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TO THE MEMBERS OF
GIRDHARILAL SUGARS AND ALLIED INDUSTRIES LIMITED
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of GIRDHARILAL SUGARS AND ALLIED INDUSTRIES LIMITED (The Company), and the statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow statement and the Statement of Changes in Equity for the year ended 31st March 2019, 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 standalone Ind AS financial statements give the information required by 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 a airs of the Company as at March 31, 2019, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
BASIS FOR OPINION
We concluded our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our 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 as sufficient and appropriate to provide a basis for our opinion subject to Basis of Qualified Opinion given hereunder :-
BASIS OF QUALIFIED OPINION
The Company has not provided Rs. 74.94 Lacs for the quarter ended 31.3.2019 towards interest on loans from Banks.
Had the above liability been considered there would have been a loss of Rs.186.93 Lacs as against the reported loss of Rs. 111.99 Lacs and other equity as at the balance sheet date would have been Rs. (-) 348.42 Lacs as against reported gure of Rs.(-) 273.48 Lacs.
In our opinion and to the best of our information and according to the explanations given to us, except for the the ects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by 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 a airs of the Company as at 31st March 2019, and its pro t/loss and its cash flows for the year ended on that date.
EMPHASIS ON MATTERS
We draw attention to the following matters in the Notes to the financial Statement:
a) Note No. 37 in respect of interest liability on unpaid undisputed statutory dues if any.
Our opinion is not modified in respect of this matter
b) Note No. 22c in respect of non-deposition of unclaimed debentures amount to Investors Education and Protection Fund Account.
c) Note No. 36 in respect of non-provision of MAT Liability under section 115JB of the Income Tax Act of 1961 of Rs.24473898/- for the F.Y. 14-15 to 17-18.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgment were of the most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon and we do not provide a separate opinion on these matters except para (2) hereunder:-
|Key Audit Matter Description||How our Audit addressed the key audit matter|
|1) Considering the companys business as a going concern and the accounts prepared in accordance, with.||We understood and tested the controls established by the management and evaluated that the companys soya division business has temporarily been discontinued due to disparity of margin. However, the company has continued in doing its dairy business which gives good cash margin. Based on these factors we relied that the companys business is still to be continued as a going concern company.|
|2) Non-provision of interest of Rs.74.94 Lacs on loan taken from banks for the quarter ended 31.3.2019.||We understood and tested the controls established by the management and evaluated that as the company has not made the provision of interest liability of Rs. 74.94 Lacs for the quarter ended 31.3.2019 on the ground that the companys Account has been treated by the bank as a Non-Performing Asset account and also a symbolic possession of the asset taken over by the bank. We do not agree with the reasoning given by the Company and are of the view that the company should have made a provision of interest liability, even the bankers have declared the account as a Non-Performing Asset account. We have taken up this matter in our report as our qualified opinion.|
|3) Non-Provision of the MAT liability for the F.Y. 14-15 TO 17-18 of Rs. 2,44,73,898 (Refer Note No. 36)||We understood and tested the controls established by the management and evaluated that the non-provision of MAT Liability for the A.Y. 14-15 to 17-18 of Rs. 2,44,73,898 is not in the nature of contingent liability but still has to be provided in the books. The total liability which was not provided by the company has been explained fully in Note No. 36 as referred and we are of the view that the company should have provided this liability. We have referred this matter in Emphasis of Matter for the knowledge of the stakeholders.|
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 audit6 or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is material misstatement of this information, we are required to report the fact.
We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS
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 Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) 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 Ind AS 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, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to 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 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 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 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 financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment 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 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 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 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 de ciencies 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 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
1. As required by the Companies (Auditors Report) order, 2015 ("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 statement on the matters specified in paragraphs 3 and 4 and 5 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 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 appears from our examination of those books of the Company.
c. The Balance Sheet, the Statement of Pro t and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid Standalone Ind AS financial Statements dealt with by this repot comply with the account standards specified under section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014.
e. On the basis of written information received from the directors of the Company and taken on record by the Board of Directors as on 31st March 2019, and the information and explanations given to us, we report that none of the directors is disqualified as on 31st March 2019, from being appointed as a director in terms of subsection (2) 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", and
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 as referred to in note no.40 to the financial statements.
(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and as required on long-term contracts including derivative contracts.
(iii) According to the information and explanations given to us, the company has not transferred a sum of Rs.80.41 lacs to on account of unclaimed debenture account. However as per BIFR order dated 15.01.2014, the company was exempted from the provisions of Sec 125 of the Companies Act 2013 (erstwhile section 205C of the Companies Act 1956) and deferred the same payment till2016-17.
|Place: Dewas||For, SUNIL BANDI & CO.|
|Date : 28th May, 2019||Chartered Accountants|
|F. R. No. 007419C|
|CA Sunil Bandi|
|M. No. 077705|