TO THE MEMBERS OF VISTA PHARMACEUTICALS LIMITED (AND REDUCED)
Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of VistaPharmaceuticals Limited (And Reduced) ("the Company") which comprisethe Balance Sheet as at 31st March 2019 the Statement of Profit and Loss the Cash FlowStatement for the year then ended including a summary of the significant accountingpolicies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these Financial Statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error.
In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstancesbut not for the purpose of expressing an opinion on whether the Company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India
a) in case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2019;
b) in the case of Statement of Profit and Loss of the profit for the year ended onthat date; and
c) in the case of Cash Flow Statement of the cash flows for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act (hereinafterreferred to the "Order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the Annexure - 1 a statement on the matters specifiedin 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 bestof 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 theCompany so far as it appears from our examination of those books
(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account and with the accountsof the branches
(d) In our opinion the Balance Sheet Statement of Profit and loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
(f) With respect to the adequacy of the Internal financial controls over financialreporting of the company and the operating effectiveness of such controls As required bySection 143 (3) (i) of the Companies Act 2013 refer to our separate Report in Annexure -2.
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialstatements as notes to accounts in note no. IV (c) to notes to accounts.
ii. In our opinion and as per the information and explanations provided to us TheCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Mahesh Virender & Sriram
Annexure I to the Independent Audit report
(Referred to in Paragraph 1 under section (Report on the Other Legal andRegulatory Requirements of our report even date)
Report on companies (Auditor's Report) Order 2016 ('the Order') issued by theCentral Government in terms of section 143 (11) of the companies Act2013
(i) (a) According to the information and explanations given to us the Company ismaintaining proper records showing full particulars including quantitative details andsituation of fixed assets.
(b) According to the information and explanations given to us majority of the fixedassets have been physically verified by the management during the year. In our opinionthe frequency of verification is reasonable having regard to the size of the company andthe nature of its assets. No material discrepancies were noticed on such verification;
(c) All the title deeds of the immovable properties are held in the name of theCompany.
(ii) According to the information and explanations given to us the inventories havebeen physically verified at reasonable intervals by the management and no materialdiscrepancies were noticed on such verification.
(iii) According to the information andexplanations given to us the Company has notgranted any loans secured or unsecured to the companies firms or other parties coveredin the register maintained under section 189 of companies' act 2013. Accordingly thesubclauses (a) and (b) are not applicable to the company
(iv) According to the information andexplanations given to us the Company has notgranted any loans nor has it made any investments or given any guarantee or securitieswhich are covered under the provisions of section 185 and 186 of Companies' act 2013.
(v) According to the information and explanations given to us the Company has notaccepted any deposits in terms of the directives issued by Reserve Bank of India and theprovisions of Sections 73 to 76 or any other relevant provisions of the Companies Act2013 and the rules framed there under.
(vi) The Central Government has not prescribed the maintenance of cost records undersubsection (1) of section 148 of the Companies Act 2013 for any of the services renderedby the Company.
(vii) (a) In our opinion and according to the information and explanations given to usand on the basis of our examination of the records the company is regular in depositingundisputed statutory dues like Provident Fund Tax Deducted at Source and Employees StateInsurance & Professional Tax with the appropriate authorities. In our opinion andaccording to the information and explanations given to us no statutory dues wereoutstanding as at the last day of the financial year under audit for a period of more thansix months from the date they became payable.
(b) According to the information and explanations given to us there are no disputeddues relating to income tax or service tax or duty of customs or cess which have not beendeposited with the appropriate authorities on account of any dispute.
(viii) According to the information and explanations given to us the company has notdefaulted in repayment of dues to a financial institution or bank during the year. Thereare no debenture holders.
(ix) According to the information and explanations given to us during the year underreview the Company has not raised any money by way of initial public offer furtherpublic offer.
(x) According to the information and explanations given to us and based upon the auditprocedures performed by us no fraud by the Company or on the Company committed by itsofficers or employees has been noticed or reported during the year.
(xi) According to the information and explanations given to us none of the promoterdirectors of the company including managing director have received any remuneration duringthe financial year except by professional whole time director. The managerial remunerationpaid to other managerial personal including professional whole time director during theyear is within the limits prescribed under the provisions of Section 197 read withSchedule V Part II of the Companies Act 2013 based on the Net Effective capital. SinceMr.N.V. Chalapathi Rao is joined in the company as Whole Time Director on 06.02.2015 Asper the provision of Schedule V Part II of the Companies Act 2013 effective capital shallbe taken on the last day of financial year immediately preceding the financial year inwhich the appointment of Managerial Person is made i.e. 31.03.2014. As per the Annualreport of for the year 2013-14 Effective capital as on 31.03.2014 is Rs.90946919/-.Accordingly an amount of Rs. 42.00 Lakhs can be paid as Managerial remuneration whereasduring the year under review total managerial remuneration paid was Rs.9.00 Lakhs Only.
(xii) As the Company is not a Nidhi Company in terms of the provisions of the CompaniesAct 2013 read with Nidhi Rules 2014 the matters to be reported under clause (xii) arenot applicable.
(xiii) According to the information and explanations given to us in respect of thetransactions with the related parties the Company has complied with the provisions ofSection 177 and 188 of the Companies Act. 2013 wherever applicable. In our opinion thedetails as required by the applicable accounting standards have been disclosed in thefinancial statements for the year under review.
(xiv) According to the information and explanations given to us the Company has madepreferential allotment of shares during the year under review. Company has issued 1218145 Equity Shares at Rs.50.00 per share which inclusive of face value Rs.2 per shareand Security Premium of Rs.48.00 per share. Company has followed the procedure prescribedUnder section 42 of the Act and necessary documents are filed with ROC & SEBI for thepreferential allotment and hence company is in compliance with Section 62(1) (c)preferential allotment of shares Rule 13 of Companies (Share Capital and Debentures)Rules 2014 and Rule 14 of Companies (Prospectus and Allotment of Securities) Rules 2014and purpose of application of the funds so raised.
(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him andhence reporting requirement on compliance with the provisions of Section 192 of theCompanies Act 2013 is not applicable.
(xvi) According to the information andexplanations given to us and in our opinion theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
For Mahesh Virender & Sriram.
FRN No: 001939S
ANNEXURE - 2 to the independent auditor's report of even date on the FinancialStatements of Vista Pharmaceuticals Ltd.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act"):
We have audited the internal financial controls over financial reporting of VISTAPHARMACEUTICALS LIMITED (AND REDUCED) ("the Company") as of March 31 2019 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (the "Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit.
We conducted our audit in accordance with the Guidance Note and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Mahesh Virender& Sriram.
FRN No: 001939S