Mar 31, 2023
Neuland Laboratories Limited
Report on the Audit of the Standalone FinancialStatements
We have audited the accompanying standalone financial statements of Neuland 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 notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("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 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 and profit, other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended March 31,2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon, we do not provide a separate opinion on these matters.
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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. 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; design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
We give in "Annexure A" a detailed description of Auditor''s responsibilities for Audit of the Standalone Financial Statements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure B" 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, 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 Statement of Changes in Equity and the Statement of Cash Flow 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.
(e) On the basis of the written representations received from the directors as on March 31,2023 taken on record by the Board of Directors, none of the directors are disqualified as on March 31,2023 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure C"
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 40 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (1) The Management has represented that, to the
best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(2) The Management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, as on the date of this audit report, that the Company shall, directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(3) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, and according to the information and explanations provided to us by the Management in this regard nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (1) and (2) above, contain any material mis-statement.
v. The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend. (Refer Standalone Statement of Changes in Equity in the Standalone financial statements).
vi. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.
3. In our opinion, according to information, explanations given to us, the remuneration paid by the Company to its directors is within the limits prescribed under Section 197 of the Act and the rules thereunder.
For M S K A & Associates
Chartered Accountants ICAI Firm Registration No. 105047W
Amit Kumar Agarwal
Partner
Place: Hyderabad Membership No. 214198
Date: May 11,2023 UDIN: 23214198BGXCQR3187
Mar 31, 2022
Report on the Audit of the Standalone FinancialStatementsOpinion
We have audited the standalone financial statements of Neuland Laboratories Limited ("the Company"), which comprise the Balance Sheet as at March 31,2022, and the Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("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 Companies (Indian Accounting Standards) Rules, 2015 as amended and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022, and profit, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended March 31, 2022. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Sr. No Key Audit Matters |
How the Key Audit Matter was addressed in our audit |
|
1 Impairment of Goodwill |
Our audit procedures in respect of this area included: |
|
Refer Note 38 to the standalone financial statements. |
1. |
Obtained an understanding from the management with respect |
Goodwill is tested for impairment by the Management |
to process followed and controls implemented by the Company |
|
on an annual basis as required by IND AS 36 - |
to perform annual impairment test related to goodwill and |
|
Impairment of Asset. In determining the fair value/ |
intangibles; |
|
value in use of business reporting units, the Company |
2. |
Assessed the Company''s internal controls over preparation of |
has applied judgment in estimating future revenues, |
annual budgets and future forecasts for the business as a whole |
|
operating profit margins, long-term growth rate and |
and the approach followed for annual impairment test and key |
|
discount rates. |
assumptions applied; |
|
As at March 31, 2022, Goodwill represents 20.22% |
3. |
Evaluated the reasonableness of the assumptions used and |
of the Company''s total assets and 33.45% of the |
appropriateness of the valuation methodology applied and |
|
Company''s total shareholder''s equity. The Company |
tested the discount rate and long-term growth rates used in |
|
has performed its annual impairment test of goodwill |
the forecast including comparison to economic and industry |
|
and determined that there is no impairment required |
forecasts where appropriate; |
|
to be done. |
4. |
Assessed reasonableness and appropriateness of the future |
Due to significance of the above matter and |
revenue and margins, the historical accuracy of the Company''s |
|
involvement of the significant management |
estimates and its ability to produce accurate long-term forecasts; |
|
judgement in estimation of fair value/ value in use, we |
5. |
Compared the future operating cash flow forecasts with the |
have considered this as a key audit matter. |
business plan and budgets approved by the Board; and |
|
6. |
Verified the disclosures made by the management in the standalone financial statements; |
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the Director''s report but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
We give in "Annexure A" a detailed description of Auditor''s responsibilities for Audit of the Standalone Financial Statements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure B" 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, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flow 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 March 31,2022 taken on record by the Board of Directors, none of the directors are disqualified as on March 31,2022 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure C"
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 41 to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. (1) The Management has represented that, to the best of it''s knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(2) The Management has represented, that, to the best of it''s knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, as on the date of this audit
report, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(3) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, and according to the information and explanations provided to us by the Management in this regard nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (1) and (2) above, contain any material mis-statement.
v. The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend. (Refer Standalone Statement of Changes in Equity in the Standalone financial statements).
3. As required by The Companies (Amendment) Act, 2017, in our opinion, according to information, explanations given to us, the remuneration paid by the Company to its directors is within the limits laid prescribed under Section 197 of the Act and the rules thereunder.
For M S K A & Associates
Chartered Accountants ICAI Firm Registration No. 105047W
Amit Kumar Agarwal <
Partner
Place: Hyderabad Membership No. 214198
Date: May 10, 2022 UDIN: 22214198AISFPM1049
Mar 31, 2019
Report on the Audit of the Standalone Financial Statements
Opinion
1. We have audited the accompanying standalone financial statements of Neuland Laboratories Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2019, 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.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (âInd ASâ) specified under section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2019, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditorâs Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (âICAIâ) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
5. We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter |
How our audit addressed the key audit matter |
|
Carrying value of goodwill Refer note 2 [iillgl for the accounting policy and note 37 for the financial disclosures in the standalone financial statements. As at March 31, 2019, the Companyâs assets include goodwill aggregating to RS.27,946.10 lacs, in accordance with the Scheme of Amalgamation and Arrangement, on account of acquisition of businesses of Neuland Health Sciences Private Limited and Neuland Pharma Research Private Limited which were engaged in the business of peptides and contract research services respectively. Goodwill is carried at cost and is tested for impairment, if any, in accordance with Ind AS 36 âImpairment of Assetsâ. As at March 31, 2019, the management has assessed that the value of goodwill will be recovered through future cash flows from the acquired businesses. However, there is potentially a risk that the goodwill will be impaired if the projected cash flows are not met. The impairment review performed by the Company, based on the projected future cash flow, involves use of various significant judgements and estimates such as revenue growth, profit margins, terminal values and the discount rate. Changes in these assumptions could lead to an impairment to the carrying value of goodwill. We identified this as key audit matter for current year audit owing to the materiality of the amounts involved and inherent subjectivity involved in the determination of recoverable value through estimation of future cash flows. |
Our audit procedures in relation to testing of impairment of goodwill, included, but were not limited to the following: - Assessed and tested the design and operating effectiveness of the Companyâs controls over recognition of impairment assessment process. - Obtained the impairment analyses and tested the appropriateness of the impairment model and reasonableness of the key assumptions used, including earnings before interest depreciation and amortization, terminal value, selection of discount rate and benchmarking the market-related assumptions used against the external data with the help of valuation experts; - Challenged the judgements exercised by the management in respect of the above key assumptions based on our knowledge of the industry and market factors; - Compared the prior year budgets with the actual results to determine the efficacy of the managementâs budgeting process. Further, compared the cash flow forecasts to the latest budgets approved by the Board of Directors; - Obtained and evaluated sensitivity analysis performed by the management on aforesaid key assumptions and performed further independent sensitivity analysis to determine impact of estimation uncertainty on the carrying value; and - Assessed the appropriateness and adequacy of the related disclosures in the financial statements in accordance with the applicable accounting standards. |
|
Recoverability of Minimum Alternate Tax (MAT) credit asset Refer to note 2[iil[ql for the accounting policy and note 18 for the financial disclosures in the standalone financial statements. As at March 31, 2019, the Company has recognized deferred tax asset in the nature of MAT credit aggregating to RS.2,672.26 lacs. Recognition of MAT credit asset requires significant judgement regarding the likelihood of its realization with-in the utilization period through estimate of future taxable profits of the Company and consequently there is a risk that the MAT credit asset may not be realised within the utilization period, if these projections are not met. Managementâs assessment of recoverability of the MAT credit asset requires estimation of future taxable profits as per the prevalent provisions under the Income Tax Act, 1961 (âIT Actâ) which involves key assumptions such as revenue growth, profit margins, tax adjustments. These future taxable profits are computed based on the business plan prepared by the management and projected post-tax cash flows of the Company. We identified this as key audit matter for current year audit owing to the materiality of the amounts involved and inherent subjectivity involved in the determination of utilization of MAT credit through estimation of future taxable profits. |
Our audit procedures in relation to assessment of MAT credit recognised as at reporting date, included, but were not limited to the following: - Assessed and tested the design and operating effectiveness of the Companyâs controls over recognition of the MAT credit. - Obtained the Companyâs analyses for MAT credit realisability involving future projections of taxable profits and tested the reasonableness of the key assumptions used, including growth in profit, gross margins and tax adjustments; - Challenged the judgements exercised by the management in respect of the above key assumptions based on our knowledge of the industry; - Compared the prior year expected tax profits with the actual results to determine the efficacy of the managementâs budgeting process; - Tested the appropriateness of the forecasted tax liability computation as per the provisions of the IT Act, including assessment of the eligibility of various tax exemptions availed and MAT liability computation as per Section 115JB of the IT Act; - Obtained and evaluated sensitivity analysis performed by the management on aforesaid key assumptions and performed further independent sensitivity analysis to determine impact of estimation uncertainty on the future taxable profits; and - Assessed the appropriateness and adequacy of the related disclosures in the financial statements in accordance with the applicable accounting standards. |
Information other than the Financial Statements and Auditorâs Report thereon
6. The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditorâs report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
7. The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
9. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Financial Statements
10. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
11. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for explaining our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
12. 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.
13. 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.
14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
15. As required by section 197(16) of the Act, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.
16. 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, we give in the Annexure I a statement on the matters specified in paragraphs 3 and. 4 of the Order.
17. Further to our comments in Annexure I, as required by section 143(3) of the Act, we report that:
a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) the standalone financial statements dealt with by this report are in agreement with the books of account;
d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;
e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated May 16, 2019 as per Annexure II expressed unmodified opinion;
g) with respect to the other matters to be included in the Auditorâs 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, as detailed in note 40 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at March 31, 2019;
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, 2019;
iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2019; and
iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from November 8, 2016 to December 30, 2016, which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.
Annexure I to the Independent Auditorâs Report of even date to the members of Neuland Laboratories Limited, on the standalone financial statements for the year ended March 31, 2019 AnnexureI
Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) 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 verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.
(c) The title deeds of all the immovable properties (which are included under the head âProperty, plant and equipmentâ) are held in the name of the Company except for the following property which according to the information and explanation given to us, are under dispute pending with Honorable High Court of Telangana as to the ownership of the property, as stated in note 40(h) to the financial statements.
(rs. in lacs)
Nature of property |
Whether leasehold /freehold |
Gross block as on March 31, 2019 |
Net block on March 31, 2019 |
Remarks |
Land |
Freehold |
3.30 |
3.30 |
The title deeds of the land are in the name of Neuland Health Sciences Private Limited, erstwhile Company that was merged with the Company. Further, the title of the land is under dispute in respect of which we have been informed by the management of the Company that they have filed a writ petition with Honorable High Court of Telangana. |
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit. No material discrepancies were noticed on the aforesaid verification.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii) (b) and 3(iii)(c) of the Order are not applicable.
(iv) In our opinion, the Company has complied with the provisions of Section 186 in respect of investments. Further, in our opinion, the Company has not entered into any transaction covered under Section 185 and Section 186 of the Act in respect of loans, guarantees and security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Companyâs products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, goods and service tax, duty of customs, duty of excise, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of sales-tax, service-tax, value added tax, duty of customs on account of disputes, are as follows:
Amount (Rs. in lacs) |
|||||
Name of the statute |
Nature of dues |
Total Claim |
Amount paid under protest |
Period to which the amount relates |
Forum where dispute is pending |
Finance Act, 1994 |
Service tax |
119.32 |
55.45 |
2009-15 |
Honâble High Court of Telangana |
5.70 |
- |
2004-05 to 2008-09 |
CESTAT, Bangalore |
||
Income Tax Act, 1961 |
Income Tax |
18.13 |
- |
AY 1998-99 |
Honâble High Court of Telangana |
81.64 |
- |
AY 2001-02 |
|||
14.52 |
- |
AY 2002-03 |
|||
693.33 |
- |
AY 2004-05 |
|||
19.01 |
3.81 |
AY 2012-13 |
Commissioner of Income Tax (Appeals), Hyderabad |
||
1,357.45 |
273.49 |
AY 2012-13 to 2018-19 |
|||
96.27 |
0.82 |
AY 2016-17 |
(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution or bank during the year. The Company has no loans or borrowings payable to government and does not have any outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) and did not have any term loans outstanding during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid / provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the standalone financial statements etc., as required by the applicable Ind AS.
(xiv) During the year, the Company has made private placement of shares. In respect of the same, in our opinion, the company has complied with the requirement of Section 42 of the Act and the Rules framed thereunder. Further, in our opinion, the amounts so raised were applied for the purposes for which these securities were issued, though idle funds which were not required for immediate utilisation have been invested in liquid investments, payable on demand. During the year, the company did not make preferential allotment/private placement of fully/partly convertible debentures.
(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act. Accordingly, the provisions of clause 3(xv) of the order are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure II to the Independent Auditorâs Report of even date to the members of Neuland Laboratories Limited, on the standalone financial statements for the year ended March 31, 2019
Annexure II
Independent Auditorâs Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. In conjunction with our audit of the standalone financial statements of Neuland Laboratories Limited (âthe Companyâ) as at and for the year endeRs. 31 March 2019, we have audited the internal financial controls over financial reporting (âIFCoFRâ) of the Company as at that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs Board of Directors 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 the Companyâs business, including adherence to the 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.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on the Companyâs IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (âICAIâ) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (âthe Guidance Noteâ) issued by the ICAI. 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 IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A companyâs IFCoFR 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 IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at March 31, 2019, 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 Walker Chandiok & Co LLP
Chartered Accountants
Firmâs Registration No: 001076N/N500013
Sanjay Kumar Jain
Partner
Membership No: 207660
Place: Hyderabad
Date: May 16, 2019
Mar 31, 2018
Report on the Standalone Financial Statements
1. We have audited the accompanying Standalone Financial Statements of Neuland Laboratories Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 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 the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
2. 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 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) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit.
4. 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.
5. 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 these Standalone Financial Statements are free from material misstatement.
6. 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 auditorâs 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 controls relevant to the Companyâs 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 Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on these Standalone Financial Statements.
Opinion
8. 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 including Ind AS specified under Section 133 of the Act, of the state of affairs of the Company as at 31 March 2018, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
9. We draw attention to note 37 to the standalone financial statements, which describes that the Scheme of Amalgamation and Arrangement (the âSchemeâ) entered between Neuland Health Sciences Private Limited, Neuland Pharma Research Private Limited (collectively Transferor Companiesâ), and the Company, approved by the Honâble National Company Law Tribunal, Hyderabad Bench. Pursuant to the terms of the Scheme, the amalgamation is accounted as per the âPurchase Methodâ prescribed under Accounting Standard 14 - Accounting for Amalgamations (AS 14) specified under Section 133 of the Act. Our opinion is not modified in respect of this matter.
Other Matter
10. The Company had prepared separate sets of statutory financial statements for the year ended 31 March 2017 and 31 March 2016 in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) on which we issued auditorâs reports to the shareholders of the Company dated 12 May 2017 and 20 May 2016 respectively. These financial statements have been adjusted to give effect to the Scheme and for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have also been audited by us. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11 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, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.
12. Further to our comments in Annexure I, as required by Section 143(3) of the Act, we report that:
a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) the Standalone Financial Statements dealt with by this report are in agreement with the books of account;
d) in our opinion, the aforesaid Standalone Financial Statements comply with Ind AS specified under Section 133 of the Act;
e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 11 May 2018 as per Annexure II expressed unmodified opinion; and
g) with respect to the other matters to be included in the Auditorâs 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, as detailed in Note 41 to the Standalone Financial Statements, has disclosed the impact of pending litigations on its financial position;
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; and
iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016 which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.
Annexure I to the Independent Auditorâs Report
of even date to the members of Neuland Laboratories Limited, on the standalone financial statements for the year ended 31 March 2018 Annexure 1
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) 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 verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.
(c) The title deeds of all the immovable properties (which are included under the head âProperty, plant and equipmentâ) are held in the name of the Company except for the immovable properties which were transferred as a result of amalgamation of transferor companies as stated in note 37 to the standalone financial statements wherein the tittle deeds are in the name of the erstwhile company and another immovable property (which is included under the head âcapital work in progressâ) which was acquired during the current year as stated in note 44 to the Standalone Financial Statements.
Immovable property included under Property, plant and equipment:
(Rs. in lakhs)
Nature of property |
Whether leasehold / freehold |
Gross block as on 31 March 2018 |
Net block on 31 March 2018 |
Remarks |
The title deeds of the land are in the name of Neuland |
||||
Health Sciences Private Limited, erstwhile Company |
||||
that was merged with the Company. Further, the title of |
||||
Land |
Freehold |
3.30 |
3.30 |
the land is under dispute in respect of which we have been informed by the management of the Company that they have filed a writ petition with Honorable High Court of Andhra Pradesh. |
Land |
Freehold |
87.23 |
87.23 |
The title deeds are in the name of Neuland Pharma |
Building |
Freehold |
672.27 |
672.27 |
Research Private Limited, erstwhile Company that was merged with the Company. |
Immovable property included in capital work-in-progress:
(Rs. in lakhs)
Whether |
|||
Nature of property |
leasehold / freehold |
Amount |
Remarks |
Land |
Freehold |
801.40 |
As detailed in note 44 to the financial statements, the management is in |
Building |
Freehold |
3,564.50 |
the process of mutation of the title for the acquired immovable property (i.e., land and building) in the Companyâs name. |
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and no material discrepancies between physical inventory and book records were noticed on physical verification.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable.
(iv) In our opinion, the Company has complied with the provisions of Section 186 in respect of investments. Further, in our opinion, the Company has not entered into any transaction covered under Section 185 and Section 186 of the Act in respect of loans, guarantees and security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Companyâs products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, goods and service tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount |
Amount paid under Protest |
Period to which the amount relates |
Forum where dispute is pending |
Rs. in lakhs |
Rs. in lakhs |
||||
|
The Honâable High Court of the |
||||
|
119.32 |
55.45 |
2007-15 |
combined State of Andhra Pradesh |
|
Finance Act, 1994 |
Service tax |
and Telangana |
|||
|
5.70 |
- |
2004-05 to 2008-09 |
CESTAT, Bangalore |
|
Income tax Act, 1961 |
Income tax |
18.13 |
- |
AY 1998-99 |
|
|
81.64 |
- |
AY 2001-02 |
The Honâble High Court of the |
|
|
14.52 |
- |
AY 2002-03 |
combined state of Andhra Pradesh |
|
|
and Telangana |
||||
|
693.33 |
- |
AY 2004-05 |
||
|
19.01 |
- |
AY 2012-13 |
Commissioner (Appeals), Hyderabad |
(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution or a bank during the year. The Company did not have any outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the standalone financial statements etc., as required by the applicable Ind AS.
(xiv) During the year, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
(xv) In our opinion, the company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure ll to the Independent Auditorâs Report of even date to the members of Neuland Laboratories Limited, on the Standalone Financial statement for the year ended 31 March 2018
Annexure II to the Independent Auditorâs report
on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. In conjunction with our audit of the standalone financial statements of Neuland Laboratories Limited (âthe Companyâ) as at and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (âIFCoFRâ) of the Company as at that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs Board of Directors 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 the Companyâs business, including adherence to the 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
3. Our responsibility is to express an opinion on the Companyâs IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (âICAIâ) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (âthe Guidance Noteâ) issued by the ICAI. 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 IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A companyâs IFCoFR 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 IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 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 Walker Chandiok & Co LLP
Chartered Accountants
Firmâs Registration No.: 001076N/N500013
per Sanjay Kumar Jain
Partner
Membership No.: 207660
Place: Hyderabad
Date: 11 May 2018
Mar 31, 2016
To the Members of Neuland Laboratories Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Neuland Laboratories Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, 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
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with including 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; 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
3. Our responsibility is to express an opinion on these stand alone financial statements based on our audit.
4. 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.
5. 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 financial statements are free from material misstatement.
6. 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 controls relevant to the Company''s preparation of the standalone 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.
7. 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
8. 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
9. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I, a statement on the matters specified in paragraphs 3 and 4 of the Order.
10. As required by Section143(3) of the Act, we report that:
a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. the standalone financial statements 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 (as amended);
e. on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified from being appointed as a director in terms of Section 164(2) of the Act;
f. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 20 May 2016 as per Annexure II expressed an un-modified opinion;
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. as detailed in note 32 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
of even date to the members of Neuland Laboratories Limited, on the financial statements for the year ended March 31, 2016
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) 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 verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets
(c) The title deeds of all the immovable properties are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)
(c) of the Order are not applicable.
(iv) In our opinion the, Company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees, and security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company''s products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited to the appropriate authorities and there have been significant delays in a large number of cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount |
Amount paid under protest |
Period to which the amount relates |
Forum where dispute is pending |
Rs, in lacs |
Rs, in lacs |
||||
Finance Act, 1994 |
Service tax |
143.41 |
79.54 |
2007-15 |
High Court of Andhra Pradesh |
7.41 |
- |
2008-15 |
CESTAT, Bangalore |
||
Income tax Act, 1961 |
Income tax |
18.13 |
- |
AY 1998-99 |
Income Tax Appellate Tribunal |
1,145.72 |
- |
AY 2008-09 |
|||
727.17 |
- |
AY 2009-10 |
|||
421.18 |
- |
AY 2012-13 |
|||
217.04 |
- |
AY 2013-14 |
|||
81.64 |
- |
AY 2001-02 |
High Court of Andhra Pradesh |
||
14.52 |
- |
AY 2002-03 |
|||
14.56 |
- |
AY 2003-04 |
(viii) The Company has not defaulted in repayment of loans or borrowings to any bank or financial institution or government during the year. The Company did not have any outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
(xv) In our opinion, the Company has not entered into any non-cash transactions with directors or persons connected with them.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
1. In conjunction with our audit of the standalone financial statements of Neuland Laboratories Limited ("the Company") as of and for the year ended 31 March 2016, we have audited the internal financial controls over financial reporting (IFCoFR) of the Company of as of that date.
Management''s Responsibility for Internal Financial Controls
2. The Company''s Board of Directors 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 the Company''s 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
3. Our responsibility is to express an opinion on the Company''s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI. 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 IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, 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.
5. 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 IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A Company''s IFCoFR 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 IFCoFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, 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 Walker Chandiok & Co LLP
Chartered Accountants
Firm''s Registration No.: 001076N/N500013
per Sanjay Kumar Jain
Partner
Membership No.: 207660
Place: Hyderabad
Date : 20 May 2016
Mar 31, 2014
We have audited the accompanying financial statements of Neuland
Laboratories Limited (''the Company''), which comprise the Balance Sheet
as at March 31, 2014, 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 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 Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 (''the Act'') which shall continue to apply in
respect of section 133 of the Companies Act, 2013 in terms of General
Circular 15/2013 dated September 13, 2013 issued by the Ministry of
Corporate Affairs. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date and;
(iii) 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 (as
amended) (''the Order'') issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of the Act, we enclose in the
annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
2. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956 which shall
continue to apply in respect of section 133 of the Companies Act, 2013
in terms of General Circular 15/2013 dated September 13, 2013 issued by
the Ministry of Corporate Affairs;
e) on the basis of the written representations received from the
directors, as on March 31, 2014, and taken on record by the Board of
Directors, none of the directors of the Company is disqualified as on
March 31, 2014 from being appointed as a director, in terms of clause
(g) of sub- section (1) of Section 274 of the Companies Act, 1956.
(Referred to in paragraph 1 under the heading ''Report on Other Legal
and Regulatory Requirements'' of our Report of even date on the
financial statements for the year ended on March 31, 2014, of Neuland
Laboratories Limited)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The Fixed Assets have been physically verified by the management in
accordance with regular programme of verification which, in our
opinion, is reasonable having regard to the size of the Company and
nature of its assets. Discrepancies noticed on such verification have
been appropriately dealt with in the books of account.
(c) Fixed assets disposed off during the year were not substantial.
According to the information and explanations given to us, we are of
the opinion that the disposal of fixed assets has not affected the going
concern status of the Company.
(ii) (a) The inventories have been physically verified during the year
by the management. 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) In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between physical stocks and
the book records were not material and have been properly dealt with in
the books of account.
(iii) (a) The Company has not granted loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, sub- clause
(b), (c), (d), are not applicable.
(e) The Company has taken unsecured loans from two parties listed in
the register maintained under section 301 of the Companies Act, 1956
wherein the balance payable as at the year-end is Rs. 2800.00 lakhs
(Maximum balance outstanding during the year Rs. 2800.00 lakhs).
(f) In our opinion and according to the explanations given to us, the
rate of interest and other terms and conditions of the aforesaid loan
are not, prima facie prejudicial to the interests of the Company.
(g) In respect of loans taken, no amounts have become due for payment
in respect of principal amount and interest thereon at the close of the
year
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no other major weakness has
been noticed in the internal control system in respect of these areas.
(v) (a) As per information and explanation and on basis of records
maintained by the Company we are of the opinion that 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 made in pursuance of contracts or
arrangements entered in the registers maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A, 58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. As informed to us, no order has been passed
by the Company Law Board or National Company Law Tribunal or Reserve
Bank of India or any court or any other tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labor and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
(ix) (a) According to the records of the Company, Provident Fund,
Investor Education and Protection Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Cess and other material statutory dues applicable to it have
generally been regularly deposited during the year with the appropriate
authorities though there has been a delay in a few cases.
According to the information and explanations given to us, no
undisputed amounts payable in respect of above which were outstanding,
as at March 31, 2014 for a period of more than six months from the date
on which they became payable.
(b) According to the records of the Company, the dues outstanding of
Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise
duty and cess which have not been deposited on account of dispute as on
March 31, 2014 are as follows:
Name of Nature of Amount Period to Forum
the Statute the Dues (Rs. in which the where
lakhs) amount dispute is
relates pending
Income Tax Income Tax 6.34 AY 1998-99 Income Tax
Act, 1961 Appellate
19.17 AY 2008-09 Tribunal
16.82 AY 2009-10
3.42 AY 2001-02 Andhra
14.15 AY 2002-03 Pradesh
1.44 AY 2003-04 High Court
(x) The Company does not have any accumulated losses at the end of the
financial year and has neither incurred 4 cash losses during the
financial year covered by our audit and nor in the immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has delayed in repayment of dues to banks as
detailed below:
Rs. in lakhs
Principal Interest Period of
delay (in days)
188.00 357.67 1 - 15 Paid during
the year
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
(xiv) In our opinion the Company is not dealing in or trading in
shares, securities, debentures and other securities. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) In our opinion, 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
an overall examination of the Balance Sheet of the Company, we report
that funds raised on short-term basis aggregating to Rs. 2442.53 lakhs
(including current maturities of long term borrowings of Rs. 1661.05
lakhs) have been utilised for the repayment of long term loans which
were taken for creation of long-term investments in fixed assets and
capital work in progress.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures.
(xx) The Company has not raised any money through public issue during
the year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For K. S. Aiyar & Co,
Chartered Accountants
ICAI Firm Registration No: 100186W
Raghuvir M. Aiyar
Place: Mumbai Partner
Date: May 09, 2014 Membership No.: 38128
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Neuland
Laboratories Limited (''the Company''), which comprise the Balance Sheet
as at March 31, 2013, 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 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 Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 (''the Act''). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to the following:
(a) Note 40 to the financial statements,regarding credit aggregating to
Rs.23.32 million arising from reversal of Minimum Alternate Tax (MAT)
previously written down, which have been reviewed by the Management as
on the Balance Sheet date;
(b) Note 26 to the financial statements: the Profits for the year are
higher by Rs.33.80 Million due to credits arising from profits on sale of
R & D assets, rental income and transfer of related costs as part of
the re-organisation. Our opinion is not qualified in respect of these
matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (as
amended) (''the Order'') issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of the Act, we enclose in the
annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
2. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956.
e) on the basis of the written representations received from the
directors, as on March 31, 2013, and taken on record by the Board of
Directors, none of the directors of the Company is disqualified as on
March 31, 2013 from being appointed as a director, in terms of clause
(g) of sub- section (1) of Section 274 of the Companies Act, 1956;
Referred to in paragraph 1 under the heading ''Report on Other Legal and
Regulatory Requirements'' of our Report of even date on the financial
statements for the year ended on March 31, 2013, of Neuland
Laboratories Limited)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The Fixed Assets have been physically verified by the management in
accordance with regular programme of verification which, in our
opinion, is reasonable having regard to the size of the Company and
nature of its assets. Discrepancies noticed on such verification have
been appropriately dealt with in the books of account.
(c) Fixed assets disposed off during the year were not substantial.
According to the information and explanations given to us, we are of
the opinion that the disposal of fixed assets has not affected the
going concern status of the Company.
(ii) (a) The inventories have been physically verified during the year
by the management. 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) In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between physical stocks and
the book records were not material and have been properly dealt with in
the books of account.
(iii) (a) The Company has not granted loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, sub-clause
(b), (c), (d), are not applicable.
(e) The Company has taken unsecured loans from two parties listed in
the register maintained under section 301 of the Companies Act, 1956
wherein the balance payable as at the year-end is Rs.280.00million
(Maximum balance outstanding during the year Rs.280.00 million).
(f) In our opinion and according to the explanations given to us, the
rate of interest and other terms and conditions of the aforesaid loan
are not, prima facie prejudicial to the interests of the Company.
(g) In respect of loans taken, no amounts have become due for payment
in respect of principal amount and interest thereon at the close of the
year.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no other major weakness has
been noticed in the internal control system in respect of these areas.
(v) (a) As per information and explanation and on basis of records
maintained by the Company we are of the opinion that 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 made in pursuance of contracts or
arrangements entered in the registers maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A, 58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. As informed to us, no order has been passed
by the Company Law Board or National Company Law Tribunal or Reserve
Bank of India or any court or any other tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(l)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
(ix) (a) According to the records of the Company, Provident Fund,
Investor Education and Protection Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Cess and other material statutory dues applicable to it have
generally been regularly deposited during the year with the appropriate
authorities though there has been a delay in a few cases.
According to the information and explanations given to us, no
undisputed amounts payable in respect of above which were outstanding,
as at March 31, 2013 for a period of more than six months from the date
on which they became payable.
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
(xiv) In our opinion the Company is not dealing in or trading in
shares, securities, debentures and other securities. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) In our opinion, 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
an overall examination of the Balance Sheet of the Company, we report
that funds raised on short-term basis aggregating to Rs.320.42 million
(including current maturities of long term borrowings of Rs.269.04
million) have been utilised for the repayment of long term loans which
were taken for creation of long-term investments in fixed assets and
capital work in progress.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures.
(xx) The Company concluded its Rights Issue on April 16, 2012, with the
allotment of shares on April 27, 2012. The monies raised on account of
this Rights Issue have been utilized for the purpose for which it was
raised as disclosed in note 3 (b) to the Financial Statements.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For K. S. Aiyar & Co,
Chartered Accountants
Registration No: 100186W
Raghuvir M. Aiyar
Partner
Mumbai, May 10, 2013 Membership No.: 38128
Mar 31, 2012
1. We have audited the attached Balance Sheet of Neuland Laboratories
Limited, as at March 31, 2012 and also the Statement of Profit and Loss
for the year ended on that date annexed thereto and the 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.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by 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:
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, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 to the extent applicable;
e. On the basis of written representations received from the
Directors/companies, as on March 31, 2012, and taken on record by the
Board of Directors we report that none of the Directors is disqualified
as on March 31, 2012 from being appointed as a director in terms of
clause (g) of sub-section (1) of Section 274 of the Companies Act,
1956.
f. 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:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
ii. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
iii. in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our Report of even date on the accounts
for the year ended on March 31, 2012 of Neuland Laboratories Limited)
i. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The fixed assets have been physically verified by the management in
accordance with regular programme of verification which, in our
opinion, is reasonable having regard to the size of the company and
nature of its assets. Discrepancies noticed on such verification have
been appropriately dealt with in the books of account.
c. Fixed assets disposed off during the year were not substantial.
According to the information and explanations given to us, we are of
the opinion that the disposal of fixed assets has not affected the
going concern status of the Company.
ii. a. The inventories have been physically verified during the year by
the management. 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. In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between physical stocks and
the book records were not material and have been properly dealt with in
the books of account.
iii. a. The Company has not granted loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, sub-clauses
(b), (c), (d), are not applicable.
e. The Company has taken unsecured loan from parties listed in the
register maintained under Section 301 of the Companies Act, 1956
wherein the balance payable as at the year end is Rs52.50 millions
(Maximum balance outstanding during the year Rs52.50 millions).
f. In our opinion and according to the explanations given to us, the
rate of interest and other terms and conditions of the aforesaid loan
are not, prima facie prejudicial to the interest of the Company.
g. In our opinion and according to the explanations given to us, the
Company is generally regular in paying the interest as stipulated.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no other major weakness has
been noticed in the internal control system in respect of these areas.
v. a. As per information and explanation and on basis of records
maintained by the company we are of the opinion that 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 made in pursuance of contracts or
arrangements entered in the registers maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A, 58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. As informed to us, no order has been passed
by the Company Law Board or National Company Law Tribunal or Reserve
Bank of India or any court or any other tribunal.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
ix. a. According to the records of the Company, Provident Fund,
Investor Education and Protection Fund, Employees' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Cess and other material statutory dues applicable to it have
generally been regularly deposited during the year with the appropriate
authorities though there has been a small delay in a few cases.
According to the information and explanations given to us, no
undisputed amounts payable in respect of above which were outstanding,
as at March 31, 2012 for a period of more than six months from the date
on which they became payable.
b. According to the records of the Company, the dues outstanding of
Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise
duty and cess which have not been deposited on account of dispute as on
March 31, 2012 are as follows:
Name of the
statute Nature of Rs in Million Period to which Forum where
the dues the amount relates dispute is
pending
Income Tax
Act, 1961 Income tax 36.61 A.Y. 2009-10 Commissioner
of Income
Tax
(Appeals)
x. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has defaulted in repayment of dues to banks as
detailed below:
Rs in Million
Principal Interest Period of delay
(in days)
69.93 43.51 1 - 30
17.29 19.45 31 - 60 Paid during the year
88.54 13.22 61 - 90
15.80 2.39 Existing as on
March 31, 2012 Paid on April 16, 2012
xii. Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiii. In our opinion the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore the provisions of clause 4(xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
xiv. In our opinion the Company is not dealing in or trading in shares,
securities, debentures and other securities. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
xvi. In our opinion, 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
an overall examination of the Balance Sheet of the Company, we report
that funds raised on short-term basis aggregating to Rs693.81 million
have been utilised for the repayment of long term loans which were
taken for creation of long-term investments in fixed assets and capital
work-in-progress.
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956
xix. The Company has not issued any debentures.
xx. The Company concluded its Rights Issue on April 16, 2012, with the
allotment of shares on April 27, 2012. As on the reporting date, the
Company received nominal amounts towards application for the Rights
Issue in escrow accounts with banks and had not utilized the same.
xxi. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For K. S. Aiyar & Co.
Chartered Accountants
Registration No. 100186W
Raghuvir M. Aiyar
Partner
Hyderabad, May 3, 2012. Membership No.: 38128
Mar 31, 2011
We have audited the attached Balance Sheet of Neuland Laboratories
Limited, as at March 31, 2011 and also the Profit and Loss Account for
the year ended on that date annexed thereto and the 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 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.
1. As required by the Companies (Auditor's Report) Order, 2003 as
amended by 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.
2. 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
Companies Act, 1956 to the extent applicable;
e. On the basis of written representations received from the
Directors/companies, as on March 31, 2011, and taken on record by the
Board of Directors we report that none of the Directors is disqualified
as on March 31, 2011 from being appointed as a director in terms of
clause (g) of sub-section (1) of Section 274 of the Companies Act,
1956.
f. 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:
i. In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
ii. In the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
iii. In the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 1 of our Report of even date on the accounts
for the year ended on March 31, 2011 of Neuland Laboratories Limited)
i. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The fixed assets have been physically verified by the management in
accordance with regular programme of verification which, in our
opinion, is reasonable having regard to the size of the Company and
nature of its assets. Discrepancies noticed on such verification have
been appropriately dealt with in the books of account.
c. Fixed assets disposed off during the year were not substantial.
According to the information and explanations given to us, we are of
the opinion that the disposal of fixed assets has not affected the
going concern status of the Company.
ii. a. The inventories have been physically verified during the year by
the management. 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. In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between physical stocks and
the book records were not material and have been properly dealt with in
the books of account.
iii. a. The Company has not granted loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, sub-clause
(b), (c), (d), are not applicable.
e. The Company has taken unsecured loan from parties listed in the
register maintained under Section 301 of the Companies Act, 1956
wherein the balance payable as at the year end is Rs.225 lakhs (Maximum
balance outstanding during the year Rs.225 lakhs).
f. In our opinion and according to the explanations given to us, the
rate of interest and other terms and conditions of the aforesaid loan
are not, prima facie prejudicial to the interest of the Company.
g. In our opinion and according to the explanations given to us, the
Company is regular in paying the principal and interest as stipulated.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services, however, further strengthening of these controls is
recommended in the environment of ERP. During the course of our audit,
no other major weakness has been noticed in the internal control system
in respect of these areas.
v. a. As per information and explanation and on basis of records
maintained by the company we are of the opinion that particulars of
contracts or arrangements referred to in Section 301 of the Companies
Act, 1956 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 contracts or
arrangements entered in the registers maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A, 58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. As informed to us, no order has been passed
by the Company Law Board or National Company Law Tribunal or Reserve
Bank of India or any court or any other tribunal.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business; however certain
areas planned for in the annual audit programme were not completed.
viii. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
ix. a. According to the records of the Company, provident fund,
investor education and protection fund, employees' state insurance,
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it have
generally been regularly deposited during the year with the appropriate
authorities though there has been a small delay in a few cases.
According to the information and explanations given to us, no
undisputed amounts payable in respect of above which were outstanding,
as at March 31, 2011 for a period of more than six months from the date
on which they became payable except for unclaimed fixed deposits of
?0.71 lakhs to be deposited to Investor Education and Protection Fund
related to and due on various dates.
b. According to the records of the Company, the dues outstanding of
income tax, sales tax, wealth tax, service tax, custom duty, excise
duty and cess which have not been deposited on account of dispute as on
March 31, 2011 are as follows:
Name of the
statute Nature of ? in lakhs Period to which Forum where
the dues the amount
relates dispute is
pending
Income Tax Act,
1961 Income tax 318.35 2003-04 Commissioner
of Tax
(Appeals)
x. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has defaulted in repayment of dues to banks as
detailed below:
Name of Bank Principal amount of
default Due on Paid on
Exim Bank ?48.87 lakhs March 31, 2011 Not paid
Bank of India ?158.00 lakhs March 31, 2011 Not paid
The above information relates to defaults existing at the balance sheet
date
xii. Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore the provisions of clause 4(xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other securities. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
xvi. In our opinion, 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
an overall examination of the Balance Sheet of the Company, we report
that funds raised on short-term basis aggregating to ?1807.19 lakhs
have been utilized for the repayment of long term loans which were
taken for creation of long-term investments in fixed assets and capital
work in progress.
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956
xix. The Company has not issued any debentures.
xx. The Company has not raised any money through public issue during
the year.
xxi. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For K. S. Aiyar & Co.
Chartered Accountants
Registration No. 100186W
Raghuvir M. Aiyar
Partner
Mumbai, May 20, 2011. Membership No.: 38128
Mar 31, 2010
We have audited the attached Balance Sheet of Neuland Laboratories
Limited, as at March 31, 2010 and also the Profit and Loss Account for
the year ended on that date annexed thereto and the Cash FLow Statement
for the year ended on that date. 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 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.
1. As required by the Companies (Auditors Report) Order, 2003 as
amended by Companies (Auditors 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.
2. 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 and Profit and Loss Account dealt with by this
report are in agreement with the books of account;
d. In our opinion, the Balance Sheet and Profit and Loss Account dealt
with by this report comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956 to the
extent applicable;
e. On the basis of written representations received from the
directors/companies, as on March 31, 2010, and taken on record by the
Board of Directors we report that none of the directors is disqualified
as on March 31, 2010 from being appointed as a director in terms of
clause (g) of sub-section(l) of Section 274 of the Companies Act, 1956.
f. 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:
i. In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
ii. In the case of the Profit and Loss Account, of the loss for the
year ended on that date; and
iii. In the case of Cash Flow Statement, of the Cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 1 of our Report of even date on the Accounts
for the year ended on March 31, 2010 of Neuland Laboratories Limited)
i. a. The Company has maintained proper records showing fuLL
particulars including quantitative details and situation of fixed
assets.
b. The fixed assets have been physically verified by the management in
accordance with regular programme of verification which, in our
opinion, is reasonable having regard to the size of the company and
nature of its assets. Discrepancies noticed on such verification have
been appropriately dealt with in the books of account.
c. Fixed assets disposed off during the year were not substantial.
According to the information and explanations given to us, we are of
the opinion that the disposal of fixed assets has not affected the
going concern status of the Company.
ii. a. The inventories have been physically verified during the year by
the management. 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. In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on verification between physical stocks and
the book records were not material and have been properly dealt with in
the books of account.
iii. The Company has not granted or taken loans, secured or unsecured
to/from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Accordingly,
sub-clause (b), (c), (d), (f) & (g) are not applicable.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services, however, further strengthening of these controls is
recommended in the environment of ERP. During the course of our audit,
no other major weakness has been noticed in the internal control system
in respect of these areas.
v. As per information and explanation and on basis of records
maintained by the Company we are of the opinion that 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 made in pursuance of contracts or
arrangements entered in the registers maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A, 58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. As informed to us, no order has been passed
by the Company Law Board or National Company Law Tribunal or Reserve
Bank of India or any court or any other tribunal.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(l)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
ix. a. According to the records of the Company, Provident Fund,
Investor Education and Protection Fund, Employees State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Cess and other material statutory dues applicable to it have
generally been regularly deposited during the year with the
appropriate authorities though there has been a small delay in a few
cases. According to the information and explanations given to us, no
undisputed amounts payable in respect of above were in arrears, as at
March 31, 2010 for a period of more than six months from the date on
which they became payable.
b. According to the records of the Company, there are no dues of
Income tax, Sales tax, Wealth tax, Service tax, Custom duty. Excise
duty and Cess which have not been deposited on account of any dispute.
x. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has defaulted in repayment of dues to banks as
detailed below:
Principal Amount default Due on Paid on
Rs.1.88 Lakhs February 29, 2010 April 16, 2010
Rs.150.00 Lakhs March 20, 2010 May 24, 2010
The above information relates to defaults existing at the balance sheet
date.
xii. Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiii. In our opinion the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore the provisions of clause 4(xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
xiv. In our opinion the Company is not dealing in or trading in shares,
securities, debentures and other securities. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
xvi. In our opinion, 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
an overall examination of the Balance Sheet of the Company, we report
that funds raised on short-term basis aggregating to Rs.665.22 lakhs
have been utilised for financing long-term investments including the
repayment of loans taken for fixed assets and capital work in progress.
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956.
xix. The Company has not issued any debentures.
xx. The Company has not raised any money through public issue during
the year.
xxi. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For K. S. Aiyar & Co.
Chartered Accountants
Registration No. 100186W
Raghuvir M. Aiyar
Partner
Mumbai, May 29, 2010. Membership No.: 38128