TO THE MEMBERS OF
GIRDHARILAL SUGAR AND ALLIED INDUSTRIES LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of GIRDHARILAL SUGAR AND ALLIEDINDUSTRIES LIMITED (The Company) which comprises the Balance sheet as at 31st March 2017and the statement of Profit and Loss and Cash Flow statement for the year then ended anda summary of significant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for matters stated in Section 134(5) ofthe Companies Act 2013 ("The Act") with respect to the preparation of thesefinancial statements that give a true and fair value of the financial positions financialperformance and cash flows of the company in accordance with the accounting standardsreferred to in section 133 of the Act read with rule 7 of the Companies (Accounts) Rule2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provision of act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the standards on Auditing specified underSection 143(10) of the Act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
BASIS OF QUALIFIED OPINION
The company has not provided Rs.10109852/- for the year 2014-15 and Rs.5798339 /-for the year 2015-16 and 3421667/- for the year 2016-17 towards MAT payable as perSec115JB of Income Tax Act 1961 Refer Note No.29 of notes to accounts. Had the aboveliability been considered there would have been a profit of Rs.25656573 /- as againstthe reported profit of Rs.29078240 /- and Reserves & Surplus as at the balancesheet date would have been Rs. (-)69198450/- as against reported figure ofRs.(-)49868592 /-
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its Profit and its cash flows for the year ended on that date.
EMPHASIS ON MATTERS
We draw attention to the following matters in the Notes to the financial Statement:
a. Note No. 17 (II) in respect of interest not adjusted on loans given to relatedparty.
b. Note No. 30 in respect of interest liability on unpaid undisputed statutory dues ifany.
Our opinion is not modified in respect of this matter.
c. Note No. 8 (c) in respect of non-deposition of unclaimed debentures amount toInvestors Education and Protection Fund Account.
a. Note no. 35(a) in respect of not adjusting gratuity liability as per Actuaryvaluation.
b. Note no.27 in respect of provision of Industrial Promotion assistance received fromGovt. of M.P.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its profit and its cash flows for the year ended on thatdate.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) order 2015 ("the order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the annexure a statement on the matters specified inparagraphs 3 and 4 and 5 of the order to the extent applicable.
2. As required by section 143(3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the bestof 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 thecompany so far as appears from our examination of those books of the Company.
c. The Balance Sheet and statement of Profit and Loss Account and Cash Flow statementdealt with by these reports are in agreement with the books of account of the Company.
d. In our opinion the Balance Sheet and Profit & Loss Account and Cash Flowstatement dealt with by this repot comply with the account standards specified undersection 133 of the Act read with rule 7 of Companies (Accounts) Rules 2014.
e. On the basis of written information received from the directors of the Company andtaken on record by the Board of Directors as on 31st March 2017 and the information andexplanations given to us we report that none of the directors is disqualified as on 31stMarch 2017 from being appointed as a director in terms of subsection (2) of section 164of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B" and
g. With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements as referred to in note no.42 to the financialstatements.
ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any and as required on long-term contractsincluding derivative contracts.
iii) According to the information and explanations given to us the company has nottransferred a sum of Rs.99.02 lacs to on account of unclaimed debenture account. Howeveras per BIFR order dated 15.01.2014 the company was exempted from the provisions of Sec125 of the Companies Act 2013 (earst while section 205C of the Companies Act 1956) anddeferred the same payment till 2016-17. However during the year the company has issuedletters to debenture holders requested them to claim the said amount . During the year thecompany has also paid Rs.9.02 to debenture holders on claim basis during the year 2016-17.
iv)The Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December2016 and these are in accordance with the books of accounts maintainedby the company. Refer Note. 41 to the financial statements.
|Place: Indore ||For : M.MEHTA & COMPANY |
|Dated: 29-5-2017 ||Chartered Accountants |
| ||(Firm Regn. No. 000957C) |
| ||CA P R Bandi |
| ||PARTNER |
| ||(M. No. 016402) |
Annexure referred to in our Independent Auditor's Report to the Members of the Companyon the Financial Statements for the year ended 31st March 2017 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) The fixed assets of the Company have been physically verified by the management atreasonable intervals. As informed to us no discrepancies have been noticed on suchverification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except original title deed of land situated at HalolGujrat were not available for our verification. It was informed that the title deeds arelying with Canara Bank Debenture TrusteesBangluru.
ii. As explained to us the inventory of the Company has been physically verifiedduring the year by the management. In our opinion the frequency of the verification isreasonable and no material discrepancies were noticed on verification between the physicalstocks and book records.
iii. According to the information's and explanations given to us the Company hasgranted unsecured loans to one body corporate covered in the register maintained undersection 189 of the Companies Act 2013 ('the Act').
(a) In our opinion and according to the information and explanation given to us nointerest has been charged on loans the same have been waived off as per Board ofDirectors resolution dated 31/01/2014 and subsequent resolution passed on 31/07/2014.Which had been granted to the parties listed in the register maintained under section 189of the Act. The other terms and conditions on such loans are not prima facie prejudicialto the interest of the company.
(b) In case of loans granted to parties covered in the register maintained undersection 189 of the Companies Act 2013 these are interest free loans and the terms ofarrangements do not stipulate any repayment schedule and the loans are repayable ondemand. Accordingly paragraph 3(iii)(b) of the Order is not applicable to the Company inrespect of the repayment of the loan amount.
(c) There are no overdue amounts outstanding more than ninty days in respect of theloans granted to parties listed in the register maintained under section 189 of the Act.
iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made and necessary approval (erstwhile section 372(A) of theCompanies Act 1956) have been taken by way of special resolution passed in general meetingheld on 29/08/2009.
v. In our opinion and according to the information and explanations given to us thecompany has not accepted deposit from public with the meaning of Section 73 to 76 or anyother relevant provision of the Act.
vi. We have broadly reviewed the cost records maintained by the company pursuant to thecompanies (cost records and audit) Rules2014 as amended and prescribed by the centralgovernment under sub section (1) of section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records ofthe company examined by us in our opinion the company has no statutory dues of ProvidentFund Employee state Insurance Income Tax Sales Tax Service Tax Custom duty Exciseduty Value added Tax cess and any other statutory dues with the appropriate authoritiesexcept following dues of sales tax entry tax Income Tax and Service Tax for earlieryears were due for payment for more than 6 month from the date they became payable as perbooks of accounts as at 31st March 2016.
|Sr. No. ||Name of the Statue ||Nature of Due ||Amount ||Period |
|1. ||M.P. Commercial Tax Act 1994 ||Regular ||45550167 ||2006-07 to 2016-17 |
|2. ||Income Tax ||Regular ||2213260 ||2011-12 |
|3. ||Service Tax ||Regular ||239558 ||2013-14 to 15-16 |
(b) According to the information and explanation given to us there are no dues ofIncome Tax Sales Tax Service Tax duty of custom duty of excise or value added taxwhich have not been deposited with the appropriate authorities on account of any disputeexcept as given below:
|Name of the Statute ||Nature of the Dues ||Forum where dispute is pending ||Period to which the amount relates ||Amount |
|M.P. Commercial Tax Act'1994 ||Sales Tax CST and Entry Tax ||High Court/ Commissioner of Sales Tax / Deputy Commissioner. ||1999- 2000 to 2016-17 ||45065537 |
|Income Tax Act'1961 ||Income Tax Demand ||CIT Appeal ||2009-10 ||19517760 |
|Central Excise Act'1944 ||Excise Duty ||Commissioner of Central Excise (Appeal) ||2005-06 ||818153 |
viii.The company has not defaulted in repayment of any loans or borrowings from anyFinancial Institution Banks Government or debenture holders during the year exceptDeferred Commercial Taxes of Rs. 147411211/-
ix. The company did not raise any money by initial offer or further public offer(including debt instrument) and terms loans during the year. Accordingly paragraph 3(ix)of the order is not applicable.
x. To the best of our knowledge and belief and according to the information andexplanations given to us we report that no fraud on or by the company has been noticed orreported during the year.
xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us thecompany is not a nidhi company. Accordingly paragraph 3(xii) of the order is notapplicable.
xiii.According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Financial Statements as required by the applicableAccounting Standards.
xiv.According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with him as per provisions of section 192of the Companies Act 2013 hence Paragraph 3(xv) of the order is not applicable.
xvi.The company is not required to be registered under section
45-IA of the Reserve Bank of India Act 1934.
For : M.MEHTA & COMPANY
(Firm Regn. No. 000957C)
CA P R Bandi
(M. No. 016402)
ANNEXURE - B TO THE AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of GirdharilalSugar and Allied Industries Limited ("the Company") as of 31 March 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For : M.MEHTA & COMPANY |
| ||Chartered Accountants |
|Place: Indore ||(Firm Regn. No. 000957C) |
|Dated: 29/05/2017 ||CA P R Bandi |
| ||PARTNER |
| ||(M. No. 016402) |