Mangalam Drugs and Organics Ltd.
|BSE: 532637||Sector: Health care|
|NSE: MANGALAM||ISIN Code: INE584F01014|
|BSE 00:00 | 08 Dec||137.50||
|NSE 00:00 | 08 Dec||137.85||
|Mkt Cap.(Rs cr)||218|
|Mkt Cap.(Rs cr)||217.66|
Mangalam Drugs and Organics Ltd. (MANGALAM) - Auditors Report
Company auditors report
To the Members of MANGALAM DRUGS & ORGANICS LIMITED Report on theAudit of the Standalone Financial Statements
We have audited the financial statements of Mangalam Drugs andOrganics Limited ("the Company") which comprise the Balance Sheet as at31st March 2022 the statement of Profit and Loss (statement of changes in equity) andstatement of Cash Flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2022its profit including other comprehensive income its cash flows and the changes in equityfor the year ended on that date.
Basis for Qualified Opinion
The Company has capitalised two vehicles amounting to Rs. 132 lakhsduring the year ended 31 March 2021 in the names of Individual Directors and has alsodisclosed the corresponding secured loans availed from banks as its liabilities One ofthe Non - Executive Director has resigned during the year ended on 31 March 2021.Ownership of the vehicles are not yet transferred in the name of the Company hence theassets of the Company are overstated to the extent of Rs. 108.80 lakhs net ofDepreciation. Liabilities are overstated to the extent of Rs. 67.92 lakhs.
Since the ownership of the vehicles are not in the name of the Companythe expenses are overstated for the year ended on March 31 2022 by Rs. 22.01 lakhs tothat extent Profit for the year ended has been understated.
We have been informed that the Company has taken possession of thesevehicles as on March 29 2022.
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 Auditors? Responsibilities for the Audit ofthe Financial Statements section of our report.
We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India together with the ethicalrequirements 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.
Emphasis of Matter Paragraph
Balances of Trade Receivables Trade Payables Loans and advances aresubject to confirmation and reconciliation. Management has confirmed that the final impactupon reconciliation would not be material.
Our opinion is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
We have determined the matters described below to be the key auditmatters to be communicated in our report.
Information other than the Financial Statements and Auditors?Report thereon
The Company?s Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the financial statements and our Auditors? reportthereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated. If based on the work we have performed weconclude that there is a material misstatement of this other information we are requiredto report that fact.
We have nothing to report in this regard.
Management?s Responsibility for the Standalone FinancialStatements
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 (changes in equity) and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and 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 statements 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 forassessing the Company?s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting 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.
Auditors? Responsibilities for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditors? report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
2. Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
3. Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
4. 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 Auditors?report to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our Auditors? report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
5. Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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 financialstatements of the current period and are therefore the key audit matters. We describethese matters in our Auditors? report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors? 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.
As required by Section 143(3) of the Act we report that:
1. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
2. 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 and properreturns adequate for the purposes of our audit have been received from the branches notvisited by us.
3. The Balance Sheet the Statement of Profit and Loss and the CashFlow Statement dealt with by this Report are in agreement with the books of account.
4. 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.
5. On the basis of the written representations received from thedirectors as on 31st March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2022 from being appointed as a director interms of Section 164 (2) of the Act.
6. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".
7. With respect to the other matters to be included in theAuditors? 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:
The Company has disclosed the impact of pending litigations onits financial position in its statements - Refer Note 41 to the financial statements.
The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.
The Annexure A referred to in Independent Auditors? Report to themembers of the Company on the financial statements for the year ended
31 March 2022 we report that:
i. (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.
(B) The Company has maintained proper records showing full particularsof Intangible assets.
(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has conducted ofphysical verification of its property plant and equipment by which all Property plantand equipment are verified every year.
(c) The title deeds of all the immovable properties (other thanproperties where the Company is the Lessee) and the lease agreements are duly executed infavour of the lessee disclosed in the financial statements are held in the name of theCompany.
(d) The Company has neither revalued its Property plant and equipment(including Right-of-use assets) nor Intangible assets during the year.
(e) No proceedings initiated or pending against the Company for holdingany benami property under the Prohibition of Benami Property Transactions Act 1988 andrules made thereunder.
ii. (a) Physical verification of inventory has been conducted atreasonable intervals by the management In our opinion the coverage and procedure of suchverification is appropriate; No discrepancies of 10% or more in physical verification ofinventory were reported by them.
(b) The Company has been sanctioned working capital limits in excess offive crore rupees from the banks on the basis of security of current assets; thequarterly statements filed by the Company with such banks are not in agreement with thebooks of account of the Company.
The Company has not availed any working capital limits from financialinstitutions.
iii. During the year the Company has not made investments in providedany guarantee or security or granted any loans or advances in the nature of loans securedor unsecured to companies firms Limited Liability Partnerships or any other parties.Accordingly reporting under clause 3 (iii) (a) to (f) of the Order is not applicable.
iv. During the year the Company has not given any loans guaranteesand securities and invested any amount. Accordingly reporting under clause 3(iv) of theOrder and of section 185 and 186 of the Act are not applicable.
v. The Company has not accepted any deposits or amounts which aredeemed to be deposits Hence the directives issued by the Reserve Bank of India and theprovisions of the Sections 73 to 76 or any other relevant provisions of the Act and rulesframed thereunder are not applicable . Accordingly reporting under clause 3(v) of theOrder is not applicable.
vi. We have broadly reviewed the books of account maintained by theCompany pursuant to the order made by the Central Government for maintenance of costrecords prescribed under sub-section 1 of section 148 of the Act and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.
vii. According to the information and explanations given to us and therecords of the Company examined by us in our opinion
a) The Company is regular in depositing undisputed statutory duesincluding Goods and Services Tax provident fund employees? state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand any other statutory dues to the appropriate authorities.
Further no undisputed amounts payable in respect of provident fundemployee state insurance income tax sales tax service tax GST duty of customs dutyof excise value added tax cess and any other material statutory dues were in arrears asat 31 March 2022 for a period of more than six months from the date they became payable.
b) On the basis of our examination of the records of the Company thereare no statutory dues relating to Provident Fund Employees State Insurance or Cess orother statutory dues which have not been deposited with the appropriate authorities onaccount of any dispute except Excise duty service tax and income tax:
viii. The Company has not surrendered or disclosed any transactionpreviously unrecorded in the books of account in the tax assessments under the Income TaxAct 1961 as income during the year. Accordingly the requirement to report on clause3(viii) of the Order is not applicable to the Company.
ix. (a) During the year the Company has not defaulted in repayment ofloans or other borrowings or in the payment of interest thereon to any lender.
(b) During the year the Company has not been declared a wilfuldefaulter by any bank or Financial institution or any other lender.
(c) During the year term loans availed from banks were applied for thepurpose for which the loans were obtained.
(d) During the year funds raised on short term basis have not beenutilised for long term purposes.
(e) The Company does not have any subsidiaries associates or jointventures. Accordingly reporting under clause ix (e) and (f) of the Order is notapplicable.
x. (a) During the year the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments). Accordinglyclause 3(x)(a) of the Order is not applicable.
(b) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures.Accordingly reporting under clause 3(x)(b) of the Order is not applicable
xi. (a) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that no fraud by theCompany or no fraud on the Company has been noticed or reported during the year.
(b) During the year no report under sub-section (12) of section 143 ofthe Companies Act 2013 has Been filed by us in Form ADT - 4 as prescribed under Rule 13of Companies (Audit and Auditors) Rules 2014 with the Central Government.
(c) We have taken into consideration whistle-blower complaints receivedby the Company during the year while determining the nature timing and extent of auditprocedure.
xii. In our opinion the Company is not a Nidhi Company. Accordinglyreporting under clause 3(xii)(a) (b) and (c) of the Order is not applicable
xiii. According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the financial statements as required by the applicable India accountingstandards
xiv. (a) The Company has an internal audit system which has beenconducted by the Independent Chartered Accountants which is in commensurate with the sizeand nature of its Business.
(b) The internal audit reports of the Company issued by him till dateof the audit report for the period under audit have been considered by us.
xv. The Company has not entered into any non-cash transactions withdirectors or persons connected with him as per referred to in section 192 of the Act.
xvi. (a) The Company is not required to be registered under Section45-IA of the Reserve Bank of India Act 1934. Accordingly clause 3(xvi)(a) of the Orderis not applicable. (b) The Company has not conducted any Non- Banking Financial andhousing finance activities.
(c) The Company is not a Core Investment Company as defined in theregulations made by Reserve Bank of India. Accordingly the requirement to report onclause 3(xvi)(c) and (d) of the Order is not Applicable to the Company
xvii. The Company has not incurred any cash losses in the current andin the immediately preceding financial year.
xviii. Erstwhile statutory auditor of the Company has been resignedduring the year. The issues objections or concerns raised by him during earlier year aretaken into consideration by us.
xix. On the basis of the financial ratios dislosed in note 47 to thefinancial statements ageing and expected dates of realisation of financial assets andpayment of financial liabilities other information accompanying the financial statementsour knowledge of the Board of Directors and management plans and based on our examinationof evidence supporting the assumptions nothing has come to our attention which causes usto believe that any material uncertainty exists as on the date of the audit report thatCompany is not capable of meeting its liabilities existing at the date of balance sheet asand when they fall due within a period of one year from the balance sheet date. Wehowever state that this is not an assurance as to the future viability of the Company. Wefurther state that our reporting is based on the facts up to the date of audit report andwe neither give any guarantee nor any assurance that all liabilities falling due within aperiod of one year from the balance sheet date will get discharged by the Company as andwhen they are due.
xx. (a) The Company has complied the provisions under section 135 ofthe Act. Hence there are no unspent amount to a Fund specified in
Schedule VII to the Act.
(b) No amount remaining unspent under sub-section (5) of section 135 ofthe Act pursuant to any ongoing project.
Annexure - B to the Auditors? Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Act
We have audited the internal financial controls over financialreporting of Mangalam Drugs and Organics Limited. ("the Company") as of31 March 2022 in conjunction with our audit of the financial statements of the Company forthe 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(ICAI?).These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany?s policies the safeguarding of its assets the prevention and detection offrauds and 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?sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the Auditors? judgment including the assessment of therisks of material 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 controlssystem over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company?s internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company?s internal financial controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany?s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion and to the best of our information and according to theexplanations give to us 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 2022 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.