To the Members of Mavi Industries Limited
Report on the Audit of the Ind AS Financial Statements
We have audited the Ind AS financial statements of Mavi Industries Limited ("theCompany") which comprise the balance sheet as at 31st March 2020 the statement ofProfit and Loss (Including Other Comprehensive Income) statement of cash flows andstatement of changes in equity for the year then ended and notes to the Ind AS 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 Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2020 and Loss (Financial performance including other comprehensiveincome) its cash flows and changes in equity 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 the IndAS financial 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 the Ind ASfinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters ate those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.We have determined that there are no key audit matters to be communicated inour report. Information Other than the Ind AS Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisReport Board's Report Report on Corporate governance and Business Responsibility Reportbut does not include the Ind AS financial statements and our auditor's report thereon.Ouropinion on the Ind AS 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 Ind AS financial statements our responsibility isto read the other information and in doing so consider whether die other information ismaterially inconsistent with the Ind AS financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed 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 Ind ASFinancial 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Ind AS and accounting principlesgenerally accepted in India including the Ind AS specified under Section 133 of the Actread with relevant rules issued thereunder. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessingdie Company'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.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process
Auditor's Responsibilities for the Audit of the Ind AS Financial Statements
1. Our objectives are to obtain reasonable assurance about whether the Ind AS 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 Ind AS financial statements.
2. 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 Ind AS 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion onwhether 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 Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
* Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves Fairpresentation.
3. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of (he audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
4. 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.
5. From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when 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) Older 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" statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
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.
d) In our opinion the aforesaid Ind AS financial statements comply with the 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 "Anncxure 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 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 amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
h) With respect to the matter to be included in the Auditors' Report under section197(16): In our opinion and according to the information and explanations given to us theCompany has not paid any remuneration to its directors during the current year henceprovisions of Section 197 of the Act are not applicable to the Company. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
Annexure "A" to Independent Auditor's Report
Annexure referred to in Paragraph 1 under "Report on Other Legal and RegulatoryRequirements'' in the Independent Auditor's Report of even date to the members of MaviIndustries Limited ("the Company") on the Ind AS financial statements for theyear ended 31st March 2020.
(i) a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
b) During the year the fixed assets of the Company have been physically verified bythe Management and as informed no material discrepancies were noticed on suchverification. In our opinion the frequency of verification is reasonable having regard tothe size of the Company and the nature of its assets.
c) The title deeds of immovable properties recorded as fixed assets in the books ofaccounts of the Company are held in the name of the Company.
(ii) The Company does not have any inventories accordingly this clause is notapplicable to the Company.
(iii) As informed the Company has not granted any Loan secured or unsecured tocompanies firms Limited Liability Partnership or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Accordingly paragraph 3 (iii)(a) 3 (iii) (b) and 3 (iii) (c) of the said Order are not applicable to the Company.
(iv) Based on information and explanation given to us in respect of loans investmentsguarantees and securities the Company has complied with the provisions of Sections ofSection 185 and 186 of the Act.
(v) In our opinion and according to the information and explanation given to us theCompany has not accepted any deposit from the public within the provision of Section 73 to76 of the Act and the rules framed there under.
(vi) As per information and explanation given to us Maintenance of Cost Records hasbeen specified by the Central Government under sub-section (1) of Section 148 of theCompanies Act 2013 are not applicable to the Company.
(vii) a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including Provident Fund Employees State Insurance Income TaxSales Tax Service Tax Goods and Service Tax Value Added Tax Custom Duty Excise Dutycess and any other material statutory dues applicable to it.
According to the information and explanation given to us no undisputed amounts payablein respect of provident fund employees state insurance income tax sales tax servicetax goods and service tax value added tax custom duty excise duty cess and any othermaterial statutory dues applicable to it were outstanding at the year end for a periodof more than six month from the date they became payable.
b) According to the information and explanation given to us there are no dues withrespect to income tax sales tax service tax Goods & Service Tax value added taxcustom duty excise duty which have not been deposited on account of any dispute.
(viii) According to the information and explanations given to us the Company has notdefaulted in the repayment of loans or borrowings to banks and financial institutions.
(ix) The Company has not raised money by way of public issue offer/ further publicoffer (including debt instruments) and term loan have been applied by the Company for thepurposes for which they were raised.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practises in India andaccording to the information and explanation given to us we have neither come across anyinstances of fraud by the Company or any fraud on the Company by its officer or employeesnoticed or reported during the year nor have we been informed of any such instance by theManagement.
(xi) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not paid / provided anymanagerial remuneration. Accordingly the provisions of section 197 read with Schedule Vto the Act are not applicable to the Company.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company Accordingly paragraph 3 (xii) of the Order is notapplicable.
(xiii) According to the information and explanation given to us all transactionentered into by the Company with the related parties are in compliance with Sections 177and 188 of Act where applicable and the details have been disclosed in the financialStatements etc. as required by the applicable Indian Accounting Standards
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under reviewAccordingly paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanation given to us the Company has notentered into any noncash transactions with the directors or persons connected with himduring the year.
(xvi) According to the information and explanation given to us the Company Is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure "B" to the Independent Auditor's Report of even date on the Ind ASfinancial statements of Mavi Industries Limited for the year ended 31st March2020.
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 MaviIndustries Limited ("the Company") as of March 31 2020 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining 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 ("ICAI").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 safeguarding ofits 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 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 issued by ICAI. 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 over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the Ind AS 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 Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting 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 Ind AS financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance 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 Ind AS 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 ICAI.