To The Members of KHANDELWAL EXTRACTIONS LIMITED
Report on the Audit of Financial Statements
We have audited the financial statements of KHANDELWAL EXTRACTIONS LIMITED (theCompany") which comprise the balance sheet as at 31st March 2020 and the statementof Profit and Loss including Other Comprehensive Income statement of changes in equityand statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
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 IndianAccounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended ( "Ind AS") and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2020 and the loss Total Comprehensive Income changes in equity and itscash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of thefinancial statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Note No25 of the financial statements which describes thefollowing matters:Manufacturing operations at Akrampur Magarwara factory had been closedon 1 November 2018. There is significant doubt upon the entity's ability to continue as agoing concem as the Company has planned to sell or lease or other wise dispose off thewhole or substantially the whole of the undertaking situated at Akrampur-Magarwara Distt.Unnao. However the management is of the opinion that realizable value of all assets isnot lower than the amount appearing in the books and therefore there is no need to providefor any impairment loss.
Our opinion is not modified in respect of this matter.
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 ManagementDiscussion and AnalysisBoard's Report including Annexures to Board's Report andShareholder's Information but does not in elude the financial statements and ourauditor's report there on.
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 during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that facts we havenothing to report in this regard..
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 Total Comprehensive Income changes in equity and cash flows of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The 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 skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions 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 identity during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships 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 onOther Legal and Regulatory Requirements As required by the Companies (Auditor'sReport)Order 2016 ("the Order") issued by the Central Government of India interms of sub-section (11) of section 143 of the Companies Act 2013 we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
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 faras it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome statement of changes in Equity and the Cash Row Statement dealt with by thisReport are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the Ind AccountingStandards 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 Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
I. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements -Refer Note No 29.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there 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.
ANNEXURE- A TO THE INDEPENDENT AUDITOR'S REPORT Re : KHANDELWAL EXTRACTIONS LIMITED
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31St March 2020 wereport that:
i. In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) All the assets have not been physically verified by the management during the yearbut there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examinedby us and based on the examination of registered sale deed /transfer deed/ conveyance deedand other relevant records evidencing title provided to us we report that the titledeeds comprising all the immovable properties of land and building are held in the nameof the company as at the balance sheet date except the following:
|Particular of land ||Gross Block as at 31-03- 2020 Rs. ||Net Block as at 31-03- 2020 Rs. ||Remarks |
|Freehold land (two cases)) ||155124 ||155124 ||The title deeds of land is held in the erstwhile name of the company - KHANDELWAL EXTRACTIONS PRIVATE LIMITED |
ii. In respect of its Inventories:
As explained to us inventories have been physically verified during the year by themanagement at reasonable intervals and discrepancies noticed on verification betweenphysical stocks and the book records were not material.
iii. In respect of loans secured or unsecured granted by the Company to Companiesfirms or other parties covered in the register maintained under section 189 of theCompanies Act 2013 according to the information and explanations given to us:
The Company has not granted any loan to Companies firms or other parties covered inthe register maintained under section 189 of the Companies Act 2013 There for theprovisions of paragraph 3 (iii) the Companies (Auditor's Report) order 2016 are notapplicable to the company.
iv. In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
v. In our opinion and according to information and explanations given to us thecompany has not accepted any deposits within the provisions of sections 73 to 76 or anyother relevant provisions of the Companies Act 2013 . Therefore the provisions ofparagraph (v) of the Companies (Auditor's Report) order 2016 are not applicable to thecompany.
vi. In our opinion and according to the information and explanations given to us theCentral Government has not prescribed maintenance of cost records under sub-section (1) ofsection 148 the Companies Act 2013 for the products of the company.
vii. According to the information and explanations given to us in respect of statutoryand other dues:
(a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of custom duty of excise value added tax Goods &Service Tax cess and any other statutory dues applicable to it. According to theinformation and explanations given to us no undisputed amounts payable in respect ofprovident fund employees' state insurance income tax sales tax service tax duty ofcustom duty of excise value added tax Goods & Service Tax cess and otherstatutory dues were in arrear as at 31st March 2020 for a period more than sixmonths from the date they became payable.
(b) According to the information and explanations given to us there is no dues ofincome tax sales tax service tax Goods & Service Tax and duty of custom duty ofexcise or value added tax which have not been deposited on account of any dispute.
viii. As the company has no Loan outstanding from Financial institutions Bank orDebenture holders at any time during the year the provisions of the Companies (Auditor'sReport) Order 2016 are. therefore not applicable to the company.
ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loan during the year. Accordinglyprovisions of paragraph (ix) of the Companies (Auditor's Report) order 2016 are notapplicable to the company.
x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
xi. According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid/provided for managerialremuneration in accordance with requisite approvals mandated by the provisions of section197 read with schedule Vto the Act.
xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly provisions of paragraph3 (xii) of theCompanies (Auditor's Report ) order. 2016are not applicable to the company.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transaction with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. According to the information and explanations given to us and on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us and on our examination ofthe records of the Company the Company has not entered into non cash transactions withdirectors or person connected with them. Accordingly provisions of paragraph (xv) of theCompanies (Auditor's Report) order 2016are not applicable to the company.
xvi. The Company is not required to be registered under 45 -IA of the Reserve Bank ofIndia Act 1934.
ANNEXURE -"B" TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF KHANDELWAL EXTRACTIONS LIMITED
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 KHANDELWALEXTRACTIONS LIMITED ("the Company") as of 31 March 2020 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls The Company's management isresponsible for establishing and maintaining internal financial controls 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 ('ICAI'). These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of Its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable 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 Pased 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 deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and. both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 overfinancial 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. Webelieve that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the Company's internalfinancial 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 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 31 March 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 Gupta Vaish& Co. Chartered Accountants |
| ||Registration Number: 005087C |
|Place: Kanpur ||Rajendra Gupta (PARTNER) Membership Number: 073250 |
|Date: 27-06-2020 ||UDIN N020073250AAAAAS6482 |