To the Members of Vipul Organics Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying Standalone Financial Statements ofVipul Organics Limited ("the Company") which comprise the Balance Sheet as at31st March 2020 and Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone 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 (financial position) ofthe Company as at 31st March 2020 and its profit (financial performanceincluding other comprehensive income) its cash flows and the changes in equity for theyear ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act. Our responsibilities under those standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode 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 Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined that there are no other key audit matters to becommunicated in our report.
Information other than the Financial Statements and Auditor'sReport thereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the financial statements and our auditor's reportthereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance/ conclusion thereon. In connectionwith our audit of the financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated. If based on the work we have performed weconclude that there is a material misstatement of this other information we are requiredto report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements
The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance(including Other Comprehensive Income)cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified undersection 133 of the Act.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditors' Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists.
Misstatements can arise from fraud or error and are considered materialif individually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls with reference tothe Standalone Financial Statements in place and the operating effectiveness of suchcontrols.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists 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 auditor's report to therelated disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern. Evaluate the overallpresentation structure and content of the Standalone Financial Statements including thedisclosures and whether the Standalone Financial Statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure A" a statement on thematters specified in Para 3 and 4 of the 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;
(c) the Balance Sheet and Statement of Profit and Loss (including otherComprehensive Income) Cash Flow Statement and the Statement of Changes in Equity dealtwith by this report are in agreement with the books of account;
(d) in our opinion the aforesaid Standalone financial statementscomply the Indian Accounting Standards specified under Section 133 of the Act read withrelevant rules thereunder;
(e) on the basis of the written representations received from thedirectors as on 31st March2020 taken on record by the Board of Directors noneof the directors is disqualified as on 31st March2020 from being appointed asa director in terms of Section 164 (2) of the Act; and
(f) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls we give report in "Annexure B".
(g) As required by Section 197(16) of the Act we report that duringthe year the Company has paid remuneration to its directors in accordance with theprovisions of and limits laid down under Section 197 of the Act.
(h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed impact of pending litigation on itsfinancial position in its standalone financial statements. (refer note 33 on contingentliabilities).
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There has been delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
"Annexure A" to the Independent Auditors' Report of evendate on the Standalone Financial Statements of Vipul Organics Limited
Referred to in paragraph 1 under the heading Report on OtherLegal & Regulatory Requirement' of our report of even date to the Standalonefinancial statements of the Company for the year ended 31st March 2020 :
1) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets;
(b) The Company has a regular programme of physical verification of itsfixed assets by which fixed assets are verified in a phased manner. In accordance withthis programme certain fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) According to the information and explanation given to us and on thebasis of our examination of the records of the Company the title deeds of the immovableproperties are held in the name of the Company except for a Land whose gross block is Rs.2500(000).
2) The inventories has been physically verified by the management atreasonable intervals during the year.In our opinion the frequency of such physicalverification is reasonable and no material discrepancies were noticed on physicalverification carried out during the year. We were not in a position to physically attendthe inventory verification which was planned at the year end due to shut down of its plantfollowing the nationwide lockdown imposed by the Govt. of India in view of the Covid 19Pandemic. Consequently we have conducted alternative analytical review proceduresincluding roll forward procedures and relied on other internal controls for drawingcomfort on the inventory as reported in the financial statements as the year end.
3) The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability partnerships or other parties covered in the Registermaintained under section 189 of the Act. Accordingly the provisions of clause 3 (iii) (a)to (c.) of the Order are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanationsgiven to us the company has complied with the provisions of section 185 and 186 of theCompanies Act 2013 In respect of loans investments guarantees and security.
5) in our opinion the Company has not accepted any deposits from thepublic within the provisions of Sections 73 to 76 of the Act and rules framed thereunder.
6) We have broadly reviewed the books of accounts maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148 of the Act and are of the opinion that prima facietheprescribed accounts and records have been maintained. We have not however made adetailed examination of the records with a view to determine whether they are accurate orcomplete.
7) (a) According to information and explanations given to us and on thebasis of our examination of the books of account and records the Company has beengenerally regular in depositing undisputed statutory dues including Income-Tax Valueadded tax Service tax Custom Duty Excise Duty and any other statutory dues with theappropriate authorities except for delays in depositing Goods & Service Tax and Taxdeducted at source. According to the information and explanations given to us noundisputed amounts payable in respect of the above were in arrears as at 31stMarch 2020 for a period of more than six months from the date on when they becomepayable.
b) According to the information and explanation given to us there areno dues of income tax Value added tax service tax custom duty excise duty and anyother statutory dues outstanding on account of any dispute except for followings:-
|Name of the statute/ dues ||Amount (in 000) ||Period to which the amount relates ||Forum where the dispute is pending |
|Income Tax Act1961 ||55 ||A.Y. 2002-03 ||Income Tax Appellant Tribunal Mumbai |
|Income Tax Act1961 ||316 ||A.Y. 2011-12 ||Commissioner of Income TaxAppeals Mumbai |
|Income Tax Act1961 ||21714 ||A.Y. 2015-16 ||Commissioner of Income TaxAppeals Mumbai |
8) Based on the records examined by us and according to the informationand explanations given to us the Company has not defaulted in repayment of loans orborrowings to any financial institution or bank as at the Balance Sheet date. Further theCompany did not have loans or borrowings from the government and has not issued anydebentures as at the Balance Sheet date.
9) The company has not raised moneys by way of initial public offer orfurther public offer including debt instruments. based on the records examined by us andaccording to the information and explanations given to us the moneys raised by way ofterm loans were applied for the purpose for which they were obtained.
10) According to the information and explanations given by themanagement and based upon the audit procedures performed and we report that no fraud bythe Company or on the company by its officers or employees has been noticed or reportedduring the year.
11) Based upon the audit procedures performed and the information andexplanations given by the management managerial remuneration has been paid in accordancewith the requisite approvals mandated by the provisions of section 197 read with scheduleV of the Companies Act2013.
12) In our opinion the Company is not a Nidhi Company. Therefore theprovisions of clause 4 (xii) of the Order are not applicable to the Company.
13) In our opinion all transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 and the details have beendisclosed in the Ind AS Financial Statements as required by the applicable accountingstandards.
14) Based upon the audit procedures performed and the information andexplanations given by the management the company has not made preferential allotment ofshares during the year under review. Funds so raised in previous year were applied for thepurpose for which it was issued surplus funds have been temporarily held in fixed depositwith bank.
15) According to the information and explanations given by themanagement the company has not entered into any non-cash transactions with directors orpersons connected with him. Accordingly the provisions of clause 3 (xv) of the Order arenot applicable to the Company and hence not commented upon.
16) In our opinion the company is not required to be registered undersection 45 IA of the Reserve Bank of India Act 1934.
"Annexure B" to the Independent Auditor's Report of evendate on the Standalone Financial Statements of Vipul Organics Limited
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Vipul Organics Limited ("the Company") as of 31stMarch2020 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Board of Directors is responsible for establishingand maintaining internal financial controls 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 Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness.
Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31stMarch2020 based the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.
|For R. A. Kuvadia & Co. |
|Chartered Accountants |
|Firm Reg. No. 105487W |
|R. A. Kuvadia |
|Membership No. 040087 |
|Place: Mumbai |
|Date:31st July2020 |