managerial remuneration during the year. Accordingly, paragraph 3(xi) of the order is not applicable.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) According to the information and explanation given to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placements of shares or fully or partly convertible debentures during the year.
(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 person connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, the provision of clause 3 (xvi) of the Order are not applicable to the company.
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For Dewan and Gulati |
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Chartered Accountants |
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(Firm''s Registration No. 03881N) |
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CA. (Dr.) Sunil Gulati |
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Place : New Delhi |
(Partner) |
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Date : 29th May, 2018 |
(Membership No. 082929) |
Annexure "B" to the Independent Auditor''s Report
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act")
We have audited the internal financial controls over financial reporting of THE BLUE COAST HOTELS LIMITED ("the Company") as of March 31, 2018 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 "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s 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 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 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, to the best of our information and according to the explanations given to us the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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.
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For Dewan and Gulati |
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Chartered Accountants |
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(Firm''s Registration No. 03881N) |
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CA. (Dr.) Sunil Gulati |
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Place : New Delhi |
(Partner) |
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Date : 29th May, 2018 |
(Membership No. 082929) |
Mar 31, 2018
Independent Auditors'' Report
To, The Members of Blue Coast Hotels Limited Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of Blue Coast Hotels Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements")
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 ("the 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 the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with relevant rules issued thereunder.
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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting 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 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 believe that the audit evidence obtained by us 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 March 31, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
Without qualifying our opinion, we draw attention to the folio wing notes on the financial statements:
1. Refer Note No. 17 (B)
The Company has filed a Review Petition before the Hon''ble Supreme Court of India against the judgement dated 19.03.2018 setting aside the order of the Hon''ble High Court of Bombay dated 23.03.2015 and thereby upholding the sale of the hotel property at Goa . The Review Petition is pending for disposal before the Hon''ble Supreme Court of India. The outcome may have the material impact as a going concern. The Hotel Property continues to be operated under the brand "Park Hyatt Goa Resort & Spa" and maintained under the management agreement with Hyatt International.
2. Refer Note 2 (ii)
Capital Works in Progress includes amounts incurred by the Company for the Delhi Aerocity Hotel Project (Rs 3449.67 Lakh) and Chandigarh Hotel Project (Rs 846.95 Lakh)
3. Refer Note 3(i)
During the year, Silver Resort Hotel India Private limited, the subsidiary of the Company, has filed an appeal before the Hon''ble High Court of Delhi challenging the alleged termination of the Development Agreement and Infrastructure Development Services Agreement. Pursuant to the Arbitral Tribunal Award, DIAL has deposited a sum of Rs 7698.66 Lakh with the Hon''ble High Court of Delhi in a representative suit filed by the unit holders of the Aerocity Hotel Project. Further, DIAL has also filed a winding up petition against the Company for recovery of Rs 9588.97 Lakh towards the licence fee, advance development cost and interest etc thereon which was challenged by the Company before the Hon''ble High Court and the Hon''ble High Court was pleased to grant a stay in an appeal filed by the Company against the Order of the Single Judge. Pending the disposal of the Appeals, no provision for licence fee and interest on overdue payments has been made after the date of alleged termination.
4. Refer Note 3(iii)
The shareholding held by the Company in Joy Hotel & Resorts Private Limited is pledged with the bank & financial institution which has extended the credit facilities the funds for implementing the Chandigarh hotel project.
5. Refer Note 4 & 20
The outcome of the pending litigation in the subsidiary company Golden Joy Hotel Resort Private Limited with respect to Amritsar Hotel Project may have an impact on investment made by the Company.
6. Refer Note 11 (B)
The ownership in equity shares held by Northern Projects Limited, Morgan Ventures Ltd and Praveen Electronics Pvt Ltd and is in dispute and the matter is pending adjudication at different foras.
7 Refer Note 11 (C)
During the year, the tenure for the redemption of cumulative redeemable preference shares of Rs 41,50,00,000/- ( Rs Forty One Crore Fifty Lakh) has been extended upto fifteen years i.e. upto the year 2032 pursuant to the resolution passed by way of Postal Ballot Sept 20, 2017 . A minority shareholder has taken an ex-parte order against the above resolution which the company is contesting.
8. Refer Note 17
The Company is contesting the suit filed by the Debenture holder and in view of the pending litigation, no debenture redemption reserve is created,
9. Refer Note 20 (i)
The company has given a guarantee of Rs. 6500 Lakh to Banks / Financial institutions for loan taken by Joy Hotel Private Limited for setting up a five-star hotel project at Chandigarh which has achieved a One Time Settlement with its secured lenders which had initiated recovery proceedings against it under SARFAESI Act, 2002. Further, the Hon''ble High Court was pleased to stay the auction of the hotel plot by the Estate Office which had resumed it.
10. Refer Note 20 (ii)
The financial institution from which the company had taken term loan had also invested in the equity share capital of the subsidiary of the company Silver Resort Hotel India (P) Limited (setting up a five star hotel project near International Airport, Delhi) to the tune of Rs. 8500.00 Lakh. The company had executed Buy-back agreements on joint & several basis with the erstwhile directors. Till the buy back of entire equity is completed, IFCI Limited has a first charge basis on the hotel property at Goa.
11. Refer Note 25
Finance cost includes provision for dividend on cumulative redeemable preference shares for the year. Further in view of the pending litigations, no provision for interest or any other charges has been made on secured borrowings from financial institution, bank and debentures.
In view of the above, the assumption of the going concern is dependent upon realisation of the various initiatives undertaken by the Company, outcome of the Review Petition before the Hon''ble Supreme Court of India and other court cases and / or ability of the Company to raise requisite finances / generate cash flows in future to meet its obligations including financial support to its subsidiary companies.
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, based on our audit we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of 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 including 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 Indian Accounting Standards prescribed under section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31,2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
(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, as amended, 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 the respective schedules in its 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;
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For Dewan and Gulati |
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Chartered Accountants |
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(Firm''s Registration No. 03881N) |
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CA. (Dr.) Sunil Gulati |
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Place: New Delhi |
Partner |
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Date: 29th May, 2018 |
(Membership No. 082929) |
Annexure "a" to the Independent Auditor''s Report Blue Coast Hotels Limited
The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statement for the year ended 31st March 2018
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records of the Company, the title deeds of the immovable properties are held in the name of the company.
(ii) According to the information and explanations furnished to us, the inventory has been physically verified at reasonable intervals by the management & no material discrepancies were noticed by the management.
(iii) According to the information and explanations furnished to us, the company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnership or other parties during the year covered in the register maintained under Section 189 of the Act.
(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investment made, and guarantees and security provided by it during the year.
(v) According to the information & explanations given to us the company has not accepted deposits from the public within the meaning of section 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified during the year. Hence, the provisions of this clause are not applicable.
(vi) The Central Government has not prescribed cost records for the company under section (1) of section 148 of the Act. Hence, the provisions of this clause are not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
a) According to the information and explanations given to us and on the basis of our examination of the records of the company, the company, in general, is regular in depositing 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 statutory dues due to the appropriate authorities.
b) According to the information & explanations given to us, there are no dues payable in respect of Sales-tax, Value Added Tax, Service-tax, Income Tax, Customs duty, cess, central excise which have not been deposited with the appropriate authorities on account of any dispute.
viii) Based on our audit procedures and according to the information and explanation given to us by the management, the company has defaulted in repayment of dues to the financial institution and debenture holders as under:
|
S.No. |
Name |
Nature of dues |
Principal Amount (Rs. in lacs) |
Period of default |
|
1 |
IFCI Ltd. |
Term Loan |
11,368.91 |
Up to 6 years |
|
2 |
PACL Ltd. |
Debentures principal amount |
10,000.00 |
Up to 5 years |
(ix) According to the information and explanations given to us and based on our examination of the records of the company, the company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the order is not applicable.
(x) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the company or on the company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
(xi) According to the information and explanations given to us and based of our verification of books of accounts of the company, the company has not paid/provided any amount of Managerial remuneration during the year. Accordingly, paragraph 3(xi) of the order is not applicable.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) According to the information and explanation given to us and based on our examination of the records of the company, the company has not made any preferential allotment or private placements of shares or fully or partly convertible debentures during the year.
(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 person connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, the provision of clause 3 (xvi) of the Order are not applicable to the company.
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For Dewan and Gulati |
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Chartered Accountants |
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(Firm''s Registration No. 03881N) |
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CA. (Dr.) Sunil Gulati |
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Place : New Delhi |
(Partner) |
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Date : 29th May, 2018 |
(Membership No. 082929) |
Annexure "B" to the Independent Auditor''s Report
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act")
We have audited the internal financial controls over financial reporting of THE BLUE COAST HOTELS LIMITED ("the Company") as of March 31, 2018 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 "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s 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 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 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, to the best of our information and according to the explanations given to us the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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.
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For Dewan and Gulati |
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Chartered Accountants |
|
|
(Firm''s Registration No. 03881N) |
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|
CA. (Dr.) Sunil Gulati |
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|
Place : New Delhi |
(Partner) |
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Date : 29th May, 2018 |
(Membership No. 082929) |
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Morepen Laboratories Limited (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including 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 (hereinafter referred to as âthe standalone Ind AS financial statementsâ).
Managementâs responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) prescribed under Section 133 of the Act, read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the adequacy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting 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 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 procedure selected depend on the auditorâs judgement, including the assessment of the risk 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 Companyâs preparation of 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 Companyâs 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 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 including the Ind AS, of the financial position of the Company as at March 31, 2018, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of section 143(11) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and as per information and explanations given to us during the course of audit, we give in the 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 accounts as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of the Changes in Equity dealt with by this report are in agreement with the books of accounts.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act read with relevant rules issues thereunder.
(e) On the basis of the written representations received from the Directors as on 31st March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018 from being appointed as director in terms of Section 164(2) of the Act.
(f) Based on the checking of the books and records of the Company as we considered appropriate and as per information and explanations given to us, our separate report with respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls is as per Annexure B.
(g) 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 on its financial position in its standalone Ind AS financial statements - Refer Note No. 20 to the Standalone Ind AS financial statements;
ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts i ncluding derivate contracts;
iii. there has been no delay in transferring amounts, requiring to be transferred to the Investor Education and Protection Fund by the Company.
Annexure âAâ referred to in paragraph 1 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date on the standalone Ind AS financial statements of Morepen Laboratories Limited for the year ended 31â March, 2018.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) According to the explanation and information given to us, the Company has a regular programme of physical verification of its fixed assets. In our opinion, the frequency of physical verification is reasonable having regard to the size and the nature of its assets. As, informed to us, the discrepancies noticed on such verification are not material and have been properly dealt with adjusted in the books of accounts.
(c) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the title deeds of immovable property are held in the name of the Company.
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification. The discrepancies noticed on physical verification of inventory as compared to books of accounts were not material.
(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. Hence provision of this clause is not applicable.
(iv) According to the information and explanations given to us and based on audit procedures performed, we are of the opinion that in respect of loans, investments, guarantees and security, the Company has complied with the provisions of Section 185 and 186 of the Act.
(v) With approval of scheme of Arrangement and Compromise u/s 391 of the Companies Act, 1956 for the fixed deposit holders by Honâble high Court of Himachal Pradesh in Shimla and in compliance thereof, the Company issued equity shares to the fixed deposit holders towards settlement of their dues. However, pursuant to the representation by the Central Government, the NCLT, Chandigarh rejected the scheme vide its order dated 12.03.2018. On an appeal filed by the Company before National Company Law Appellate Tribunal (NCLAT), the NCLAT while issuing notice has stayed the operation of the NCLT order dated 12.03.2018) (Refer note 38(d) to the standalone Ind AS financial statements).
(vi) We have broadly reviewed the books of accounts 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 Act in respect of the Companyâs products to which the said rules are made applicable and that prima facie, the prescribed cost records have been made and maintained. However we have not carried out detailed examination of the records with a view to determine whether these are accurate and 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, the amount deducted / accrued in the books of accounts in respect of undisputed statutory dues including sales tax, service tax, duty of custom, duty of excise, cess have generally been regularly deposited during the year by the Company with the appropriate authorities. However the Company is not regular in depositing the dues of Employeeâs State Insurance, Provident fund, Income Tax (TDS) & Value Added Tax (VAT), Goods and Services Tax (GST) though the delays in deposit have not been serious. According to the records and information and explanations given to us, no undisputed amount payable in respect of provident fund, sales tax, income tax, value added tax, duty of custom, service tax, cess and other material statutory dues were in arrears as on March 31, 2018 for a period of more than six months from the date they became payable.
(b) According to the records and information and explanation given to us there are no dues in respect of Income-tax, Sales-tax, VAT, Service-tax, Customs duty, cess outstanding as at March 31, 2018 due to any dispute. According to the information provided to us, the following duties of excise have not been deposited by the company on account of disputes:
|
Name of the statute |
Nature of dues |
Amount (in Rs) |
Period to which the amount relates |
Forum where dispute is pending |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
35,22,989 |
April, 2003 to July, 2003 |
CESTAT - Ahmedabad |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
6,05,49,602 |
August, 2001 to April, 2004 |
CESTAT - Delhi |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
70,14,776 |
June, 2004 to July, 2008 |
CESTAT - Chandigarh |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
72,44,941 |
June, 2004 to March, 2009 |
CESTAT - Chandigarh |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
83,456 |
December, 2008 to March, 2009 |
CESTAT - Chandigarh |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
13,27,597 |
April, 2009 to March, 2010 |
CESTAT - Chandigarh |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
1,59,828 |
April, 2009 to March, 2010 |
CESTAT - Chandigarh |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
2,00,175 |
April, 2010 to September, 2010 |
CESTAT - Chandigarh |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
7,07,894 |
April, 2010 to December, 2010 |
Commissioner of Appeal - Chandigarh |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
25,60,641 |
January, 2011 to June, 2015 |
Commissioner of Appeal - Chandigarh |
|
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
10,78,144 |
July, 2015 to June, 2017 |
Commissioner of Appeal - Chandigarh |
(viii) According to the information and explanations given to us by the management, the defaults in making payments to Banks/FIs by the Company is as under:
|
Name of Lenders |
Interest Amount (Rs. in Lakhs) |
Period of default |
|
UCO Bank |
27.31 |
Less than 3 months |
|
Karur Vysya Bank |
3.57 |
Less than 3 months |
|
Exim Bank |
34.23 |
Less than 3 months |
(ix) According to the information and explanations given to us and based on our examination of the records of the Company, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management
(xi) According to the information and explanations given to us and on the basis of our verification of books of accounts of the Company, the Company has paid/provided for Managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V of the Act.
(xii) In our opinion and according to information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(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 Sections 177 & 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) 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 convertible debentures during the year under review. Accordingly, the provision of clause 3(xiv) of the Order are 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 transaction with directors or person connected with them during the year. Accordingly, the provision of clause 3(xv) of the Order are not applicable to the Company.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act,1934.
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Morepen Laboratories Limited (âthe Companyâ) as of March 31,2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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 (âICAIâ). 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 Act.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial control. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting 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 auditorâs 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 Companyâs 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 Companyâs 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, 2018, 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 Satinder Goyal & Co.
Chartered Accountants
Firmâs Regn. No: 027334N
(CA S. K. Goyal)
Place: New Delhi Partner
Date: 16th May 2018 Membership No.: 084613
Mar 31, 2017
To
The Members of Morepen Laboratories Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Morepen Laboratories Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017 the statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone 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 and presentation 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 the 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' 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 and the rules, 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 in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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 the disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. 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 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 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 aforesaid 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 31,2017 and 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, and on the basis of such checks of the books and records of the company as we consider appropriate and according to the information and explanations given to us, we give in the Annexure A a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
(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 and the 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 Companies (Accounts) Rules, 2014 .
(e) On the basis of the written representations received from the directors as on March 31,2017 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 "Annexure B".
(g) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at March 31, 2017 on its financial position in its financial statements - Refer Note 17 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 as at March 31,2017.
iii. No amount was required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017.
iv The Company has provided requisite disclosure in its financial statements as to holdings as well as dealing in Specified Bank Notes during the period from November 8,2016 to December 30,2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 18 to the financial statements.
The Annexure referred to in our Independent Auditorsâ Report to the members of the Company on the standalone financial statements for the year ended March 31, 2017, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As explained to us, most of the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency 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 the immovable properties are held in the name of the company.
(ii) As explained to us, the inventory has been physically verified at reasonable intervals by the management & no material discrepancies were noticed by the management. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
(iii) According to the information and explanations furnished to us, the company has not granted any loan 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 hence, provisions of this clause are not applicable.
(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investment made, and guarantees and security provided by it.
(v) With approval of scheme of Arrangement and Compromise u/s 391 of the Companies Act, 1956 for the fixed deposit holders by Hon''ble High Court of
Himachal Pradesh at Shimla and in compliance thereof, issued equity shares to the fixed deposit holders towards settlement of their dues. However, the Central Government has filed an appeal against the order approving the scheme, the Hon''ble Division Bench allowed the appeal and remanded the matter back to the single judge for considering the representation of Central Government & deciding the petition. The matter was pending adjudication before single judge of Hon''ble Himachal Pradesh High Court, has since been transferred to National Company Law Tribunal, regional Bench at Chandigarh. Subject to the pending decision of the National Company Law Tribunal, Chandigarh, in our opinion there is no default by the company of the relevant provisions of the Act.
(vi) We have reviewed the cost records maintained by the company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of section 148 of the Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have not, however, 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, the amount deducted /accrued in the books of accounts in respect of undisputed statutory dues including sales tax, service tax, duty of custom, duty of excise, cess have generally been regularly deposited during the year by the company with the appropriate authorities, however the company is not regular in depositing the dues of Employee''s State Insurance, Provident fund, Income Tax (TDS) & Value Added Tax (VAT) though the delays in deposit have not been serious.
According to the information and explanations given to us, no undisputed amount payable in respect of provident fund, sales tax, income tax, value added tax, duty of custom, service tax, cess and other material statutory dues were in arrears as on March 31,2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us there are no dues in respect of Income-tax, Sales-tax, VAT, Service-tax, Customs duty, cess outstanding as at March 31, 2017 due to any dispute. According to the information provided to us, the following duties of excise have not been deposited by the company on account of disputes:
|
Sl. No. |
Name of the statute |
Nature of dues |
Amount (in Rs) |
Period to which the amount relates |
Forum where dispute is pending |
|
1. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
33,44,991 |
April, 2003 to July, 2003 |
CESTAT - Ahmadabad |
|
2. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
5,79,60,281 |
August, 2001 to April, 2004 |
CESTAT - Delhi |
|
3. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
66,62,907 |
June, 2004 to July, 2008 |
CESTAT - Chandigarh |
|
4. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
68,77,129 |
June, 2004 to March, 2009 |
CESTAT - Chandigarh |
|
5. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
79,175 |
December, 2008 to March, 2009 |
CESTAT - Chandigarh |
|
6. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
12,57,930 |
April, 2009 to March, 2010 |
CESTAT - Chandigarh |
|
7. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
1,51,331 |
April, 2009 to March, 2010 |
CESTAT - Chandigarh |
|
8. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
1,89,401 |
April, 2010 to September, 2010 |
CESTAT - Chandigarh |
|
9. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
56,20,232 |
February, 2006 |
CESTAT - Delhi |
|
10. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
6,51,538 |
April, 2010 to December, 2010 |
Commissioner of Appeal - Chandigarh |
|
11. |
Central Excise Act, 1944 |
Excise duty, Penalty, Fine and Interest |
23,03,399 |
January, 2011 to June 2015 |
Commissioner of Appeal - Chandigarh |
(viii) According to information and explanation given to us by the management, the defaults in making payments to Banks/FIs by the Company is as under:
(Figures in Lacs)
|
Name of Lenders |
Interest Amount |
Period of default |
|
UCO Bank |
68.86 |
Less than 3 months |
|
Karur Vysya Bank |
16.91 |
Less than 3 months |
|
Exim Bank |
36.06 |
Less than 3 months |
(ix) According to the information and explanations given to us and based on our examination of the records of the company, the company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. However, loan for purchase of car have been raised during the year.
(x) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the company or on the company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
(xi) According to the information and explanations given to
us and on the basis of our verification of books of accounts of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 of the Act read with Schedule V of the Act.
(xii) In our opinion and according to information and explanations given to us, the company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the order is not applicable.
(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 sections 177 & 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) 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 paid convertible debentures during the year under review. Accordingly, the provision of clause 3(xiv) of the Order are 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 transaction with directors or person connected with them during the year. Accordingly, the provision of clause 3(xv) of the Order are not applicable to the company.
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act,1934. Accordingly, the provision of clause 3(xvi) of the Order are not applicable to the company.
We have audited the internal financial controls over financial reporting of Morepen Laboratories Limited
("the Company") as of March 31,2017 in conjunction with our audit of the standalone 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 (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to 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 Act.
Auditors'' 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 "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system 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 Company''s 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 authorisations 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 M Kamal Mahajan & Co. LLP
Chartered Accountants
FRN: 006855N/ N500061
(CA M K Mahajan)
New Delhi Partner
April 29, 2017 Membership number: 017418
Mar 31, 2016
Independent Auditors'' Report
To the Members of Blue Coast Hotels Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Blue Coast Hotels Limited (''the Company''), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone 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 and presentation 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 the 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' 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 there under.
We conducted our audit 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 financial statements are free from material misstatement(s).
An audit involves performing procedures to obtain audit evidence about the amounts and the 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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 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.
Emphasis Of Matter
Without qualifying our opinion, we draw attention to the following notes on the financial statements:
(i) Note no. 9(B) to the financial statements regarding the secured lender IFCI Limited had initiated the recovery proceedings and allegedly auctioned the hotel property under the provisions of the SARFAESI Act which was contested by the Company at Hon''ble High Court of Bombay. By the Judgment dated 23.3.2016, the Hon''ble Bombay High Court quashed and set aside the alleged auction sale of property and directed secured lender IFCI Limited to refund the sale consideration to auction purchaser ITC Limited . subsequently ITC Ltd & IFCI Ltd have approached the Hon''ble Supreme Court against the Bombay High Court judgment whereupon the grant of stay against the order was not accepted. however, it ordered that ''Status Quo'' as on 22nd April, 2016 be maintained and further ordered that the amounts paid by ITC Limited in the auction purchase shall remain with the IFCI Ltd until further orders. The Hotel property continues to be operated under the brand "Park Hyatt Goa Resort & Spa" maintained under management agreement with Hyatt International.
(ii) Note no. 23(b) to the financial statements regarding no provision for interest or any other charges has been made during the year on debentures pending litigation and recovery proceedings. Further, Interest is provided at simple contracted rate of interest on term loan from financial institution in view of the initiation of recovery proceeding and pending litigation, subject to order of the court.
(iii) The appropriateness of assumption of going concern is dependent upon realization of the various initiatives undertaken by the company, outcome of court cases and / or the company''s ability to raise requisite finance / generate cash flows in future to meet its obligations including financial support to its subsidiary companies.
Opinion
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 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 2016 and 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 (Auditors'' 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 A a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that :
(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 and the 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 7of the Companies (Accounts) Rules, 2014;
(e) On the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016frombeingappointedasa director in terms ofSection164 (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 B".
(g) with respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) the Company has disclosed the impact of pending litigation son its financial positions in its financial statements- Refer Note no. 18to 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) no amount was required to be transferred to the Investor Education and protection fund by the company.
The Annexure referred to in our Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2016, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details & situation of fixed assets.
(b) As explained to us, most of the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency 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 the immovable properties are held in the name of the company.
(ii) As explained to us, the inventory has been physically verified at reasonable intervals by the Management & no material discrepancies were noticed by the management.
(iii) (a) According to the information and explanations furnished to us, the company has granted 0.75 lac unsecured fresh loan to its two wholly owned subsidiary companies covered in the register maintained under Section 189 of the Companies Act, 2013 during the year. Also old interest free loan unsecured loan to two wholly owned subsidiary companies amounting to Rs. 463.97 lacs are outstanding as on 31.03.2016.
(b) According to the information & explanation given to us there is no stipulated schedule of repayment of principal, so we are unable to comment on the regularity of repayment of principal.
(c) According to the information & explanation given to us the whole amount of Rs. 464.72 lacs is overdue for more than 90 days, and there is no reasonable steps taken by the company for recovery of principal.
(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013, with respect to the loans, guarantees, security and investment during the year. However the company has already given a guarantee of Rs. 6500. lacs to bank/ Financial institutions for loan taken by associate company setting up a five star hotel project at Chandigarh. Refer note no. 18(i) to the financial Institutions.
(v) The company has not accepted any deposit from the public within the meaning of section 73,74,75,76 of the Companies Act, 2013 and the rules framed there under to the extent notified during the year.
(vi) According to the information & explanation given to us the Central Government has not prescribed the maintenance of cost records for the company under section 148(1) of the Companies Act, 2013.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, the amount deducted /accrued in the books of accounts in respect of undisputed statutory dues including , duty of custom, duty of excise if any, cess, Employees'' Provident Fund, Employees'' State Insurance, luxury tax, VAT& WCT have generally been regularly deposited with the appropriate authorities, however undisputed statutory dues including income tax (TDS) have not generally been regularly deposited with the appropriate authorities though the delays in deposit have not been serious.
According to the information and explanations given to us, the below mentioned undisputed amount in respect of Income Tax (TDS), were in arrears as on 31st March2016 for a period of more than six months from the date they became payable:
Statement of Arrears of Statutory Dues Outstanding for more than Six months
|
Name of the Statue |
Nature of the Dues |
Amount (Rs) |
Period to which amount relates |
Due Date |
Date of payment |
|
Income Tax Act-1961 |
Income tax (TDS) |
4,64,202 |
FY 2015-16 |
FY 2015-16 |
Not paid |
|
Income Tax Act-1961 |
Income tax (TDS) |
60,317 |
FY 2014-15 |
FY 2014-15 |
Not paid |
(b) According to the information and explanations given to us, there is no amount due in respect of Income-tax, Sales-tax, VAT, Employee''s State Insurance, Provident Fund, Duty of Excise, Customs duty, cess & Service Tax outstanding as at 31st March, 2016 due to any dispute.
(viii) Based on our audit procedures and according to the information and explanation given to us by the management, the company has defaulted in repayment of dues to the Financial institution and debenture holders as under:
|
S.No. |
Name |
Nature of dues |
Principal Amount (Rs. in lacs) |
Period of default |
|
1 |
IFCI Ltd. |
Term Loan |
11,368.91 |
Up to 4years |
|
2 |
IFCI Ltd. |
Interest on Term Loan |
1,967.85 |
Up to 2 years |
|
3 |
PACL Ltd. |
Debentures principal amount |
10,000.00 |
Up to 3 years |
|
4 |
PACL Ltd. |
Debentures interest |
5737.13 |
Up to 5 years |
|
5 |
PACL Ltd. |
Debentures redemption premium |
2,800.00 |
Up to 3 years |
(ix) According to the information and explanations given to us and based on our examination of the records of the company, the company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable to the company.
(x) According to the information and explanations given to us, no fraud by the company or 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 on the basis of our verification of books of accounts of the company, the company has not paid/provided any amount of Managerial remuneration during the year. Accordingly, paragraph 3(xi) of the order is not applicable.
(xii) In our opinion and according to information and explanations given to us, the company is not a Nidhi company. Accordingly, paragraph 3(xii) of the order is not applicable.
(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 sections 177 & 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) 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 paid convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into any non- cash transaction with directors or person connected with them.
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act1934.
For M Kamal Mahajan And Co.
Chartered Accountants
Firm''s Regn. No. 006855N
M. Kamal Mahajan
Place : New Delhi (Partner)
Date : May 30, 2016 Membership number 017418
Mar 31, 2016
Independent Auditors'' Report
To the Members of Blue Coast Hotels Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Blue Coast Hotels Limited (''the Company''), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone 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 and presentation 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 the 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' 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 there under.
We conducted our audit 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 financial statements are free from material misstatement(s).
An audit involves performing procedures to obtain audit evidence about the amounts and the 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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 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.
Emphasis Of Matter
Without qualifying our opinion, we draw attention to the following notes on the financial statements:
(i) Note no. 9(B) to the financial statements regarding the secured lender IFCI Limited had initiated the recovery proceedings and allegedly auctioned the hotel property under the provisions of the SARFAESI Act which was contested by the Company at Hon''ble High Court of Bombay. By the Judgment dated 23.3.2016, the Hon''ble Bombay High Court quashed and set aside the alleged auction sale of property and directed secured lender IFCI Limited to refund the sale consideration to auction purchaser ITC Limited . subsequently ITC Ltd & IFCI Ltd have approached the Hon''ble Supreme Court against the Bombay High Court judgment whereupon the grant of stay against the order was not accepted. however, it ordered that ''Status Quo'' as on 22nd April, 2016 be maintained and further ordered that the amounts paid by ITC Limited in the auction purchase shall remain with the IFCI Ltd until further orders. The Hotel property continues to be operated under the brand "Park Hyatt Goa Resort & Spa" maintained under management agreement with Hyatt International.
(ii) Note no. 23(b) to the financial statements regarding no provision for interest or any other charges has been made during the year on debentures pending litigation and recovery proceedings. Further, Interest is provided at simple contracted rate of interest on term loan from financial institution in view of the initiation of recovery proceeding and pending litigation, subject to order of the court.
(iii) The appropriateness of assumption of going concern is dependent upon realization of the various initiatives undertaken by the company, outcome of court cases and / or the company''s ability to raise requisite finance / generate cash flows in future to meet its obligations including financial support to its subsidiary companies.
Opinion
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 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 2016 and 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 (Auditors'' 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 A a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that :
(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 and the 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 7of the Companies (Accounts) Rules, 2014;
(e) On the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016frombeingappointedasa director in terms ofSection164 (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 B".
(g) with respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) the Company has disclosed the impact of pending litigation son its financial positions in its financial statements- Refer Note no. 18to 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) no amount was required to be transferred to the Investor Education and protection fund by the company.
The Annexure referred to in our Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2016, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details & situation of fixed assets.
(b) As explained to us, most of the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency 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 the immovable properties are held in the name of the company.
(ii) As explained to us, the inventory has been physically verified at reasonable intervals by the Management & no material discrepancies were noticed by the management.
(iii) (a) According to the information and explanations furnished to us, the company has granted 0.75 lac unsecured fresh loan to its two wholly owned subsidiary companies covered in the register maintained under Section 189 of the Companies Act, 2013 during the year. Also old interest free loan unsecured loan to two wholly owned subsidiary companies amounting to Rs. 463.97 lacs are outstanding as on 31.03.2016.
(b) According to the information & explanation given to us there is no stipulated schedule of repayment of principal, so we are unable to comment on the regularity of repayment of principal.
(c) According to the information & explanation given to us the whole amount of Rs. 464.72 lacs is overdue for more than 90 days, and there is no reasonable steps taken by the company for recovery of principal.
(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013, with respect to the loans, guarantees, security and investment during the year. However the company has already given a guarantee of Rs. 6500. lacs to bank/ Financial institutions for loan taken by associate company setting up a five star hotel project at Chandigarh. Refer note no. 18(i) to the financial Institutions.
(v) The company has not accepted any deposit from the public within the meaning of section 73,74,75,76 of the Companies Act, 2013 and the rules framed there under to the extent notified during the year.
(vi) According to the information & explanation given to us the Central Government has not prescribed the maintenance of cost records for the company under section 148(1) of the Companies Act, 2013.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, the amount deducted /accrued in the books of accounts in respect of undisputed statutory dues including , duty of custom, duty of excise if any, cess, Employees'' Provident Fund, Employees'' State Insurance, luxury tax, VAT& WCT have generally been regularly deposited with the appropriate authorities, however undisputed statutory dues including income tax (TDS) have not generally been regularly deposited with the appropriate authorities though the delays in deposit have not been serious.
According to the information and explanations given to us, the below mentioned undisputed amount in respect of Income Tax (TDS), were in arrears as on 31st March2016 for a period of more than six months from the date they became payable:
Statement of Arrears of Statutory Dues Outstanding for more than Six months
|
Name of the Statue |
Nature of the Dues |
Amount (Rs) |
Period to which amount relates |
Due Date |
Date of payment |
|
Income Tax Act-1961 |
Income tax (TDS) |
4,64,202 |
FY 2015-16 |
FY 2015-16 |
Not paid |
|
Income Tax Act-1961 |
Income tax (TDS) |
60,317 |
FY 2014-15 |
FY 2014-15 |
Not paid |
(b) According to the information and explanations given to us, there is no amount due in respect of Income-tax, Sales-tax, VAT, Employee''s State Insurance, Provident Fund, Duty of Excise, Customs duty, cess & Service Tax outstanding as at 31st March, 2016 due to any dispute.
(viii) Based on our audit procedures and according to the information and explanation given to us by the management, the company has defaulted in repayment of dues to the Financial institution and debenture holders as under:
|
S.No. |
Name |
Nature of dues |
Principal Amount (Rs. in lacs) |
Period of default |
|
1 |
IFCI Ltd. |
Term Loan |
11,368.91 |
Up to 4years |
|
2 |
IFCI Ltd. |
Interest on Term Loan |
1,967.85 |
Up to 2 years |
|
3 |
PACL Ltd. |
Debentures principal amount |
10,000.00 |
Up to 3 years |
|
4 |
PACL Ltd. |
Debentures interest |
5737.13 |
Up to 5 years |
|
5 |
PACL Ltd. |
Debentures redemption premium |
2,800.00 |
Up to 3 years |
(ix) According to the information and explanations given to us and based on our examination of the records of the company, the company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable to the company.
(x) According to the information and explanations given to us, no fraud by the company or 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 on the basis of our verification of books of accounts of the company, the company has not paid/provided any amount of Managerial remuneration during the year. Accordingly, paragraph 3(xi) of the order is not applicable.
(xii) In our opinion and according to information and explanations given to us, the company is not a Nidhi company. Accordingly, paragraph 3(xii) of the order is not applicable.
(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 sections 177 & 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) 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 paid convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into any non- cash transaction with directors or person connected with them.
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act1934.
For M Kamal Mahajan And Co.
Chartered Accountants
Firm''s Regn. No. 006855N
M. Kamal Mahajan
Place : New Delhi (Partner)
Date : May 30, 2016 Membership number 017418
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Morepen Laboratories Limited ('the Company'), which comprise the
balance sheet as at 31 March, 2015, the statement of profit and loss
and the cash flow statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone 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 and presentation 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
the 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 design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
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 there under.
We conducted our audit 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 financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the 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, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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 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 aforesaid 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 31 March, 2015 and 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, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
(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 and the 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 the written representations received from the
directors as on 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
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 A; and
(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 18 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. No amount was required to be transferred to the Investor Education
and Protection Fund by the Company.
The Annexure referred to in our Independent Auditors' Report to the
members of the Company on the standalone financial statements for the
year ended 31 March 2015, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, most of the fixed assets have been physically
verified by the management during the year and no material
discrepancies were noticed on such verification. In our opinion, the
frequency of physical verification is reasonable having regard to the
size of the Company and the nature of its assets.
(ii) (a) As explained to us, the inventory has been physically verified
at reasonable intervals by the management.
(b) In our opinion, the procedures of physical verification of
inventories 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. The
discrepancies noticed on verification between the physical stocks and
the book records were not material and have been properly dealt with in
the books of accounts.
(iii) According to the information and explanations furnished to us,
the company has not granted any loan secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
189 of the Act hence provisions of this clause are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
service. Further during the course of audit, we have not come across
any instance of major weakness in internal control.
(v) With approval of scheme of Arrangement and Compromise u/s 391 of
the Companies Act, 1956 for the fixed deposit holders by Hon'ble High
Court of Himachal Pradesh at Shimla and issue of equity shares
thereafter to the fixed deposit holders, in our opinion there is no
default by the company of any of the provisions of the Act.
(vi) The Central Government under section (1) of section 148 of the Act
has prescribed maintenance of cost records for the company and company
has maintained such accounts and records.
(vii) (a) As per records of the company, the company, in general, is
regular in depositing undisputed statutory dues including provident
fund, employees' state insurance, income tax, sales-tax, wealth-tax,
service tax, duty of custom, duty of excise, value added tax, cess and
other statutory dues with the appropriate authorities and no such dues
are outstanding for a period exceeding six months from the date they
became payable.
(b) There is no amount in respect of Income-tax, Sales-tax, Wealth tax,
Service-tax, Customs duty, cess outstanding as at 31st March, 2015 due
to any dispute. According to the information provided to us, the
following duties of excise have not been deposited by the company on
account of disputes:
Sl. Name of the statute Nature of dues Amount
No. (in Rs)
1. Central Excise Act, 1944 Excise duty, Penalty, 18,99,630
Fine and Interest
2. Central Excise Act, 1944 Excise duty, Penalty, 487,74,545
Fine and Interest
3. Central Excise Act, 1944 Excise duty, Penalty, 54,58,206
Fine and Interest
4. Central Excise Act, 1944 Excise duty, Penalty, 56,40,498
Fine and Interest
5. Central Excise Act, 1944 Excise duty, Penalty, 70,601
Fine and Interest
6. Central Excise Act, 1944 Excise duty, Penalty, 11,18,405
Fine and Interest
7. Central Excise Act, 1944 Excise duty, Penalty, 1,34,313
Fine and Interest
8. Central Excise Act, 1944 Excise duty, Penalty, 1,67,824
Fine and Interest
9. Central Excise Act, 1944 Excise duty, Penalty, 43,03,960
Fine and Interest
10. Central Excise Act, 1944 Excise duty 3,13,091
11. Central Excise Act, 1944 Excise duty 2,42,477
12. Central Excise Act, 1944 Excise duty 3,19,412
13. Central Excise Act, 1944 Excise duty 67,952
14. Central Excise Act, 1944 Excise duty 3,80,702
15. Central Excise Act, 1944 Excise duty 2,24,842
16. Central Excise Act, 1944 Excise duty 2,29,040
17. Central Excise Act, 1944 Excise duty 3,53,219
Sl. Name of the statute Period to which Forum where
No. the amount relates dispute is
pending
1. Central Excise Act, 1944 April 2003 to CESTAT-Ahmedabad
July 2003
2. Central Excise Act, 1944 August 2001 to CESTAT - Delhi
April 2004
3. Central Excise Act, 1944 June 2004 to CESTAT-Chandigarh
July 2008
4. Central Excise Act, 1944 June 2004 to CESTAT-Chandigarh
March 2009
5. Central Excise Act, 1944 December 2008 to CESTAT-Chandigarh
March 2009
6. Central Excise Act, 1944 April 2009 to CESTAT-Chandigarh
March 2010
7. Central Excise Act, 1944 April 2009 to CESTAT-Chandigarh
March 2010
8. Central Excise Act, 1944 April 2010 to CESTAT-Chandigarh
September 2010
9. Central Excise Act, 1944 February/06 CESTAT -Delhi
10. Central Excise Act, 1944 April 2010 to Commissioner of
December 2010 Appeal-Chandigarh
11. Central Excise Act, 1944 January 2011 to A.C. -Shimla
October 2011
12. Central Excise Act, 1944 April 2007 to A.C. -Shimla
December 2008
13. Central Excise Act, 1944 November 2011 to A.C. -Shimla
March 2012
14. Central Excise Act, 1944 January 2012 to D.C.-Baddi
September 2012
15. Central Excise Act, 1944 March 2012 to ACCE-Shimla
September 2012
16. Central Excise Act, 1944 October 2012 to ACCE-Shimla
June 2013
17. Central Excise Act, 1944 July 2013 to ACCE-Shimla
June 2014
(c) As per records of the company, no amount was required to be
transferred to the Investor Education and Protection Fund by the
Company.
(viii) The accumulated losses of the company at the end of the
financial year are not more than fifty percent of its net worth. The
company has not incurred cash losses during the financial year covered
by our audit and in the immediately preceding financial year.
(ix) Based on our audit procedures and on the information and
explanations given by the management the company has defaulted in
repayment of dues to financial institutions amounting to Rs. 358 lacs
and interest Rs. 158 lacs both for a period less than three months.
(Refer Note no. 4(I)(e) of notes on financial statements).
(x) In our opinion and according to the information and the
explanations given to us, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xi) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that the term loans have been applied for the
purpose for which they were raised.
(xii) Based upon the audit procedures performed and 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 M Kamal Mahajan And Co.
Chartered Accountants
Firm's Regn. No: 006855N
M K Mahajan
New Delhi Partner
15th May, 2015 Membership number: 017418
Mar 31, 2014
We have audited the accompanying financial statements of Morepen
Laboratories Limited ("the company"), which comprise the Balance Sheet
as at 31st March, 2014, 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 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
the Accounting Principles generally accepted in India including
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act") read with the General Circular No.
15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs
in respect of Section 133 of the Companies Act, 2013. This
responsibility includes the design, implementation and maintenance of
internal controls 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.
Our Responsibility
Our responsibility is to express an opinion on these financial
statements based on our examination. We conducted our examination in
accordance with the Standards on Auditing issued by the Institute of
Chartered Accountants of India. Those Standards require that we comply
with the ethical requirements and plan and perform the examination to
obtain reasonable assurance about whether the financial statements are
free of 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 auditors'' 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, we considered
the 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 audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Matters of Emphasis
Without qualifying our opinion, we draw attention to the Note no. 35(e)
to the financial statement regarding remuneration paid to directors
without taking approval of Central Government.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the 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 31st March, 2014;
b) in the case of the Statement of Profit and Loss, of the loss of the
Company 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.
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,
to the extent applicable to the Company.
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 purposes of our
examination.
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examinati on of those
books.
c. The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d. In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Act read with the
General Circular No. 15/2013 dated 13th September, 2013 of the Ministry
of Corporate Affairs in respect of Section 133 of the Companies Act,
2013.
e. On the basis of written representations received from the directors
and taken on record by the Board of Directors, we report that none of
the directors is disqualified as on 31st March, 2014 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
Annexure to Independent Auditors'' Report of Morepen Laboratories
Limited
Referred to under the heading of "Report on other Legal and Regulatory
Requirements" of our report of even date.
(i) a) The company has generally maintained proper records showing full
particulars including quantitative details and situation of fixed
assets except for items like pipe, meter instruments and other similar
items.
b) As explained to us, most of the fixed assets have been physically
verified by the management during the year and we have been informed
that no material discrepancy was noticed on such verification. In our
opinion, the frequency of physical verification is reasonable having
regard to the size of the company and nature of its business.
c) During the year, the company has not disposed off substantial part
of the fixed assets.
(ii) a) As explained to us, the inventory has been physically verified
at reasonable intervals by the management.
b) In our opinion, the procedures of physical verification of
inventories 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. The
discrepancies noticed on verification between the physical stocks and
the book records were not material and have been properly dealt with in
the books of accounts.
(iii) a) According to the information and explanations furnished to us,
the company has not granted secured or unsecured loans to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956.
b) According to the information and explanations furnished to us,
during the year, the company has not taken any fresh loan from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. During the year, the company has repaid
fully the existing outstanding loan taken from one company amounting to
Rs. 1074 lacs along with interest due. In our opinion, the rate of
interest and other terms of the loan are prima facie not prejudicial to
the interest of the company. (Refer Note no. 4(II) of notes on
financial statements).
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
service. Further during the course of audit, we have not come across
any instance of major weakness in internal control.
(v) a) Based on the audit procedures applied by us and according to the
explanations provided by the management, we are of the opinion that the
transactions that need to be entered in the register maintained under
section 301 of the act have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions which have been entered into pursuant to
contract that have been entered in the register maintained under
Section 301 of the act have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
(vi) With approval of scheme of Arrangement and Compromise u/s 391 of
the Companies Act, 1956 for the fixed deposit holders by Hon''ble High
Court of Himachal Pradesh at Shimla and issue of equity shares
thereafter to the fixed deposit holders, in our opinion there is no
default by the company u/s 58A of the Companies Act, 1956.
(vii) In our opinion and according to the information and explanations
given to us, the company has an internal audit system commensurate with
the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company pursuant to rules made by the Central Government under section
209(1)(d) of the Companies Act, 1956 for maintenance of Cost records
and are of the opinion that, prima facie, the prescribed accounts and
records have been maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.
(ix) According to the records of the company, the company, in general,
is regular in depositing with appropriate authorities undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income Tax, Sales-tax, Wealth-tax, Service tax, Custom duty,
Excise-duty, Cess and other statutory dues applicable to it and as on
31.3.2014, there are no statutory dues outstanding for a period
exceeding six months. There is no amount in respect of Income-tax,
Sales-tax, Wealth tax, Service-tax Customs duty, cess outstanding as at
31st March, 2014 due to any dispute. According to the information
provided to us, an amount of Rs. 744 Lacs is disputed by the company in
respect of excise duty matters under the Central Excise Act, 1944
pertaining to years from 2006-07 to 2013-14 and the matter is pending
with Customs and Central Excise Appellate Tribunals- Rs. 578 Lacs and
Commissioners of Central Excise- Rs. 166 Lacs.
(x) The accumulated losses of the company at the end of the financial
year are not more than fifty percent of its net worth. The company has
not incurred cash losses during the financial year covered by our audit
and in the immediately preceding financial year.
(xi) Based on our audit procedures and on the information and
explanations given by the management the company has defaulted in
repayment of dues to financial institutions amounting to Rs. 157 lacs
and interest Rs. 182 lacs both for a period less than three months.
(Refer Note no. 4(I)(e) of notes on financial statements)
(xii) Based on our examination of documents and records, we are of the
opinion that the company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The company is not a chit fund/nidhi/mutual benefit
fund/societies.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments.
(xv) In our opinion, and according to the information and explanations
given to us and on the basis of our verification of books of accounts
of the company and based on our examination of the records, we are of
the opinion that the company has not given any guarantee for loans
taken by others from bank or financial institutions.
(xvi) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that the term loans have been applied for the
purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that funds raised for short term basis were not used
for long term investment.
(xviii)During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the act.
(xix) The company has no debentures as on 31.3.2014 and hence this
clause is not applicable to the company.
(xx) During the year covered by our audit report, the company has not
raised any money by way of public issue hence provisions of this clause
are not applicable to it.
(xxi) Based upon the audit procedures performed and 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 M Kamal Mahajan And Co.
Chartered Accountants
Firm Regn. No. 006855N
(M K Mahajan)
Place : New Delhi (Partner)
Date : 21st May, 2014 Membership No. 017418
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Morepen
Laboratories Limited ("the company"), which comprise the Balance Sheet
as at 31st March,2013, 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
the Accounting Principles generally accepted in India including
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.
Auditors'' 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 the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors'' judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. 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 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 aforesaid financial statements, subject
to Note no. 37(e) of notes on financial statement regarding
remuneration paid to directors of Rs. 304 lacs (including Rs. 50 lacs
for the current year) without taking approval of Central Government,
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 31st March,2013;
b) in the case of the Statement of Profit and Loss, of the loss for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
year ended on that date.
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 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 appears from our examination of those
books.
c. The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d. In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Act.
e. On the basis of written representations received from the
directors, as on 31st March,2013, and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,2013
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Act.
Annexure to Independent Auditors'' Report of Morepen Laboratories
Limited
Referred to in Paragraph 1 under the heading of "Report on other Legal
and Regulatory Requirements" of our report of even date.
(i) a) The company has generally maintained proper records showing full
particulars including quantitative details and situation of fixed
assets except for items like pipe, meter instruments and other similar
items.
b) As explained to us, most of the fixed assets have been physically
verified by the management during the year and we have been informed
that no material discrepancy was noticed on such verification. In our
opinion, the frequency of physical verification is reasonable having
regard to the size of the company and nature of its business.
c) During the year, the company has not disposed off substantial part
of the fixed assets.
(ii) a) As explained to us, the inventory has been physically verified
at reasonable intervals by the management.
b) In our opinion, the procedures of physical verification of
inventories 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. The
discrepancies noticed on verification between the physical stocks and
the book records were not material and have been properly dealt with in
the books of account.
(iii) a) According to the information and explanations furnished to us,
the company has not granted secured or unsecured loans to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956.
b) According to the information and explanations furnished to us,
during the year, the company has not taken any fresh loan from
companies, firms or other parities covered in the register maintained
under Section 301 of the Act. However, the company has partly paid loan
amount of Rs. 430 lacs of the existing loan taken from one company.
Balance outstanding loan from the company is Rs. 1074 lacs. In our
opinion, the rate of interest and other terms of the loan are prima
facie not prejudicial to the interest of the company. However, interest
payment of Rs. 279 lacs is overdue for a period less than a year.
(Refer Note no. 4(II) of notes on financial statements).
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
service. Further during the course of audit, we have not come across
any instance of major weakness in internal control.
(v) a) Based on the audit procedures applied by us and according to the
explanations provided by the management, we are of the opinion that the
transactions that need to be entered in the register maintained under
section 301 of the act have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions which have been entered into pursuant to
contract that have been entered in the register maintained under
Section 301 of the act have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
(vi) With approval of scheme of Arrangement and Compromise u/s 391 of
the Companies Act, 1956 for the fixed deposit holders by Hon''ble High
Court of Himachal Pradesh at Shimla and issue of equity shares
thereafter to the fixed deposit holders, in our opinion there is no
default u/s 58A of the Companies Act, 1956.
(vii) In our opinion and according to the information and explanations
given to us, the company has an internal audit system commensurate with
the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company pursuant to rules made by the Central Government under section
209(1)(d) of the Companies Act, 1956 for maintenance of Cost records
and are of the opinion that, prima facie, the prescribed accounts and
records have been maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete;
(ix) According to the records of the company, the company, in general,
is regular in depositing with appropriate authorities undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income Tax, Sales- tax, Wealth-tax, Service tax, Custom duty,
Excise-duty, Cess and other statutory dues applicable to it and as on
31.3.2013, there are no statutory dues outstanding for a period
exceeding six months. There is no amount payable in respect of
Income-tax, Sales-tax, Wealth tax, Service-tax, Customs duty, cess
outstanding as at 31st March, 2013 due to any dispute. According to the
information provided to us, an amount of Rs. 1119 Lacs is disputed by
the company in respect of excise duty matters under the Central Excise
Act, 1944 pertaining to years from 2006-07 to 2012-13 and the matter is
pending with Customs and Central Excise Appellate Tribunals- Rs. 469
Lacs and Commissioners of Central Excise- Rs. 650 Lacs.
(x) The accumulated losses of the company at the end of the financial
year are not more than fifty percent of its net worth. The company has
not incurred cash losses during the financial year covered by our audit
and in the immediately preceding financial year.
(xi) Based on our audit procedures and on the information and
explanations given by the management the company has defaulted in
repayment of dues to financial institutions amounting to Rs. 261 lacs
for a period less than three months. (Refer Note no. 4(I)(e) of notes
on financial statements)
(xii) Based on our examination of documents and records, we are of the
opinion that the company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The company is not a chit fund/nidhi/mutual benefit
fund/societies.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments.
(xv) In our opinion, and according to the information and explanations
given to us and on the basis of our verification of books of accounts
of the company and based on our examination of the records, we are of
the opinion that the company has not given any guarantee for loans
taken by others from bank or financial institutions.
(xvi) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that the term loans have been applied for the
purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that funds raised from short term basis were not
used for long term investment.
(xviii) During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the act.
(xix) The company has no debentures as on 31.3.2013 and hence this
clause is not applicable to the company.
(xx) During the year covered by our audit report, the company has not
raised any money by way of public issue hence provisions of this clause
are not applicable to it.
(xxi) Based upon the audit procedures performed and 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 M Kamal Mahajan And Co.
Chartered Accountants
Firm Regn. No. 006855N
(M K Mahajan)
Place :New Delhi (Partner)
Date :13th May, 2013 Membership No.F-17418
Mar 31, 2012
We have audited the attached balance sheet of Morepen Laboratories
Limited, as at 31st March, 2012 and the statement of profit and loss
for the year ended on that date annexed thereto, and its cash flow
statement for the year ended on that date. 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.
We conducted our audit in accordance with the 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.
As required by the Companies (Auditor's Report) Order, 2003 issued by
the Central Government of India in terms of sub- section (4A) of
Section 227 of the Companies Act, 1956, ("the act"), we enclose in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
Further to our comments in the Annexure referred to above, 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 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 appears from our examination of
those books ;
c. The balance sheet, the 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, the 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 act;
e. On the basis of written representations received from the
directors, as on 31st March, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the act;
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts, read together with notes
thereon, 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 31st March, 2012;
b) in the case of the statement of profit and loss, of the loss of the
company for the year ended on that date; and
c) in the case of the cash flow statement, of the cash flows of the
company for the year ended on that date.
Annexure to Auditors' Report of Morepen Laboratories Limited
Referred to in our report of even date
(i) a) The company has generally maintained proper records showing full
particulars including quantitative details and situation of fixed
assets except for items like pipe, meter instruments and other similar
items.
b) As explained to us, most of the fixed assets have been physically
verified by the management during the year and we have been informed
that no material discrepancy was noticed on such verification. In our
opinion, the frequency of physical verification is reasonable having
regard to the size of the company and nature of its business.
c) During the year, the company has not disposed off substantial part
of the fixed assets.
(ii) a) As explained to us, the inventory has been physically verified
at reasonable intervals by the management.
b) In our opinion, the procedures of physical verification of
inventories 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. The
discrepancies noticed on verification between the physical stocks and
the book records were not material and have been properly dealt with in
the books of account.
(iii) a) According to the information and explanations furnished to us,
the company has not granted secured or unsecured loans to companies,
firms or other parties whose particulars are recorded in the register
maintained under Section 301 of the Companies Act, 1956.
b) According to the information and explanations furnished to us,
during the year, the company has taken an unsecured loan of Rs. 71 Lacs
(year end balance Rs. 1504 Lacs) from a company covered in the register
maintained under Section 301 of the act. In our opinion, the term and
condition of the loan are not prima facie prejudicial to the interest
of the company.(Refer Note 4(II) of the financial statements).
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
service. Further during the course of audit, we have not come across
any instance of major weakness in internal control.
(v) a) Based on the audit procedures applied by us and according to the
explanations provided by the management, we are of the opinion that the
transactions that need to be entered in the register maintained under
section 301 of the act have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions which have been entered into pursuant to
contract that have been entered in the register maintained under
Section 301 of the act have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
(vi) With approval of scheme of Arrangement and Compromise u/s 391 of
the Companies Act, 1956 for the fixed deposit holders by Hon'ble High
Court of Himachal Pradesh at Shimla and issue of equity shares
thereafter to the fixed deposit holders, in our opinion there is no
default u/s 58A of the Companies Act, 1956.
(vii) In our opinion and according to the information and explanations
given to us, the company has an internal audit system commensurate with
the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company pursuant to rules made by the Central Government under section
209(1)(d) of the Companies Act, 1956 for maintenance of Cost records
and are of the opinion that, prima facie, the prescribed accounts and
records have been maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete;
(ix) According to the records of the company, the company, in general,
is regular in depositing with appropriate authorities undisputed
statutory dues including Provident Fund, Employees' State Insurance,
Income Tax, Sales- tax, Wealth-tax, Service tax, Custom duty,
Excise-duty, Cess and other statutory dues applicable to it and as on
31.3.2012, there are no statutory dues outstanding for a period
exceeding six months. There is no amounts payable in respect of
Income-tax, Sales-tax, Wealth tax, Service-tax Customs duty, cess were
outstanding as at 31st March,2012 due to any dispute. According to the
information provided to us, an amount of Rs. 453 Lacs is disputed by
the company in respect of excise duty matters under the Central Excise
Act, 1944 pertaining to years from 2006-07 to 2011-12 and the matter is
pending with Customs and Central Excise Appellate Tribunals- Rs. 357
Lacs and Commissioners of Central Excise- Rs. 96 Lacs.
(x) The accumulated losses of the company at the end of the financial
year are not more than fifty percent of its net worth. The company has
not incurred cash losses during the financial year covered by our audit
and in the immediately preceding financial year.
(xi) Based on our audit procedures and on the information and
explanations given by the management, the company is negotiating
settlement as per the approved CDR scheme with two debenture holders
with whom the company is in default in repayment amounting to Rs. 565
Lacs.
(xii) Based on our examination of documents and records, we are of the
opinion that the company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The company is not a chit fund/nidhi/mutual benefit
fund/societies.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments.
(xv) In our opinion, and according to the information and explanations
given to us and on the basis of our verification of books of accounts
of the company and based on our examination of the records, we are of
the opinion that the company has not given any guarantee for loans
taken by others from bank or financial institutions.
(xvi) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that the term loans have been applied for the
purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that funds raised from short term basis were not
used for long term investment.
(xviii) During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the act.
(xix) Necessary charge has been created in respect of debentures issued
by the company.
(xx) During the year covered by our audit report, the company has not
raised any money by way of public issue hence provisions of this clause
are not applicable to it.
(xxi) Based upon the audit procedures performed and 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 M Kamal Mahajan And Co.
Chartered Accountants
Firm Regn. No. 006855N
(M K Mahajan)
Place : New Delhi (Partner)
Date : 14th May, 2012 Membership No.F-17418
Mar 31, 2011
We have audited the attached balance sheet of Morepen Laboratories
Limited, as at 31st March,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.
We conducted our audit in accordance with the 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.
As required by the Companies (Auditor's Report) Order, 2003 issued by
the Central Government of India in terms of sub- section (4A) of
Section 227 of the Companies Act, 1956, (Ãthe actÃ), we enclose in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
Further to our comments in the Annexure referred to above, 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 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 appears from our examination of
those books ;
c. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account.
d. 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 act;
e. On the basis of written representations received from the
directors, as on 31st March,2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March,2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the act;
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts, read together with other
notes thereon, 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 31st March,2011;
b) in the case of the profit and loss account, of the loss for the year
ended on that date; and
c) in the case of the cash flow statement, of the cash flow for the
year ended on that date.
Annexure to Audit Report of Morepen Laboratories Limited
Referred to in our report of even date
(i) a) The company has generally maintained proper records showing full
particulars including quantitative details
and situation of fixed assets except for items like pipe, meter
instruments and other similar items.
b) As explained to us, most of the fixed assets have been physically
verified by the management during the year and we have been informed
that no material discrepancy was noticed on such verification. In our
opinion, the frequency of physical verification is reasonable having
regard to the size of the company and nature of its business.
c) During the year, the company has not disposed off substantial part
of the fixed assets.
(ii) a) As explained to us, the inventory has been physically verified
at reasonable intervals by the management.
b) In our opinion, the procedures of physical verification of
inventories 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. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. During the year, the
company has taken interest free unsecured loan of Rs 408.39 lacs from a
party covered in the Register maintained under Section 301 of the
Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
service. In our opinion, no continuing failure to correct major
weakness in internal control system has been noticed.
(v) a) Based on the audit procedures applied by us and 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 have been entered in the register required to
be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions entered in the registers maintained under
Section 301 have been made at prices which are reasonable having regard
to prevailing market prices at the relevant time.
(vi) With approval of scheme of Arrangement and Compromise u/s 391 of
the Companies Act, 1956 for the fixed deposit holders by Hon'ble High
Court of Himachal Pradesh at Shimla and issue of equity shares
thereafter to the fixed deposit holders, in our opinion there is no
default u/s 58A of the Companies Act, 1956.
(vii) In our opinion and according to the information and explanations
given to us, the company has an internal audit system commensurate with
the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company pursuant to rules made by the Central Government under section
209(1)(d) of the Companies Act, 1956 for maintenance of Cost records
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 records with a view to determine whether
they are accurate or complete;
(ix) According to the records of the company, the company, in general,
is regular in depositing with appropriate authorities undisputed
statutory dues including Provident Fund, Employees' State Insurance,
Income Tax, Sales- tax, Wealth-tax, Service tax, Custom duty,
Excise-duty, Cess and other statutory dues applicable to it and as on
31.3.2011, there are no statutory dues outstanding for a period
exceeding six months.. There is no amounts payable in respect of
Income-tax, Sales-tax, Wealth tax, Service-tax, Customs duty, cess were
outstanding as at 31st March,2011 due to any dispute.
(x) The accumulated losses of the company at the end of the financial
year are not more than fifty percent of its net worth. The company has
not incurred cash losses during the financial year covered by our audit
and in the immediately preceding financial year.
(xi) Based on our audit procedures and on the information and
explanations given by the management, the company is negotiating
settlement as per the approved CDR scheme with two debenture holders
with whom the company is in default in repayment amounting to Rs.
565.00 lacs.
(xii) Based on our examination of documents and records, we are of the
opinion that the company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The company is not a chit fund/nidhi/mutual benefit
fund/societies.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments.
(xv) In our opinion, and according to the information and explanations
given to us and on the basis of our verification of books of accounts
of the company and based on our examination of the records, we are of
the opinion that the company has not given any guarantee for loans
taken by others from bank or financial institutions.
(xvi) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that the term loans have been applied for the
purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that funds raised from short term basis were not
used for long term investment.
(xviii) During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the act.
(xix) Necessary charge has been created in respect of debentures issued
by the company.
(xx) During the year covered by our audit report, the company has not
raised any money by way of public issue hence provisions of this clause
are not applicable to it.
(xxi) Based upon the audit procedures performed and 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 M Kamal Mahajan And Co.
Chartered Accountants
Firm Regn. No. 006855N
(M K Mahajan)
(Partner)
Membership No.F-17418
Place : New Delhi
Date : 13th May, 2011
Mar 31, 2011
1) We have audited the attached balance sheet of Blue Coast Hotels
Limited as at 31st March 2011 and the profit and loss account and also
the cash flow statement for the period 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 the 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 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 by the Companies (Auditor's Report) (Amendment) order, 2004
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 accounts;
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 written representations received from the directors
as on 31 st March, 2011 and taken on record by the board of directors,
we report that none of the directors is disqualified as on 31 March,
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 31 st March, 2011;
(b) in the case of profit and loss account, of the loss 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.
Annexure to Auditors' Report
Referred to in paragraph (3) of our report of even date to the members
of Blue Coast Hotels Limited on the Financial Statements for the year
ended 31 st March, 2011
(i) (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, all the fixed assets have been physically
verified by the management during the year. As explained to us by the
company, no material discrepancies were noticed on such verification.
(c) During the period, the company has not disposed off substantial
part of the fixed assets.
(ii) (a) As explained to us, the inventory has been physically verified
by the management during the year. In our opinion, the frequency of
verification is reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. As explained to us, the discrepancies noticed on
verification between the physical stocks and the book records were not
material and have been properly dealt with in the books of accounts.
(iii) As per records of the company and as per information and
explanations furnished to us, we are of the opinions that during the
year, the company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms and other parties covered in the
register maintained under Section 301 of the Companies Act, 1956 except
grant of interest free temporary loan/advance of Rs. 0.01 lacs and Rs.
58.61 lacs to Blue Coast Hospitality Limited and Golden Joy Hotel
Private Limited (both subsidiary companies).
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and with regard to the sale of
goods and services. During the course of our audit, no major weakness
has been noticed in the internal controls systems.
(v) (a) Based on the audit procedures applied by us and 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, wherever applicable, have been entered in
the register required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted deposits from public and
hence provisions of section 58Aand58AA of the Companies Act, 1956 are
not applicable.
(vii) In our opinion and according to the information and explanations
given to us, the company has an internal audit system commensurate with
the size of the company and nature of its business.
(viii) As explained to us, the Central Government has not prescribed
any cost records under Section 209 (1) (d) of the Companies Act, 1956
for the company.
(ix) (a) According to the records of the company, the company in
general, is regular in depositing with appropriate authorities
undisputed statutory dues including Provident Fund, Employees' State
Insurance, Income Tax, Sales-tax, Wealth-tax, Service tax, Custom duty,
Excise duty, Cess and other statutory dues applicable to it except
undisputed amount in respect of TDS which is outstanding in the books
of accounts as on 31.03.2011, for a period of six months from the date
the amount became payable amounting to Rs. 18.22 lacs. However, the
company has deposited the same after 31.3.2011.
(b) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, no
amounts payable in respect of Income-tax, Sales-tax, Wealth tax,
Service-tax Custom duty, Excise duty, Cess were outstanding, as at 31
st March, 2011 due to any dispute.
(x) The company has no accumulated losses as on 31st March, 2011 .The
company has not incurred cash losses during the year covered by our
audit and in the immediately preceding financial year.
(xi) Based on our audit procedures and on the information and
explanations give by the management, we are of the opinion that the
company has not defaulted in repayment of dues to financial
institutions and banks,
(xii) Based on our examination of documents and records, we are of the
opinion that 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/nidhi/mutual
benefit fund/societies and hence provisions of clause (xiii) are not
applicable to it.
(xiv) In our opinion, the company is not dealing or trading in shares,
securities, debentures and other investments hence provisions of this
clause are not applicable to it.
(xv) Based on our examination of the records of the company and as
explained to us, we are of the opinion that the company has not given
any guarantee for loans taken by others from bank or financial
institutions.
(xvi) Based on our examination of the records, we are of the opinion
that the term loans have been applied for the purpose for which they
were raised.
(xvii) Based on our examination of the records, we are of the opinion
that funds raised from short term basis were not used for long term
investment.
(xvii i) During the year the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Act.
(xix) During the year, the company has allotted 10000, 12% Non
Convertible Debenture of Rs. 100000/- each to an Indian company for
which the company has created the necessary security/charge. (Refer
Note no. 2.1 of II of schedule XVI).
(xx) During the year covered by our audit, the company has not raised
any money by way of public issue.
(xxi) Based upon the audit procedures performed and 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 M Kamal Mahajan And Co.
(Firm Regn.No.06855N)
Chartered Accountants
(S.K. Maheshwari)
Place: New Delhi (Partner)
Date : 30th May, 2011 M. No. 504238
Mar 31, 2010
We have audited the attached balance sheet of Morepen Laboratories
Limited, as at 31st March, 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
companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with the 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.
As required by the Companies (Auditors Report) Order, 2003 issued by
the Central Government of India in terms of sub- section (4A) of
Section 227 of the Companies Act, 1956, ("the act"), we enclose in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
Further to our comments in the Annexure referred to above, 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 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 appears from ourexamination of those
books ;
c. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account.
d. 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 act;
e. On the basis of written representations received from the
directors, as on 31 st March,2010 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March,2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the act;
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts, read together with other
notes thereon, 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 31st March, 2010;
b) in the case of the profit and loss account, of the loss for the year
ended on that date; and
c) i n the case of the cash flow statement, of the cash flow for the
year ended on that date.
Annexure to Audit Report Referred to in our report of even date
(i) a) The company has generally maintained proper records showing full
particulars including quantitative details and situation of fixed
assets except for items like pipe, meter instruments and other similar
items.
b) As explained to us, most of the fixed assets have been physically
verified by the management during the year and we have been informed
that no material discrepancy was noticed on such verification. In our
opinion, the frequency of physical verification is reasonable having
regard to the size of the company and nature of its business.
c) During the year, the company has not disposed off substantial part
of the fixed assets.
(ii) a) As explained to us, the inventory has been physically verified
at reasonable intervals by the management.
b) In our opinion, the procedures of physical verification of
inventories 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. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. During the year, the
company has taken interest free unsecured loan of Rs. 1024.09 Lacs from
a party covered in the Register maintained under Section 301 of the
Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
service. In our opinion, no continuing failure to correct major
weakness in internal control system has been noticed.
(v) a) Based on the audit procedures applied by us and 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 have been entered in the register required to
be maintained underthat section.
b) In our opinion and according to the information and explanations
given to us, the transactions entered in the registers maintained under
Section 301 have been made at prices which are reasonable having regard
to prevailing market prices at the relevant time.
(vi) With approval of scheme of Arrangement and Compromise u/s 391 of
the Companies Act, 1956 for the fixed deposit holders by Honble High
Court of Himachal Pradesh at Shimla and issue of equity shares
thereafter to the fixed deposit holders, in our opinion there is no
default u/s 58A of the Companies Act, 1956.
(vii) In our opinion and according to the information and explanations
given to us, the company has an internal audit system commensurate with
the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company pursuant to rules made by the Central Government under section
209(1 )(d) of the Companies Act, 1956 for maintenance of Cost records
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 records with a view to determine whether
they are accurate or complete;
(ix) According to the records of the company, the company, in general,
is regular in depositing with appropriate authorities undisputed
statutory dues including Provident Fund, Employees State Insurance,
Income Tax, Sales- tax, Wealth-tax, Service tax, Custom duty,
Excise-duty, Cess and other statutory dues applicable to it and as on
31.3.2010, there are no statutory dues outstanding for a period
exceeding six months. There is no amounts payable in respect of
Income-tax, Sales-tax, Wealth tax, Service-tax Customs duty, cess were
outstanding as at 31 st March,2010 due to any dispute.
(x) The accumulated losses of the company at the end of the financial
year are not more than fifty percent of its net worth. The company has
not incurred cash losses during the financial year covered by our audit
and in the immediately precedingfinancial year.
(xi) Based on our audit procedures and on the information and
explanations given by the management, the company is negotiating
settlement as per the approved CDR scheme with two debenture holders
with whom the company is in default in repayment amounting to Rs.
565.00 lacs.
(xii) Based on our examination of documents and records, we are of the
opinion that the company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The company is not a chit fund/nidhi/mutual benefit
fund/societies.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments.
(xv) In our opinion, and according to the information and explanations
given to us and on the basis of our verification of books of accounts
of the company and based on our examination of the records, we are of
the opinion that the company has not given any guarantee for loans
taken by others from bank or financial institutions.
(xvi) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that the term loans have been applied for the
purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
the basis of our verification of books of accounts of the company, we
are of the opinion that funds raised from short term basis were not
used for long term investment.
(xviii) During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Act.
(xix) Necessary charge has been created in respect of debentures issued
by the company.
(xx) During the year covered by our audit report, the company has not
raised any money by way of public issue hence provisions of this clause
are not applicable to it.
(xxi) Based upon the audit procedures performed and 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 M Kamal Mahajan And Co.
Chartered Accountants
(M K Mahajan)
(Partner)
Membership No.F-17418
Firm Regn.No.006855N
Place : New Delhi
Date : 13th May, 2010
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