To
the members of
M/s.VBC Ferro Alloys Limited,
Hyderabad
Report on the Audit of the Standalone Ind AS Financial Statements
Qualified Opinion:
We have audited the accompanying standalone Ind AS financial statements of M/s.VBC
Ferro Alloys Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income),
the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on
that date, and a summary of the significant accounting policies and other explanatory
information (hereinafter referred to as "the standalone Ind AS financial statements
").
In our opinion and to the best of our information and according to the explanations
given to us, except for the possible effects of the matters described in the Basis for
Qualified Opinion section of our report, the accompanying standalone Ind AS 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, ("Ind AS") and other
accounting principles generally accepted in India, of the state of affairs of the Company
as at March 31, 2023, the profit and total comprehensive income, changes in equity and its
cash flows for the year ended on that date.
Basis for Qualified Opinion
a) Non-provision of shortfall of deemed energy charges for earlier years amounting to
Rs 53,44,77,378/-, pending disposal of companys petition before TSERC as stated in Note
No. 2.34 to the standalone Ind AS financial statements has resulted in understatement of
the loss for the year.
b) As noted in Note No. 2.04c, the company has not adhered to the requirements of
Indian Accounting Standard "Financial Instruments" (Ind AS 109) by failing to
measure its investments in equity instruments, designed to be measured at fair value
through Other Comprehensive Income, at their fair values. This is a contravention of the
provisions outlined in section 133 of the Companies Act, 2013.
c) As disclosed in Note No. 2.41, the balances in the Long Term and Short Term
Borrowings, Trade Payables, Trade Receivables and other payables and receivables are
subject to confirmations.
d) The company has not made provision for future payments of gratuity and leave
encashment, considering the present liability using the Projected Unit Credit method as
mandated by Ind AS 19 "Employee Benefits". This constitutes noncompliance with
the provisions of section 133 of the Companies Act, 2013.
e) As per Note No. 2.40, the company has not performed the impairment test of its
cash-generating assets despite indications of assets remaining idle. This contravenes Ind
AS 36 "Impairment of Assets" and is non-compliant with section 133 of the
Companies Act, 2013.
f) The company has not carried out physical verification of its inventories during the
year. Consequently, we are unable to express our opinion on the realisability of the
stated amount in the books of account.
We conducted our audit of the Standalone Ind AS 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 of the Standalone Ind AS Financial Statements section of
our report. We are independent of the Company in accordance with the Code of Ethics issued
by the Institute of Chartered Accountants of India (ICAI) together with the ethical
requirements that are relevant to our audit of the Standalone Ind AS 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 Qualified opinion on the standalone Ind AS financial
statements.
Key Audit Matters
We have determined that there are no key audit matters to be communicated in our
report.
Information Other than the Standalone Ind AS 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, Board of Directors Report including Annexures to Boards Report,
Business Responsibility Report, Corporate Governance and Shareholders Information, but
does not include the financial statements and our auditors report thereon. The above
specified reports are expected to be made available to us after the date of this auditors
report.
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.
When we read the above specified reports, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to those charged with
governance.
Managements Responsibility for the Standalone Ind AS 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 Ind AS Financial
Statements that give a true and fair view of the financial position, financial
performance, total comprehensive income, changes in equity and cash flows of the Company
in accordance with the Ind AS and other accounting principles generally accepted in India.
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 Ind
AS Financial Statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the Standalone Ind AS 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.
The Board of Directors is responsible for overseeing the Companys financial reporting
process.
Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS
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 Ind AS 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 Ind AS
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 Ind AS 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 Ind
AS Financial Statements, including the disclosures, and whether the Standalone Ind AS
Financial Statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Ind AS Financial
Statements that, individually or in aggregate, makes it probable that the economic
decisions of a reasonably knowledgeable user of the Standalone Ind AS 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 Standalone Ind AS 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 Ind AS 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 in terms of Section 143(11) of the Act, we give in
"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, based on our audit we report that:
a) We have sought and, except for the matters described in the Basis for Qualified
Opinion section above, obtained all the information and explanations which to the best of
our knowledge and belief were necessary for the purposes of our audit.
b) Except for the effects of the matter described in the Basis for Qualified Opinion
section above, in our opinion, proper books of account as required by law have been kept
by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this
Report are in agreement with the relevant books of account.
d) Except for the effects of the matter described in the Basis for Qualified Opinion
section above, in our opinion, the aforesaid Standalone Ind AS Financial Statements comply
with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
e) As written representations received from the directors as on March 31, 2023 taken on
record by the Board of Directors, have not been provided to us, we are unable to state
whether any of the directors is disqualified as on March 31, 2023 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:
The remuneration paid to the Directors by the company is in accordance with the
provisions of the sec. 197.
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, as amended in
our opinion and to the best of our information and according to the explanations given to
us:
i The Company has disclosed the impact of pending litigations on its financial position
in its Standalone Ind AS Financial Statements.
ii. The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts.
iii. The unpaid dividend amounting to Rs 563,316/- has not been transferred to the
Investor Education and Protection Fund as required to be transferred by the Company.
iv. (a) 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) 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. The company has neither declared nor paid any dividend during the year
|
For PAVULURI & Co. |
|
Chartered Accountants |
|
Firm Reg No. 012194S |
|
(CA V N DEEPTHI KONERU) |
|
Partner |
|
Membership No. F-228424 |
|
UDIN: 23228424BGQBHO4129 |
| Place: Hyderabad |
|
| Date: 30-05-2023 |
|
ANNEXURE-A TO THE INDEPENDENT AUDITORS REPORT
The Annexure A referred to in our Independent Auditors report of even date, to the
members of VBC Ferro Alloys Limited, Hyderabad, for the year ended 31 March 2023
we report that:
i) a) The Company has not maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
b) The fixed assets could not be physically verified by the management during the year
in accordance with phased programme of verification. Accordingly, we are unable to report
on any material discrepancies between the fixed asset register and the assets physically
available.
c) We could not verify the title deeds of the immovable properties as the same are not
produced for our verification.
ii) Physical verification of inventory including Capital stock of stores and spares
could not be conducted during the year by the management in the entire year. As no
physical verification of inventories has been carried out during the year under report, we
are unable to report regarding the discrepancies between the physical stocks and the book
records. During the year, the company has not been sanctioned working capital limits in
excess of five crore rupees, in aggregate, from banks or financial institutions on the
basis of security of current assets.
iii) The Company has not 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. Consequently, clauses 3 (iii) (a), (b) and (c) of
the Order are not applicable.
iv) The company has neither given any loans to the directors or any other persons in
whom the director(s) is interested nor given/provided any guarantee/security in connection
with any loan taken by directors or such other persons as per the provisions of section
185 of the Companies Act, 2013. The investment made by the company in an earlier year does
not exceed the limits prescribed under section 186 of the Companies Act, 2013.
v) The Company has not accepted any deposits from the public. Consequently, the clause
3(v) of the order is not applicable to the Company.
vi) We have broadly reviewed the books of account relating to materials, labour and
other items of cost maintained by the Company pursuant to the Rules made by the Central
Government for the maintenance of cost records under sub-section (1) of section 148 of the
Companies Act, 2013 and we are of the opinion that prima facie the prescribed accounts and
records have been made and maintained. However, we have not made a detailed examination of
the records.
vii) a) According to the information and explanations given to us and on the basis of
examination of the records of the Company, amounts deducted/ accrued in the books of
account in respect of 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 other material statutory dues have not been deposited during the year
by the Company with the appropriate authorities.
According to the information and explanations given to us, undisputed amounts are
payable in respect of income tax, sales tax, service tax, duty of customs, duty of excise,
value added tax or cess and other material statutory dues which were in arrears as at 31st
March 2023 for a period of more than six months from the date they became payable.
Undisputed Dues:
| Sr. No. |
Name of the Statute |
Nature of the Dues |
Amount (in Rs.) |
Period to which the amount relates |
| 1. |
Employee state Insurance Corporation Act 1948 |
Employers contribution |
1,00,000 |
From 01.04.2012 to 31.03.2015 |
| 2. |
Employee state Insurance Corporation Act 1948 |
Employees contribution |
26,216 |
From 01.07.2013 to 31.03.2015 |
| 3. |
Professional Tax 1975 |
Employees contribution |
4,42,530 |
From 01.07.2012 to 31.03.2017 |
| 4 |
Central Sales Tax Act |
Central Sales Tax |
1,19,562 |
For the year 201314 |
| 5. |
Income Tax Act, 1961 |
Dividend Distribution Tax |
21,38,620 excluding interest |
For the financial year 2011-12 |
| 6. |
. Income Tax Act, 1961 |
Income tax deducted at source |
1,37,92,657 |
From 01.04.2012 to 31.08.2022 |
| 7. |
Greater Hyderabad Municipal Corporation Act |
Property Tax |
9,31,384 |
From 01.04.2012 to 31.08.2022 |
b) As at 31st March 2023, there have been no disputed dues, which have not been
deposited with the respective authorities in respect of Income tax, Service tax, duty of
customs, duty of excise, value added tax and Cess, except the following:
| Sr. No. |
Name of the Statute |
Nature of the Dues |
Amount* (in Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
| 1 |
Employees State Insurance Act, 1948 |
Non-payment of contribution |
25,98,486 |
September 2013 onwards. |
High Court |
| 2 |
Income Tax Act,1961 |
Demand raised u/s 143(3) of The Income Tax Act,1961 |
3,22,96,420 |
2018-19 |
CIT (Appeals). |
| 3 |
Income Tax Act,1961 |
270A of The Income Tax Act, 1961 |
56,61,871 |
2018-19 |
CIT (Appeals). |
(*) Net of Pre deposits made
(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
Income Tax Act, 1961.
1x)
a) According to the records of the company examined by us, the Information and
explanations given to us, the company has not defaulted in repayment of loans or
borrowings to any financial institutions or banks as on at the balance sheet date.
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 taken any term loan during the year .
d) On an overall examination of the financial statements of the Company, funds raised
on short-term basis have, prima facie, not been used during the year for long-term
purposes by the Company.
e) On an overall examination of the financial statements of the Company, the Company
has not taken any funds from any entity or person on account of or to meet the obligations
of its subsidiaries.
f) The Company has not raised any loans during the year on the pledge of securities
held in its subsidiaries, joint ventures or associate companies and hence reporting on
clause 3(lx)(f) of the Order is not applicable.
x) The Company did not raise any money by way of initial public offer or further public
offer (including debt instruments) and term loans during the year under report.
Accordingly, paragraph 3 (lx) of the Order is not applicable. the company has not made any
preferential allotment or private placement of shares and convertible debentures (fully
convertible) during the year
xi) a) No fraud by the Company and no material fraud on the Company has been noticed or
reported during the year.
b) No report under sub-section (12) of section 143 of the Companies Act has been filed
in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014
with the Central Government, during the year and upto the date of this report.
c) 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 Nldhi Company and hence reporting under clause (xii) of the
Order is not applicable
xiii) According to the information and explanations to us and based on our examination
of the records of the company transactions with the related parties are in compliance with
section 177 and 188 of Companies Act,2013 where applicable and the details of such
transactions have been disclosed in the Financial Statements as required by the applicable
accounting standards.
a) xl) The Company does not have an internal audit system and is required to have an
internal audit system as per section 138 of the Act.
b) As reported under sub-clause (a) above, the company did not have an internal audit
system for the period under audit.
7) In our opinion during the year the Company has not entered into any non-cash
transactions with its directors or persons connected with its directors. and hence
provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.
8) In our opinion, the company is not required to be registered under section 45 IA of
the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of
the Order are not applicable to the Company and hence not commented upon.
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.
9) The Company has incurred operating cash losses of Rs.28,38,18,300/- during the
financial year covered by our audit and Rs. 16,59,12,024/-in the immediately preceding
financial year.
10) There has been no resignation of the statutory auditors of the Company during the
year.
11) On the basis of the financial ratios, ageing and expected dates of realization of
financial assets and payment of financial liabilities, other information accompanying the
financial statements and our knowledge of the Board of Directors and Management plans and
based on our examination of the evidence supporting the assumptions, nothing has come to
our attention, which causes us to believe that any material uncertainty exists as on the
date of the audit report indicating that Company is not capable of meeting its liabilities
existing at the date of balance sheet as and when they fall due within a period of one
year from the balance sheet date. We, however, state that this is not an assurance as to
the future viability of the Company. We further state that our reporting is based on the
facts up to the date of the audit report and we neither give any guarantee nor any
assurance that all liabilities falling due within a period of one year from the balance
sheet date, will get discharged by the Company as and when they fall due.
12) There are no unspent amounts towards Corporate Social Responsibility (CSR) on other
than ongoing projects requiring a transfer to a Fund specified in Schedule VII to the
Companies Act in compliance with second proviso to sub-section (5) of Section 135 of the
said Act. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable for
the year.
|
For PAVULURI & Co. |
|
Chartered Accountants |
|
Firm Reg No. 012194S |
|
Sd/- |
|
(CA V N DEEPTHI KONERU) |
|
Partner |
|
Membership No. F-228424 |
|
UDIN: 23228424BGQBHO4129 |
| Place: Hyderabad |
|
| Date: 30-05-2023 |
|
Annexure "B" to the Independent Auditors Report
(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory
Requirements section of our report to the Members of M/s VBC FERRO ALLOYS LIMITED.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of
Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")
Opinion
We have audited the internal financial controls over financial reporting of M/s. VBC
FERRO ALLOYS 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, 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 31,2023, 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 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 Section 143(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 effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, 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 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:
(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 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.
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.
|
For PAVULURI & Co. |
|
Chartered Accountants |
|
Firm Reg. No: 012194s |
|
Sd/- |
|
CA V N DEEPTHI KONERU |
|
PARTNER |
|
M.No:228424 |
|
UDIN: 23228424BGQBHO4129 |
| Place: Hyderabad |
|
| Date: 30.05.2023 |
|
+91-9892691696
