To the Members of Vipul Organics Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of Vipul OrganicsLimited ("the Company") which comprise the Balance Sheet as at 31st March2019and Statement of Profit and Loss (including Other Comprehensive Income) the Cash Flowstatement 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 the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ('Act') in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India including IndianAccounting Standards ('Ind AS') specified under section 133 of the Act of the state ofaffairs (financial position) of the Company as at 31 March 2019 and its profit (financialperformance including other comprehensive income) its cash flows and the changes inequity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act.Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ('ICAI') together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our 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 other key audit matters to be communicated in ourreport.
Information other than the Financial Statements and Auditor'sReport thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe 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 thefinancial statements our responsibility is to read the other information andin doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. 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.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 ofthese financial statements that give a true and fair view of the financial positionfinancial performance(including Other Comprehensive Income)cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue 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.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditors' Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material ifindividually 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 professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Standalone 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 financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Companies Act2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to theStandalone Financial Statements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertainty existsrelated to events or conditions that may cast significant doubt on the Company's abilityto continue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in theStandalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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 them allrelationships and other matters that may reasonably be thought to bear on our independenceand 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 Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specifiedin 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 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 and Statement of Profit and Loss (including other ComprehensiveIncome) Cash Flow Statement and the Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account;
(d) in our opinion the aforesaid Standalone financial statements comply the IndianAccounting Standards specified under Section 133 of the Act read with relevant rulesthereunder;
(e) on the basis of the written representations received from the directors as on31stMarch2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31stMarch2019 from being appointed as a director in terms of Section164 (2) of the Act; and
(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controls wegive report in "Annexure B".
(g) As required by Section 197(16) of the Act we report that during the year theCompany has paid remuneration to its directors in accordance with the provisions of andlimits laid down under Section 197 of 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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed impact of pending litigation on its financial position inits standalone financial statements. (refer note 34 on contingent liabilities).
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
For R. A. Kuvadia & Co.
Firm Reg. No. 105487W
R. A. Kuvadia
Membership No. 040087
"Annexure A" to the Independent Auditors' Report of even date on theStandalone Financial Statements of Vipul Organics Limited
Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date to the Standalone financial statements of theCompany for the year ended 31st March 2019 :
1) (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. In accordance with this programmecertain fixed assets were verified during the year and no material discrepancies werenoticed on such verification. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of the immovable properties areheld 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 at reasonableintervals during the year.In our opinion the frequency of such physical verification isreasonable and no material discrepancies were noticed on physical verification carried outduring the year.
3) 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 Act. Accordingly the provisions of clause 3 (iii) (a) to (c.) of theOrder are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013In respect of loans investments guarantees and security.
5) in our opinion the Company has not accepted any deposits from the public within theprovisions of Sections 73 to 76 of the Act and rules framed thereunder.
6) We have broadly reviewed the books of accounts maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148 of the Act and are of the opinion thatprima faciethe prescribed accounts andrecords have been maintained. We have not however made a detailed examination of therecords with a view to determine whether they are accurate or complete.
7) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Income-Tax Value added tax Servicetax Custom Duty Excise Duty and any other statutory dues with the appropriateauthorities except for delays in depositing Professional tax Goods & Service Tax andTax deducted at source. According to the information and explanations given to us noundisputed amounts payable in respect of the above were in arrears as at 31st March 2019for a period of more than six months from the date on when they become payable.
b) According to the information and explanation given to us there are no dues ofincome tax Value added tax service tax custom duty excise duty and any other statutorydues outstanding on account of any dispute except for Rs. 55('000) income tax in respectof Assessment Year 2002-03 which is in Appeal with Income Tax Appellate Tribunal Mumbaiand for Rs. 316('000) Income Tax in respect of Assessment Year 2011-12 which is Appealwith Commissioner of Income Tax Mumbai.
8) Based on the records examined by us and according to the information andexplanations 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 or further publicoffer including debt instruments. based on the records examined by us and according to theinformation and explanations given to us the moneys raised by way of term loans wereapplied for the purpose for which they were obtained.
10) According to the information and explanations given by the management and basedupon the audit procedures performed and we report that no fraud by the Company or on thecompany by its officers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanationsgiven by the management managerial remuneration has been paid in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V of theCompanies Act2013.
12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in the IndAS Financial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made preferential allotment of shares duringthe year under review. Funds so raised in previous year were applied for the purpose forwhich it was issued surplus funds have been temporarily held in fixed deposit with bank.
15) According to the information and explanations given by the management the companyhas not entered into any noncash transactions with directors or persons connected withhim. Accordingly the provisions of clause 3 (xv) of the Order are not applicable to theCompany and hence not commented upon.
16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934.
For R. A. Kuvadia & Co.
Firm Reg. No. 105487W
R. A. Kuvadia
Membership No. 040087
"Annexure B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of Vipul Organics Limited
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 VipulOrganics Limited ("the Company") as of 31st March2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria 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. 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 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'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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March2019 based theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For R. A. Kuvadia & Co.
Firm Reg. No. 105487W
R. A. Kuvadia
Membership No. 040087