The Members of Modella Woollens Limited
REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying Standalone financial statements of MODELLA WOOLLENSLIMITED("the Company") which comprises the Balance Sheet as atMarch 31 2021 the Statement of Profit and Loss(including other comprehensive income)the standalone statement of changes in equity and statement of cash flows for the yearthen endedand 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 the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner sorequired and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2021 and loss other comprehensive income changes in equity and itscash flows for the year ended on that date.
BASIS FOR OPINION
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
The Company has accumulated losses and its net worth has been fully eroded and theCompany s current liabilities exceeded its current assets as at the balance sheet date.These conditions along with other matters indicate the existence of a materialuncertainty that may cast significant doubt about the Company s ability to continue as agoing concern. However based on the representation received from the management regardingcontinuing support and assurance of raising requisite fianc / generate cash flow infuture to meet its obligations and to earn profits in future the financial statements ofthe Company have been prepared on a going concern basis.
Our opinion is not modified in respect of this matter.
The Company s Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board s Report including Annexure to Board s Report BusinessResponsibility Report Corporate Governance and Shareholder s Information but does notinclude the standalone financial statements and our auditor s report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standard financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materiality inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materiality misstated
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact . We havenothing to report in this regard.
RESPONSIBILITY OF MANAGEMENT FOR THE STANDALONE 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 of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting 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 statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
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 RESPONSIBILITYFOR 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 highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
? Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
? Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial control in place and the operatingeffectiveness of such 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions 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.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor s Report) Order 2016 ( the Order ) issued bythe Central Government of India in terms of sub-section (11) of section 143 of theCompanies Act 2013 we give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143(3) of the Act we report that:
We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.
a. In our opinion proper books of account as required by law have been kept bythe Company so far as it appears from our examination of those books.
b. The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income ) the standalone statement of changes in equity the Cash FlowStatement dealt with by this Report are in agreement with the books of account.
c. In our opinion the aforesaid standalone financial statements comply with theAccounting
Standards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
d. On the basis of the written representations received from the directors as on31st March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act.
e. With respect to the adequacy of the internal financial controls overfinancial reporting of the
Company and the operating effectiveness of such controls refer to our separate reportin Annexure B . Our report expresses an unmodified opinion on the adequacy and operatingeffectiveness of the Company s internal financial controls over financial reporting;
f. With respect to the matters to be included in the Auditors Report u/s 197(16) no managerial remuneration is paid/provided.
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 opinion and to the best ofour information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact itsfinancial position as on 31st March 2021. ii. The Company did not haveany long-term contracts including derivative contracts for which there were any materialforeseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and
Protection Fund by the Company.
The Annexure A referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31 March 2021 we reportthat:
(i) (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) We are informed that fixed assets have been physically verified by the managementat reasonable interval and no discrepancies were noticed on such verification. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and nature of its assets.
(c)According to the information and explanations given to us the company does not holdimmoveable properties.
(ii) According to the information and explanations given to us the Company has no stockduring the year or at the end of the year. Hence no question of conducting physicalverification of inventory arises.
(iii) (a) The Company has not granted loans to parties covered in the registermaintained under section 189 of the Companies Act2013 ( the Act ).Thus paragraph(iii)(b) and 3 (c) of the Order is not applicable.
(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or has made any investments or has given any guaranteeor security within the meaning of section 185 and 186 of the Companies Act 2013 and hencethe provision of this clause is not applicable for the year under audit.
(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public.
(VI) We have been informed that the cost records have not been specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act (vii) (a) Accordingto the information and explanations given to us and on the basis of our examination of therecords the Company is regular in depositing undisputed statutory dues includingprovident fund income tax service tax GST cess and other material statutory dues withthe appropriate authorities. As explained to us the Company did not have any dues onaccount ofsales tax wealth tax duty of customs value added tax employees' stateinsurance and duty of excise.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax service tax cess and other materialstatutory dues were in arrears as at 31 March2021 for a period of more than six monthsfrom the date they became payable.
(b) According to the information and explanations given to us there are no materialdues income tax or sales tax or wealth tax or service tax or duty of customs or duty ofexcise or value added tax or cess which have not been deposited with the appropriateauthorities on account of any dispute. However according to information and explanationsgiven to us the following dues of duty of customs and Service tax have not been depositedby the Company on account of disputes:
(viii) The Company did not have any outstanding dues to financial institutions banksor debenture holders during the year.
(ix) The company has not raised moneys by way of initial public offer or further publicoffer (including debt instrument) and term loans during the year.
(x) According to the information and explanations given to us no material fraud on orby the Company has been noticed or reported during the course of our audit.
(XI) According to the information and explanations given to us and based on ourexamination of the record of the Company the managerial remuneration has not been paid orprovided.
(xii) In our opinion and according to the information and explanations given to us thecompany is not nidhi company. Accordingly paragraph 3(xii) of Order is not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the record of the Company transactions with related parties are incompliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial statements as required by the applicableaccounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
(xv) According to the information and explanations given to us and based on ourexamination of the record of the Company the company has not entered into any non-cashtransactions with directors or persons connected with him.
ANNEXURE B TO THE AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ModellaWoollens Limited('the Company') as of 31-Mar-2021 in conjunction with our audit of thestandalone 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. 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 to companys policies the safeguarding of its assets the prevention and detection of frauds anderrors 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'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 deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2)provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3)provide reasonable assurance regarding prevention or timely detection ofunauthorised 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 31-Mar-2020based on theinternal control over financial reporting criteria established by the Company consideringthe essential component of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by Institute of CharteredAccountants of India.
|Place : Mumbai. ||For Kochar & Associates |
|Date : 28th June 2021. ||Chartered Accountants |
| ||CA Piyush Kochar |
| ||Partner |
| ||Membership No. 106049 |
| ||Firm No. 105256W |