We have audited the Financial Statements of
KARNIKA INDUSTRIES LIMITED
(“the Company”), which comprise the Balance
Sheet as at 31st March 2025, and the
Statement of Profit and Loss and Statement of
Cash Flows for the year then ended, and notes
to the Financial Statements, including a
summary of 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, the aforesaid 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 accounting
principles generally accepted in India, of the
state of affairs of the Company as at March 31,
2025, and its profit and its Cash Flow for the
year ended on that date.
Basis for Opinion
We conducted our audit in accordance with
the Standards on Auditing (SAs) specified
under Section 143(10) of the Act. Our
responsibilities under those SAs are further
described in the Auditor’s Responsibilities for
the Audit of the 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 together with the ethical
requirements that are relevant to our audit of
the financial statements under the provisions
of the Act and the Rules thereunder, 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
on the financial statements.
Key Audit Matters:
Key audit matters are those matters that, in
our professional judgment, were of most
significant in our audit of the Financial
Statements of the current period. These
matters were addressed in the context of our
audit of the financial statement as a whole, and
in forming our opinion thereon, and we do
not provide a separate opinion on these
matters. In the audit of the current period, we
have not observed any key audit matters
required to be reported separately.
Information Other than the Financial
Statements and Auditor’s Report thereon
The Company’s Board of Directors are
responsible for the preparation of the other
information. The other information
comprises the information included in the
Company’s annual report but does not include
the financial statements and our auditor’s
report there on.
Our opinion on the financial statements does
not cover the other information and we do not
express any form of assurance conclusion
there on.
In connection with our audit of the financial
statements, our responsibility is to read the
other information identified above when it
becomes available and, in doing so, consider
whether the other information is materially
inconsistent with the financial statements or
our knowledge obtained during the course of
our 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.
Responsibility of Management for
Financial Statements
The Company’s Management and Board of
Directors are responsible for the matters
stated in Section 134(5) of the Act with respect
to the preparation of these financial
statements that give a true and fair view of the
financial position, financial performance 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
statements that give a true and fair view and
are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the
Management and Board of Directors are
responsible for assessing the Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related to
going concern and using the going concern
basis of accounting unless the Management
and the Board of Directors either intends to
liquidate the Company or to cease operations,
or has no realistic alternative but to do so.
The Board of Directors are also responsible
for overseeing the company’s financial
reporting process.
Auditor’s Responsibilities for the Audit of
the Financial Statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from material
misstatement, whether due 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 audit conducted in accordance with SAs
will always detect a material misstatement
when it exists. Misstatements can arise from
fraud or error and are considered material if,
individually or in aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on the basis
of these financial statements.
As part of an audit in accordance with SAs, we
exercise professional judgement and maintain
professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material
misstatement of the 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 Companies Act,
2013, we are also responsible for
expressing our opinion on whether the
company has adequate internal financial
controls with reference to financial
statements 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 and
Board of Directors
• Conclude on the appropriateness of
Management and Board of Directors use
of the going concern basis of accounting in
preparation of Financial Statements and,
based on the audit evidence obtained,
whether a material uncertainty exists
related to events or conditions that may
cast significant doubt on the Company’s
ability to continue as a going concern. If we
conclude that a material uncertainty exists,
we are required to draw attention in our
auditor’s report to the related disclosures in
the 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 auditor’s 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 financial
statements, including the disclosures, and
whether the financial statements represent
the underlying transactions and events in a
manner that achieves fair presentation.
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.
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.
From the matters communicated with those
charged with governance, we determine those
matters that were of most significance in the
audit of the Financial Statements of the
current period and are therefore the key audit
matters. We describe these matters in our
auditor’s 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
1. A. As required by the Companies (Auditor’s
Report) Order, 2020 (“the Order”),
issued by the Central Government of
India in terms of sub-section (11) of
section 143 of the Companies Act, 2013,
we give in the “Annexure A” a statement
on the matters specified in paragraphs 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 best of 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 the Company so far as it
appears from our examination of
those books.
(c) The Balance Sheet, the Statement of
Profit and Loss and the Statement of
Cash Flow dealt with by this Report
are in agreement with the books of
account.
(d) In our opinion, the aforesaid financial
statements comply with the
Accounting Standards specified
under Section 133 of the Act, read
with Rule 7 of the Companies
(Accounts) Rules, 2014.
(e) On the basis of the written
representations received from the
directors as on 31st March 2025 taken
on record by the Board of Directors,
none of the directors is disqualified as
on 31st March 2025 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 with
reference to financial statements 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
operating effectiveness of the
company's internal financial controls
over financial reporting.
B. With respect to the other matters to
be included in the Auditor’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 the explanations given to us:
(a) The Company does not have any
pending litigations which would
impact on its financial position.
(b) The Company did not have any
long-term contracts including
derivative contracts for which
there were any material
foreseeable losses.
(c) There were no amounts which
were required to be transferred
to the Investor Education and
Protection Fund by the
company.
(d) The Management has
represented that, to the best of
its knowledge:
i. 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 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
ultimate beneficiaries.
ii. no funds have been
received by the company
from any person(s) or
entity(ies) including foreign
entities (“Funding Parties”)
with the understanding
whether in writing or
otherwise, that such
company shall directly or
indirectly, lend or invest in
other persons or entities
identified in any manner
whatsoever by or on behalf
of the Funding Parties
(Ultimate Beneficiaries) or
provide any guarantee,
security or the like on behalf
of the Ultimate
beneficiaries.
iii. Based on such audit
procedures as 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 iv(a) and iv(b)
contain any material
misstatement.
(e) Based on our examination which
included test checks, the
Company has used accounting
software for maintaining its
books of account, which have a
feature of recording audit trail
(edit log) facility and the same
has operated throughout the year
for all relevant transactions
recorded in the respective
software:
Further, for the periods where
audit trail (edit log) facility was
enabled and operated
throughout the year for the
respective accounting software,
we did not come across any
instance of the audit trail feature
being tampered with.
The Audit Trail has been
preserved by the Company as per
the statutory requirements for
record retention.
C. The dividend declared by the
Company during the year has been
paid until the date of this audit
report is in compliance with Section
123 of the Act.
D. With respect to the matter to be
included in the Auditor’s Report
under Section 197(16) of the Act:
In our Opinion, and according to the
information and explanations given
to us the remuneration paid by the
Company to its Directors during the
current year 2025 has been paid
/provided by the company to its
directors is in accordance with the
provisions of section 197 of the Act.
For A A A J & Associates
(Formerly known as Uttam Agarwal & Associates)
Chartered Accountants
Firm Reg. No. 0322455E
Sd/-
CA Deepak Agarwal
Partner
Mem. No. 061132
Date: 27.05.2025
UDIN: 25061132BMIYTN1259
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