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Granules India

BSE: 532482|NSE: GRANULES|ISIN: INE101D01020|SECTOR: Pharmaceuticals
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Mar 15
Auditor's Report (Granules India) Year End : Mar '16
1.  We have audited the accompanying standalone financial statements of
 Granules India Limited (the Company), which comprises the Balance
 Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash
 Flow Statement for the year then ended, and a summary of significant
 accounting policies and other explanatory information.
 
 Management''s Responsibility for the Standalone Financial Statements
 
 2.  The Company''s Board of Directors are responsible for the matters
 stated in Section 134(5) of the Companies Act, 2013 (the Act) with
 respect to the preparation of these standalone financial statements
 that give a true and fair view of the financial position, financial
 performance and cash flows of the Company in accordance with accounting
 principles generally accepted in India, including the Accounting
 Standards specified under Section 133 of the Act, read with Rule 7 of
 the Companies (Accounts) Rules, 2014. This responsibility also includes
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding of the assets of the Company and
 for preventing and detecting frauds and other irregularities; selection
 and application of appropriate accounting policies; making judgments
 and estimates that are reasonable and prudent; and the design,
 implementation and maintenance of adequate internal financial 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.
 
 Auditor''s Responsibility
 
 3.  Our responsibility is to express an opinion on these standalone
 financial statements based on our audit. We have taken into account the
 provisions of the Act, the accounting and auditing standards and
 matters which are required to be included in the audit report under the
 provisions of the Act and the Rules made thereunder. We conducted our
 audit in accordance with the Standards on Auditing, issued by the
 Institute of Chartered Accountants of India, as specified under Section
 143(10) of the Act. Those Standards require that we comply with ethical
 requirements and plan and perform the audit to obtain reasonable
 assurance about whether the standalone financial statements are free
 from material misstatement.
 
 4.  An audit involves performing procedures to obtain audit evidence
 about the amounts and disclosures in the financial statements. The
 procedures selected depend on the auditor''s judgment, including the
 assessment of the risks of material misstatement of the financial
 statements, whether due to fraud or error. In making those risk
 assessments, the auditor considers internal financial controls relevant
 to the Company''s preparation of the financial statements that give a
 true and fair view in order to design audit procedures that are
 appropriate in the circumstances. An audit also includes evaluating the
 appropriateness of accounting policies used and the reasonableness of
 the accounting estimates made by the Company''s Directors, as well as
 evaluating the overall presentation of the financial statements.
 
 5.  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
 
 6.  In our opinion and to the best of our information and according to
 the explanations given to us, the standalone financial statements give
 the information required by the Act in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India, of the state of affairs of the Company as
 at March 31, 2016, its Profit and its cash flows for the year ended on
 that date.
 
 Report on Other Legal and Regulatory Requirements
 
 7.  As required by the Companies (Auditor''s report) Order, 2016 (the
 Order) issued by the Central Government of India in terms of
 sub-section (11) of section 143 of the Act, we give in the ''Annexure
 A'', a statement on the matters specified in paragraphs 3 and 4 of the
 Order.
 
 8.  As required by section 143 (3) of the Act, we report that:
 
 (a) We have sought and obtained all the information and explanations
 which to the best of our knowledge and belief were necessary for the
 purpose of our audit;
 
 (b) In our opinion proper books of account as required by law have been
 kept by the Company so far as it appears from our examination of those
 books;
 
 (c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account;
 
 (d) In our opinion, the aforesaid standalone financial statements
 comply with the Accounting Standards specified under section 133 of the
 Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
 
 (e) On the basis of written representations received from the directors
 as on March 31, 2016, and taken on record by the Board of Directors,
 none of the directors are disqualified as on March 31, 2016, from being
 appointed as a director in terms of section 164 (2) of the Act.
 
 (f) With respect to the adequacy of the internal financial controls
 over financial reporting of the Company and the operating effectiveness
 of such controls, refer to our separate Report in ''Annexure B''.
 
 (g) With respect to the other matters to be included in the Auditor''s
 Report in accordance with Rule 11 of the Companies (Audit and Auditors)
 Rules, 2014, in our opinion and to the best of our information and
 according to the explanations given to us:
 
 i) The Company disclosed the impact of pending litigations on its
 financial position in its standalone financial statements - Refer Note
 2.40 to the financial statements.
 
 ii) The Company did not have any long-term contracts including
 derivative contracts for which there were any material foreseeable
 losses.
 
 iii) There were no amounts which were required to be transferred to the
 Investor Education and Protection Fund by the Company.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) Fixed assets have been physically verified by the management during
 the period and no material discrepancies were identified on such
 verification.
 
 (c) Based on our audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and
 according to the information and explanations given by the management,
 title deeds of all the immovable properties are held in the name of the
 Company.
 
 (ii) (a) The Inventories of raw materials, packing materials,
 consumables, stores, work-in-progress and finished goods have been
 physically verified during the year at regular intervals by the
 management.
 
 (b) The procedures of physical verification of stocks followed by the
 management are reasonable and adequate in relation to the size of the
 company and the nature of its business. In respect of finished goods
 lying with the consignees, the certificate given by the management is
 relied upon.
 
 (c) The company is maintaining the proper records for recording the
 inventory and the discrepancies noticed on verification of stocks as
 compared to books were not material and have been properly dealt with
 in the books of accounts.
 
 (iii) The Company has granted loans to parties covered in the register
 maintained under section 189 of the Act and complied with the
 provisions of the said Act..
 
 (iv) In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of section
 185 and 186 of Act, in respect of loans, investments, guarantees, and
 security to the extent applicable to it.
 
 (v) According to the information and explanations given to us, the
 company has not accepted any deposits from the public within the
 meaning of section 73 to 76 of the Act and the rules framed thereunder.
 Therefore, the provisions of clause 3(v) of the order are not
 applicable to the Company.
 
 (vi) The Central Government has prescribed maintenance of cost records
 under the provisions of Section 148(1) of the Companies Act, 2013 in
 respect of manufacturing activities of the company. The company has
 maintained accounts and records of such activities.
 
 (vii) (a) The company is regular in depositing with appropriate
 authorities undisputed statutory dues including Provident Fund,
 Employees State Insurance, Income tax, Wealth Tax, Sales tax, Service
 tax, Customs Duty, Excise Duty, Cess and other applicable statutory
 dues with the appropriate authorities. According to the information and
 explanations given to us no undisputed amounts payable in respect of
 outstanding statutory dues as at the last day of the year ending
 31.03.2016 for period exceeding 6 months from the date they became
 payable.
 
 (b) Reference is invited to Note No.2.40 regarding pending litigations
 with various authorities in respect of Income- tax, Customs duty, Sales
 tax, Service tax, Excise duty, Cess.
 
 (viii) According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to any financial institution, bank, Government or
 debenture holders as at the Balance Sheet date.
 
 (ix) According to the information and explanations given to us and
 based on our verification, the Company has not raised moneys by way of
 public issue and moneys raised by way of term loans were applied for
 the purpose for which the loans were obtained.
 
 (x) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the year.
 
 (xi) In our opinion, the managerial remuneration has been paid or
 provided in accordance with the requisite approvals mandated by the
 provisions of section 197 read with Schedule V of the Companies Act,
 2013.
 
 (xii) In our opinion, the Company is not a chit fund or a nidhi /
 mutual benefit fund / society. Therefore, the provisions of clause
 3(xii) of the Order are not applicable to the Company.
 
 (xiii) In our opinion, all the transactions with the related parties
 are in compliance with section 177 and 188 of the Act, where applicable
 and the details have been disclosed in the notes to the financial
 statements as required by applicable accounting standards.
 
 (xiv) During the year, the Company has made preferential allotment of
 warrants to promotors and promotor group entities numbering 40,95,230
 warrants Rs. 84.91 each and 1,86,56,000 warrants Rs. 95.30 each totalling
 to Rs.21256.43 lakhs.  Out of the said warrants, a total of 40,95,230 at
 Rs.84.91 each and 72,55,000 at Rs.95.30 each were converted into equity
 shares of Rs.1/- each. The company has complied with the requirement of
 section 42 of the Companies Act 2013 for the allotment of
 warrants/shares and has applied the funds received there from for the
 purpose for which the funds were raised.
 
 (xv) According to the information and explanations given to us and on
 an overall examination of the financial statements of the Company, we
 report that the Company has not entered into any non-cash transaction
 with directors or persons connected with him.
 
 (xvi) In our opinion, the Company is not required to be registered
 under section 45-IA of the Reserve Bank of India Act, 1934.
 
 For Kumar & Giri
 
 Chartered Accountants
 
 FRN 001584S
 
 
 
 Sd/-
 
 J.Bhadra Kumar
 
 Partner
 
 Membership No.025480
 
 
 
 Place: Hyderabad
 
 Date: April 28, 2016
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