The Members of Super Tannery Limited
Report on the Audit of Standalone Financial Statements
We have audited the accompanying standalone financial statements of Super Tannery Limited ("the Company"), which comprise the standalone Balance Sheet as at March 31, 2023, and the standalone Statement of Profit and Loss (including other comprehensive income), the standalone Statement of Change in Equity and standalone Statement of Cash Flows 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")
in our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, thereof ("IndAS") and other accounting principles generally accepted in India, ofthe state ofaffairs of the Company as at March 31, 2023, its profit, total comprehensive income, change in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit ofthe standalone Financial Statements section of our report We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone Financial Statements
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe standalone financial statements of the current period These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters We have determined that there are no key audit matters to be communicated in our report
Information Other than the standalone Financial Statements and Auditors Report Thereon
he Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report and Corporate Governance and Shareholders information, but does not include the consolidated financial statements, standalone financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon
In connection with our audit of the financial statements, our responsibility is to read the Other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained 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 fad. We have nothing to report in this regard
Responsibility of Management forthe standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, including other comprehensive income, change in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards specified under section 133 of the Act This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and
maintenance of 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 statement that give a true and fair view and are free from material misstatement, whether due to fraud orerror
In preparing the standalone financial statements, management 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so Those Board of Directors are also responsible for overseeing the companys financial reporting process
Auditors Responsibilities for the Audit of the 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 errorand 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 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 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 contentofthe standalone financial statements, including the disclosures, andwhether 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 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 audil 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, 2020 ("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" astaternenton the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable
2 Furtherto our comments in Annexure A, as required by Section 143(3) of the Act, wereportthat:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the
standalone statement of change in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 oftheAct, read with Rule 7 of the Companies (Accounts) Rules, 2014,
(e) On the basis of the written representations received from the directors as of March 31,2023 taken on record by the Board of Directors, none of the directors is disqualified as on M arch 31,2023 from being appointed as a director in terms of Section 164 (2) oftheAct.
(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) As required by Section 197( 16) of the Act, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under Section 197 read with ScheduleVto the Act
(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 ourinformation and according to the explanations given to us
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -
Refer Note no 33 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, and
iii there has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.
iv (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement,
v. (a) Thefinal dividend proposed in the previous year, declared and paid by the Company during Ihe year is in accordance with Section 123 oftheAct, as applicable
(b) As stated in Note 12 (I) to the financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting The amount of dividend proposed is in accordance with Section 123 oftheAct, as applicable
vi Proviso to Rule 3(1) of the Companies (Accounts ) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023
Annexure A to the Independent Auditors Report
(Referred to in paragraph 1 of our report of even date on standalone financial statements for the financial year ended March 31, 2023 of SuperTannery Limited)
In terms of the information and explanations sought by us and given by the company and the books of accounts and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:
(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of its
property, plant and equipment and relevant details of right-to-use asset,
(B)The Company has maintained proper records showing full particulars of intangible assets,
(b) The Company has a program of physical verification of Property, Plant and Equipment and right-of-use assets so to cover all the assets once every three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets Pursuant to the program, certain Property, Plant and Equipment were due for verification during the year and were physically verified by the Management during the year According to the information and explanations given to us, no material discrepancies were noticed on such verification,
(c) Title Deeds of immoveable properties as disclosed in the financial statements are held in the name of the company excepting the following properties (refer Note no. 50 (a)}:
|Description of Property||Gross
Carrying Value (Rupees)
|Held in the
|Whether promoter, director or relative||Held
|Reason for not being held in name of co|
|Land No 1363,Banther Unnao||24.722.00||Veaarul Amin||Director||14 08.2002||
Though cost of land is paid by Company but due to oversight registration was done in the name of director. However the process of registering the title deeds in the name of company is underway at the time of finalization of accounts
|Land No 1362 Banther Unnao||99.892.00||Veaarul Amin||Director||14.08.2002|
|Land No 1417 Banther Unnao||1.05.453.00||Veqarul Amin||Director||14.08.2002|
|Land No 1416 & 1415 Banther Unnao||96.396.00||Veqarul Amin||Director||09 10.2002|
|Land No 1413 & 1414 Banther Unnao||2.05.820.00||Veaarul Amin||Director||01.01.2004|
|Land No 1364 & 1365 Banther Unnao||42.850.00||Veqarul Amin||Director||10 03.2004|
|Land No 1366 Banther Unnao||1,02,520.00||Iftikharul Amin||Director||14,09.2004|
(d) The Company has not revalued any of its Property, Plant and Equipment and intangible assets during the year.
(e) No proceedings have been initiated during the year or are pending againstthe Company as at March 31,2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder
(ii) (a) The inventories of the Company have been physically verified by the management at reasonable interval during the year. In our opinion, the coverage and procedure of such verification is appropriate having regard to the size of the company and nature of its operation. N o discrepancies of 10% or more in the aggregate foreachdassof inventory were noticed on verification during the year when compared with books of account
(b) As disclosed in note no. 50(e) to the financial statements, the Company has been sanctioned working capital limits in excess of Rupees five crores in aggregate from banks during the year on the basis of security of current assets of the Company. The quarterly returns/ statements filed by the Company with such banks are not in agreement with the books of accounts of the Company and the details are as follows:
(Rs. in Lacs)
|Quarter Ending||Value as per of Accounts||Values as per quarterly return/ statements filed with lenders||Difference||Reason|
|June 30, 2022||8512.57||8625 61||113.04||
As explained, the differences are there, because the statements filed v/ith the lenders are based on financial statements prepared on provisional basis and also because of exclusion of certain current assets in the statements tiled with the lenders.
|September 30, 2022||13184 79||12861 20||323 59|
|December 31, 2022||12151.76||12474.47||322.71|
|March 31,2023||11295.04||1111943||175 61|
(iii) The company has made investments, granted unsecured loans to companies, during the earlieryears, in respectof which
(a) The Company has provided loan to two WOS and also to one subsidiary The details are as under
(Rs. in Lacs)
|Name of the Company||Relationship||Loan/ Guarantee||Balance as at 31 03 2023||Maximum amount outstanding during the year|
|Super Tannery (U K) Ltd||WOS||Loan||130.04||130.04|
|Secure safety limited||Subsidiary||Loan||12.49||12.49|
|Super Italia SRL||WOS||Loan||87 59||87.59|
(b) Incur opinion, the investments made and the terms and conditions of the grant of loans, during the year are, prima facie, not prejudicial to the Companys interest.
(c) As the loans are in the nature of demand loan, no schedule of repayment of principal and payment of interest has been specified
(d) In respect of loans granted by the Company, there is no overdue amount thereon as no demand has been raised by the company.
(e) No loan granted by the Company which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties
(f) During the year, the Company has not granted any loans or advances in the nature loans eilher repayable on demand or without specifying any terms or period of repayment,
(iv) The Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable
(v) In our opinion, the Company has not accepted any deposit or an amount deemed to be deposit during the year within the meaning of Section 73 to Section 76 of the Companies Act, 2013(theAct)read with the Rules framed there under Hence, paragraph 3(v) of the Order is not applicable
(vi) Having regard to the nature of the Companys business / activities, the maintenance of cost records has not been specified by the Central Government under section 148(1) of the Act. Accordingly reporting under clause (vi) of paragraph 3 of the Order is not applicable
(vii) (a) According to the books and records produced and examined by us, the Company is generally regular in depositing undisputed
Statutory dues including Goods and Services Tax (GST), Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues as applicable with the appropriate authorities and no undisputed amount payable in respect of aforesaid statutory dues were outstanding as at March 31,2023 for a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and GST which have not been deposited on account of any dispute.
(viii) There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the IncomeTaxAct, 1961 (43 of 1961)
(ix ) (a) The company has not defaulted in repayment of loans or other borrowings or on the payment of interest thereon to any lender
during the year
(b) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority
(c) The company has not availed any term loan during the year Hence, paragraph 3(ix)(c) of the Order is not applicable
(d) On an overall examination of the financial statements ofthe Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company
(e) the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries and hence reporting under clause 3(ix)(e) ofthe Order is not applicable.
(f) The Company has not raised any loans during the year on the pledge of securities held in its subsidiaries. JV or associate Company and hence reporting under clause 3(ix)(f) of the Order is not applicable
(x) (a) The company has not raised any money by way of initial public offer or further public offer (including debt instruments) during
the year and hence reporting under clause 3(x)(a) ofthe Order is not applicable (b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) ofthe Order is not applicable,
(xi) (a) No fraud by the company or any fraud on the Company has been noticed orreported during the year
(b) No report under sub-section (12) of section 143 of the Companies Act has beenfiled in FormADT-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) We have taken into consideration the whistle blower complaints received by the Company during the year (and upto the date of this report), while determining the nature, timing and extent of our audit procedures
(xii) The company is not a "Nidhi Company"; hence paragraph 3(xii) the Order is not applicable
(xiii) In our opinion, transactions with the related parties are in compliance with section 177 and 188 of Act where applicable and the details of such transactions have been disclosed in Note no 46 in the Standalone Financial Statements as required by the applicable IndAS.
(xiv) (a) In ouropinionthe Company has an adequate internal audit system commensurate with the size and the nature of its business, (b) We have considered, the internal audit reports forthe year under audit, issued to the Company during the year and till date, in
determining the nature, timing and extent of our audit procedures
(xv) In our opinion, the company has not entered into any non-cash transactions with directors or persons connected with him Hence, paragraph 3(xv) the Order is not applicable
(xvi) (a) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934
Hence, reporting under clause 3(xvi)(a), (b) and (c) of the Order is not applicable (b) in our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3(xvi)(d) of the Order is not applicable
(xvii) The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year
(xviii) There has been no resignation of the statutory auditors ofthe Company during the year
(xix) On the basis ofthe financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying thefinancial statements and our knowledge ofthe Board of Directors and Management plans and based on our examination ofthe evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date ofthe audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date ofthe audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.
(xx) The Company has fully spent the required amount towards Corporate Social Responsibility (CSR) and there is no unspent CSR amount for the year requiring a transfer to a Fund specified in Schedule VII to the Companies Act or special account in compliance with the provision of Sub-section (6) of Section 135 of the said Act Accordingly, reporting under clause (xx) of the Order is not applicable for the year
Annexure B to the Independent Auditors Report
(Referred to in paragraph 3(f) of our report of even date on the standalone financial statements for thefinancial year ended March 31,2023 of SuperTannery Limited)
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") Opinion
We have audited the internal financial controls with reference to standalone financial statements of Super Tannery Limited ("the Company) as of March 31,2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date
In our opinion, 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, 2023, 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,
Managements Responsibility for Internal Financial Controls
The Companys management 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 (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 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 Act
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 ICAI 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 standalone 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 indudes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements
Inherent Limitations of Internal Financial Controls overFinancial 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