TO THE MEMBERS OF IND-SWIFT LABORATORIES LIMITED
We have audited the accompanying standalone Ind AS financial statements of IND-SWIFT LABORATORIES LIMITED
(“the Company”), which comprises the Balance Sheet as at March 31, 2018, the Statement of Profit
and Loss , Statement of Cash Flows and the Statement for changes in Equity for the year then ended, include
and a summary of significant accounting policies and other explanatory information. (hereinafter referred to
as ‘standalone Ind AS financial statements’).
Management’s Responsibility for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the
Companies Act, 2013 (“the Act”)with respect to the preparation and presentation of these
standalone Ind AS financial statements that gives a true and fair view of the financial position, financial
performance, cash flows and changes in equity of the Company in accordance with accounting principles
generally accepted in India, including the Indian Accounting Standards(Ind AS) specified under section 133 of
the Act, read with relevant rules there. This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for
preventing and detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and
maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to the preparation and presentation of the standalone
Ind AS financial statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our
audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters
which are required to be included in the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of
the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the standalone Ind AS financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal financial
control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a
true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of the
accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of
the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at March 31, 2018, its profits, total comprehensive income
its cash flows and changes in equity for the year ended on that date.
Emphasis of Matters
Without qualifying our opinion, we draw attention to the following matters in the Notes to the standalone
Ind AS financial statements:
a) Refer Note No. XII of Ind AS Financial Statements in regard to following:
- As on 31.03.2018 Seven Banks/ Financial Institutions have transferred their entire Loan Portfolio to
their respective Assets Reconstruction Companies.
- During the year in pursuance of Ind AS -18 “ Revenue Recognition “ issued by ICAI, the
company has not provided impact in the books of accounts on account of waiver of liability and interest on
loan pending completion of one time settlement of loans of State Bank of Patiala ( now merged with State Bank
of India) & State Bank of India.
- During the year in pursuance of Ind AS -18 “ Revenue Recognition” the company has booked
income of Rs.4587.45 Lacs on account of One time Settlement with SIDBI,Mahindra & Mahindra Services Limited
and State Bank of Hyderabad( now merged with State bank of India).
- As on 31.03.2018 Three banks have declared the accounts of the company as NPA.
b) During the last year, a fire incidence had occurred in one of the plant in Derabassi unit of the
company,
However the company has assessed the loss due to fire and has booked insurance claim amounting to
Rs.657.73 Lacs. Further as per the opinion of the management this incident of fire does not have any impact
on the going concern of the company. (Refer Note no. XLI to Financial Statements).
c) During the year the company has received the proceeds of insurance claim recoverable lodged with
“the United India Insurance company” against full and final settlement of the same , thus
resulting the loss on claim amounting to Rs.116.61 Lacs. (Refer Note no. XL to Financial Statements).
d) During the year the company has written off Intangible assets and capital WIP intangible amounting
to Rs. 4337.34 Lacs & Rs. 263.10 Lacs respectively considering no expected future cash flows from these
products looking into market scenario. ( Refer Note no. XXXIX to Financial Statements).
e) The Provisions of the Companies Act, 1956 (Further amended to Companies act 2013), where the
company has got its fixed Deposit Scheme restructured vide order No. C.P 27/01/2013, dated 30.09.2013 of
Company Law Board. The Company has been granted extension of time of repayment of those deposits. (Refer
Note. No. XII of Ind AS Financial Statements).
f) Regarding payment of Managerial Remuneration of Rs.407.68 Lacs for the financial year ended 31
march 2018 which is same since 2012, a sum of Rs. 371.67 Lacs has been disallowed in terms of limits
prescribed under section 196,197 & 198 read with Part II of Schedule V of Companies Act, 2013 during the year
which is in addition to the amount already disallowed pertaining to the earlier years. Further the company has
filed necessary application to Central Government which is pending approval as on date. Pending the ultimate
outcome of the above said matter which is presently unascertainable, no adjustments have been recorded in the
statement (Refer Note No. XIX of Financial Statements).
Without qualifying our opinion, we draw attention to the following matters in the Notes to the Standalone
Ind AS financial Statements:
The Comparative Financial Information of the company for the transition date opening balance sheet as at
01st April 2016 and for the year ended 31.3.2017 included in these standalone Ind AS Financial statements,
are based on the previously issued statutory financial statements prepared in accordance with the companies
(Accounting Standards) Rules 2006 audited by the predecessor auditors whose report expressed an unqualified
opinion on those standalone financial statements ,as adjusted for the differences in the accounting
principles adopted by the company on the transition to the Ind AS, which have been audited by us.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued
by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the
“Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the 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 and proper returns adequate for the purpose of our audit ;
(c) The Balance Sheet, Statement of Profit and Loss including other comprehensive income, Cash Flow
Statement and the statement of changes in equity dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting
Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014;
(e) On the basis of written representations received from the directors as on March 31, 2018 taken on
record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being
appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure
B” ;and
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with
Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information
and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its
financial statements - Refer Note XXIII to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company;
(i) (a) The Company has maintained proper records showing full particulars, including quantitative
details and situation of fixed assets.
(b) According to information and explanations given by the management, the company has a system of
physical verification of all its fixed assets over a period of four years. In accordance with this programme,
certain fixed assets were verified during the year and no material discrepancies were noticed on such
verification. In our opinion, this periodicity of physical verification is reasonable having regard to the
size of the Company and the nature of its assets.
(c) According to information and explanations given by the management, the title deeds of immovable
properties included in fixed assets are held in the name of the Company. Except in case of the following
immovable properties where the title deeds are not in the name of the company:
In case of land:
|
No. of cases
|
Leasehold/
Freehold
|
Gross Block as at 31st March, 2018
|
Net Block as at 31st March, 2018
|
Remarks
|
|
2
|
Freehold
|
Rs. 13.79 Crores
|
Rs. 13.79 Crores
|
The cost of land amounting to Rs. 13.79 Crores includes the following :
- land measuring 29 kanals & 3 Marlas amounting to Rs. 9.75 crores was purchased on Power of Attorney
from Fortune (India) constructions Ltd.
- land measuring 20 kanals & 17 Marlas amounting to Rs. 4.03 crores was purchased on Power of Attorney
from Essix Biosciences Limited
|
|
1
|
Leasehold
|
Rs.171.89 Lacs
|
Rs.149.70 Lacs
|
Lease hold land Jammu Plant, Samba
|
(ii) As explained to us, the inventories, excluding stocks with some of the third parties, were
physically verified during the year by the management at reasonable intervals and no material discrepancies
were noticed on physical verification. In respect of inventories lying with third parties, these have
substantially been confirmed by them.
(iii) According to information and explanations given to us the Company has not granted loans secured
or unsecured during the year to companies , firms, Limited Liability Partnerships or other parties covered in
the register maintained under section 189 of the Companies Act, 2013, and hence reporting under Accordingly,
paragraph 3 (iii) of the Order is not applicable.
(iv) In our opinion and according to the information and explanations given to us, the Company has
complied with the provisions of section 185 and 186 of the Act, in respect of loans, investments, guarantees
and security made.
(v) In our opinion and according to the information and explanations given to us, the Company has
complied with the provisions of sections 73 to 76 of the Companies Act, 2013 and the rules framed thereunder
and the directives issued by The Reserve Bank of India with regards to the deposits accepted from the public
.
(vi) The maintenance of cost records has been specified by the Central Government Under sub section
(1) of section 148 of the act. We have broadly reviewed the cost records maintained by the Company pursuant
to the companies( Cost records and audit) Rules 2014, as amended , prescribed by the Central Government under
sub-section (1) of section 148 of the act and are of the opinion that, prima facie the prescribed cost records
have been made and maintained. We have however not made a detailed examination of the cost records with a view
to determine whether they are accurate or not.
(vii) According to information and explanations given to us in respect of Statutory Dues;
(a) The Company is regular in depositing with appropriate authorities undisputed statutory dues
including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, customs duty,
excise duty, value added tax, cess and other material statutory dues applicable to it though there have been
slight delays in few cases.
(b) There were no undisputed amounts payable in respect of provident fund, employees’ state
insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, cess and
other material statutory dues were outstanding, at the year end, for a period of more than six months from
the date they became payable.
(c) the dues outstanding of income-tax, sales-tax, service tax, duty of custom, duty of excise ,value
added tax and cess on account of any dispute, are as follows:
|
Name of the Statute
|
Nature of Dues
|
Amount (In Rs. Lacs )
|
Period to which the amount relates
|
Forum where dispute is pending
|
|
Income Tax Act,1961
|
Demand Amount as per Order
|
0.22
|
AY 2006-07
|
No appeals
|
|
Income Tax Act,1961
|
Demand Amount as per Order
|
31.08
|
AY 2007-08
|
CIT(A)
|
|
Income Tax Act,1961
|
Demand Amount as per Order
|
11.09
|
AY 2009-10
|
ITAT
|
|
Income Tax Act,1961
|
Demand Amount as per Order
|
24.65
|
AY 2010-11
|
ITAT
|
|
Income Tax Act,1961
|
Demand Amount as per Order
|
37.00
|
AY 2011-12
|
ITAT
|
|
Income Tax Act,1961
|
Demand Amount as per Order
|
145.04
|
AY 2012-13
|
ITAT
|
|
The Punjab Vat Act,2005
|
Sale tax, Penalty & Interest
|
31.94
|
April 2006 to March 2007
|
Supreme Courtl
|
|
The Punjab Vat Act,2005
|
Sale tax, Penalty & Interest
|
46.40
|
April 2007 to March 2008
|
DETC ( Appeals)
|
|
The Punjab Vat Act,2005
|
Sale tax, Penalty & Interest
|
48.46
|
April 2012 to March 2013
|
DETC ( Appeals)
|
|
The Punjab Vat Act,2005
|
Sale tax, Penalty & Interest
|
238.35
|
2010-11
|
DETC ( Appeals)
|
|
Jammu Vat Act
|
Sale tax, Penalty & Interest
|
1.35
|
April 2012 to March 2013
|
Commissioner
Appeals
|
|
Jammu Vat Act
|
Sale tax, Penalty & Interest
|
32.20
|
April 2013 to March 2014
|
ETC (Appeal)
|
|
The Custom Act, 1962
|
Differential CD
|
23.06
|
2012-13
|
CESTAT, Ahmedabad
|
|
The Central Excise Act, 1944
|
Penalty under Excise Rules
|
0.84
|
2009-10
|
CESTAT , Chandigarh
|
|
The Central Excise Act, 1944
|
Service Tax & Penalty Thereon
|
4.11
|
2006-07, 2007-08, 200809, 2009-10, 2010-11
|
CESTAT , Chandigarh
|
|
The Central Excise Act, 1944
|
Service Tax & Penalty Thereon
|
41.14
|
2009-10, 2010-11, 2011-12
|
Commissioner (Appeal), Chandigarh
|
|
The Central Excise Act, 1944
|
Service Tax & Penalty Thereon
|
14.66
|
2011-12
|
CESTAT , Chandigarh
|
|
The Central Excise Act, 1944
|
Service Tax & Penalty Thereon
|
82.19
|
2012-13
|
CESTAT , Chandigarh
|
|
The Central Excise Act, 1944
|
Service Tax & Penalty Thereon
|
29.03
|
2013-14
|
CESTAT , Chandigarh
|
|
The Central Excise Act, 1944
|
Service Tax & Penalty Thereon
|
69.89
|
2014-15
|
CESTAT , Chandigarh
|
|
The Central Excise Act, 1944
|
Penalty under Excise Rules
|
6.60
|
2005-06, 2006-07, 200708, 2008-09, 2009-10
|
CESTAT , Chandigarh
|
(viii) In our opinion and according to the information and explanations given to us, the Company has
defaulted in repayment of dues to the financial institution, bank or debenture holders. The details of such
default are as follows:
|
Particulars
|
Amount of default as at 31st March, 2018 (Rs. In Lacs)
|
Period of default
|
Remarks, if any
|
|
i) Name of the lenders in case of:
|
|
|
|
|
Financial Institution:
|
|
|
|
|
1.DEG
|
6651.28
|
More than 3 years
|
Status not known to company
|
|
Banks:
|
|
|
|
|
1.Canara Bank
|
541.44
|
More than 4 years
|
Declared NPA by the Bank
|
|
2.Bank Of Baroda
|
10099.47
|
More than 3 years
|
Status not known to company
|
(ix) The Company did not raise any money by way of initial public offer or further public offer
(including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is
not applicable.
(x) According to the information and explanations given by the management, we report that no fraud by
the Company or no fraud on the Company by the officers and employees of the Company has been noticed or
reported during the year.
(xi) According to the information and explanations give to us and based on our examination of the
records of the Company, the Company has paid/ provided the following amounts for managerial remuneration
which will not be allowed as mandated under section 197 read with Schedule V to the Act and the approval
granted by the Central Government on application by the company.
|
Payment made to: Director/ WTD/ MD/ Manager
|
Amount approved by Central Government
|
Amount due for recovery for the year ending 31 March, 2018
|
Steps taken to secure the recovery of the amount
|
Remarks, if any
|
|
407.68 Lacs
|
36.00 Lacs
|
371.68 Lacs
|
The company has applied to the Central Government for the requisite approval.
|
Approval is still pending as on 31.03.2018.Further the amount recoverable is in addition to the amount
already disallowed pertaining to the earlier years.
|
(xii) In our opinion, the Company is not a Nidhi company. Therefore, the provisions of clause 3(xii)
of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given to us and based on our examination of the
records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of
the Act where applicable and details of such transactions have been disclosed in the financial statements as
required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the
balance sheet, the Company has complied with the provisions of the Act with respect to shares issued under
preferential allotment during the year.
(xv) According to the information and explanations given to us and based on our examination of the
records of the Company, the Company has not entered into non-cash transactions with directors or persons
connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act,
1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company
To the Members of Ind-Swift Laboratories Limited
We have audited the internal financial controls over financial reporting of Ind-Swift Laboratories
Limited(“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone Ind
AS financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s Management is responsible for establishing and maintaining internal financial
controls based on the internal control over financial reporting criteria established by the Company
considering the essential components of internal control stated in the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These
responsibilities include the design, implementation and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly and efficient conduct of its business, including
adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over
financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit
of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards
on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an
audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both
issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial reporting was established and maintained and if
such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal
financial controls system over financial reporting and their operating effectiveness. Our audit of internal
financial controls over financial reporting included obtaining an understanding of internal financial
controls over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion on the internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. A
company’s internal financial control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including
the possibility of collusion or improper management override of controls, material misstatements due to error
or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls
over financial reporting to future periods are subject to the risk that the internal financial control over
financial reporting may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system
over financial reporting and such internal financial controls over financial reporting were operating
effectively as at March 31, 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 Avishkar Singhal & Associates
Chartered Accountants
(Regd No.:017362N)
Avishkar Singhal
Partner
Membership No.: 098689
Place of Signature: Chandigarh
Date: 30.05.2018 |
-1.35 (-4.99%)