To the Members of Hester Biosciences Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements ofHester Biosciences Limited (the Company?) which comprise the Balance Sheet asat 31 March 2022 and the statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and Statement of Cash Flows for the year thenended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "standalone financial statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the "Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2022its profit total comprehensive income the changes in equity and its cash flows for theyear then ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor?s Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by Institute of Chartered Accountantsof India (ICAI) together with the ethical requirements that are relevant to our audit ofthe standalone financial statements under the provisions of the Act and the Rules madethereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI?s Code of Ethics. We believe that the audit evidenceobtained by us is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for thefinancial year ended 31 March 2022. These matters were addressed in the context of ouraudit of the standalone financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. We have determined thematters described below to be the key audit matters to be communicated in our report. Foreach matter below our description of how our audit addressed the matter is provided inthat context. We have fulfilled the responsibilities described in the Auditor?sresponsibilities for the audit of the standalone financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.
|Sr. Key Audit Matters No. ||Auditor?s Response |
|1 Valuation of Inventories ||Our audit procedures included following: |
|The Company has inventory of carrying value Rs 707.34 million which is around 32% of it?s total revenue including Raw Materials packing material work in progress finished goods and traded goods. || We understood and tested the design and operating effectiveness of controls as established by the management in determination of valuation of inventory. |
| || Assessing the appropriateness of Company?s accounting policy for valuation of inventories and compliance of the policy with the requirements of the prevailing accounting standards. |
|We have considered the valuation of inventories as a key audit matter given the relative size of the balance in the financial statements and significant judgement involved in the consideration of factors || We considered various factors including the estimation of costs overheads incurred actual selling price prevailing around and subsequent to the year-end. |
|in determination of inventory value. The inventory valuation of the company involves complex procedures estimating the costs incurred overheads applied and provisioning for slow moving expired and obsolete inventory and ascertainment of net realisable value. || Compared the cost of the finished goods with the estimated net realisable value and checked if the finished goods were recorded at net realisable value where the cost was higher than the net realisable value. |
| || We have considered the process of periodical physical verification of inventory carried out by the management. |
| || We have evaluated the design and operating effectiveness of controls as established by the management in determination of slow moving expired and obsolete inventory. |
| || Considered the completeness and accuracy of the disclosures. |
Information other than the Standalone Financial Statements &Auditor?s Report thereon
The Company?s Board of Directors is responsible for the OtherInformation. The Other Information comprises the information included in the Board?sReport including Annexures to Board?s Report and Management Discussion & Analysisbut does not include the standalone financial statements and our auditor?s reportthereon.
Our opinion on the standalone financial statements does not cover theOther Information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit orotherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this Other Information we are required to report that fact. Wehave nothing to report in this regard.
Responsibility of Management for the Standalone Financial Statements
The Company?s Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the Ind AS and accounting principles generally accepted inIndia. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgement and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively or ensuring accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the Company?s ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany?s financial reporting process.
Auditor?s Responsibilities for the Audit of the StandaloneFinancial Statements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting polices used and thereasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management?s use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company?s ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor?sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor?s report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor?s report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 Companies Act 2013 we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
2. As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich 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 beenkept 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 OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid Standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.
e) On the basis of the written representations received from thedirectors as on 31 March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2022 from being appointed as a director in termsof Section 164(2) of the Act.
f) With respect to the adequacy of internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B".
g) With respect to the other matters to be included in theAuditor?s Report in accordance with the requirements of section 197(16) of the Actas amended:
In our opinion and according to the information and explanation givento us by the management the remuneration paid/provided during the Current Year by theCompany to its directors is in accordance with the provisions of Section 197 read withSchedule V of the Act.
h) With respect to the other matters to be included in theAuditor?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 theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on thefinancial position of its standalone financial statements (Refer Note 36 to the standalonefinancial statements).
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
iv.a. The Management has represented that to the best of its knowledgeand belief no funds have been advanced or loaned or invested (either from borrowed fundsor share premium or any other sources or kind of funds) by the Company to or in any otherperson(s) or entity(ies) including foreign entities ("Intermediaries") withthe understanding whether recorded in writing or otherwise that the Intermediary shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries.
b. The Management has represented that to the best of its knowledgeand 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 inwriting or otherwise as on the date of this audit report that the Company shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries
c. Based on the audit procedures performed that have been consideredreasonable and appropriate in the circumstances and according to the information andexplanations provided to us by the Management in this regard nothing has come to ournotice that has caused us to believe that the representations under sub-clause (i) and(ii) of Rule 11(e) as provided under (a.) and (b.) above contain any materialmisstatement.
V. The dividend declared or paid during the year by the Company is incompliance with Section 123 of the Act.
TO THE INDEPENDENT AUDITOR?S REPORT
Referred to in paragraph 1 on Report on Other Legal &Regulatory Requirements? of our report of even date to the standalone financialstatements of the Company for the year ended 31 March 2022:
i. a) A. The Company is maintaining proper records showing fullparticulars including quantitative details and situation of Property Plant &Equipment.
B. The Company has maintained proper records showing full particularsof intangible assets.
b) The Property Plant and Equipment were physically verified by themanagement in a phased manner designed to cover all the items over a period of threeyears which in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.
c) The title deeds of all the immovable properties (other thanimmovable properties where the Company is the lessee and the lease agreements are dulyexecuted in favour of the Company) as disclosed in the financial statements are held inthe name of the Company.
d) The Company has not revalued its property plant and Equipment andits intangible assets during the year.
e) No proceedings have been initiated during the year or are pendingagainst the Company as at 31 March 2022 for holding any benami property under the BenamiTransactions (Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.
ii. a) The inventories were physically verified during the year by theManagement at reasonable intervals. In our opinion and according to the information andexplanations given to us the coverage and procedure of such verification by theManagement is appropriate having regard to the size of the Company and the nature of itsoperations. No material discrepancies were noticed on such verification.
b) The Company has been sanctioned working capital limits in excess of? 5 crores in aggregate at points of time during the year from banks on the basis ofsecurity of current assets. In our opinion and according to the information andexplanations given to us the quarterly returns or statements comprising stock statementsfiled by the Company with such banks are in agreement with the reviewed/audited books ofaccounts of the Company of the respective quarters and no material discrepancies have beenobserved.
iii. a) According to the information explanation provided to us theCompany has made investments provided loans or provided advances in the nature of loansor given guarantee or provided security to any other entity.
The details of such loans or advances and guarantees or security tosubsidiaries Joint Ventures & Others are as follows:
(Amount in Millions)
|Particulars ||Guarantees ||Loans |
|Aggregate amount granted/provided during the year || || |
|Subsidiaries ||- ||- |
|Others ||- ||1.53 |
|Balance Outstanding as at balance sheet date || || |
|Subsidiaries ||1062.97 ||- |
|Others ||- ||1.18 |
c) In case of the loans and advances in the nature of loan schedule ofrepayment of principal and payment of interest have been stipulated and the borrowers havebeen regular in the payment of the principal. However borrower has not been regular inthe payment of interest to the Company. The details of the same are follows:
(Amount in Millions)
|Name of the entity ||Amount ||Due Date ||Extent of delay ||Remarks if any |
|Tamboli Trading LLP ||Interest - 5.23 ||3 March 2022 ||28 Days (Not paid till 31 March 2022) ||N.A. |
d) There are no amounts overdue for more than ninety days in respect ofthe loan granted to Company/ Firm/ LLP/ Other Parties.
e) According to the information explanation provided to us the loansor advance in the nature of loan granted has fallen due during the year. The same has beenrenewed or extended and/or fresh loans are granted to settle the overdue of existing loansgiven to existing parties. The details of the same are as follows:
|Name of the Parties ||Aggregate amount of overdue of existing loans renewed or extended or settled by fresh loans ||Percentage* of the aggregate to the total loans or advances in the nature of loans granted during the year |
|Tamboli Trading LLP ||55 million ||93.60% |
f) According to the information explanation provided to us the Companyhas not any granted loans and / or advances in the nature of loans which are eitherrepayable on demand or without specifying any terms or period of repayment. Hence therequirements under paragraph 3(iii)(f) of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with provisions of Section 185 and 186 of theCompanies Act 2013.
v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits from the public within the meaningof the directives issued by the Reserve Bank of India and the provisions of Sections 73 to76 of the Act and the rules framed there under.
vi. The Central Government has prescribed maintenance of Cost Recordsunder Section 148(1) of the Companies Act 2013 in respect of manufacturing activities ofthe Company. We have broadly reviewed the accounts and records of the Company in thisconnection and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have however not made a detailed examination of thesaid records with a view to determine whether they are accurate or complete.
vii. In respect of statutory dues:
a) The Company has been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income Tax Goods & Service TaxDuty of Customs Cess and any other statutory dues with the appropriate authorities.According to the information and explanations given to us no undisputed amounts payablein respect of the above statutory dues were in arrears as at 31 March 2022 for a periodof more than six months from the date on when they become payable.
b) According to the information and explanations given to us there areno material dues of Income Tax Goods & Service Tax and Customs Duty which have notbeen deposited with the appropriate authorities on account of any dispute except asfollows:
|Name of the Statue ||Nature of Dues ||Amount (f in Million) ||Years to Which matter pertains ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax ||1.10 ||A.Y. 2015-16 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||0.38 ||A.Y. 2018-19 ||DCIT Ahmedabad |
|Income Tax Act 1961 ||Income Tax ||0.08 ||A.Y. 2017-18 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax ||0.10 ||AY. 2018-19 ||Commissioner of Income Tax (Appeals) |
viii. According to the information and explanations given to us there are notransactions relating to previously unrecorded income that were surrendered or disclosedas income in the tax assessments under the Income Tax Act 1961 during the year.
ix. a) In our opinion based on the audit procedures performed for thepurpose of reporting the true and fair view of the financial statements and according tothe information and explanations given by the management the Company has not defaulted inrepayment of loans or borrowings to banks. The Company did not have any loans orborrowings from financial institutions Government and debenture holders.
b) According to the information and explanations given to us and on thebasis of our audit procedures we report that the company has not been declared wilfuldefaulter by any bank or financial institution or government or any government authority.
c) In our opinion and according to the information explanation providedto us money raised by way of term loans during the year have been applied for the purposefor which they were raised.
d) On an overall examination of the financial statements of theCompany funds raised on short-term basis have prima facie not been used during the yearfor long-term purposes by the Company.
e) According to the information explanation given to us and on anoverall examination of the standalone financial statement of the company we report thatthe Company has not taken funds from any entity or person on account of or to meet theobligations of its subsidiaries and joint ventures.
f) According to the information and explanations given to us andprocedures performed by us we report that the Company has not raised loans during theyear on the pledge of securities held of its subsidiaries and joint ventures.
x. a) According to the information and explanations given to us andprocedures performed by us the company has not raised money by way of initial publicoffer or further public offer (including debt instruments) during the year and hencereporting under clause x(a) of the Order is not applicable.
b) According to the information and explanations given to us andprocedures performed by us the Company has not made any preferential allotment or privateplacement of shares or fully or convertible debentures (fully partly or optionallyconvertible) during the year under review and hence reporting under clause x(b) of theOrder is not applicable.
xi. a) During the course of our audit examination of the books andrecords of the Company carried out in accordance with the generally accepted auditingpractices in India and according to the information and explanations given to us we haveneither come across any instance of material fraud by the Company nor on the Company.
b) No report under sub-section (12) of section 143 of the Companies Acthas been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government during the year and upto the date of this report.
c) As represented to us by the Management there were no whistle blowercomplaints received by the Company during the year. Accordingly the provisions stated inparagraph (xi)(c) of the Order is not applicable to company.
xii. The Company is not a Nidhi Company and hence reporting underclause (xii) of the Order is not applicable.
xiii. In our opinion the Company is in compliance with Section 177 and188 of Companies Act 2013 with respect to applicable transactions with the relatedparties and the details of related party transactions have been disclosed in the financialstatements as required by the applicable accounting standards.
xiv. a) In our opinion the Company has an adequate internal auditsystem commensurate with the size and the nature of its business.
b) We have considered the internal audit reports for the year underaudit issued to the Company during the year and till date.
xv. In our opinion the Company has not entered into any non-cashtransactions with directors or persons connected with its directors during the year. Henceprovisions of Section 192 of the Companies Act 2013 are not applicable to the Company.Accordingly the provisions stated in paragraph 3(xv) of the Order are not applicable tothe Company.
xvi. a) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Accordingly the reporting under clause 3(xvi)(a) of the Order is not applicable to the Company.
b) In our opinion the Company has not conducted any Non-BankingFinancial or Housing Finance activities without any valid Certificate of Registration fromReserve Bank of India. Hence the reporting under paragraph clause 3 (xvi)(b) of the Orderare not applicable to the Company.
c) The Company is not a Core investment Company (CIC) as defined in theregulations made by Reserve Bank of India. Hence the reporting under paragraph clause 3(xvi)(c) of the Order are not applicable to the Company.
d) The Company does not have CIC as a part of its group. Hence theprovisions stated in paragraph clause 3 (xvi)(d) of the Order are not applicable to theCompany.
xvii. The Company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year. Hence theprovisions stated in paragraph clause 3 (xvii) of the Order are not applicable to theCompany.
xviii. There has been no resignation of the statutory auditors of theCompany during the year. Accordingly clause 3(xviii) of the Order is not applicable.
xix. On the basis of the financial ratios ageing and expected dates ofrealisation of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.
xx. According to the information and explanations given to us theprovisions of section 135 of the Act are applicable to the Company. The Company has madethe required contributions during the year and there are no unspent amounts which arerequired to be transferred to the special account as on the date of our audit report.Accordingly the provisions of paragraph (xx)(a) to (b) of the Order are not applicable tothe Company.
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OFSUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")
We have audited the internal financial controls with reference tostandalone financial statements of Hester Biosciences Limited ("the Company") asof 31 March 2022 in conjunction with our audit of the standalone financial statements ofthe Company for the year ended on that date.
Management?s Responsibility for Internal Financial Controls
The Company?s management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company?s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.
Our responsibility is to express an opinion on the Company?sinternal financial controls with reference to these standalone financial statements basedon our audit. We conducted our audit in accordance with the Guidance Note and theStandards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls with reference to standalonefinancial statements and both issued by the Institute of Chartered Accountants of India.Those Standards on Auditing 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 with reference to standalone financial statementswere established and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofinternal financial controls with reference to standalone financial statements assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 standalone financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company?s internalfinancial controls with reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to standalonefinancial statements
A company?s internal financial control with reference tostandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of standalonefinancial statements for external purpose in accordance with generally accepted accountingprinciples. A company?s internal financial control with reference to standalonefinancial statements includes those policies and procedures that
1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany.
2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company and
3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company?s assetsthat could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls with reference tostandalone financial statements Because of the inherent limitations of internal financialcontrols with reference to standalone financial statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls with reference to standalone financial statements to futureperiods are subject to the risk that the internal financial control with reference tostandalone financial statements may become inadequate because of changes in conditions orthat the degree of compliance with the policies of procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial control system with reference to standalone financial statements andsuch internal financial controls were operating effectively as on 31 March 2022 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal controls stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reports issued by the Institute ofChartered Accountants of India.
|For Chandulal M. Shah & Co. Chartered Accountants FRN 101698W || || |
|Arpit D. Shah ||Date ||20 May 2022 |
|Partner M. No. 135188 UDIN: 22135188AJHTEU5053 ||Place ||Ahmedabad |