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Vadilal Enterprises Ltd.

BSE: 519152 Sector: Others
NSE: N.A. ISIN Code: INE693D01018
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NSE 05:30 | 01 Jan Vadilal Enterprises Ltd
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VOLUME 130
52-Week high 1987.95
52-Week low 1431.75
P/E 33.92
Mkt Cap.(Rs cr) 127
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Sell Price 0.00
Sell Qty 0.00
OPEN 1521.00
CLOSE 1520.00
VOLUME 130
52-Week high 1987.95
52-Week low 1431.75
P/E 33.92
Mkt Cap.(Rs cr) 127
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Vadilal Enterprises Ltd. (VADILALENTERP) - Auditors Report

Company auditors report

To the members of Vadilal Enterprises Limited

Report on the Audit of the Financial Statements Qualified Opinion

We have audited accompanying financial statements of Vadilal Enterprises Limited("the Company") which comprise the Balance Sheet as at March 31 2021 and theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for possible effects of the matters described in the ‘Basis forQualified Opinion’ section of our report the aforesaid financial statements give theinformation required by the Companies Act 2013 (‘Act’) in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Indian Accounting Standards (‘Ind AS’)specified under section 133 of the Act of the state of affairs of the Company as at March31 2021 and its profit (including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Basis for Qualified Opinion

We are unable to comment upon the possible effects of the following matters on thefinancial statements of the Company for the year ended March 31 2021. The matter morefully discussed in the Note 42 to the financial statements pertaining to the pendingreceipt of conclusive reports/findings for the items described therein:

(i) Matter relating to the cross allegations between the Promoter Directors during theperiod 2013-14 to 2017-18 and 2013-14 to 2018-19 respectively for the appropriateness ofthe expenses amounting to Rs. 45.90 lakh and Rs. 53.39 lakh respectively; and

(ii) Matter involving allegations of operations and management issue wherein marketingexpenses of advertisements amounting to Rs. 38 crore during the period 2015-16 to2018-19 were alleged by one Promoter Director to be paid by the Company on approval byanother Promoter Director without following the process of the Company.

Pending receipt of the reports/findings as referred above we are unable to concludethe possible effects on the financial statements as a whole of any undetectedmisstatements if any and whether it could be material.

We conducted our audit of the financial statements in accordance with the Standards onAuditing ("SAs") specified under Section 143(10) of the Companies Act 2013 asamended ("the Act"). Our responsibilities under those Standards are furtherdescribed in the "Auditor’s Responsibilities for the Audit of the FinancialStatements" section of our report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and the Rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our qualified opinion.

Emphasis of Matter

We draw attention to

1. Note 43 of the financial statements which describes the management’sassessment of the impact of the outbreak of COVID-19 on the business operations of theCompany.

2. Note 36 of the financial statements which refers to the status of on-goinglitigations filed against the Company and some of its promoters under Section 241 and 242of the Companies Act 2013 pertaining to prevention of oppression and mismanagement ofthe Company before the National Company Law Tribunal Ahmedabad.

Our opinion is not modified in respect of the above matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended March31 2021. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

In addition to the matters described in the Basis for Qualified Opinion section wehave determined the matters described below to be the key audit matters to be communicatedin our report. For each matter below our description of how our audit addressed thematter is provided in that context.

Key audit matters How our audit addressed the Key Audit Matter
Revenue Recognition – Sale of Goods
Refer Note 2(f) in the Summary of significant accounting policies and other explanatory information Our procedures included :
The company recognised an amount of Rs. 34015.15 Lakh revenue in the year ended 31 March 2021 as disclosed in Note 27 of the financial statements. - Obtained an understanding of the process of each revenue stream particularly of ice-cream.
Revenue for the Company primarily comprises of revenue from sale of ice-cream and dairy products. - Evaluated the design and implementation and tested the operating effectiveness of controls over revenue recognition.
In accordance with Standards on Auditing there is a presumed fraud risk relating to revenue recognition. Accordingly occurrence and existence of revenue is a key focus area on account of the multiplicity of Company’s products multiple channels for sales various categories of customers having varying terms of contracts and the volume of the sales made to them. - Performed substantive analytical procedures on revenue which includes region wise analysis;
Due to the above factors we have identified testing of revenue recognition as a key audit matter. - Evaluated the terms and conditions of the contracts with customers to ensure that the revenue recognition criteria are assessed by the management in accordance with the accounting standards;
- We selected a sample to test revenue transactions recorded during the year and revenue transactions recorded in the period before and after year-end with supporting documents such as invoices agreements with customers proof of deliveries discounts and claims and subsequent collection of payment;
- Evaluated the design and implementation of key internal controls over the revenue from sale through the combination of procedures involving inquiry and observations reperformance and inspection of evidence in respect of operations of these controls.
- Performed other substantive audit procedures including obtaining Trade Receivables confirmations on a sample basis obtaining reconciliations in cases of variation reviewed the subsequent collection of payment and proof of deliveries document of such selected Trade Receivables.
- Evaluated disclosures made in the financial statements for revenue recognition from sale of goods for appropriateness in accordance with the accounting standards.

 

Recoverability of Trade Receivables and Provision for Expected Credit Loss
The company as at 31 March 2021 has trade receivable amounting to Rs. 2681.01 Lakh (net of provision) - Obtaining an understanding of the management processes evaluating the design and testing the effectiveness of key internal financial controls over assessing the recoverability of trade receivables;
Considering the materiality of the amounts involved volume of the customers uncertainty associated with the impact of Covid-19 and significant management judgement involved in its assessment of recoverability this was considered to be a key audit matter in the audit of the financial statements. - Discussing extensively with management regarding steps taken for recovering the amounts and evaluating the design and testing operating effectiveness of controls;
- Assessing the reasonability of judgements exercised and estimates made by management in recognition of these receivables and validating them with corroborating evidence;
- Challenging the assumptions made by the management with respect to the provisions to be made as per the Expected Credit Loss reperforming the arithmetic calculations and evaluating the assumptions made with the base data
- Obtained confirmations from customers on sample basis to support existence assertion of trade receivables;
- Evaluated the nature and status of customers and obtained the understanding from management about whether ongoing business relationship with the customers past payment history of customers and any impact on those customers because of COVID 19 pandemic.
- Assessing the disclosures made by the management are in accordance with applicable accounting standards.

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 ReportCorporate Governance and Shareholder’s Information but does not include thefinancial statements and our auditors’ report thereon. The other information isexpected to be made available to us after the date of this auditors’ report.

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 our audit or otherwise appears to 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 communicate the matter to thosecharged with governance as required under SA 720 ‘The Auditors’ responsibilitiesrelating to other Information’.

Responsibilities of the Management and Board of Directors for the Financial Statements

The Company’s Management and Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. 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 accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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.

In preparing the financial statements Management and Board of Directors areresponsible 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.

The Board of Directors are also responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibilities for 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 ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud 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 scepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the Financial Statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists 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 auditors’ 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 auditors’ report. However future events or conditions may cause theCompany to cease to continue as a going concern.

- Evaluate the overall presentation structure and content of the Financial Statementsincluding the disclosures and whether the Financial Statements represent the underlyingtransactions 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 de_ciencies 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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Financial Statements for thefinancial year ended March 31 2021 and are therefore the key audit matters. We describethese matters in our auditors’ report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and except for the matter described in the "Basis for QualifiedOpinion" paragraph obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) Except for the matter described in the "Basis for Qualified Opinion"paragraph 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;

(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

(d) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) The matter described in the "Basis for Qualified Opinion" paragraph inour opinion may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;

(g) The qualification relating to maintenance of accounts and other matters connectedtherewith are as stated in the "Basis for Qualified Opinion" paragraph above andpara 2(b);

(h) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these financial statements and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B" tothis report;

(i) 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 information and according to the explanations given tous:

I. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 35 to the financial statements;

II. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

III. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For Arpit Patel & Associates.
Chartered Accountants
[Firm Registration No : 144032W]
Arpit K. Patel
Partner
Place: Ahmedabad [Membership No.: 034032]
Date: June 30 2021 UDIN: 21034032AAAACI1389

Annexure A to the Independent Auditor’s Report

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report to the members Vadilal Enterprises Limited ofeven date)

The Annexure referred to in Independent Auditor’s Report to the members of theCompany on the financial statements for the year ended March 312021.

We report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. However during the year no physical verification of fixed assetswas conducted as per the program prepared by the Management hence we are unable tocomment on the discrepancies.

(c) With respect to immovable properties of buildings according to the information andexplanations given to us and the records examined by us and based on the examination ofthe registered sale deed provided to us we report that the title deeds of such immovableproperties are held in the name of the Company as at the balance sheet date.

(ii) As explained to us inventories have been physically verified at reasonableintervals by the management during the period. In our opinion the frequency of suchverification is reasonable. No material discrepancies were noticed during suchverification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 as amended. According to the information and explanations given to us no order hasbeen passed by the Company Law Board or the National Company Law Tribunal or the ReserveBank of India or any Court or any other Tribunal.

(vi) To the best of our knowledge and according to the information and explanationsgiven to us the Company is not required to maintain cost records pursuant to Companies(Cost Records and Audit) Rules 2014 as amended prescribed by the Central Governmentunder section 148(1) of the Companies Act 2013.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Income-tax Customs Duty cess Goods and Service Tax and othermaterial statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Income-taxCustoms Duty cess Goods and Service Tax and other material statutory dues in arrears asat March 31 2021 for a period of more than six months from the date they became payable.

(c) Details of dues of Sales Tax Duty of excise Goods and Services Tax and Income-taxwhich have not been deposited as on 31st March 2021 on account of disputes are givenbelow:

Name of Statute Nature of Dues Forum where dispute is pending Period to which the amount relates Amount involved (In Lakh) Amount unpaid (In Lakh)
Central Sales Tax Act1956 and Sales Sales tax demand Member Commercial Tax Tribunal Bareilly 2010-2011 21.66 4.88
Tax Act of various states Sales tax demand Additional Commissioner - Grade-2 (appeal) Bareilly 2011-2012 3.65 3.65
Sales tax demand Member Commercial Tax Tribunal Bareilly 2012-2013 11.04 6.62
Sales tax demand Excise & Taxation Officer-Cum- Assessing Authority Sonepat 2014-15 20.92 20.92
Entry Tax Demand In the High Court of Judicature for Rajasthan Jaipur Bench Jaipur 2013-2014 4.78 -
Entry Tax Demand In the High Court of Judicature for Rajasthan Jaipur Bench Jaipur 2014-2015 12.07 -
Entry Tax Demand In the High Court of Judicature for Rajasthan Jaipur Bench Jaipur 2017-18 6.15 6.15

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks andfinancial institutions. The Company has not taken any loans or borrowings from governmentor has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to usmoney raised by way of term loans has been applied by the Company during the year for thepurpose for which they were raised other than temporary deployment pending application ofproceeds. The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments).

(x) We refer to the matter described in the Basis for Qualified Opinion section of ouraudit report the outcome of which is inconclusive as on date of this report. Read withthe above to the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) According to the information and explanations given by the management the Companyhas not paid/provided any managerial remuneration during the period and hence reportingunder clause 3(xi) of the Order is not applicable to the Company.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company has entered into transactions with related parties in compliance with theprovisions of Sections 177 and 188 of the Companies Act 2013. The details of such relatedparty transactions have been disclosed in the Financial Statements as required by theapplicable accounting standard.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible

debentures and hence reporting under clause (xiv) of the Order is not applicable to theCompany.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Arpit Patel & Associates.
Chartered Accountants
[Firm Registration No : 144032W]
Arpit K. Patel
Partner
Place: Ahmedabad [Membership No.: 034032]
Date: June 30 2021 UDIN: 21034032AAAACI1389

Annexure B to the Independent Auditor’s Report

(Referred to in paragraph 1(h) under ‘Report on Other Legal and RegulatoryRequirements’ section of our report to the Members of Vadilal Enterprises Limited ofeven date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of VadilalEnterprises Limited ("the Company") as of March 31 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management and Board of Directors’ Responsibility for Internal Financial Controls

The Management and the Board of Directors of the Company are responsible forestablishing and maintaining internal financial controls based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to respectivecompany’s policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols with reference to financial statements based on our audit conducted in accordancewith the Guidance Note on Audit of Internal Financial Control over Financial Reporting(the "Guidance Note") and the standard on Auditing deemed to be prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of internal financial controls and both issued bythe Institute of Chartered Accountants of India and the Standards on Auditing prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 judgement 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 qualified 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 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 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 havea material 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.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified in the Company’s internal financialcontrols over financial reporting as at 31 March 2021: We draw attention to Note 42 of thefinancial statements relating to the cross allegations between the Promoter Directorsduring the period 2013-14 to 2017-18 and 2013-14 to 2018-19 respectively for theappropriateness of the expenses amounting to Rs. 45.90 lakh and Rs. 53.39 lakhrespectively and matter involving allegations of operations and management issue whereinmarketing expenses of advertisements amounting to Rs. 38 crore during the period 2015-16to 2018-19 were alleged by one Promoter Director to be paid by the Company on approval byanother Promoter Director without following the process of the Company. Pending receiptof the reports/ findings as referred above we are unable to conclude whether theCompany’s financial reporting process did have controls to identify the nature of theexpenses and the procedures to be followed for the payments made for certain advertisementexpenses.

A ‘material weakness’ is a de_ciency or a combination of de_ciencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company’s annual or interim financialstatements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion to the best of our information and according to the explanations givento us except for the possible effect of the material weakness described in Basis forQualified Opinion paragraph above on the achievement of the objectives of the controlcriteria the Company has maintained in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as of 31 March 2021 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by the ICAI.

We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the financialstatements of the Company for the year ended 31 March 2021 and this material weakness hasaffected our opinion on the said financial statements of the Company and we have issued aqualified opinion on the financial statements of the Company.

For Arpit Patel & Associates.
Chartered Accountants
[Firm Registration No : 144032W]
Arpit K. Patel
Partner
Place: Ahmedabad [Membership No.: 034032]
Date: June 30 2021 UDIN: 21034032AAAACI1389

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