Gujarat Sidhee Cement Ltd Merged Auditor Reports

<dhhead>INDEPENDENT AUDITOR’S REPORT</dhhead>

To the Members of Gujarat Sidhee Cement Limited Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying financial statements of Gujarat Sidhee Cement Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, the Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as ‘‘the financial statements’’). 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, as amended ("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, 2022, its profit and total comprehensive income, the changes in equity and its cash flows for the year ended on that date.

 

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act (SAs). Our responsibilities under those Standards 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 ("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 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 audit opinion on the financial statements.

 

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of 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, for the year ended March 31, 2022 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 was the matter addressed in our audit
Rebates, Discounts and Incentives	Our audit procedures included the following:
The Company sells its products through various channels such as dealers and commission agents (customers) and provide various rebates, discounts and incentives payable to them under various marketing schemes.	Assessed the design and implementation of controls from the management relating to recording of rebates, discounts and incentives based on estimation of revenue and tested the operating effectiveness of such controls.
Revenue is recognised net of rebates, discounts and incentives based on the arrangement with customers.	Tested the inputs used in the estimation of revenue in context of incentives and selecting samples of revenue transactions and circulars to re-check that rebates, discounts and schemes incentives were calculated in accordance with the eligibility criteria mentioned in the scheme circular.
Rebates, discounts and incentives to customers are administered through various schemes. Amounts involved for such rebates, etc. are material items voluminous and complex, and also involves significant judgment and estimates.
The value of rebates, discounts and incentives together with the level of judgment involved make its accounting treatment a key audit matter.	Ensured the completeness of liabilities recognised by evaluating the parameters for the schemes.
	Review of inputs used in calculating the amount and in some cases, re-performed the calculation.
	Verification of appropriate authorisation.
[Refer Notes 1.11 and 25 to the financial statements.]	Analysed past trends by comparing actuals with the estimates of earlier periods.
	Assessed the disclosures rebates, discounts and incentives in accordance with the requirements of Ind AS 115 on "Revenue from Contracts with Customers.’’
Deferred Tax Assets ("DTA") on MAT Credit Entitlement
The Company has recognised MAT Credit Entitlement in earlier years and reflect the same as DTA and during the year, DTA for a portion of MAT Credit has been utilised and hence, reversed.	Our audit procedures included the following:
	Considered the Company’s accounting policies with respect to recognition of tax credits in accordance with Ind AS 12 on "Income Taxes".
The recognition of MAT Credit ("tax credits") as DTA was on the basis that it is probable that future taxable profits will be available against which such tax credits can be utilised.	Evaluated the Company’s tax positions by comparing it with prior years and past precedents.
Such recognition and reversal of DTA is a key audit matter as the determination that it is probable that future taxable will be available, that is, the recoverability of such tax credits within the allowed time frame, involves significant estimate of the financial projections, availability of sufficient taxable income in the future and significant judgments in the interpretation of tax regulations and tax positions adopted by the Company.	Evaluated the estimates of profitability made by the management on the basis of which it is considered probable that the Company will have sufficient taxable income against which the tax credits will be utilised.
	Discussed with the management the future business plans and financial projections on which the estimate of profitability is made.
[Refer Notes 1.15, 18 and 33 to financial statements]	Assessed the management’s long-term financial projections and the key assumptions used in the projections by comparing it to the approved business plan and projections used for impairment assessment where applicable.
	Assessed the disclosures in accordance with the requirements of Ind AS 12 on "Income Taxes".
Uncertain tax positions Direct and Indirect Taxes
The Company has uncertain tax matters pending litigations under direct tax and various indirect tax laws.	Our audit procedures include the following:
The litigation involves significant judgement to determine the possible outcome based on which accounting treatment is given to the disputed amount.	Obtained details of uncertain tax position and gained understanding thereof;
These matters are considered to be key audit matter given the magnitude of potential outflow of economic resources and uncertainty of potential outcome.	Obtained details of completed tax assessments and also demands raised;
	Read and analysed relevant communication with the authorities;
[Refer Notes 22 and 34 to the financial statements]	Considered the legal advice obtained by the management on possible outcome of the litigation;
	Discussed with senior management and evaluated management’s assumptions regarding provisions made;
	Assessed the disclosures in accordance with the requirements of Ind AS 37 on "Provisions, Contingent Liabilities and Contingent Assets".

 

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 Board’s Report including Annexures to Board’s Report, Management Discussion and Analysis, Corporate Governance and Shareholder’s Information, but does not include the financial statements and our auditor’s 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 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.

 

Management’s Responsibility for the 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 and presentation of these 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 accounting principles generally accepted in India, including the Ind AS specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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 judgements and estimates that are reasonable and prudent; and the 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 Board of Directors 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 management 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 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 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 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 Act, 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.

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 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. Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the 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 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 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, 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 Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

e. On the basis of written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act;

f. With respect to 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 A";

g. With respect to the matters to be included in the Auditor’s Report in accordance with requirement 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 during the current year by the Company to its directors 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 financial statements – Refer Note 34 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as required under the applicable law or accounting standards;

iii. There has not been any amount which is required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2022.

iv. (a) The Management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 45(vii) to the financial statements);

(b) The Management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 45(viii) to the financial statements);

(c) Based on such 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 in (a) and (b) above, contain any material misstatement. v. Since the Company has neither declared nor paid any dividend during or for the year, the question of commenting on whether the same is in accordance with Section 123 of the Act does not arise.

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

For BANSI S. MEHTA & CO.

Chartered Accountants Firm Registration No.100991W

 

PARESH H. CLERK

Partner Membership No. 36148 UDIN : 22036148AJRPTP6248

 

PLACE : Mumbai DATED : May 26, 2022

 

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

Referred to in paragraph 1(f) under the heading of "Report on Other Legal and Regulatory Requirements" in our Independent Auditor’s Report of even date on the financial statements for the year ended March 31, 2022.

 

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

We have audited the internal financial controls with reference to financial statements of Gujarat Sidhee Cement Limited ("the Company") as of March 31, 2022 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

 

Management’s Responsibility for Internal Financial Controls

The Company’s Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements 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 ("the Guidance Note") issued by the 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 its business, including adherence to the 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 Company’s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to 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 financial statements 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 with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to 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 financial statements.

 

Meaning of Internal Financial Controls with reference to Financial Statements

A company’s internal financial control with reference to 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 company’s internal financial controls with reference to financial statements includes those policies and procedures that: a. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; b. provide reasonable assurance that transactions are recorded as necessary to permit preparation of the 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 of management and directors of the company; and c. provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

 

Inherent Limitations of Internal Financial Controls with reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements, 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 financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements 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, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls with reference to the financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2022, based on the internal controls over financial reporting criteria established by the Company, considering the essential components of internal control stated in the Guidance Note

For BANSI S. MEHTA & CO.

Chartered Accountants Firm Registration No.100991W

 

PARESH H. CLERK

Partner Membership No. 36148 UDIN : 22036148AJRPTP6248

 

PLACE : Mumbai DATED : May 26, 2022

 

ANNEXURE B TO THE INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 2 under the heading of "Report on Other Legal and Regulatory Requirements" of our Independent Auditors’ Report of even date to the members of Gujarat Sidhee Cement Limited on the financial statements for the year ended March 31, 2022. i.

a. A. The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment ("PPE") and relevant details of Right-of-use Assets.

B. The Company has maintained proper records showing full particulars of Intangible Assets.

b. The management of the Company verifies PPE and Right-of-use Assets according to a phased programme designed to cover all items over a period of three years, which, in our opinion, is at reasonable intervals. Pursuant to the programme, a portion of the items of PPE have been verified by the management during the year, and no material discrepancies have been noticed on such verification.

c. According to the information and explanations given to us and on the basis of the records examined by us, we report that, the title deeds of immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), disclosed in the financial statements are held in the name of the Company except for the following.

Description of property	Gross carrying value	Title deeds held in name of	Whether the title deed holder is a promoter, director or their relative or employee	Period held – indicate range, where appropriate	Reason for not being held in name of Company
Freehold land at Chagiya and Javantri	Separate value not available	Cement Corporation of Gujarat Limited	Self (Erstwhile Name of the Company)	Freehold Land at Chagiya (different survey nos.) held since 17.06.1983, 13.12.1984 and 14.07.1987 Freehold Land at Javantri held since 04.04.1990	It remained in the erstwhile name of the Company; the change of name on the title deeds from Cement Corporation of Gujarat Limited to Gujarat Sidhee Cement Limited is under process.

 

d. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company has neither revalued any of its Property, Plant and Equipment (including Right-of-use Assets) nor revalued its Intangible Assets during the year. Accordingly, reporting under clause 3(i)(d) of the Order is not applicable.

e. According to the information and explanations given to us, no proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibitions) Act, 1988 (as amended in 2016) and Rules made thereunder. Accordingly, reporting under clause 3(i)(e) of the Order is not applicable.

ii. a. Physical verification of inventories has been conducted by the management during the year which, in our opinion, is at reasonable intervals; and, in our opinion, the coverage and procedure of such verification by the management is appropriate. The discrepancies noticed on verification between physical stock and book records were not 10% or more in aggregate for each class of inventory.

b. The Company has been sanctioned working capital limits in excess of Rs 5 crores, in aggregate, from banks on the basis of security of current assets. The Company has filed Stock and Debtors statement with such banks, which are in agreement with the books of account other than those as set out below : (Rs in Lakhs)

Quarter ended	Name of bank	Particulars of Securities provided	Amount as per books of account	Amount as reported in the quarter end statement	Amount of difference	Reason for material discrepancies
June 30, 2021	HDFC Bank Limited	Inventories and Trade Receivables	14,874.42	11,304.60	(3,569.82)	i. Stock under letter of credit, debtors for other operating revenue and outstanding debtors > 120 days, amounting to Rs 3,534.97 lakhs in aggregate, are not considered by the bank for drawing power calculation and hence, not reported in the statement submitted to the bank.
						ii. Change in value after completion of Limited Review for the quarter, after submission of statement to the bank.
Sep 30, 2021	HDFC Bank Limited	Inventories and Trade Receivables	9,730.98	9,504.08	(226.90)	i. Receivable from related party, debtors for other operating revenue and outstanding debtors > 120 days, amounting to Rs 194.66 lakhs in aggregate, are not considered by the bank for drawing power calculation and hence, not reported in the statement submitted to the bank.
						ii. Change in value after completion of Limited Review for the quarter, after submission of statement to the bank.
Dec 31, 2021	HDFC Bank Limited	Inventories and Trade Receivables	14,692.71	10,821.28	(3,871.43)	i. Stock under letter of credit, receivable from related party, debtors for other operating revenue and outstanding debtors > 120, amounting to Rs 3,963.14 lakhs in aggregate, are not considered by the bank for drawing power calculation and hence, not reported in the statement submitted to the bank.
						ii. Change in value after completion of Limited Review for the quarter, after submission of statement to the bank.
March 31, 2022	HDFC Bank Limited	Inventories and Trade Receivables	11,412.89	11,341.28	(71.61)	i. Debtors for other operating revenue and outstanding debtors > 120 days, amounting to Rs 76.69 lakhs in aggregate, are not considered by the bank for drawing power calculation and hence, not reported in the statement submitted to the bank.
						ii. Change in value after completion of Statutory Audit for the year, after submission of statement to the bank.

 

Also refer Note 19.1 to the financial statements. iii. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company has not made any investment in, provided guarantee or security to companies, firms, Limited Liability Partnerships or any other parties during the year. The Company has granted interest-free unsecured loans to its employees during the year.

According to the information and explanations given to us and based on the audit procedures conducted by us, a. A. The Company does not have any subsidiary, joint venture and/or associate. Accordingly, reporting under clause 3(iii)(a)(A) of the Order is not applicable to the Company.

B. The Company has only granted interest-free unsecured loans to employees as specified in below

Loans to employees	Amount Rs in lakhs
Aggregate amount granted during the year	11.05
Balance outstanding as on March 31, 2022	9.32

 

b. The terms and conditions of the grant of loans, as referred to a(B) above, are prima facie not prejudicial to the interest of the Company.

c. In respect of loans granted by the Company, the schedule of repayment of principal has been stipulated and the repayments are regular.

d. In respect of loans granted by the Company, there is no overdue amount remaining outstanding as at the balance sheet date.

e. No loans granted by the Company that have fallen due during the year, have been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties.

f. The Company has not granted any loans that are either repayable on demand or without specifying any terms or period of repayment.

iv. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company has neither advanced any loan nor has given any guarantee or provided any security in connection with any loan as specified under Section 185 and Section 186 of the Act. Further, in respect of loans and investments made, in our opinion, the Company has complied with the provisions of Section 186 of the Act.

v. In our opinion and according to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company has not accepted deposits or amounts which are deemed to be deposits under the Act and Rules made thereunder from the public. Accordingly, reporting under clause 3(v) of the Order is not applicable.

vi. We have broadly reviewed the books of account and records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 as specified by the Central Government for maintenance of cost records under Section 148(1) of the Act, in respect of the products manufactured by the Company 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 said accounts and records with a view to determine whether they are accurate or complete.

vii. a. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company has been regular in depositing undisputed statutory dues including Goods and Service Tax, Provident Fund, Employees’ State Insurance, Income-tax, Sales-tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues, as applicable to it, with the appropriate authorities. There are no arrears of outstanding statutory dues as at March 31, 2022, for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, details of statutory dues referred in sub-clause (a) above, which have not been deposited on account of disputes as on March 31, 2022 and the forum where the dispute is pending are given below

Name of the Statute	Forum where the dispute is pending	Nature of Dues	Period to which amount relates	Amounts Rs in lakhs
Customs Act, 1962	Customs, Excise and Service Tax Appellate Tribunal	Customs Duty	1995-96	35.85
	Customs, Excise and Service Tax Appellate Tribunal	Customs Duty and Penalty	2012-13	420.59 (*42.62)
Central Excise Act, 1944	Customs, Excise and Service Tax Appellate Tribunal	Excise Duty	1992-93	36.72
	Customs, Excise and Service Tax Appellate Tribunal	Excise Duty and Penalty	2008-09 to 2011-12 and 2013-14 to 2016-17	3,211.07 (*123.39)
	Commissioner (Appeal), GST Junagadh	Excise Duty and Penalty	2017-18	23.94 (*2.98)
	Commissioner / Add. Commissioner, Central Excise	Excise Duty and Penalty	2009-10, 2010-11 and 2012-13	495.34(*4.95)
	Joint Commissioner, Central Excise	Excise Duty and Penalty	2013-14	5.85(*1.11)
Central Excise / CENVAT Credit Rules, 2004	Customs, Excise and Service Tax Appellate Tribunal	Service Tax and Penalty	2012-13 and 2013-14	138.36(*5.37)
Rajasthan Sales Tax Act, 1994	Rajasthan High Court	Sales Tax and Penalty	1996-97	24.73
Gujarat Sales Tax Act, 1961	Joint Commissioner (A), Rajkot	Sales Tax, Interest and Penalty	2002-03 to 2004-05	121.21(*37.61)
Gujarat Value Added Tax Act, 2003	Joint Commissioner (A), Rajkot	Value Added Tax, Interest and Penalty	2006-07 and 2007-08	321.88(*54.23)
Maharashtra Value Added Tax Act, 2002	Joint Commissioner (A), Mumbai	Value Added Tax and Interest	2009-10	3.22
Income-tax Act, 1961	CIT (A), National Faceless Appeal Centre (NFAC)	Income Tax and Interest	2017-18	302.30(*75.57)
Income-tax Act, 1961	CIT(A) 3, Mumbai	Income Tax and Interest	2015-16	4.35(*1.10)
The Gujarat Panchayats Act, 1993	District Court, Veraval	House Tax	1993-94 to 2021-22	40.12
The Mines and Minerals (Development and Regulation) Act, 1957	Honourable High Court of Gujarat	Royalty	April 2003 to July 2014	546.10

 

* indicates amount deposited or paid under dispute

viii. According to the information and explanations given to us, the Company did not have any transaction 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.

ix. a. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender during the year.

b. According to the information and explanations given to us and on the basis of our audit procedures, we report that the Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

c. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the term loans taken during the year were applied for the purposes for which those loans were obtained.

d. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis have not been utilised for long-term purposes.

The Company does not have any subsidiary, associate or joint venture. Accordingly, reporting under clause 3(ix)(e) and clause 3(ix)(f) of the Order is not applicable.

x. a. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable.

b. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year. Accordingly, reporting under clause 3(x)(b) of the Order is not applicable.

xi. a. On the basis of the books and records of the Company examined by us and according to the information and explanations given to us, we report that no material fraud by the Company or any fraud on the Company has been noticed or reported during the year in the course of our audit.

b. To the best of our knowledge, no report under Section 143 (12) of the Act has been filed by the auditors in Form ADT- 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report. c. As represented to us by the management, the Company has not received any whistle-blower complaint during the year and upto the date of this report.

xii. The Company is not a Nidhi company. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us and on the basis of books and records of the Company examined by us, transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable, and the details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv. a. According to the information and explanations given to us, in our opinion, the Company has internal audit system commensurate with the size and nature of its business.

b. The reports of the internal auditors for the year under audit, issued to the Company during the year and till date, have been considered by us in determining the nature, timing and extent of our audit procedures.

xv. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company has not entered into any non-cash transaction with its directors or persons connected to its directors. Accordingly, reporting under clause 3(xv) of the Order is not applicable.

xvi. a. As per the information and explanations given to us and on the basis of the books and records of the Company examined by us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934; the Company has not conducted any Non-banking Financial or Housing Finance activities during the year; The Company is not a Core Investment Company(CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, reporting under clauses 3(xvi) (a), 3(xvi)(b) and 3(xvi)(c) of the Order are not applicable to the Company.

b. According to the information and explanations provided by the management of the Company, the Company does not have more than one CIC as part of the Group. We have not, however, separately evaluated the information so provided.

xvii. The Company has not incurred cash losses in the financial year covered by our audit and the immediately preceding financial year. xviii. There has been no resignation by the statutory auditors of the Company during the year. Accordingly, clause 3(xviii) of the Order is not applicable.

xix. According to the information and explanations given to us and on the basis of financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, 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 the 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. According to the information and explanations given to us and on the basis of the books and records of the Company examined by us, for Corporate Social Responsibility, there is no unspent amount under sub-section (5) of Section 135 of the Act, 2013 pursuant to any project. Accordingly, reporting under clauses 3(xx)(a) and 3(xx)(b) of the Order are not applicable

For BANSI S. MEHTA & CO.

Chartered Accountants Firm Registration No.100991W

 

PARESH H. CLERK

Partner Membership No. 36148 UDIN : 22036148AJRPTP6248

 

PLACE : Mumbai DATED : May 26, 2022