To the Members of Evexia Lifecare Limited (Formerly Known as Kavit Industries Limited)
Report on the Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the accompanying standalone financial statements of Evexia Lifecare
Limited (Formerly Known as Kavit Industries Limited) (“the Company”), which
comprises of the Balance Sheet as at 31 March, 2023, the Statement of Profit and Loss
(including Other Comprehensive Income), the Statement of Changes in Equity and the Cash
Flow Statement for the year then ended, and notes to the standalone financial statements,
including a summary of the significant accounting policies and other explanatory
information.
In our opinion and to the best of our information and according to the explanations
given to us, except for the possible effects of the matters described in the Basis for
Qualified Opinion section of our report, the aforesaid standalone financial statements
give the information required by the Companies Act, 2013 (‘the Act) in the manner so
required and give a true and fair view in conformity with the Indian Accounting Standards
(‘Ind AS) specified under section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015 and other accounting principles generally accepted in
India, of the state of affairs of the Company as at 31 March 2023, and its profit
(including other comprehensive income), its cash flows and the changes in equity for the
year ended on that date.
Basis for Qualified Opinion
a) We draw attention to the Note No 43 to the Financial Results, which indicates that
Loans receivables of INR 1449.32 lakhs, which have significant increase in credit risk, in
respect of which the Company has not made any assessment for expected credit loss, in
accordance with the requirements of Ind AS 109: Financial instruments, as the management
considers such balances as good and recoverable in future. In the absence of such
assessment for expected credit loss by the Management and any other evidence to
corroborate the Managements assessment, we are unable to comment on the recoverability of
these balances and the consequent impact, if any, on the provision thereon and the loss
reported in the financial results.
b) We draw attention to the Note No 44 to the Financial Results, which indicates that
Trade Receivables amounting to INR 4301.85 lakhs, which have significant increase in
credit risk, in respect of which the Company has not made any assessment for expected
credit loss, in accordance with the requirements of Ind AS 109: Financial instruments,
as the management considers such balances as good and recoverable in future. In the
absence of such assessment for expected credit loss by the Management and any other
evidence to corroborate the Managements assessment, we are unable to comment on the
recoverability of these balances and the consequent impact, if any, on the provision
thereon and the loss reported in the financial
c) We draw attention to the Note No 45 to the Financial Results, which indicates that
company has made investments in unquoted equity shares of the companies amounting to INR
87.39/- Lakhs for which company is unable to determine fair valuation of its
investments.
d) We draw attention to the Note No 46 to the Financial Results, which indicates that
company has subsidiary “Kavit Edible Oil Limited” which has suspended its
manufacturing operations since March, 2019. Company has exposure of INR 123.98 Lakhs in
form of Equity and unsecured loan and companys subsidiary has negative net worth as of 31st
March, 2023. These conditions raised substantial doubt about its ability as going concern.
e) We draw attention to the Note No 48 to the Financial Results, regarding the Company
has not recognized the financial liabilities of Foreign Currency Convertible Bonds
amounting to INR 68,887.47 Lakhs at amortized cost as per the Ind AS 109 Financial
instruments. Had this amortization is followed as per Ind AS 109, Profit after tax for the
year and consequently Retained Earnings as at 31st March 2023 would have been
lower by INR 584.98 Lakhs.
Emphasis of Matter
a. We draw attention to the Note No 43 to the financial results in respect of the
Interest free loans granted by the Company to associates concern and others of INR 4156.85
Lakhs, the terms and conditions including repayment thereof have not been stipulated by
the Company
Our Opinion is not modified in respect of these matters.
Information other than the Financial Statements and Auditors Report thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual Report but does not include
the financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information; we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone
Financial Statements
The accompanying standalone financial statements have been approved by the Companys
Board of Directors .The Companys Board of Directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the
preparation of these standalone financial statements that give a true and fair view of the
state of affairs (financial position), profit or loss (financial performance including
other comprehensive income), changes in equity and cash flows of the Company in accordance
with the accounting principles generally accepted in India, including the accounting
Standards specified under section 133 of the Act. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statement that give a true and fair view and
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those Board of Directors are also responsible for overseeing the companys financial
reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objective is to obtain reasonable assurance about whether the statement
responsibility is to issue a report on these financial results based on our audit
conducted in accordance with Standards on Auditing generally accepted in India. However,
because of the matters described in the Basis of Disclaimer of Conclusion Paragraph, we
were not able to obtain sufficient appropriate evidence to provide a basis for our
conclusion on these financial results.
As part of an audit in accordance with Standards on Auditing, specified under section
143(10) of the Act we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financial
results, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Identify and assess the risks of material misstatement of the standalone financial
results, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a Evaluate the appropriateness of
accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Board of Directors. material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Obtain an
understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act,
we are also responsible for expressing our opinion whether the company has adequate
internal financial controls with reference to financial statements in place and the
operating effectiveness of such controls. Conclude on the appropriateness of the Board of
Directors use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the ability of the Group and its associate to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors report to the related disclosures in the consolidated financial
results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditors report. Evaluate the
overall presentation, structure and content of the standalone financial results, including
the disclosures, and whether the standalone financial results represent the underlying
transactions and events in a manner that achieves fair presentation. Obtain sufficient
appropriate audit evidence regarding the financial statements of the Company and its joint
operations or the business activities within the Company to express an opinion on the
financial statements. We are responsible for the direction, supervision and performance of
the audit of financial statements of the Company and such joint operations included in the
financial statements, of which we are the independent auditors, if any. For the joint
operations included in the financial statements, which have been audited by other
auditors, such other auditors remain responsible for the direction, supervision and
performance of the audits carried out by them. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding among other matters, the
planned scope and timing of the audit & significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by section 197(16) of the Act, based on our audit, we report that the
Company has paid remuneration to its directors during the year in accordance with the
provisions of and limits laid down under section 197 read with Schedule V to the Act.
2. As required by the Companies (Auditors Report) Order, 2020 (“the Order”)
issued by the Central Government in terms of Section 143(11) of the Act, we give in
“Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the
Order.
3. As required by Section 143(3) of the Act, based on our audit, we report that:
a) We have sought and except for the matters described in the Basis for Qualified
Opinion section, obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of our audit of the accompanying
standalone financial statements.
b) Except for the possible effects of the matters described in the Basis for Qualified
Opinion section, in our opinion, proper books of account as required by law have been kept
by the Company so far as it appears from our examination of those books.
c) Subject to the matters described in the Basis for Qulified of Opinion section above,
the Balance Sheet, the Statement of Profit and Loss including Other Comprehensive income,
the statement of changes in equity and the Cash Flow Statement dealt with by this Report
are in agreement with the books of account.
d) Due to the possible effects of the matter described in the Basis for Qualified of
Opinion section above, we are unable to state whether; the aforesaid standalone financial
statements comply with the Indian Accounting Standards prescribed under section 133 of the
Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended.
e) On the basis of written representations received from the directors as on 31st
March 2023 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March 2023 from being appointed as a director in terms
of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in “Annexure B”. Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Companys internal financial controls over
financial reporting. g) With respect to the other matters to be included in the Auditors
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 the explanations given to
us: i. The Company has disclosed the impact of pending litigations on its financial
position in its financial statements. ii. The Company has made provision, as required
under the applicable law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts. iii. There has been no delay in
transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the Company. iv. a) The Management has represented that , to the best of their
knowledge and belief, no funds have been advanced or loaned or invested (either from
borrowed funds or share premium or any other sources or kind of funds) by the Company to
or in any other person(s) or entity(ies), including foreign entities
("Intermediaries"), with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
company ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries;
b) The Management has represented that , to the best of their knowledge and belief, no
funds have been received by the company from any person(s) or entity(ies), including
foreign entities (“Funding Parties”), with the understanding, whether recorded
in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security
or the like on behalf of the Ultimate Beneficiaries; and c) Based on such audit procedures
performed that have been considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e) contain any material mis-statement.
v. There is no dividend declared or paid during the year by the Company and hence
provisions of section 123 of the companies Act, 2013 are not applicable.
For M Sahu & Co Chartered Accountants Firm Registration No: 130001W
| Partner (Manojkumar Sahu) |
Date: 27th May, 2023. |
| Membership No: 132623 |
Place: Vadodara |
| UDIN: 23132623BGXVGX3714 |
|
Evexia Lifecare Limited (Formerly Known as Kavit Industries Limited) CIN
L23100GJ1990PLC014692
+91-9892691696
