The Members of
MORYO INDUSTRIES LIMITED
Report on the Financial Statements
We have audited the accompanying standalone financial statements of Moryo IndustriesLimited ('the Company') which comprise the balance sheet as at 31 March 2017 thestatement of profit and loss and the cash flow statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the 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 andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandardspecified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively forensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material m isstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
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 so required 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 31 March 2017 and its Loss and its cash flows for the year ended on that date.
Other of Matters
We draw attention to Note No. 3 on reserve and surplus of financial statementsas therein the company's net profit during the year ^8.34 Lakhs as at 31stMarch 2017 Wherein the company have suffered gross Loss from
Commodity business amounting ? (83.41) Lakhs earned income from Textiles business of?34.96 lakhs and earned income from short term financing of ?90.74 lakhs.
It has suffered loss from share in stock as on 31.03.2017 of ?7.61 Lakh which isdue to devaluation of closing stocks of securities and management has expect to grew stockin shares hence going concern is not subject matter.
The SEBI vide their interim order No. WTM/RKA/140/ISD/2014 has restrainedparticular class of persons/entities from accessing the securities market and buyingselling or dealing in securities either directly or indirectly.
Report on Other Legal and Regulatory Requirements
1) 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 the Act wegive in the Annexure Aa statement on the matters specified in the paragraph 3 and 4 ofthe Order to the extent applicable.
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 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 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 comply with theAccounting Standards Except AS- 22 Accounting for Taxes on Income and AS-15EmployeeBenefits specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
e) On the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act; and
f) Report on the Internal Financial Controls under Clause (1) of Sub-section 3 ofsection 143 of thecompanies Act 2013 ("the Act")- refer to our separate reportin Annexure B ;and
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 opinionand to the best of our information and according 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 No. 24 to the financial statements;.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts. The Companydoes not have any derivative contract.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For R SONI & COMPANY
Firm's registration number:130349W
CA Rajesh Soni
ANNEXURE A TO THE AUDITORS' REPORT
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31 March 2017 we reportthat:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) There are no immovable properties held by the Company.
(ii) (a) As informed to us the equity shares held as inventories in dematerializedform and stocks lying in the inventory have been verified by the management withsupportive evidence during the year
(b) The procedure for physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the company and the nature of itsbusiness
(c) The Company is maintaining proper record of inventory the discrepancies noticed onverification between the physical stocks and bookrecords were not material.
(iii) (a) The Company has not granted loans to parties covered in the registermaintainedunder section 189 of the Companies Act2013 ('the Act')
Thus paragraph (iii)(b) and (iii) (c) of the Order is not applicable.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with provision of section 185 and 186 of Act with respect to theloan and investment made.
(v) The Company has not accepted any deposits from the public.
(vi) The Central Government has not prescribed the maintenance of cost records undersection148(1) of the Act for any of the services rendered by the Company
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records the Company is regular in depositing undisputed statutorydues including provident fund income tax service tax cess and other material statutorydues with the appropriate authorities. As explained to us the Company did not have anydues on account of sales tax wealth tax duty of customs value added tax employees'state insurance and duty of excise.
(b)According to the information and explanations given to us no dispute pending inrespect of dues of income tax/sales tax/wealth tax/service tax/custom duty/exciseduty/cess/value added were in arrears as at 31 March2017 for a period of more than sixmonths from the date they became payable. However Company is subject to pay dues underProfessional Tax but no amount was amount deposited till the reporting date.
However on verification of outstanding demand as per Income Tax Website some demandsare appearing outstanding which are produced in table below:
|Name of the Statute ||Nature of dues ||Amount (In Rs.) ||Period to which amount relates ||Forum where dispute is pending |
|Income Tax Act ||Income Tax and Interest ||14172700 ||Assessment Year 2014-15 ||Assessing officer of Income Tax (Appeal) |
(viii) The Company did not have any outstanding dues to financial institutions banksordebenture 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 no managerial remuneration has 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 Schedule-21 as required by theapplicable accounting 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.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For R SONI & COMPANY
Firm's registration number: 130349W
CA Rajesh Soni Partner
Membership No.133240 Mumbai
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 MoryoIndustries Limited('the Company') as of 31st-Mar-2017 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 tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'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 extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence 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 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.
According to the information and explanation given to us and behalf of our audit thefollowing material weakness has been identified as at March 31 2017.
a. The company did not have an appropriate internal control system for grating loans.Demand and other loans given are governed by the board policies. Considering the closemonitoring of Board policies there are no appraisal renewal policies or documents havebeen prescribed and executed.
b. The company's internal control system is not commensurate to the size and scale ofoperation over purchase and sale of trading division.
A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporti ng such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.
In our opinion except for the effects/possible effects of the material weaknessdescribed above on the achievement of the objectives of the control criteria the companyhas maintained in all material aspects adequate internal financial controls overfinancial reporting and such internal financial control over financial reporting wereoperating effectively as of March 31 2017 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 Control overFinancial Reporting issued by the Institute of Chartered Accountants of India.
We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of March 31 2017financial statements of the company and the material weakness does not affect our opinionon the financial statements of the company.
For R SONI & COMPANY
Firm's registration number: 130349W
CA Rajesh Soni