To the Members of Modi Naturals Limited
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Modi Naturals Limited ('theCompany")which comprise the Balance Sheet as at March 31 2019 the Statement ofProfit and Loss (Including other Comprehensive Income) the statement of changes in Equityand Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryInformation.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ('Act') in the manner so required and give a true and fair view Inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ('Ind AS*)and other accounting principles generally accepted in India of the state of affairs ofthe Company as at March 31 2019 the profit and total comprehensive income changes inequity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described In the (Auditor's Responsibilities for the Audit ofthe Financial 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 (ICA1) together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules thereunder and wehave fulfilled our other ethical responsibilities In accordance with these requirementsand the ICAJ's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for out audit opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and Informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined that there are no matter which is required to be described as key auditmatter 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 preparation of the otherInformation The other information comprises the information Included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notInclude the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other Information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other Information ismaterially Inconsistent with the financial statements or our knowledge obtained during thecourse of out audit or otherwise appears be materially 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.
Management's Responsibilities for the Financial Statements
The Company's Board of Directors are responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that give3 true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the Ind AS andother accounting principles generally accepted in India. This responsibility also Includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother Irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of 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 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.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast sign If leant 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.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in financial statements.
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.
Form the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters In ourauditor's report unless law or regulation precludes public discloser about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
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 in terms of section 143(11) of the Act we give in'Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act based on our audit we report that
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account
d) In our opinion the aforesaid financial statements comply with the specified undersection 133 of the Act read with the Rule 7 of the Companies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
f) With respect of the adequacy of the Internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g) With respect to the other matters to be Included In the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our Information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year Is Inaccordance with the provisions of section 197 read with Schedule V to the Act.
h) 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 as amended Inour opinion and to the best of our opinion and to the best of our Information andaccording to the explanations given to us:
I. The company has disclosed the impact of pending litigation on its financial positionin its financial statements. Refer Note 32 to the financial statements.
ii. The company did not have any long term contracts and had no derivative contractsoutstanding as at 31" March 2019.
iii. The Company did not have any dues required to the transferred by It to theInvestor Education and Protection fund.
For Kashyap a Co
Firm Registration No. 0113S5C
(Premjit S. Kashyap)
Plan : New Delhi
Date : 30.05 2019
Annexure A referred to in paragraph 1 under the heading 'Report on Other Legal andRegulatory
Requirements' of Independent Auditors' Report of even date on the financial statementsfor the year ended on March 31 2019.
8ased on the amSt procedures performed for the purpose of reporting a true and fairview on the financial statement! of the Company and taionc into consttervuon theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beSefwe report that
(i) In respect of Compan/s Ftaed Assets
(a) The Company h* maaKaned wooer records showingful particulars inducing quamiutn*details and Ktuaaongf fixed assets.
(b) The toed assets have been physicaBy verified by the management during the year andno material discrepancies were noticed on such verification. In our apMon the frequencyof verification of the fixed assets Is reasonable having regard to the size of the Companyand the nature of its assets
(c) The title deeds of all the immovable properties are held the name of theCompany.
(ii) In our opinion the management has conducted physical verification of inventory atreasonable Intervals during the year and no matenai discrepancies between physicalInventory and book records were noticed on phyiical verification
(iii) The company has not granted any loans secured or unsecured to companies firmslimited liability Partnership or other parties covered in the register maintained undersection 189 of the Act.
(iv) In our opinion the Company has not entered into any transaction covered underSections IBS or Section 186 of the Act.
(v) The Company has not acxepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products and are of theopinion that prima focte the prescribed accounts and records have been made andmaintained However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.
(vii) (a) The Undisputed statutory dues including provident fund employees' stateinsurance. Income-tax Goods & Service Tax (GST) service tax duty of customs dutyof excise value added tax cess and other materia! statutory dues as applicable havegenerally been regularly deposited to the appropriate authorities though there has been aslight delay In few cases. Further no undisputed amounts payable in respect thereof wereoutstanding at the year end for a period of more than six months from the date they becamepayable.
(b) According to the records and Information and explanation given to us and therecords examined by us of the Company there were no dues In respect of Goods &Service Tax (GST) Cess and other statutory dues which have not been deposited on accountof disputes.
(viii) The Company has not defaulted In repayment of loans or borrowings to any bank orfinancial Institution or government during the year. The Company did not have anyoutstanding debentures during the year.
(ix) In our opinion the term loans were applied for the purposes for which the loanswere obtained. The Company did not raise moneys by way of Initial public offer or furtherpublic offer (including debt instruments) during the year.
(x) According to the Information and explanation given to us no fraud by the Companyor on the company by Its officers or employees has been noticed or reported during theperiod covered by our audit
(xi) Managerial remuneration has been paid (and)/ provided by the company In accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhl Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable
(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable accountingstandards.
(xiv) The company has made preferential allotment of share during the year. In ouropinion and according to the information given to us the company has compiled with therequirement of section 42 of the Companies Act 2013 and amount the raise has been used forthe purpose for which the funds were raised.
(xv) In our opinion the company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.
(xvi) The company is not required to be registered under Section 45-IAof the ReserveBank of India Act 1934.
For Kashyap & Co.
Firm Registration No. 011355C
(Premjit S. Kashyap)
Place : New Delhi
Date : 30.05.2019
Annexure 'B' to Independent Auditors' Report
(Referred to In paragraph (h) under the head 'Report on Other Legal and RegulatoryRequirements of even date)
Report on the Internal Financial Controls under Clause (I) of Sub-section 3 of Section143 of the Companies Act. ("the Act")
1. We have audited the internal financial control with reference to financial statementof MODI NATURALS LIMITED ('the Company*) as of March 312019 In conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementcriteria established by the Company considering the essential components of Internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and error? the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.
3. 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 prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of internal financial controls and issued by the ICAI. 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.
4. Our ajdlt Involves performing procedures to obtain audit evidence about the adequacyof the 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.
5. 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
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes In accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial 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 Financial Reporting
7. 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.
8. In our opinion the Company has in all material respects and adequate internalfinancial control system over financial reporting and such Internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on"the 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 Kashyap & Co.
Firm Registration No. 011355C
(Premjlt S. Kashyap)
Place : New Delhi
Date : 30.05.2019