To the Members of
SUJANA UNIVERSAL INDUSTRIES LIMITED
Report on Audit of the Standalone Financial Statements
Qualified Opinion
We have audited the accompanying Standalone Financial Statements of
Sujana Universal Industries Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2020, the Statement of Profit and Loss (including other
comprehensive income), the statement of Cash Flows and the statement of changes in equity
for the year then ended and a summary of significant accounting policies and other
explanatory information ( hereinafter referred to as " Standalone Financial
Statements
In our opinion and to best of our information and according to
explanations given to us, except for the effects of the matter described in the
"Basis for Qualified Opinion" section of our report, the aforesaid standalone
financials statements read together with significant accounting policies and accompanying
notes thereon give the information required by the Companies Act , 2013 ( the
"Act") in the manner so required and give a true and fair view in conformity
with the Indian Accounting Standards prescribed under section 133 of the Act read with the
Companies ( Indian Accounting Standards) rules, 2015, as amended, ("Ind AS") and
other accounting principles generally accepted in India , of the state of affairs of the
Company as at 31st March 2020, and its Loss ( financials performance including other
Comprehensive income) , the changes in equity and its cash flow for the year ended on that
date.
Basis of Qualified Opinion
a) The Company has defaulted in repayment of dues to Banks/Financial
Institutions and all loans outstanding were classified as NPAs by the banks. Provision
for interest (excluding penal interest) amounting to Rs. 61.95 Cr. and Rs.236.81 Cr for
the quarter ended 31st March 2020 and Year ended on such date respectively on its Working
Capital Loan and Term Loan has not been made in the books by the Company, as those Loan
Accounts were classified as NPA by the Lending Banks and Financial Institutions. The loss
of the Company has been understated by Rs.61.95 Cr for the quarter ended 31st March 2020
and Rs. 236.81 Cr for the year ended on such date in view of non-provision of Interest
amount.
b) Trade receivables could not be verified as the confirmation of
balances have not been received. The Company has made a provision for bad and doubtful
debts for trade receivables amounting to Rs.65.49 Cr during the Year ended 31st March
2020. The realizability of remaining trade receivables amounting to Rs.506.88 Cr is in
doubt and the company has not made any provision for Bad and Doubtful Debts in respect of
this trade receivables.
c) Loans and advances of Rs. 44.11 Cr has been given to various
sub-contractors, suppliers and other parties are old advances. Having regard to the age of
this advances , in our opinion , this are doubtful of recovery. The company is yet to
assess the change in risk of default and resultant expected credit allowance on such Loan
and advances. Had the aforesaid Loans and advances has been provided for impairment , loss
of the company for the quarter ended 31st March 2020 and year ended on such date would
have been higher by Rs. 44.11 cr .
d) The Company is not regular in payment of undisputed statutory dues
towards TDS, Provident Fund, Employees State Insurance during the year ended 31st March
2020
e) The Companys Net worth has been eroded on account of losses
incurred by the company during the year ended 31st March 2020 and previous financial year
and the net worth of the company is negative. The Current Liabilities of the company
exceeded the current assets of the company as at 31st March 2020 by Rs.831.07 Cr. It would
cast doubt on the Companys ability to continue as a going concern basis.
f) The Company has not made impairment valuation adjustments towards
Plant and Machinery and other Fixed Assets
We conducted our audit in accordance with the Standards on Auditing
(SAs) specified under Section 143(10) of the Companies Act, 2013. Our responsibility under
those standards are further described in the Auditors Responsibilities for the Audit of
the Financials Statements section of our report. We are independent of the entity in
accordance with the Code of Ethics issued by ICAI together with the ethical requirements
that are relevant to our audit of the financial statements under the provisions of the
Companies Act, 2013, and the rules thereunder and we have fulfilled our other ethical
responsibilities in accordance with the Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our qualified
opinion on the standalone financial statements.
Emphasis of Matters:
a) Note No. 2.37(b) to the financial statements which describes the
uncertainty related to the outcome of the lawsuit filed against the Company by the
Mauritius Commercial Bank which has financed one of its subsidiaries - Hestia Holdings
Limited for which the Company has given a Corporate Guarantee.
b) Note No.2.37 (c) to the financial statements which describes the
uncertainty related to the outcome of the Bank Debt recalled by the Standard Bank which
has financed one of its step-down subsidiaries - Selene Holdings Limited for which the
Company has given a
Corporate Guarantee
c) Note No. 2.39 to the financial statements which describes the
initiation of Corporate Insolvency Resolution Process and appointment of Resolution
Professional based on the application filed by one of the operational creditors.
Our opinion is not modified in respect of the above matters
Key Audit Matters
Key Audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the standalone financial statement of the
current period. These matters were addressed in the context of our audit of the standalone
financial statements as a whole , and in forming our opinion thereon , and we do not
provide a separate opinion on these matters.
Evaluation of uncertain tax positions:
The company has material uncertain tax positions including matters
under dispute as disclosed under Contingent Liabilities (Note no: 2.37), which involves
significant judgement to determine the possible outcome of these disputes.
How our audit addressed the key audit matter
We have obtained from the management the details of the present status
of completed/pending disputes, and taken into consideration the effect of these in respect
of uncertain tax provisions to evaluate the uncertainties as at the year end.
Information Other Than the Financial Statements and Auditors Report
Thereon
The Companys board of directors is responsible for the preparation of
the other information. The other information comprises the information included in the
Management Discussion and Analysis, Boards Report including Annexures to Boards Report,
Business Responsibility Report, Corporate Governance and Shareholders Information, but
does not include the Standalone financials statement and our auditors report thereon.
Our opinion on the Standalone financial statements does not cover the
other information and we do not express any form of the assurance conclusion thereon
In connection with the audit of the standalone financial statements,
our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the standalone financials statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If,
based on the work we performed, we conclude that there is a material misstatement of this
other information; we are required to report the fact. We have nothing to report in this
regard.
Responsibility of Management 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 Financial Statements that give a true and fair view of the state
financial position and financial performance 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
there under.
This responsibility 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; design, implementation and maintenance of adequate internal
financial controls, that are 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 financial statements, the Board of Directors is
responsible for assessing the Companys ability to continue as a going concern ,
disclosing , as applicable , matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Company
or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the
companys financial reporting process.
Auditors Responsibility 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 standalone 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
standalone financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal financial controls 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 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 standalone financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our 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
standalone financial statements, including the disclosures, and whether the standalone
financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone
financial statements that, individually or in aggregate, makes it probable that the
economic decisions of a reasonably knowledgeable user of the 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 standalone
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, 2016
("the Order") issued by the Central Government of India in terms of subsection
(11) of section 143 of the Act, 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 further 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;
c) the Balance Sheet, 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) in our opinion, the aforesaid Standalone Ind AS Financial Statements
comply with the applicable Accounting Standards specified under Section 133 of the Act,
read with relevant rule issued there under.
e) On the basis of written representations received from the directors
as on March 31, 2020, and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2020,
from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over
financial reporting of the company and the operating effectiveness of such controls, refer
to our separate report in "Annexure B". Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Companys internal financial
controls over financial reporting.
g) With respect to the other matters to be included in the Auditors
Report in accordance with the requirements of section 197(16) of the Act, as amended, in
our opinion and to the best of our information and according to the explanations given to
us, the remuneration paid by the Company to its directors during the year is in accordance
with the provisions of section 197 of "the Act"
h) With respect to 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 not disclosed the impact of pending litigations
which would impact its financial position in notes to financial statements.
ii. The Company does not have any long-term contracts including
derivative contracts for which there were any material foreseeable losses.
iii. There are no amounts which were required to be transferred to the
Investor Education and Protection Fund by the company.
|
For J Singh &
Associates., |
|
Chartered Accountants |
|
(Firms RegnNo.110266W) |
|
Ritesh Tawry |
| Place: Hyderabad |
Partner |
| Date: 07th July 2020 |
M.No. 213326 |
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
Annexure referred to in Independent Auditors Report to the Members of
Sujana Universal Industries Limited on the Standalone Financial Statements for the year
ended 31st March 2020, we report that :
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed assets.
(b) The Company has a program of verification to cover all the items of
fixed assets in a phased manner over a period of three years, which, in our opinion, is
reasonable having regard to the size of the Company and the nature of its assets. However,
no physical verification has been carried on by the management during the year.
Accordingly, we were unable to comment on whether any material discrepancies were noticed
on such verification and whether they are properly dealt with in the financial statements.
(c) According to the information and explanations given to us and on
the basis of our examination of records of the Company, the title deeds of immovable
properties are held in the name of the Company.
ii. The Company was not holding any inventory during the year and hence
no physical verification was carried out.
iii. The Company has not granted any loans, secured or unsecured, to
companies, firms, and Limited Liability partnerships or other parties covered in the
register maintained under section 189 of the Companies Act, 2013. Therefore, the
provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said order are not
applicable to the company.
iv. The Company has not granted any loans or made any Investments, or
provided any guarantee or security to the parties, covered under section 185 and 186 of
the Act. Therefore, the provisions of clause 3(iv) of the said order are not applicable to
the company.
v. The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of section 73 of "the Act" and hence
directives issued by the reserve bank of India and the provisions of section 73 to 76 or
any other relevant provisions of "the Act" the Rules framed there under are not
applicable to the Company at present
vi. We have broadly verified the books of accounts and records
maintained by the company in respect of products where, pursuant to the rules made by the
central government of India, the maintenance of cost records has been specified under the
sub-section (1) of section 148 of the Companies Act 2013, and are of the opinion that,
prima facie, the prescribed accounts and records have been made and maintained. We have
not, however, made detailed examinations of the records with a view to determine whether
they are accurate or complete
vii. (a) According to the information and explanations given to us and
based on the records of the company examined by us, the company
is not regular in depositing the undisputed statutory dues, including
Provident Fund, Employees State Insurance, Income Tax,
Custom Duty, Excise Duty and other material statutory dues, as
applicable, with the appropriate authorities in India ;
(b) There were undisputed amounts payable amounting Rs. 8.11 Cr in
respect of Income Tax, Corporate Dividend Tax, VAT, Provident Fund, ESI, Service Tax, TDS
and Professional Tax, in arrears as at 31st March 2020 for a period of more than 6 Months
from the date they became payable. .
| Nature of Dues |
Amount in Cr |
| Income Tax Payable |
6.80 |
| Corporate Dividend Tax |
0.15 |
| VAT |
0.69 |
| Professional Tax |
0.01 |
| Provident Fund |
0.21 |
| ESI |
0.01 |
| TDS Payable |
0.14 |
| Excise Duty & Service Tax |
0.10 |
(c) Details of dues of Income Tax, Sales Tax, Customs duty and excise
duty and Value Added Tax which has not been deposited as at March 31, 2020 on account of
dispute are given below.
| Disputed Statutory Liability as on
31.03.2020 |
|
| Name of the Statute |
Amount in Crores |
Period to which the amount relates |
Forum where dispute is pending |
| Income Tax Act 1961 |
5.84 |
FY 2005-06 |
CIT ( Appeals) |
| Income Tax Act 1961 |
0.26 |
FY 2008-09 |
CIT ( Appeals) |
| Income Tax Act 1961 |
15.10 |
FY2010-11 |
CIT ( Appeals) |
| Income Tax Act 1961 |
1.64 |
FY 2011-12 |
CIT ( Appeals) |
| Income Tax Act 1961 |
0.16 |
FY 2013-14 |
CIT ( Appeals) |
| Income Tax Act 1961 |
0.39 |
FY2014-15 |
CIT ( Appeals) |
| TNGST Act , 1959 |
3.39 |
2000-01 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
11.15 |
2001-02 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
5.15 |
2002-03 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
23.46 |
2004-05 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
46.30 |
2005-06 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
27.33 |
2006-07 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
32.35 |
2007-08 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
4.46 |
2008-09 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
11.11 |
2009-10 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
28.49 |
2010-11 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
186.18 |
2011-12 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
222.34 |
2012-13 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
50.89 |
2013-14 |
Honble High Court of
Tamilnadu |
| TNGST Act , 1959 |
0.79 |
2014-15 |
Honble High Court of
Tamilnadu |
| Customs & Excise |
0.01 |
1998-99 |
CIT Appeals Chennai. |
| Customs & Excise |
2.38 |
1999-2000 |
Commisioner Chennai |
| Customs & Excise |
0.25 |
1999-2000 |
CESTAT, Hyderabad. |
| Customs & Excise |
0.25 |
2003-04 |
CESTAT, Hyderabad. |
| Customs & Excise |
0.48 |
2008-09 |
Supreme court of India, New
Delhi. |
| 0.37 |
2008-09 |
High court of Telangana. |
| Workmen Compensation |
0.05 |
2007-08 |
Interim Stay granted by
Honble High Court as against the order passed by the Honble Labour Commissioner |
viii. The company has defaulted in the repayment of loans taken from
banks and financial institutions during the current financial year and no interest
provision was made by the company on working capital loan amounting to Rs. 179.88 Cr and
term loan amounting to Rs. 20.52 Cr., Details of defaults are given below
Details of over dues to Banks / Financial Institutions as on 31.03.2020
| Name of the Bank |
Nature of default |
Amount of Default |
Period of Default |
| Term Loans |
| IDBI Bank Ltd |
Principle |
5,152.63 |
January 2015 to March 2018 |
| Interest |
2,052.08 |
March 2015 to March 2018 |
| Redemption of Preference Share Capital |
| IDBI Bank Ltd |
CRP Shares |
2,035.78 |
January 2015 to March 2018 |
| Dividend |
98.60 |
January 2015 to March 2018 |
| Working Capital Loans |
| A) Cash Credits |
|
|
|
| Bank of Baroda |
Monthly Interest |
5,515 |
February 2015 to March 2018 |
| Bank of India |
Monthly Interest |
19,397 |
October 2015 to March 2018 |
| Central Bank of India |
Monthly Interest |
8,037 |
September 2015 to March 2018 |
| IDBI Bank Ltd |
Monthly Interest |
3,601 |
April 2015 to March 2018 |
| Indian Overseas Bank |
Monthly Interest |
13,669 |
September 2015 to March 2018 |
| Oriental Bank of Commerce |
Monthly Interest |
12,231 |
May 2015 to March 2018 |
| UCO Bank |
Monthly Interest |
6,415 |
April 2015 to March 2018 |
| Sub-Total |
|
68,865 |
|
| B) Letter of Credits |
|
|
|
| Bank of India |
LC devolvement |
6,250 |
October 2015 to March 2018 |
| Central Bank of India |
LC devolvement |
10,000 |
October 2015 to March 2018 |
| Indian Overseas Bank |
LC devolvement |
12,000 |
May 2015 to March 2018 |
| UCO Bank |
LC devolvement |
8,000 |
June 2015 to March 2018 |
| Export-Import Bank of India, Mumbai |
SBLC devolvement |
11,964 |
March 2016 to June 2019 |
| Sub-Total |
|
48,214 |
|
| Grand Total |
|
1,17,079 |
|
ix. The Company has not raised any moneys by way of initial public
offer, further public offer (including debt instruments) and term loans during the year.
Accordingly, the provisions of this clause are not applicable to the Company.
x. According to the information and explanations given to us, no
material fraud by the company or on the company by its officers or employees has been
noticed or reported during the course of our Audit.
xi. In our opinion and to the best of our information and according to
the explanations given to us, the remuneration paid by the Company to two of its directors
during the year is in excess of the remuneration payable as per provisions of section 197
of "the Act"-refer note 2.28 (III) to Standalone financial statements
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014
are not applicable to it; the Provisions of clause 3(xii) of the order are not applicable
to the company.
xiii. The Company has entered into transactions with related parties in
compliance with the provisions of section 188 of the Act. The details of such related
party transactions have been disclosed in the Ind AS Financial Statements as required
under Indian Accounting standard (Ind AS) 24, related party disclosures specified under
section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014.
xiv. The Company has not made any preferential allotment of private
placement of shares or fully or partly convertible debentures during the year under
review. Accordingly, the provisions of clause 3(xiv) of the Order are not applicable to
the Company.
xv. The Company has not entered into non-cash transactions with its
directors or persons connected with him. Accordingly, the provisions of clause 3(xv) of
the Order are not applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA
of The Reserve Bank of India Act 1934. Accordingly, the provisions of clause 3(xvi) of the
order are not applicable to the Company.
|
For J Singh &
Associates., |
|
Chartered Accountants |
|
(Firms RegnNo.110266W) |
|
Ritesh Tawry |
| Place: Hyderabad |
Partner |
| Date: 07th July 2020 |
M.No. 213326 |
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
Report on the Internal Financial Controls over Financial Reporting
under clause (i) of the Sub-section 3 of the Section 143 of the Companies Act, 2013 (The
Act)
We have audited the internal financial controls over financial
reporting of Sujana Universal Industries Limited (the company) as of 31st march 2020 in
conjunction with our audit of standalone financial statements of the company for the year
ended on that date.
Managements Responsibility for Internal Financial Controls
The Board of Directors of the Company 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. 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 respective 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 internal financial
controls over financial reporting of the Company based on our audit. We conducted our
audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting (the "Guidance Note") issued by the Institute of Chartered
Accountants of India and the Standards on Auditing prescribed under Section143(10)of the
Companies Act,2013,to the extent applicable to an audit of internal financial controls.
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 We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the internal financial
controls system over financial reporting of the Company
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 (l) 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 and directors of the company; 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.
Limitation of Internal Financial Controls over Financial Reporting
Because of the inherent limitation 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.
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 system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2020, 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 J Singh &
Associates., |
|
Chartered Accountants |
|
(Firms RegnNo.110266W) |
|
Ritesh Tawry |
| Place: Hyderabad |
Partner |
| Date: 07th July 2020 |
M.No. 213326 |
+91-9892691696
