To the Members of Emmessar Biotech & Nutrition Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Emmessar Biotech & NutritionLimited ("the Company) which comprise the Balance Sheet as at 31st March 2020and the statement of Profit and Loss statement of changes in equity and statement of cashflows for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information (hereinafter referredto as "the financial statement).
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 theCompanies Act 2013 (the "Act) in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies ( Indian Accounting Standards) Rules 2015 as amended("Ind As) and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and its profit total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Companies Act 2013and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be key audit matters to be communicated inour report.
|Key Audit Matter ||Response to Key Audit Matter |
|Recognition of deferred tax Assets ||Our audit procedures included among others examining the future projections which are based on the judgement of the management taking into account the following: |
|The company has recognised deferred tax asset mainly on account of unabsorbed depreciation || |
|under and tax credit available for set off (Minimum Alternate Tax) under the Income Tax Act. Under Ind AS 22 - IncomeTaxes deferred tax assets shall be recognised to the extent that it is probable that future taxable profit will be available against which the unused tax allowance and tax credit can be utilised. This requires significant management judgement and estimation. As a result the recognition of the deferred tax asset is a significant item of our audit. ||a. Unabsorbed depreciation which forms major portion of the deferred tax asset can be carried forward and set off against taxable profits for unlimited number of years under the Income Tax Act and |
| ||b. Profitability projections based on current orders show sufficient profit for set off in future. |
| ||Accordingly we have found the future projections made by management for the purpose of recognition of deferred tax asset in the financial statements to be appropriate. |
|Company has not appointed the qualified company secretary ||The management has informed that the company has taken and is conti nuing to take steps for appointment of company secretary. The company has given adverfise- ment for the post of Company secretary but unable to get the appropriate candidate for the said post and we found that the Company has provided for penalty levied by BSE fill March 2020 in the books. |
|The company has not appointed qualified company secretary as compliance officer. || |
|As per SEBI circular no. SEBI/HO/CFD/CMD/ CIR/P/2018/77 dated May 3 2018 the Company is liable to pay the fine of Rs. 1000 per day for Non - compliance with requirement to appoint a quali fi ed company secretary as the compliance officer for the period from 1st October 2018 to 31st March 2020. || |
|Fire Incident ||As informed by the management |
|During the year fire occurred at Vendor place where the goods sent for job work on 11.02.2020 resulting in loss on account of Finished goods and packing material. ||The company has submitted insurance claim for the loss of finished goods and packing material and loss on account of fire accounted in the books. |
| ||Accordingly on the basis of information and management note on fire accident we found that Company has accounted for loss due to fire in the financial statement. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis; Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholders Information but does notinclude the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
If based on the work we have performed on the other information obtained prior to thedate of this auditor's report we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors are responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act) with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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.
In preparing the financial statements the Board of Directors are responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A a statement on the mattersspecified 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 bestof our knowledge and belief were necessary for the purposes of our audit of the financialstatements.
(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 (including Other ComprehensiveIncome) the Statement of changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account maintained for the purpose orpreparation of the financial statements.
(d) In our opinion the aforesaid standalone financial statements comply with the IndAS 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 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 refer to ourseparate Report in "Annexure B.
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its managing director during the yearis in accordance with the provisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor's Report 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 does not have any pending litigations which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amount which were required to be transferred to the InvestorEducation and protection fund by the company.
| ||For V. Sankar Aiyar & Co. |
| ||Chartered Accountants |
| ||(FRN 109208W) |
| ||V. Mohan |
|Place: Mumbai ||Partner |
|Date: June 30 2020 ||M.No.17748 |
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EMMESSAR BIOTECH &NUTRITION LIMITED ON
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2020
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and in our opinion we report that:
I. a. The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
b. The Company has a policy of physically verifying its fixed assets in a phased mannerto cover all the assets of the Company in a block of three years which in our opinion isreasonable having regard to the size of the Company and the nature of its business.
c. The title deeds of the immovable properties are held in the name of the company.
II. a. The inventory has been physically verified by the Management at reasonableintervals during the year.
b. The procedures of physical verification of inventories followed by the management isreasonable and adequate in relation to the size of the company and nature of its business.No material discrepancies were noticed on such physical verification.
c. The company has maintained proper records of inventories. As explained to us therewere no material discrepancies noticed on physical verification of inventory as comparedto the book records.
III. The Company has not granted any loans secured or unsecured during the period tothe parties covered in the Register maintained under section 189 of the Companies Act2013.
IV. The Company has not granted any loans investments or any guarantees or securitiesaccordingly provision of Section 185 and 186 does not apply.
V. The Company has not accepted any deposits from public.
Accordingly this clause is not applicable.
VI. The Central Government has not prescribed maintenance of cost records under section148(1) of the Act.
VII. a. The company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income-tax sales-tax wealth taxgoods and service tax duty of customs duty of excise value added tax cess and anyother statutory dues with the appropriate authorities during the year. No undisputedamount in respect of the aforesaid statutory dues were in arrears as at 31st March 2020for a period of more than six months from the date they become payable.
b. There are no dues of Income Tax Sales tax Goods and Service Tax Customs dutyWealth Tax Excise Duty and Cess which have not been deposited on account of a dispute.
VIII. The Company has not defaulted in repayment of dues to any financial institutionsor banks.
IX. The Company did not raise any money by way of initial public offer (including debtsinstruments) or further public offer and terms loans during the year. Accordingly thisclause is not applicable.
X. No material fraud by the company or on the company by its officers or employees hasbeen noticed or reported during the course of our audit.
XI. The company has paid / provided for managerial remuneration in accordance with therequisite approvals as mandated by the provisions of section 197 read with Schedule V ofthe Act.
XII. The Company is not a Nidhi Company. Accordingly this clause is not applicable.
XIII. All Transaction with related parties are in compliance with Section 177 andsection 188 of the Companies Act2013 where applicable and details of such transactionshave been disclosed in the financial statements as required by the applicable Accountingstandards.
XIV. The Company has not made any preferential allotment or private placement of sharesor fully or party convertible debentures during the year. Accordingly this clause is notapplicable.
XV. The Company has not entered into any non - cash transactions with directors orpersons connected with them.
XVI. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
| ||For V. Sankar Aiyar & Co |
| || |
| ||Firm Reg. No: 109208W |
| ||V Mohan |
|Place: Mumbai || |
|Date: June 30 2020 ||Membership No. 17748 |
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF EMMESSAR BIOTECH &NUTRITIONLIMITED ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2020
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of EmmessarBiotech & Nutrition Limited ("the Company) as of March 31 2020 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material 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 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. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 2020 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 V. Sankar Aiyar & Co |
| || |
| ||Firm Reg. No: 109208W |
| ||V Mohan |
|Place: Mumbai || |
|Date: June 30 2020 ||Membership No. 17748 |