bharat agri Auditors report

Report on the Audit of the Standalone Financial Statements Qualified Opinion

We have audited the accompanying standalone financial statements of Bharat Agri Fert and Realty Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").

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 prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023 and its loss, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

1. Basis for Qualified Opinion

Attention is drawn to:

a) Carrying value of old overdue trade receivables is Rs. 10.79 Crores as at 31^st March 2023.The Company has not made any provision regarding the said old overdue trade receivables.

b) Old overdue advances:

The Company has given advances to certain parties aggregating to Rs.1.08 Crores as at 31^st March 2023.Certain material amounts aggregating to Rs.53.78 Lakhs, out of these advances are old and overdue. The Company has not made any provision regarding the said old overdue trade payables.

c) Society Maintenance Charges (SMC):

Outstanding Society maintenance charges receivable aggregating to Rs.0.26 Crores as at 31^st March 2023 are very old and the Company has not made provision in this regard.

d) The amount of subsidy receivable from the financial year ended 31^st March 2015 to 31^st March 2018 is Rs.0.21 Crores as at 31^st March 2023. The Company has not made provision in this regard.

e) The carrying value of deposits which are not confirmed is Rs.25.01 lakhs as at 31^st March 2023. The Company has not made provision in this regard.

f) The carrying value of the stores, spares and packing material inventory is Rs. 184.10 lacs as at March 2023.The requisite /requested data of non-moving and slow- moving inventory is not provide by the Company. As the Company has not maintained inventory of stores & spares, packing material & others in the books of accounts (tally), no observations can be made on old and non-moving inventory. The Company has not made any provision for non-moving and slow- moving stores, spares and packing material inventory.

g) The Company has accepted interest free unsecured loans from the Directors. The Company has not complied with interest provision to be made on the said unsecured loans received. In view of this, the Company has not complied with Ind AS 109 in this regard.

h) The Company has not complied with provision for Expected Credit Loss (ECL). In view of this, the Company has not complied with Ind AS 109 in this regard.

i) The Company has made payment for the purpose of purchase of Transfer Developments Rights (TDR) from M/s Hubtown Limited (erstwhile Akruti City Limited) on 19/09/2014 for a sum aggregating to Rs.9.66 Crores. The Company has informed that, TDR is transferred in it?s name and it has received short TDR for area 332.180 sq. mtrs. aggregating to Rs.1.36 Crores. The Company has not made any provision for short TDR for area 332.180 sq. mtrs. aggregating to Rs. 1.36 Crores as at 31^st March 2023.The Company has not given any accounting impact/has not made any provision in respect of the short receipt of TDR as above.

j) The Resort Segment of the Company has incurred significant amount of loss in the March 2023 quarter and the earlier reporting periods. The Company has not carried out impairment study as required by Ind AS "Impairment of Assets" 36 of the Property Plant Equipment related to the Resort Segment of the Company. The Company has not made provision in this regard.

k) The Fertiliser Segment of the Company has incurred significant amount of loss in the March 2023 quarter and the earlier reporting periods. The Capacity utilisation is less than 10% in the March 2023 quarter and the earlier reporting periods The Company has not carried out impairment study as required by Ind AS "Impairment of Assets" 36 of the Property Plant Equipment related to the Fertiliser Segment of the Company. The Company has not made provision in this regard.

l) The Company has not laid down Standard Operating Procedures (SOPs) in the respect of any of the Accounting and related accounting functions. This results in major weakness in the Accounting and related accounting functions and consequently the Interim and other Financial Statements.

m) The Company accounts for subsidy on the basis of sales to dealer, however, as per the Government notification the subsidy entitlement/payment to the Company is on the basis of sale to the customer by the dealer. This may result short receipt of subsidy in an unforeseen event of failure to sale by dealer to end user. However, the Company has not made provision in this regard.

n) Confirmations of certain trade receivables, trade payables & other receivables:

Balances of certain trade receivables, trade payables & other receivables are subject to confirmations and reconciliations. Management has stated that, all known liabilities are duly provided by the Company.

The Matters as per the sr. a) to n) as stated above have been qualified in the preceding quarter ended 31^st December 2022 and the Matters as per the sr. a) to e) as stated above have been qualified in the year ended 31^st March 2022 and the Matters as per the sr. a) & b) as stated above have been qualified in the quarter ended 31^st December 2021.

In absence of the adequate audit evidence, we are unable to comment on quantum of provision to be made in respect of sr. nos. (a) to (n) above.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing ("SA"s) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor?s 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 standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI?s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.

Matter of Emphasis:

We draw attention to the following matters:

a) The outstanding subsidy receivable amount as at 31^st March 2023 pertaining to the financial year 22-23 is Rs.4.43 Crores as at 31^st March 2023.The management has contended that, the amount is recoverable and considered good.

b) The Company has weak internal control in respect of the following:

1. Accounting of Property Plant Equipment (PPE) with regard to regulatory aspects, location the date of accounting and the date of put to use.

2. Maintenance of the Appropriate documentary evidence- bills, purchase, expenses invoices having more than significant amounts with regard to the Business of the Company.

3. Bills, purchase, expenses invoices and vouchers having more than significant amounts. Payment voucher is considered as bill/invoice, which is incorrect.

4. Input GST credit accounted for in the Books of accounts.

5. Booking of the expenses as per the matching concept and the Provision for outstanding liabilities.

6. Accounting for cash expenses.

7. Tax Deducted at Source (TDS) in respect of various head.

8. Bank payments are accounted for using journal vouchers.

9. Reconciliation of resort sales as per the software vis a vis resort sales as per the books of accounts is not on record.

10. Accounting in the appropriate accounting heads e.g. Capital and Revenue expenditure.

11. Accounting of expenses without routing through vendor accounts.

c) Transfer Developments Rights & Real Estate Expenses:

The Company has made payment for the purpose of purchase of Transfer Developments Rights (TDR) from M/s Hubtown Limited (erstwhile Akruti City Limited) on 19/09/2014 for a sum aggregating to Rs.9.66 Crores. The Company has informed that, TDR is transferred in it?s name and it has received short TDR for area 332.180 sq. mtrs. aggregating to Rs.1.36 Crores. The Company has not filed any claim for the said short receipt of TDR. The Company is intending to use the said TDR and other TDRs purchased in the proposed development of the real estate business. Carrying value of the said TDR aggregating to Rs.9.66 Crores and real estate construction expenses aggregating to Rs.32.94 Crores (excluding TDR purchased) as at 31^st March 2023 depends on the Company?s ability to further fund the proposed development of reality business & other business segments.

d) Sub judice matters:

The Company has informed that, certain matters are sub judice as at 31^st March 2023.The summary in brief is as under:

Sn.	Particulars	Amt. Rs.(in Crores)
1	Amount deposited in protest with Maharashtra State Electricity Distribution Company Limited (MSEDCL)-Refer to point i. below @	0.53
2	Maintenance Charges payable*	0.33

@ The Company has not provided any documentary evidence in this regard.

* The Company has not provided any liability in view of note "2 J)" above.

i. In respect of the amount deposited in protest with MSEDCL:

Pursuant to the matter referred in the paragraph d) s.no. 1 above:

MSEDCL officials visited Bharat Agri Fert & Realty Ltd ("The Company") factory at Wada on 21/05/2016 for inspection and made observation that, MSEDCL connection was in the name of Wada Alums & Acids Pvt Ltd and manufacturing activity is going on in the name of the Company and put allegation of transfer or extending unauthorized supply of electricity from one unit to another unit.

Accordingly, MSEDCL issued notice and order for payment of Rs.106 lacs against which the Company had filed appeal with The Chief Electrical Inspector and deposited Rs.53 lakhs (50% of the liability) with Chief Electric Inspector (CEI) office.

Upon various hearing, the Company received refund order of the amount paid dated 23^rd January 2018. However, MSEDCL filed appeal in Mumbai High Court which is in Pre-admission stage.

In respect of the above, the Company has further clarified that, The Company Wada Alums & Acids Pvt Ltd had merged with erstwhile Bharat Fertilizer Industries Ltd, currently known as Bharat Agri Fert & Realty Ltd vide Mumbai High Court Merger Order on 15.06.2007. In view of this and other matters in this regard the management of the Company is hopeful about refund of the said amount deposited.

The above stated matters have significantly affected the company?s cash flows and ability to raise further funds.

Our opinion is not modified in respect of the said matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. 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

The Key Audit Matters	How our audit addressed the key audit matter
Trade Receivables	Our audit procedures included, among others, the following:
	1. Evaluation of sales procedure.
	2. Evaluated the design of the internal controls relating to sale booking.
	3. Evaluated sales invoices on test check ba
	4. Evaluated ageing analysis and ledger accounts of the trade receivables.
Inventories	Our audit procedures included, among others, the following:
	1. Evaluation of accounting of inventory related procedure.
	2. Correlation of inventory as per books and as per physical stock verification reports.
	3. Evaluated requirements of IND AS-2.
Loans & Advances	Our audit procedures included, among others, the following:
	1. Evaluation of underlying contracts.
	2. Evaluation of management perspective of overdue interest amount.

Information Other than the Financial Statements and Auditor?s Report Thereon

The Company?s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board?s Report including Annexures to Board?s Report, Corporate Governance and Shareholder?s Information, but does not include the consolidated financial statements, standalone financial statements and our auditor?s report thereon. The above-referred information is expected to be made available to us after the date of this audit report.

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 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.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company?s 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 financial position, financial performance, including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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.

In preparing the standalone financial statements, management is 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 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 is also responsible for overseeing the Company?s financial reporting process.

Auditor?s Responsibilities for the Audit of the Standalone Financial Statements

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 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 the aggregate, they could reasonably be expected to influence the economic 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 and maintain professional scepticism 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 financial 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 with reference to standalone 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 the management.

• Conclude on the appropriateness of management?s 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 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 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 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 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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

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 standalone 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. As required by Section 143(3) of the Act, based on our audit we report that:

a) We have sought and obtained all the information and explanations except for the effects of the matter described in the ‘Basis of Qualified Opinion? paragraph above, which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Except for the effects of the matter described in the ‘Basis of Qualified Opinion? paragraph above, 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 including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) Except for the effects of the matter described in the ‘Basis of Qualified Opinion? paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses modified opinion on the adequacy and operating effectiveness of the Company?s internal financial controls with reference to standalone financial statements.

g) With respect to the other matters to be included in the Auditor?s Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) 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, as amended, 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 standalone financial statements. Refer Note No.32 to the standalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no 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 its knowledge

and belief, no funds (which are material either individually or in the aggregate) 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 or entity, including foreign entity ("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 its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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;

(a) Based on the audit procedures 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), as provided under (a) and (b) above, contain any material misstatement.

v. Dividend:

(a) The Company did not proposed dividend in the immediately preceding previous year and the financial year covered by the audit. As dividend is not declared, question of compliance or otherwise do not arise.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books ofaccount using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

2. As required by the Companies (Auditor?s Report) Order, 2020 (the "Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

ANNEXURE "A" TO THE INDEPENDENT AUDITOR?S REPORT (Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements? section of our report to the Members of Bharat Agri Fert and Realty Limited of even date)

Report on the Internal Financial Controls with reference to Standalone Financials Statements under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act")

We have audited the internal financial controls with reference to standalone financial statements of Bharat Agri Fert and Realty Limited (the "Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management?s Responsibility for Internal Financial Controls

The Company?s Management is responsible for establishing and maintaining internal financial controls with reference to standalone financial statements 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 on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "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 its business, including adherence to company?s 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.

Auditor?s Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. 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 with reference to standalone financial statements was 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 with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, 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 auditor?s judgement, 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 Company?s internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to standalone financial statements

A companys internal financial control with reference to standalone financial statements 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 control with reference to standalone financial statements includes 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to Standalone Financial Statements

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 with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Basis of Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses has been identified in the operating effectiveness of the Company?s internal financial controls over financial statements as at March 31, 2023:

1. Non provisioning of old overdue trade receivables

2. Old overdue advances

3. Society Maintenance Charges (SMC)

4. Subsidy receivable

5. Carrying value of deposits

6. The carrying value of the stores, spares and packing material inventory is Rs.184.10 lacs as at March 2023.The requisite /requested data of non-moving and slow- moving inventory is not provide by the Company.

7. The Company has not complied with interest provision to be made on the said unsecured loans received. In view of this, the Company has not complied with Ind AS 109 in this regard.

8. The Company has not complied with provision for Expected Credit Loss (ECL). In view of this, the Company has not complied with Ind AS 109 in this regard.

9. The Company has not made any provision for short TDR for area 332.180 sq. mtrs. aggregating to Rs.1.36 Crores as at 31^st March 2023.The Company has not given any accounting impact/has not made any provision in respect of the short receipt of TDR

10. The Company has not carried out impairment study as required by Ind AS "Impairment of Assets" 36 of the Property Plant Equipment related to the Resort Segment of the Company. The Company has not made provision in this regard.

11. The Company has not carried out impairment study as required by Ind AS "Impairment of Assets" 36 of the Property Plant Equipment related to the Fertiliser Segment of the Company. The Company has not made provision in this regard.

12. The Company has not laid down Standard Operating Procedures (SOPs) in the respect of any of the Accounting and related accounting functions. This results in major weakness in the Accounting and related accounting functions and consequently the Interim and other Financial Statements.

13. The Company accounts for subsidy on the basis of sales to dealer, however, as per the Government notification the subsidy entitlement/payment to the Company is on the basis of sale to the customer by the dealer. This may result short receipt of subsidy in an unforeseen event of failure to sale by dealer to end user. However, the Company has not made provision in this regard.

14. Balances of certain trade receivables, trade payables & other receivables are subject to confirmations and reconciliations.

A ‘material weakness? is a deficiency, or a combination of deficiencies, in internal financial control over financial statements, such that there is a reasonable possibility that a material misstatement of the Company?s financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weakness has been identified as at 31 March 2023:

In our opinion, to the best of our information and according to the explanations given to us, except for the effects / possible effects of the material weaknesses described above under Basis for Qualified Opinion paragraph the Company has, in all material respects, an adequate internal financial controls with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2023, based on the criteria for internal financial control with reference to standalone financial statements established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bv the ICAI.

ANNEXURE ‘B? TO THE INDEPENDENT AUDITOR?S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements? section of our report to the Members of Bharat Agri Fert and Realty Limited of even date)

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

i. In respect of the Company?s Property, Plant and Equipment and Intangible Assets:

(a) (A) The Company has maintained proper records showing full particulars,

including quantitative details and situation of Property, Plant and Equipment.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The Company has a program of physical verification of Property, Plant and Equipment so to cover all the assets in a phased manner over a period of two years 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 Property, Plant and Equipment were due for verification during the year and were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification

(c) Based on our examination of the property tax receipts and lease agreement for land on which building is constructed, registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title in respect of self- constructed buildings and title deeds of all other immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favor of the lessee), disclosed in the financial statements included under Property, Plant and Equipment are held in the name of the Company as at the balance sheet date.

(d) The Company has not revalued any of its Property, Plant and Equipment and intangible assets during the year.

(e) No proceedings have been initiated during the year or are pending against the Company as at March 31, 2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

ii. In respect Company?s inventories:

(a) The management has conducted physical verification of inventory at reasonable intervals during the year. In our opinion the coverage and the procedure of such verification by the management is appropriate. Discrepancies of 10% or more in aggregate for each class of inventory were not noticed on such physical verification. This is subject to modified opinion on stores & spares inventory as referred to as per the point f) of Basis for Qualified opinion paragraph.

(b) In respect of the working capital limits sanctioned in excess of Rs. 5 Crore on

the basis of security of current assets :

The current assets hypothecated to the Bank are compared with the books of accounts. The discrepancies observed are as per the note no. 43 to the financial statements. It is reproduced as under also.-

Rs in lacs

Particulars	Amount as per the books of accounts	Amount as per stock statement submitted to the bank	Difference
	Total Amount	Total Amount
	A	B	A-B
	Jun-22
Inventories	645	2216	-1571
Trade Receivables	144	144	0
Subsidy Receivables	609	609	0
	Sep-22
Inventories	500	2031	-1531
Trade receivables	65	56	10
Subsidy Receivables	534	534	0
	Dec-22
Inventories	391	852	-461
Trade receivables	51	41	9
Subsidy Receivables	440	440	0
	Mar-23
Inventories	371	907	-536
Trade receivables	107	90	17
Subsidy Receivables	465	443	21

iii. The Company has made investments in the mutual fund Rs.30.00 lakhs during the

year. The Company has not made investments in companies, firms, Limited Liability Partnerships, during the year and has not granted unsecured loans to other parties, during the year, Hence, reporting under clause 3 (iii) (a) (A) (B) (c) to

(f) of the Order is not applicable to the Company.

iv. The Company has not granted any loans, secured or unsecured or provided any

guarantees or security to parties covered under section 185 of the Act during the year. The Company has not granted loans, no investment has been made, no guarantee and security is given to parties covered section 186 of the Act during the year. Accordingly, paragraph 3 (iv) of the Order is not applicable to the Company.

v. The Company has not accepted any deposit or amounts which are deemed to be

deposits. Hence, reporting under clause 3(v) of the Order is not applicable.

vi. We have broadly reviewed the books of accounts and records maintained by the

Company pursuant to the Rules prescribed by the Central Government under sub section (1) of section 148 of the Act 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 records with a view to determine whether they are accurate or complete.

vii. In respect of statutory dues:

(a) In our opinion, the Company has generally been regular in depositing undisputed statutory dues deducted / accrued in the books of account, including Goods and Services tax, Provident Fund, Employees? State Insurance, Income Tax, duty of Custom, Cess and other material statutory

dues applicable to it with the appropriate authorities.

There were no undisputed amounts payable in respect of Goods and Service tax, Provident Fund, Employees? State Insurance, Income Tax, duty of Custom Cess and other material statutory dues in arrears as at March 31, 2023 for a period of more than six months from the date they became payable.

(b) Details of statutory dues referred to in sub-clause (a) above which have not been deposited as on March 31, 2023 on account of disputes are given below:

Name of the Statute	Nature of Dues	Period to which it pertains	Forum Where Dispute is Pending	Amount (Excluding Interest and Penalty) (Rs. In Lakhs)
Income Tax Act,1961	Income Tax	FY 2016-17	CIT (A)	10.47
Income Tax Act,1961	Income Tax	FY2017-18	CIT (A)	9.33
Income Tax Act,1961		FY2012-13	CIT (A)	575.71

viii. There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

ix. a. The Company has not defaulted in the repayment of loans or borrowings to any lender. The Company has not raised any monies from government or financial institutions and does not have any outstanding debentures.

b. The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

c. The term loans taken during the year and the outstanding term loans at the beginning of the year were applied for the purpose for which loans were obtained.

d. On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company.

e. The Company has not taken any funds from any entity or person on account of or to meet the obligations of its associate company. The Company do not have any subsidiary company.

f. The Company do not have any subsidiary company. Hence question of raising any loans during the year on the pledge of securities held in its subsidiary Company do not arise and hence reporting under clause 3(ix) (f) of the Order is not applicable.

x. a. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3(x)(a) of the Order is not applicable.

b. During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.

xi. a. No fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

b. No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and up to the date of this report.

c. No whistle-blower complaints have been received during the year by the Company.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of

the Order is not applicable.

xiii. In our opinion, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 with respect to applicable transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable Ind Accounting Standards.

xiv. (a) The Company has not provided the internal audit reports for the period of July

2022 to March 2023.In the absence of the same we are unable to comment whether internal audit system is adequate and commensurate with the size and the nature of its business. The internal audit report for the first quarter is not commensurate with the size and nature of the Company.

(b) In view of the aforesaid, the question of considering the internal audit report in determining the nature, timing and extent of our audit procedures do not arise.

xv. In our opinion during the year the Company has not entered into any non-cash transactions with its Directors or persons connected with its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi. (a) In our opinion, the Company is not required to be registered under section 45- IA of the Reserve Bank of India Act, 1934. Hence, reporting under clause 3(xvi)(a), (b), (c) and (d) of the Order is not applicable.

xvii. The Company has not incurred cash losses aggregating to Rs.499.04 lacs during

the financial year covered by our audit. The Company has not incurred cash losses during the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors of the Company during the year.

xix. On the basis of the financial ratios, ageing and expected dates of realisation of

financial assets and payment of financial liabilities, financial support of the promoters, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. The provisions regarding the Corporate Social Responsibility (CSR) activities under

sub-section (5) of Section 135 of the Act are not applicable to the Company, hence reporting under clause (xx) (a) & (b) of paragraph 3 of the Order is not applicable to the Company.