jvl agro industries ltd Auditors report

To the Members of

JVL Agro Industries Limited

Report on the Standalone Ind-AS Financial Statements

Disclaimer of Opinion

We were engaged to audit the accompanying standalone Ind-AS financial statements of JVL Agro Industries Limited (hereinafter referred to as ‘the Company), which comprise the Balance Sheet as at 31st March 2019, the statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statements").

We do not express an opinion on the accompanying Standalone Financial Statements of the Company. Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph of this report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these Standalone Financial Statements.

Basis for Disclaimer of Opinion

1. Material uncertainty relating to Going Concern

a) We would like to draw your attention to Notes 1 and 35 to Standalone Financial Statements. Application filed by the financial creditor against the Company for initiation of Corporate Insolvency Resolution Process as per the Insolvency & Bankruptcy Code, 2016 was admitted by National Company Law Tribunal (NCLT), Allahabad Bench with effect from 25.07.2018. Interim Resolution Professional and thereafter, Resolution Professional was appointed and affairs of the Company are being managed by Resolution Professional now. Resolution Professional has filed liquidation application before NCLT.

b) During the financial year 2018-19, the Company has incurred post tax loss of 921.46 crores (out of which 253.99 crores relates to Pre-CIRP period) and as on 31st March, 2019, the Company has negative retained earnings of

1,572.62 crores and negative net worth of 1,302.42 crores. Further the companys current liabilities exceed its current assets by 1,739.03 crores. On account of its operational and financial position, the Company has delayed payments to various parties and dues to statutory authorities and interest on such delays is not determined.

c) Out of total Trade Receivables of 132.74 crores, provision for impairment has been made for 128.37 crores and only 4.37 crores has been considered as good vide Note No. 9 to Standalone Financial Statements (these provisions relate to pre-CIRP period). Further, out of total trade advances of 108.10 crores, provision for doubtful debts has been made for 61.42 crores and only 46.68 crores has been considered as good vide Note No.13 of Standalone Financial Statements (these provisions relate to pre-CIRP period).

d) As informed to us, production at plants has been stopped since more than a year.

Above factors might impact the aspect of going concern.

2. We would like to draw your attention to total cost of material consumed booked by 1,202.37 crores vide Note No. 25 to Standalone Financial Statements. Out of this, during our audit of purchases on test basis we found that, purchases of

27.09 crores of RBD Palmolein Oil was not verifiable due to non-availability of any document with the Company in this respect and no entry found in Gate Pass Register maintained in respective plant. All of these purchases were booked from 3 suppliers before CIRP period and no other indigenous purchase of RBD Palmolein Oil were booked from any other suppliers during the whole financial year.

3. We would like to draw your attention to Note 31 of Standalone Financial Statements wherein prior period expenses has been claimed at 9.29 crores. Out of this, 8.77 crores is related to loss on commodity trading (relates to pre-CIRP period) and 0.26 crores is related to cash balances write off due to physical cash differences with books (relates to pre-CIRP period) and 0.25 crore is related to inventories write off (booked in post-CIRP period). We are not able to comment on these prior period items due to unavailability of proper documents, information and explanations from the management.

4. Records of Alwar Plant of the Company were not made available as it is understood from the management of the Company that same is under the custody of CBI. Further, sales records of Naupur Plant were also not made available to us due to labour unrest as explained by the management. Thus, we are unable to comment on sales, purchases, other income and expenses booked with respect to Alwar plant and sales booked for Naupur Plant due to unavailability of proper documents and information. Most of the transactions are related to pre-CIRP period in the respect of these plants.

5. We would like to draw your attention to Note 2 of Standalone Financial Statements –

a) Addition of land has been shown at 14.09 crores (relates to pre-CIRP period). This addition of land has been booked on the basis of Patna High Court Order dated 13.10.2011. The said order was made for land of 18.25 crores. However, no registry document has been shown to substantiate the sale and purchase of the said land from the date of order till date. We are not able to comment on this addition relating to financial year 2010-11 and booked in financial year 2018-19 with partial amount due to unavailability of proper documents, information and explanations from the management.

b) Addition in Plant & Machinery has been shown at 1.75 crores (relates to pre-CIRP period). We are not able to comment on this addition due to unavailability of proper documents, information and explanations from the management.

c) Sale of vehicle costing 1.74 crores (relates to pre-CIRP period) has been claimed to be made at 0.45 crore in the books of account and loss on sale of vehicle after deprecation has been booked at 0.31 crores before CIRP period (Note 31 to Standalone Financial Statements). No document was made available to us to substantiate the sale of such vehicles. We are not able to comment on these sale of vehicles due to unavailability of proper documents, information and explanations from the management.

6. We would like to draw your attention to Note 6 and Note 22 to Standalone Financial Statements –

a) Asset relating to taxes etc. has been shown as statutory dues at 83.66 crores under the group Other Non-Current Assets and liability as statutory liabilities at 0.34 crores under the group Other Current Liabilities. Apart from this, Custom Duty Liability of 50.94 crores has been grouped in Trade Payable vide Note 20 to Standalone Financial Statements. Further, contingent liability relating to statutory dues has been shown at 372.47 crores in Note 36 to Standalone Financial Statements.

b) Against the total Claim of Custom Department of 73.56 crores, claim of 43.85 crores have been admitted by the Resolution Professional and the same ( 43.85 crores) has been shown as contingent liability vide Note 34 to standalone financial statements. Liability with respect to Custom at the end of 31st March, 2019 as per book of account at 5.52 crores only ( 50.94 crores has been grouped in Trade Payable vide Note 20 and negative balance of 45.42 crores has been grouped in other non current assets vide Note 6 to Standalone Financial Statements).

c) GST assets and liabilities are not in agreement with the returns filed. Liabilities and assets with respect to other taxes were not fully verifiable.

We are not able to comment on these statutory liability and asset balances including contingent liability and its impact, if any, on the Standalone Financial Statements due to unavailability of proper documents, orders, notices, information, explanations and reconciliations from the management.

7. We would like to draw your attention to Note No. 7 and 1.11 to Standalone Financial Statements. Inventories at the end of financial year has been shown at 94.41 crores. As per the companys policy, inventories except scrap should have been valued at lower of cost and net realizable value. During the audit, it has been observed that in many cases, raw material has been valued on the basis of FIFO method instead of Weighted Average Method. During physical verification of stock, it was observed that most of the finished goods has expired. However, finished goods has been valued at market price. Item wise working of net realizable value in any case was not made available to us. We are not able to comment on valuation of inventories due to unavailability of proper documents, information, explanations and reconciliations from the management.

8. On migration of previous software into SAP in earlier years, it resulted into migration difference of 129.08 crores (not related to CIRP period, however, differences are still there in books). End to end reconciliation of these migration differences are not made available to us and these has been adjusted against Working Capital Borrowings, Trade Payables, Trade Receivables and Balance with Bank in current account in Standalone Financial Statements. Due to unavailability of proper reconciliation, we are not able to comment on its impact, if any, on the Standalone Financial Statements.

9. We would like to draw your attention to Note 1.22 and Note 18 to Standalone Financial Statements, The Company was supposed to recognize deferred tax liability for the timing differences in depreciation for the financial year 2018-19. We are not able to comment on Deferred Tax Liability shown in Balance Sheet due to unavailability of proper documents, information, explanations and reconciliations from the management.

10. We would like to draw your attention to Note 20 to Standalone Financial Statements. The Company has disclosed Micro, Small and Medium Enterprises Creditors at NIL value, however, as per MSME form filed by the Company with MCA, total overdue to Micro and Small Enterprises as on 31.03.2019 was 2.41 crores. We are not able to comment on correct balance of Micro, Small and Medium Enterprises Creditors due to unavailability of proper documents, information and explanations from the management.

11. We would like to draw your attention to Note 19, Note 21, Note 29, and Note 31 to Standalone Financial Statements. The Company has claimed interest to bank at 53.33 crores (Note 29). However, the Company has not booked interest charged by Standard Chartered Bank. Had it been booked, interest to bank would have increased by 1.86 crores (Note 29), prior period items would have increased by 14.97 crores (Note 31), Current Maturity of Long term debt would have increased by 6.47 crores (Note 21) and Working Capital Borrowings would have increased by 10.36 crores (Note 19). However, these interest amount are related to pre-CIRP period only. Unlike Standard Chartered Bank, post CIRP period interest has been also recorded by one way or another. Complete detail of post-CIRP period interest of Standard Chartered Bank is not made available to us by the management, therefore, we are not able to comment on the same.

12. We would like to draw your attention to Note 6 and Note 29 to Standalone Financial Statements. The Company has claimed interest to bank at 53.33 crores (Note 29). The Company has shown Other Advances (Deposits with Government Authorities & Recoverable from Banks etc) at 14.73 crores (Note 6) as Other Non-current assets.

14.73 crores includes interest/charges charged by bank of 14.32 crores during the year (out of which 7.08 crores relates to post-CIRP period and 7.24 crores relates to pre-CIRP period). Instead of claiming this interest amount as expenditure, Company has shown it as an asset contending that this is excessive interest charged by bank and should be reversed. Due to unavailability of proper explanation on the same from the management, we are not able to comment on its impact, if any, on the Standalone Financial Statements.

13. We would like to draw your attention to Note 19 to Standalone Financial Statements. The Company has shown Working Capital Borrowings at 1973.72 crores. As per the reconciliations and closing bank statement/certificate produced to us, banks have credited 354.95 crores in different loan statements, however, the nature of such credit is not properly explained by the management and no accounting treatment has been made in respect of such credit. These amounts are still lying in Bank Reconciliation Statement of different Banks. We are not able to comment on these credits in bank statements and balances of borrowings as per books and its impact, if any on Standalone Financial Statment due to unavailability of proper documents, information and explanations from the management.

14. Due to unavailability of reconciliation and confirmation of Trade Receivable, Trade Payable, Trade Advances, we are not able to comment on its impact, if any, on the Standalone Financial Statements. Most of the balances of Trade Receivables and Trade Payable relate to pre-CIRP period transactions. All the Trade Advances are related to pre-CIRP period.

15. Due to unavailability of proper documents, information, explanations and reconciliations from the management, we are not able to comment on the balances shown and its impact, if any, on the Standalone Financial Statements with respect to investment shown in equity of subsidiary and associates, investment in BGR Energy System Ltd., investment in HDFC AMC PMS Mutual Fund (Refer Note 8 to Standalone Financial Statements), Government Grant Receivable (Refer Note 11 to Standalone Financial Statements), Other Advances (Refer Note 6 to Standalone Financial Statements), List of shareholders holding more than 5% Shares (Refer Note 14 to Standalone Financial Statements), and related party disclosures. (Refer Note 33 to Standalone Financial Statements).

Key Audit Matters

Except for the matter described in the "Basis for Disclaimer of Opinion" section, we have determined that there are no other key audit matters to communicate in our report.

Emphasis of Matter

We would like to draw your attention to Note No.13 to Standalone Financial Statements. The Company has shown Other Current Assets-Others at 167.72 crores. As explained to us, out of this 167.72 crores, 167.70 crores are related to fixed deposit liquidated and appropriated by banks against their letter of credit and demand loan. Resolution Professional of the Company preferred appeal before NCLT against appropriation by banks of 164.25 crores and NCLT has ordered in favor of the Company. As explained to us, rest of 3.45 crores carries the same nature therefore, similar accounting treatment has been made for the rest of 3.45 crores. Thus, 167.70 crores has been considered as recoverable from Banks and shown here and corresponding loan is included in Working Capital Borrowing shown at Note 19 to Standalone Financial Statements.

Our opinion is not modified in respect of this matter

Information other than the Standalone Financial Statements and Auditors Report thereon

The Companys management under the direction of the Resolution Professional is responsible for the preparation of the other information. The other information comprises the information included in the Boards Report including Annexures to Boards Report, Report on Corporate Governance but does not include the financial statements and our auditors report thereon.

The Boards Report and Report on Corporate Governance is expected to be made available to us after the date of this Auditors Report. Our disclaimer of 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 engagement of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the Boards Report, and Report on Corporate Governance, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and describe actions necessary as per the applicable laws and regulations.

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

The Companys management under the direction of the Resolution Professional is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of Standalone Financial Statements that 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 (‘Ind-AS) specified under section 133 of the Act, read with relevant rules issued thereunder.

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, the Companys management under the direction of Resolution Professional is responsible for assessing the Companys ability to continue as going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Companys management under the direction of Resolution Professional either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Companys management under the direction of the Resolution Professional is also responsible for overseeing the Companys financial reporting process.

Auditors 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 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.

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 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 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.

We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the ‘Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

a) As described in the Basis for Disclaimer of Opinion paragraph, we have sought but were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of audit.

b) Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books and returns provided for the purpose our audit.

c) Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to comment whether the Balance Sheet, the Statement of Profit and Loss (including other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account .

d) Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. e) No written representations or any other documents were made available to us from the directors of the Company as on 31st March, 2019, regarding disqualification of Directors of the Company in terms of section 164(2) of the Act. Therefore, in the absence of such written representation, we are unable to comment whether any of the Directors of the Company are disqualified or not.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in ‘Annexure B.

g) With respect to the matter to be included in the Auditors Report under section 197(16), In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is not in accordance with the provisions of section 197 of the Act. Since Company is in loss and defaulted in repayment of its debts to banks etc. and no prior approval from secured creditors for remuneration made available to us. The Ministry of Corporate Affairs has not prescribed other details under section 197(16) which are required to be commented upon by us.

h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the Company has disclosed the impact of pending litigations on its financial position in its standalone Ind-AS financial statements.

ii. Due to possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether, the Company has made provisions as required under the applicable law or accounting standards for material foreseeable losses, if any, on long term contracts including derivative contracts.

iii. Due to insufficient details, documents and explanations provided to us, we are unable to state whether there has been any delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company or not.

For A K Agrawal & Co.

Chartered Accountants

ICAI Firms Regn. No.018282C

CA Aadesh Kumar Agrawwal

Partner

ICAI M. No. 410473 Kolkata - March 16, 2020 UDIN -20410473AAAAAZ6363

The Annexure-A referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report to the members of JVL Agro Industries Limited (hereinafter referred to as "the Company") for the year ended 31st March, 2019. We report that:

Sl. No. Particulars	Auditors Remarks
(i) a) Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;	The company has not maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.
b) Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;	No document and satisfactory explanation were made available regarding verification of fixed assets by the management, therefore, we are not able to comment whether physical verification of fixed assets has been conducted by the management at reasonable interval or not.
c) Whether the title deeds of immovable properties are held in the name of the company. If not, provide the details thereof;	The title deeds of immovable properties were not provided for the purpose of our audit. Therefore, in the absence of title deeds, we are unable to comment whether the title deeds are held in the name of the Company or not.
(ii) Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so, whether they have been properly dealt with in the books of account;	As explained to us, inventories have been physically verified during the year by the management at regular intervals. However, during our physical verification on test basis, we found certain discrepancies and the same were not explained satisfactorily by the management. Inventory is maintained and managed manually in plants and records produced to us were not proper. Since production at the plants are ceased therefore, inventories are not being verified so frequently by the management. We would like to draw your attention to the matters covered under section "Basis of Disclaimer of Opinion" of our report
(iii) Whether the company has granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. If so,	We are unable to comment due to matters covered under section "Basis for Disclaimer of Opinion"
a) Whether the terms and conditions of the grant of such loans are not prejudicial to the companys interest;	N.A.
b) Whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular;	N.A.
c) If the amount is overdue, state the total amount overdue for more than ninety days, and whether reasonable steps have been taken by the company for recovery of the principal and interest;	N.A.
(iv) In respect of loans, investments, guarantees, and security whether provisions of section 185 and 186 of the Companies Act, 2013 have been complied with. If not, provide the details thereof.	We are unable to comment due to matters covered under section "Basis for Disclaimer of Opinion"
(v) In case, the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder, where applicable, have been complied with? If not, the nature of such contraventions be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?	According to explanation and documents given to us, the Company has not accepted any deposits from the public during the year. Accordingly, the provision of Clause 3(v) of the Order is not applicable to the Company.
(vi) Whether maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and whether such accounts and records have been so made and maintained.	According to explanations and documents produced before us, we observed that cost records were not proper. However, we have not made detailed examination of the records with a view of determining whether these are accurate and complete.
(vii) a) Whether the company is regular in depositing undisputed statutory dues including 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 to the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated;	We are unable to comment due to matters covered under section "Basis for Disclaimer of Opinion"
b) Where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not be treated as a dispute).	We are unable to comment due to matters covered under section "Basis for Disclaimer of Opinion". However, contingent liabilities disclosed in Note 34 to Standalone Financial Statements are not correct and complete.
(viii) Whether the Company has defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders? If yes, the period and the amount of default to be reported (in case of defaults to banks, financial institutions, and Government, lender wise details to be provided). (ix) Whether moneys raised by way of initial public o!er or further public o!er (including debt instruments) and term loans were applied for the purposes for which those are raised. If not, the details together with delays or default and subsequent rectification, if any, as may be applicable, be reported;	The Company has defaulted in repayment of loans or borrowing to financial institution/banks and CIRP process has been initiated. However, we are unable to comment on period and amount of default due to matters covered under section "Basis for Disclaimer of Opinion" During the year the Company has not raised any money by way of initial public o!er or further o!er or term loan.
(x) Whether any fraud by the company or any fraud on the Company by its o"cers or employees has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated;	We are unable to comment due to matters covered under section "Basis for Disclaimer of Opinion".
(xi) Whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act? If not, state the amount involved and steps taken by the company for securing refund of the same;	In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is not in accordance with the provisions of Section 197 to the Act. since Company is in loss and defaulted in repayment of its debts to banks etc. and no prior approval from secured creditors for remuneration made available to us, Managerial Remuneration paid has been disclosed vide note 33.5 to Standalone Financial Statements. To our information, no steps have been taken for recovery of the said remuneration from the directors.
(xii) Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability;	The Company is not a Nidhi Company therefore, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
(xiii) Whether all transactions with the related parties are in We are unable to comment due to matters covered under compliance with sections 177 and 188 of Companies Act, section "Basis for Disclaimer of Opinion". 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;
(xiv) Whether the company has made any preferential allotment According to the information and explanation given to or private placement of shares or fully or partly convertible us and based on our examination of the records of the debentures during the year under review and if so, as to Company, the Company has not made any preferential whether the requirement of section 42 of the Companies Act, allotment or private placement of shares or fully or partly 2013 have been complied with and the amount raised have convertible debentures during the year. Therefore, the been used for the purposes for which the funds were raised. If provisions of Clause 3(xiv) of the order are not applicable not, provide the details in respect of the amount involved and to the Company nature of non-compliance;
(xv) Whether the company has entered into any non-cash We are unable to comment due to matters covered under transactions with directors or persons connected with him section "Basis for Disclaimer of Opinion". and if so, whether the provisions of section 192 of Companies Act, 2013 have been complied with
(xvi) Whether the company is required to be registered under In our opinion and according to the information and section 45-IA of the Reserve Bank of India Act, 1934 and if so, explanations given to us, the Company is not required to whether the registration has been obtained. be registered under section 45-IA of the Reserve Bank of India Act, 1934. Therefore, the provisions of Clause 3(xvi) of the Order are not applicable to the Company

For A K Agrawal & Co.

Chartered Accountants

ICAI Firms Regn. No. 018282C

CA Aadesh Kumar Agrawwal

Partner

ICAI M. No. 410473 Kolkata - March 16, 2020 UDIN : 20410473AAAAAZ6363

Annexure - B to the Independent Auditors Report

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of JVL Agro Industries Limited (hereinafter referred to as "the Company") as of March 31, 2019 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management under the direction of Resolution Professional is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (The "Guidance Note"). 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 companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of Internal Financial Controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate Internal Financial Controls over financial reporting 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 system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors 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 Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting 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 authorizations of Management under the direction of Resolution Professional; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper Management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weakness have been identified as at 31st March, 2019:

a) The Company is not having a full-fledged ERP system to manage different operational activities. Accordingly, many of the operations, which ideally would have been taken care by the system, require manual intervention to that extant there are limitations in control system and processes.

b) The Company needs to strengthen controls to ensure correctness and completeness of accounting records by conducting reconciliation between SAP postings and physical documents as well as entries posted vis-a-vis control checks maintained.

c) The Company needs to maintain proper inventory records with correct details of material consumption and closing inventory. Further, the Company needs to maintain proper fixed assets register with location and identification of asset so that it can be controlled.

A "material weakness" is a deficiency or combination of deficiencies, in internal financial control over financial reporting, such that there is reasonable possibility that a material misstatement of the Companys annual or interim financial statement will not be prevented or detected on timely basis.

We have considered the material weakness identified and reported above in determining the nature, timing and extent of audit tests applied in our audit of the Standalone Financial Statements of the Company as at and for the year ended 31st March, 2019, and these material weaknesses has affected our opinion on the Standalone Financial Statements of the Company and we have issued Disclaimer of Opinion on the Standalone Financial Statements.

In our opinion, except for the effects/possible effects of material weaknesses described above on the achievement of the objectives of the control criteria, the Company has not maintained adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were not operating effectively as on 31st March, 2019, 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.

For A K Agrawal & Co.

Chartered Accountants

ICAI Firms Regn. No. 018282C

CA Aadesh Kumar Agrawwal

Partner

ICAI M. No. 410473 Kolkata - March 16, 2020 UDIN : 20410473AAAAAZ6363