The Members of
Mangalam Organics Limited
Report on the Indian Accounting Standards (Ind AS) Financial Statements
We have audited the accompanying financial statements of Mangalam Organics Limitedwhich comprise the Balance Sheet as at 31st March 2018 the Statement of Profit and Loss(including Other Comprehensive Income) the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and a summary of significant accountingpolicies and other explanatory information.
Management's Responsibility for the Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese 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 accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit. We have taken into account the provisions of the Act and the Rules madethereunder including the accounting and auditing standards and matters which are requiredto be included in the audit report under the provisions of the Act and the Rules madethere under.
We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the Ind ASfinancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
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: a) of the state of affairs of theCompany as at March 31 2018; b) its total comprehensive income (comprising of profit andother comprehensive income) c) of the cash flows for the year ended on that date and d)of the changes in equity for the year ended on that date
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanation given to us wegive in the Annexure A a statement on the matters specified in the paragraphs 3 and 4 ofthe Order.
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 purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.
c) The Balance Sheet Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid Ind AS financial Statement comply with the IndianAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies Accounts (Rules) 2014;
e) On the basis of written representations received from the Directors as on 31 March2018 and taken onrecord by the Board of Directors none of the Directors were disqualifiedas on 31 March 2018 from being appointed as a Director in terms of section 164(2) of theAct.
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" ; and
g) With respect to the other matters to be included in the Auditor's Report and to thebest of our information and according to explanation given to us:
1. The Company has disclosed the impact of pending litigation on its financial positionin its Ind-AS financial statement- Refer Note 27 of the financial statements.
2. The Company does not have any long-term contracts including derivatives contractsfor which there are no material foreseeable losses.
3. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended 31 March 2018.
4. The reporting on disclosures relating to Specified Bank Notes is not applicable forthe year ended 31st March 2018.
| ||For NGST & Associates |
| ||Chartered Accountants |
| ||(Registration No. 135159W) |
| ||(Bhupendra Gandhi) |
|Place: Mumbai ||Partner |
|th ||Membership No. 122296 |
|Date: 19 May 2018 || |
ANNEXURE - A TO THE AUDITOR'S REPORT
(Referred to our report of even date)
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the Financial
Statements for the year ended 31 March 2018 we report that: i) (a) (a) The Company hasnot maintained proper records showing full particulars including quantitative details andsituation of fixed assets. However the Company has informed us that it is in process ofcompilation.
(b) According to the information and explanation given to us all the fixed assets havebeen physically verified by the management during the year and we are informed that themanagement on such verification has noticed no material discrepancies. In our opinion thefrequency of verification is reasonable. c) The title deeds of immovable properties areheld in the name of the Company except that they are mortgaged to bank as per the reportgiven by the external valuer during the year and as per the management and we have reliedupon the same. ii) (a) The management has conducted physical verification of inventory atreasonable intervals during the year.
(b) As explained to us there is no material discrepancy noticed on physicalverification of inventory as compared to book records. iii) (a) In our opinion andaccording to the information and explanation given to us the Company has not granted anysecured or unsecured loans to companies firms limited liability partnerships or otherparties covered in the register maintained under section 189 of the Companies Act 2013and therefore clause iii b and iii c are not applicable. iv) In our opinion and accordingto the information and explanation provided to us in respect of loans investments guarantees and security the provisions of section 185 and 186 of the Companies Act 2013have been complied with. v) In our opinion and according to the information andexplanation given to us by the management the Company has not accepted any deposit fromthe public and therefore the directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Act and the Rulesframed there under are not applicable. vi) The Central Government has prescribedmaintenance of the cost records under sub section (1) of section 148 of the Companies Act2013 in respect to the Company's products. We have broadly reviewed the books of accounts& records maintained by the Company in this connection and are of the opinion thatprima facie the prescribed accounts and records have been made & maintained. We havehowever not made a detailed examination of the records with a view to determining whetherthey are accurate or complete. vii) (a) According to the records of the Companyundisputed statutory dues including provident fund investor education and protectionfund employees state insurance income tax value added tax custom duty Excise dutyservice tax cess and goods and service tax with effect from 1 July 2017 other materialstatutory dues applicable to it have generally been regularly deposited with theappropriate authorities and no undisputed amounts payable in respect of these wereoutstanding at the year end for a period of more than six months from the date theybecame payable.
(b) According to the information and explanation given to us there are no duesoutstanding of income-tax sales-tax service tax customs duty excise duty and cess onaccount of any dispute except as stated
|Name of the statute ||Nature of dues ||Amount of demand ||Payment of demand ||Period to which the amount relate ||Forum where dispute is pending |
|The Central Excise Act 1944 ||Camphor Price difference Excise Duty ||6452240 ||1112067 (our cum duty calculation as per supreme court order ||Feb-2004 to May-2005 ||CESTAT |
|The Central Excise Act 1944 ||Excise Duty ||109199456 ||NIL ||Apr-1999 to Aug-2003 ||High Court |
|The Central Excise Act 1944 ||Excise Duty ||16888229 ||14558818 (Cum Duty) ||Sept-2003 to Nov-2004 ||High Court |
|The Central Excise Act 1944 ||Excise Duty ||8144105 ||7001466 (Cum Duty) ||Dec-2004 to Sept-2005 ||CESTAT |
|The Central Excise Act 1944 ||Interest ||16838001 ||16838001 ||July-1999 to Jan-2004 ||Commissioner of Central Excise and Customs (Appeals) for excess calculation of Interest of Rs. 9130615 paid under protest |
|The Central Excise Act 1944 ||Interest ||22073762 ||22074070 ||Sept-2003 to Nov-2004 ||CESTAT |
viii) According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of dues to financialinstitutions or banks. Further the Company has not issued any debenture. ix) The Companydid not raise any money by way of initial public offer or further public offer (includingdebt instruments). As per the information and explanation given to us by the managementterm loans were applied for the purpose for which the loans were obtained. x) During thecourse of our examination of the books and records of the Company and according to theinformation and explanation given to us we have neither come across any instances offraud on or by the Company or any fraud on the Company by its officers or employees whichhas been noticed or reported during the current year nor we have been informed of suchcase by the management. xi) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid / providedfor managerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act. xii) In our opinion andaccording to the information and explanations given to us the Company is not a NidhiCompany. Accordingly paragraph 3(xii) of the Order is not applicable. xiii) According tothe information and explanations given to us and based on our examination of the recordsof the Company transactions with the related parties are in compliance with sections 177and 188 of the Act where applicable and details of such transactions have been disclosedin the financial statements as required by the applicable accounting standards. xiv) Thisclause is not applicable since the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review.
xv) The Company has not entered into non-cash transactions with Directors or personsconnected with them. Accordingly paragraph 3(xv) of the Order is not applicable. xvi) TheCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order is not applicable.
|For NGST & Associates |
|Chartered Accountants |
|(Registration No. 135159W) |
|(Bhupendra Gandhi) |
|Membership No. 122296 |
|Place: Mumbai |
|Date: 19 May 2018 |
ANNEXURE "B" TO THE AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (I) of Sub-Section 143 of theCompanies Act 2013 ("The
We have audited the internal financial controls over financial reporting of MangalamOrganics Limited ('the Company') as of 31st March 2018 in continuation with our audit ofthe 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and 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 includedobtaining and understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and Directors of the Company ; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For NGST & Associates |
|Chartered Accountants |
|(Registration No. 135159W) |
|(Bhupendra Gandhi) |
|Membership No. 122296 |
|Place: Mumbai |
|Date: 19 May 2018 |