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Mangalam Organics Ltd.

BSE: 514418 Sector: Industrials
NSE: MANORG ISIN Code: INE370D01013
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OPEN 549.50
PREVIOUS CLOSE 543.30
VOLUME 2806
52-Week high 1212.20
52-Week low 510.00
P/E
Mkt Cap.(Rs cr) 464
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 549.50
CLOSE 543.30
VOLUME 2806
52-Week high 1212.20
52-Week low 510.00
P/E
Mkt Cap.(Rs cr) 464
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mangalam Organics Ltd. (MANORG) - Auditors Report

Company auditors report

To the Members of Mangalam Organics Limited Report on audit of theStandalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements ofMangalam Organics Limited ("the Company") which comprises the Balance Sheet asat March 31 2022 the Statement of Profit and Loss (including Other ComprehensiveIncome) statement of changes in equity and statement of cash flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("the act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2022 and total comprehensive income(comprising of profit and comprehensive income) changes in equity and its cash flows forthe year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance 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 Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

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 nothing to report in this regard.

Other Information

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the"Management Discussion and Analysis" and "Director's Report" but doesnot include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the 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 this regard.

Responsibility of Management and Those Charged with Governance for theStandalone Financial Statements

The Company's Board of Directors are responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; 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 financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing thecompany's financial reporting process

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of theconsolidated financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• 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 auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of subsection (11) ofsection 143 of the Companies Act 2020 we give in the Annexure "A" a statementon the matters specified in paragraphs 3 and 4 of the Order 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income) the statement of changes in equity and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act.

e) 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.

f) 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"

g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

1. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 24 to the financialstatements;

2. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

3. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended March 312022.

4. (a) The management has represented that to the best of itsknowledge and belief no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other person(s) or entity(ies) including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries.

(b) The management has represented that to the best of its knowledgeand belief other than as disclosed in the notes to the accounts no funds have beenreceived by the Company from any person(s) or entity(ies) including foreign entities("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries to the financial statements); and

(c) Based on such audit procedures that we considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.

h) With respect to the matter to be included in the Auditors' Reportunder Section 197(16) of the Act:

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

For NGST & Associates
Chartered Accountants
Firm Regn. No 135159W
Sd/-
Bhupendra S Gandhi
Partner
M. No. 122296
UDIN - 22122296AJTAAQ9268
Place: Mumbai
Date: May 27 2022

ANNEXURE - A TO AUDITOR'S REPORT

(Referred to our report of even date)

The Annexure referred to in our Independent Auditors' Report to themembers of Mangalam Organics Limited ("the Company") on the Financial Statementsfor the year ended 31st March 2022 we report that:

i) (a) The company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.

(b) (b) According to the information and explanation given to us allthe property plant and equipment have been physically verified by the management duringthe year and we are informed that the management on such verification has noticed nomaterial discrepancies. In our opinion the frequency of verification is reasonable.

(c) The title deeds of immovable properties are held in the name of thecompany except that they are mortgaged to bank as per the report given by the externalvaluer during the year and as per the management and we have relied upon the same.

(d) The Company has not revalued its property plant and equipment orintangible assets or both during the year. Consequently the question of our commenting onwhether the revaluation is based on the valuation by a Registered Valuer or specifyingthe amount of change if the change is 10% or more in the aggregate of the net carryingvalue of each class of Property Plant and Equipment or intangible assets does not arise.

(e) Based on the information and explanations furnished to us noproceedings have been initiated on or are pending against the Company for holding Benamiproperty under the Prohibition of Benami Property Transactions Act 1988 (as amended in2016) (formerly the Benami Transactions (Prohibition) Act 1988 (45 of 1988)) and Rulesmade thereunder and therefore the question of our commenting on whether the Company hasappropriately disclosed the details in its financial statements does not arise.

ii) (a) The management has conducted physical verification of inventoryat reasonable intervals during the year. As explained to us there is no materialdiscrepancy noticed on physical verification of inventory as compared to book records.

(b) During the year the Company has been sanctioned working capitallimits in excess of Rs. 5 crores in aggregate from banks on the basis of security ofcurrent assets. The Company has filed quarterly returns or statements with such bankswhich are in agreement with the unaudited books of account.

iii) (a) During the year the Company has provided loans and stoodguarantee to the companies as follows.

 

 

 

(Rs. In Lakhs)

Aggregate amount granted / provided during the year Guarantees Security Loans Advances in nature of loans
- Wholly owned Subsidiaries 3800.00 Nil 514.12 Nil
Balance outstanding as at balance sheet date in respect of above cases
- Wholly owned Subsidiaries 3800.00 Nil 514.12 Nil

(b) During the year the investments made guarantees provided securitygiven and the terms and conditions of the grant of all loans and advances in the nature ofloans and guarantees to companies are not prejudicial to the Company's interest.

iv) The Company has not granted any loans or made any investments orprovided any guarantees or security to the parties covered under Sections 185 and 186.Therefore the reporting under clause 3(iv) of the Order are not applicable to theCompany.

v) In our opinion and according to the information and explanationgiven to us by the management the company has not accepted any deposit from the publicand therefore the directives issued by the Reserve Bank of India and the provisions ofsections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder are not applicable.

vi) The Central Government has prescribed maintenance of the costrecords under sub section (1) of section 148 of the Companies Act 2013 in respect to thecompany's products. We have broadly reviewed the books of accounts & recordsmaintained by the company in this connection and are of the opinion that prima facie theprescribed accounts and records have been made & maintained. We have however not madea detailed examination of the records with a view to determining whether they are accurateor complete.

vii) (a) According to the records of the Company undisputed statutorydues including provident fund investor education and protection fund employees stateinsurance income tax custom duty and goods and service tax and other material statutorydues applicable to it have generally been regularly deposited with the appropriateauthorities and no undisputed amounts payable in respect of these were outstanding at theyear end for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us there areno dues outstanding of income-tax sales-tax service tax customs duty excise duty andcess on account of any dispute.

viii) According to the information and explanations given to us and therecords of the Company examined by us there are no transactions in the books of accountthat has been surrendered or disclosed as income during the year in the tax assessmentsunder the Income Tax Act 1961 that has not been recorded in the books of account.

ix) (a) According to the records of the Company examined by us and theinformation and explanation given to us the Company has not defaulted in repayment ofdues to financial institutions or banks. Further the Company has not issued anydebenture.

(b) According to the information and explanations given to us and onthe basis of our audit procedures we report that the Company has not been declaredWillful Defaulter by any bank or financial institution or government or any governmentauthority.

(c) In our opinion and according to the information and explanationsgiven to us the term loans have been applied for the purposes for which they wereobtained.

(d) According to the information and explanations given to us and theprocedures performed by us and on an overall examination of the financial statements ofthe Company we report that no funds raised on short-term basis have been used forlong-term purposes by the Company.

(e) On an overall examination of the standalone Ind AS financialstatements of the Company the Company has not taken any funds from any entity or personon account of or to meet the obligations of its subsidiaries associates or jointventures.

(f) The Company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies. Hence therequirement to report on clause (ix)(f) of the Order is not applicable to the Company.

x) (a) The Company has not raised any money by way of initial publicoffer or further public offer (including debt instruments) during the year. Accordinglythe reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or privateplacement of shares or fully or partially or optionally convertible debentures during theyear. Accordingly the reporting under clause 3(x)(b) of the Order is not applicable tothe Company.

xi) (a) During the course of our examination of the books and recordsof the company and according to the information and explanation given to us we haveneither come across any instances of fraud on or by the company or any fraud on thecompany by its officers or employees which has been noticed or reported during thecurrent year nor we have been informed of such case by the management.

(b) During the year no report under sub-section (12) of section 143 ofthe Companies Act 2013 has been filed by cost auditor / secretarial auditor or by us inForm ADT - 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government.

(c) During the course of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us and as representedto us by the management no whistle-blower complaints have been received during the yearby the Company. Accordingly the reporting under clause 3(xi)(c) of the Order is notapplicable to the Company.

xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.

xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

xiv) (a) In our opinion and according to the information andexplanation given to us the Company has an internal audit system commensurate with thesize and nature of its business.

(b) The internal audit reports of the Company issued till the date ofthe audit report for the period under audit have been considered by us.

xv) The Company has not entered into non-cash transactions withdirectors or persons connected with its directors. Accordingly paragraph 3(xv) of theOrder is not applicable.

xvi) (a) The Company is not required to be registered under section45-IAof the Reserve Bank of India Act 1934. Accordingly paragraph 3(xvi)(a) of the Orderis not applicable.

(b) The Company has not conducted non-banking financial activities orhousing finance activities during the year. Accordingly the reporting under clause3(xvi)(b) of the Order is not applicable to the Company.

(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by the Reserve Bank of India. Accordingly the reporting under clause3(xvi)(c) of the Order is not applicable to the Company.

(d) The Group does not have any CIC. Accordingly clauses xvi(d) arenot applicable to the Company.

xvii) The Company has not incurred cash losses in the current year andin the immediately preceding financial year respectively.

xviii) There has been no resignation of the statutory auditors duringthe year and accordingly the reporting under clause (xviii) is not applicable.

xix) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realization of financialassets and payment of financial liabilities other information accompanying the financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that Company is not capable of meeting its liabilities existing at the dateof balance sheet as and when they fall due within a period of one year from the balancesheet date. We however state that this is not an assurance as to the future viability ofthe Company. We further state that our reporting is based on the facts up to the date ofthe audit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get discharged bythe Company as and when they fall due.

xx) As at balance sheet date the Company does not have any amountremaining unspent under Section 135(5) of the Act. Accordingly reporting under clause3(xx) of the Order is not applicable.

For NGST & Associates

Chartered Accountants

Registration No. 135159W

Sd/-

Bhupendra Gandhi

Partner

M. Ship No. 122296

UDIN - 22122296AJTAAQ9268

Place: Mumbai

Date: May 27 2022

ANNEXURE - B TO THE AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (I) ofSub-Section 143 of The Companies Act 2013 ("The Act")

We have audited the internal financial controls over financialreporting of Mangalam Organics Limited ('the company') as of 31 March 2022 inconjunction with our audit of the financial statements of the Company for the year endedon 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 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 Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 auditor's 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 andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess 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 control overfinancial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) Provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) Provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould 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.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2022 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For NGST & Associates

Chartered Accountants

Registration No. 135159W

Sd/-

Bhupendra Gandhi

Partner

M. Ship No. 122296

UDIN - 22122296AJTAAQ9268

Place: Mumbai

Date: May 27 2022

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