The Members of Madhusudan Industries Limited Report on the Audit of FinancialStatements Opinion
We have audited the accompanying financial statements of Madhusudan IndustriesLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2020 the statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.
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 accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Actof the state of affairs (financial position) of the Company as at 31st March2020 and its loss (financial performance including other comprehensive income) its cashflows and the changes in equity for the year ended on that date.
Basis of Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditors Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the company in accordance with the Code ofEthics issued by The Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
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.
Claims against the Company not acknowledged as debts is disclosed in note no. 26A ofthe financial statements. The existence and probability of payments against these claimsrequires management judgment to ensure disclosure of most appropriate values of contingentliabilities.
Due to level of judgment required relating to estimation and presentation of contingentliabilities this is considered to be a key audit matter.
Our audit procedure included among others assessing the appropriateness of themanagement's judgment in estimating the value of claims against the Company notacknowledged as debts as given in note no. 26A.
We have obtained details of completed tax assessments and demands / claims as at 31stMarch 2020 from the management. We assessed the completeness of the details of theseclaims through discussion with senior management personnel. We have also reviewed theoutcome of the disputed cases at various forums. We have also assessed the appropriatenessof presentation of the contingent liabilities in the financial statements.
Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe 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 haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the state of affairs (financial position) profit or loss(financial performance including other comprehensive income) cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under section 133 of the Act.
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 judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue 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.
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 high level of assurance butis not a guarantee that an audit conducted in accordance with Standards on Auditing willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.
As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism 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 control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for explaining our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 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 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 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 be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh thepublic interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act.
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 termsof Section 164(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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in financial statements - Refer note no. 26 to the financial statements.
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 Independent Auditors' Report
Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report of even date to the members of MADHUSUDANINDUSTRIES LIMITED on the financial statements as of and for the year ended 31s*March 2020.
1. In respect of its fixed assets :
(a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) As explained to us fixed assets have been physically verified by the management atreasonable intervals in a phased periodical manner which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies between the book records and the physical inventory have been noticed inrespect of the assets physically verified.
(c) The title deeds of immovable properties are held in the name of the company.
2. As explained to us the company does not hold any physical inventories during theyear. Thus paragraph 3(ii) of the Order is not applicable to the Company.
3. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loan secured orunsecured to companies firms Limited Liability Partnerships or other parties covered inthe register maintained under Section 189 of the Act.
4. According to the information and explanations given to us the company has compliedwith the provisions of Section 185 and 186 of the Act wherever applicable in respect ofloans investments guarantees and securities given by the company.
5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from the public in accordance with the provisions ofSection 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Accordingly paragraph 3(v) of the Order is not applicable to the Company.
6. In our opinion and according to the information and explanations given to us thecompany is not required to maintain cost records specified by the Central Government undersub-section (1) of section 148 of the Act.
7. (a) According to the records of the company undisputed statutory dues includingProvident Fund Employees' State Insurance Income-tax Sales-tax Service Tax Duty ofCustoms Duty of Excise Value Added Tax Goods and Service Tax Cess and other statutorydues have been generally regularly deposited with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the aforesaid dues were outstanding as at 31s* of March 2020 for a period ofmore than six months from the date they became payable.
(b) According to the information and explanations given to us following disputedstatutory dues have not been deposited on account of disputed matters pending beforeappropriate authorities are as under:
|Name of Statute ||Nature of Dues ||Forum where dispute is pending ||Amount Rs. (In Lacs) |
|1 Gujarat Sales Tax Act ||Sales-tax ||Honourable Gujarat High Court ||139.34 |
|2 Income Tax Act ||Income - tax ||Commissioner of Income-tax (Appeals) ||8.00 |
8. The company does not have any loans or borrowings from any financial institutionbankgovernmentordebenture holders during the year. Accordingly paragraph 3(viii) of theorder is not applicable.
9. The Company has not raised any moneys by way of initial public offer further publicoffer (including debt instruments) and term loans. Accordingly the provisions of Clause3(ix) of the Order are not applicable to the Company.
10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.
11. According to the information and explanations given to us the managerialremuneration has been paid or provided in accordance with the requisite approval mandatedby the provisions of section 197 read with schedule V to the Act.
12. The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicable toit the provisions of clause 3 (xii) of the Order are not applicable to the Company.
13. According to the information and explanations given to us all transactions withthe related parties are in compliance with Section 177 and 188 of the Act whereapplicable and the details have been disclosed in the Financial Statements as required bythe applicable Indian Accounting Standards.
14. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable tothe Company.
15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him and hence provisions of section192 of the Act are not applicable.
16. According to information and explanations given to us the Company is not requiredto be registered under Section 45-IA of the Reserve Bank of India Act 1934. Accordinglythe provisions of Clause 3(xvi) of the Order are not applicable to the Company.
Annexure - B to Independent Auditors' Report
Referred to in paragraph (f) under Report on Other Legal and RegulatoryRequirements' Section of our Report of even date to the members of MADHUSUDANINDUSTRIES LIMITED on the financial statements for the year ended 31s*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 overfinancial reporting of MADHUSUDANINDUSTRIES LIMITED ("the Company") as of March 31 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 is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (the "Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to and audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain evidence about the adequacy of theinternal financial controls system over financial reporting and their operatingeffectiveness. Out audit of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable details 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 authorities 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 31st March 2020based on the internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
| ||For Shailesh Shah & Associates |
| ||Chartered Accountants |
| ||ICAI Firm Reg. No. 109877W |
| ||CA. Shailesh A. Shah |
|Place : Ahmedabad ||Proprietor |
|Date : 25th June 2020 ||Membership No. 32205 UDIN: 20032205AAAAAG1324 |