To the Members of Kerala Ayurveda Limited,
Report on the Audit of the Standalone Financial Statements.
Opinion.
1. We have audited the accompanying standalone financial statements of
Kerala Ayurveda Limited (“the Company”), which comprise the Balance Sheet as at
March 31, 2021 , the Statement of Profit and Loss (Including other Comprehensive Income),
the Cash Flow statement and the statement of changes in equity for the year then ended,
and a summary of the significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial statements give the
information required by the Companies Act, 2013 (Act) in the manner so required and give a
true and fair view in conformity with the accounting principles generally accepted in
India including Indian Accounting Standards (‘Ind AS) specified under section
133 of the act , of the state of affairs (financial position ) of the Company as at March
31, 2021 and its Loss (financial performance including other Comprehensive Income) , its
cash flows and the changes in equity for the year ended on that date.
Basis of Opinion
3. We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Our responsibilities under those Standards are
further described in the Auditors Responsibilities for the Audit of the standalone
Financial Statements section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India (‘ICAI) together with the ethical requirements that are relevant to Our
audit of the financial statements under the provisions of the Act and the Rules there
under, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the standalone financial statements
for the financial year ended March 31, 2021. These matters were addressed in the context
of our audit of the standalone financial statements as a whole and in forming our opinion
thereon and we do not provide a separate opinion on these matters. We have determined the
matters described below to be the key audit matters to be communicated in our report.
| Key Audit Matter |
How the Key Audit Matter was addressed in our audit |
| Refer to note 2.f ‘Inventories to the standalone
financial statements. The total value of inventory as of March 31, 2021 amounted to 950
lakhs representing 9.87% of the total assets (2020: 1,146 Lakhs, 12.25% of the total
assets). Inventories are measured at the lower of cost and net realisable value on FIFO
basis . The valuation of inventory is dependent on establishing appropriate valuation
controls. We focused on this area as Management judgment is applied to estimate the
appropriate write-down for obsolete inventories and the indirect production costs manually
capitalised as inventory. These judgments are key elements in the valuation of
inventories. |
We have performed the following principal audit procedures in
relation to Inventory valuation: |
|
We tested relevant internal controls that the Company uses to
ensure proper valuation of inventory, including the procedures for write-down of obsolete
inventory and the indirect production costs manually capitalised as inventory. |
|
We tested the adequacy of write- downs for excess and/or
obsolete inventory by verifying future demand data, historical usage, historical accuracy
of write-downs and managements plans to utilise the inventory. |
|
We evaluated the significant judgments and estimates made by
Management in applying Companys accounting policy in relation to indirect production
costs. |
|
We assessed the Companys disclosures in the financial
statements in respect of inventory. |
Information Other than the Standalone Financial Statements and
Auditors Report Thereon
5. The Companys Board of Directors is responsible for the other
information. The other information comprises the information included in the Management
report, Chairmans statement, Directors report etc but does not include the
standalone financial statements and our auditors report thereon.
Our opinion on the standalone 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 standalone financial statements,
our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the standalone 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
6.The Companys Board of Directors is responsible for the matters
stated in Section 134(5) of 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 Indian 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 standalone financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.
7.In preparing the standalone 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.
8.Those Board of Directors are also responsible for overseeing the
Companys financial reporting process.
Auditors Responsibilities for the Audit of the standalone
Financial Statements
9.Our objectives are to obtain reasonable assurance about whether the
standalone financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditors report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Standards on auditing will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these
standalone financial statements.
10.As part of an audit in accordance with Standards on Auditing , 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
statements, 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.
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 on whether the company has
adequate internal financial controls system in place and the operating effectiveness of
such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements 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
Companys ability 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 standalone financial statements 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.
However, future events or conditions may cause the Company to cease to continue as a
going concern
Evaluate the overall presentation, structure and content of the standalone financial
statements, including the disclosures, and whether the standalone financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
11.We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our
audit.
12.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.
13.From the matters communicated with those charged with governance, we
determine those matters that were of most significance in the audit of the standalone
financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditors report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
14.As required by the Companies (Auditors Report) Order, 2016
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 the matters specified in paragraphs 3
and 4 of the Order to the extent applicable.
15.Further to our Comments in Annexure A, 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 best
of our knowledge and belief were necessary for the purpose of our audit;
b. 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. The standalone financial statements dealt with by this report are in agreement with
the books of accounts
d. In our opinion, the aforesaid standalone financial statements comply with Ind AS
specified under Section 133 of the Act
e. On the basis of the written representations received from the directors and taken on
record by the board of directors, none of the directors is disqualified as on March 31,
2021 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”.
g. In our opinion, the managerial remuneration for the year ended March 31, 2021 has
been paid / provided by the Company to its directors in accordance with the provisions of
section 197 read with Schedule V to the Act;
h. 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 does not have any pending litigations which would impact its financial
position
ii)the Company does not have any long-term contracts requiring a provision for material
foreseeable losses.
iii)The Company does not have any amounts required to be transferred to the Investor
Education and Protection Fund.
|
For Maharaj Rajan and Mathew |
|
Chartered Accountants |
|
Firm Registration Number 001932S |
|
Mathew Joseph Bcom ,FCA,DISA(ICA) |
| Ernakulam |
(Partner) |
| 30/06/2021 |
Membership Number 022658 |
Annexure A to the Independent Auditors Report
The annexure referred to in Independent Auditors report to the members
of The Company on the standalone financial statements for the year ended 31st
March 2021 ,We report that .
i. (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets comprising of property, plant and
equipment, capital work-in-progress and other intangible assets.
ii. (b) The company has a program of verification to cover all the items of fixed
assets comprising of property, plant and equipment, capital work-in-progress and other
intangible assets in a phased manner which, in our opinion, is reasonable having regard to
the size of the company and the nature of its assets. Pursuant to the program, certain
fixed assets were physically verified by the management during the year. According to the
information and explanation given to us, no material discrepancies were noticed on such
verification.
(c) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties are
held in the name of the Company. iii. In our opinion, the management has conducted
physical verification of inventory at reasonable intervals during the year, except for
goods-in-transit and stocks lying with third parties. For stocks lying with third parties
at the year-end, written confirmations have been obtained by the management. No material
discrepancies were noticed on the aforesaid verification
iv. According to the information and explanations given to us, the Company has granted
unsecured loans to subsidiaries covered in the register maintained under Section 189 of
the Act, in respect of which
a) The terms and conditions of the grant of such loans are, in our opinion, prima
facie, not prejudicial to the companys interest.
b) The Schedule of Repayment has been stipulated for the loans granted and repayments
are regular.
c) There are no overdue amount remaining outstanding as at the year-end
v. In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of the section 185 and 186 of the Act in respect
of grant of loans, making investments and providing guarantees and securities, as
applicable.
vi. In our opinion, the Company has not accepted any deposits within the meaning of
Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as
amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
vii. We have broadly reviewed the books of account maintained by the Company pursuant
to the Rules made by the Central Government for the maintenance of cost records under
Sub-Section (1)of Section 148 of the Act in respect of Companys products and are of
the opinion that, prima facie, the prescribed accounts and records have been made and
maintained. However, we have not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
viii. Undisputed statutory dues including GST, provident fund, employees state
insurance, income-tax, sales-tax, service tax, duty of customs, value added tax, cess and
other material statutory dues, as applicable, have generally been regularly deposited to
the appropriate authorities, though there has been a slight delay in a few cases. Further,
no undisputed amounts payable in respect thereof were outstanding at the year-end for a
period of more than six months from the date they became payable.
ix. Based on our audit procedures and according to the information and explanations
given to us, we are of the opinion that the Company has not defaulted in repayment of dues
to Banks, Financial Institutions, Government or debenture holders. The Company did not
have any outstanding debentures during the year .
x. The Company did not raise moneys by way of initial public offer or further public
offer (including debt instruments). In our opinion, the term loans were applied for the
purposes for which the loans were obtained.
xi. To the best of our knowledge and according to the information and explanation given
to us, no material fraud by the Company or on the Company by its officers or employees has
been noticed or reported during the period covered by our audit..
xii. According to the information and explanations given to us and based on our
examination of the records of the Company, The Company has paid/provided for Managerial
Remuneration in accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Companies Act.
xiii. The Company is not a Nidhi Company. Therefore the provisions of clause 3 (xii) of
the Order are not applicable to the Company.
xiv. In our opinion all transactions with the related parties are in compliance with
Sections 177 and 188 of Act, where applicable, and the requisite details have been
disclosed in the financial statements etc., as required by the applicable Ind AS.
xv. According to the information and explanations given to us and based on our
examination of the records of the Company , the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year
xvi. According to the information and explanations given to us and based on our
examination of the records of the Company, the company has not entered into non-cash
transactions with directors or persons connected with him; Accordingly Paragraph 3 (xv) of
the Order is not applicable.
xvii. The Company is not required to be registered under Section 45-IA of the Reserve
Bank of India Act,1934
|
For Maharaj Rajan and Mathew |
|
Chartered Accountants |
|
Firm Registration Number 001932S |
|
Mathew Joseph Bcom ,FCA,DISA(ICA) |
| Ernakulam |
(Partner) |
| 30/06/2021 |
Membership Number 022658 |
Independent Auditors report on the Internal Financial Controls
under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 (“the
Act”)
In conjunction with our audit of the standalone financial statements of
Kerala Ayurveda Limited (“the Company”) as of and for the year ended 31 March,
2021, we have audited the internal financial controls over financial reporting of the
Company as of that date.
Managements Responsibility for Internal Financial Controls
The Companys Board of Directors is responsible for establishing
and maintaining internal financial controls based on the internal control over financial
reporting criteria established by the Company considering the essential components of
internal control stated in Guidance Note on Audit of Internal Financial Controls over
Financial Reporting (the “Guidance Note”) issued by Institute of Chartered
Accountants of India (‘ICAI). These responsibilities include the design,
implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct of the Companys business,
including adherence to Companys policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as
required under the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys
internal financial controls over financial reporting based on our audit. We conducted our
audit in accordance with the Standards on Auditing, issued by the ICAI and deemed to be
prescribed under Section 143(10) of the Act, to the extent applicable to an audit of
internal financial controls over financial reporting and the Guidance Note issued by the
ICAI. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting were established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about
the adequacy of the Internal Financial Controls system over Financial Reporting and their
operating effectiveness. Our audit of Internal Financial Controls over Financial Reporting
included obtaining an understanding of Internal Financial Controls over Financial
Reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditors judgment, including the assessment of the
risks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the Companys Internal
Financial Controls system over Financial Reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Companys Internal Financial Controls over Financial Reporting
is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A Companys Internal
Financial Controls over Financial Reporting include those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of Management and Directors of the Company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the Companys 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
Financial Reporting , including the possibility of collusion or improper Management
override of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the Internal Financial Controls over
Financial Reporting to future periods are subject to the risk that Internal Financial
Controls over Financial Reporting may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, adequate
internal financial controls over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31 March, 2021, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note issued by the
ICAI.
|
For Maharaj Rajan and Mathew |
|
Chartered Accountants |
|
Firm Registration Number 001932S |
|
Sd/- |
|
Mathew Joseph Bcom ,FCA,DISA(ICA) |
| Ernakulam |
(Partner) |
| 30/06/2021 |
Membership Number 022658 |
+91-9892691696
