To the members of THE ANDHRA SUGARS LIMITED TANUKU Report onStandalone Financial Statements: Opinion
We have audited the accompanying financial statements of THE ANDHRASUGARS LIMITED ("the company") which comprise the Balance Sheet as at 31stMarch 2022 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (herein after referred to as "the Standalone financial statements")In our opinion and to the best of our information and according to the explanations givento us the accompanying financial statements give the information required by the CompaniesAct 2013 ("the Act") in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standard) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2022 and itsprofit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) specified under Section 143(10) of the Act. Ourresponsibilities under those standards are further described in the Auditor'sresponsibility for the Audit of Financial Statements section of our report. We areindependent of the company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the financial statements.
Key Audit Matters
Key Audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined that there are no key audit mattersto communicate in our report.
Information Other than the Standalone Financial Statements andAuditor's Report Thereon
The Company's Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements:
The Company's Board of Directors are responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the financial position financial performance including other comprehensive incomecash flows and changes in equity of the Company in accordance with the Indian AccountingStandards (Ind AS) prescribed under Section 133 of the Companies Act 2013 read withrelevant rules issued there under and other accounting principles generally accepted inIndia.
The Andhra Sugars Limited
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of thecompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofstandalone Ind AS financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the Standalone financial statements the Board ofDirectors are responsible for assessing the company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate thecompany or to cease operations or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibility for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic 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 maintainprofessional skepticism throughout the audit. We also: Identify and assess therisks of material misstatement of the standalone financial statements whether due tofraud or error design and perform audit procedures responsive to those risks and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant tothe 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 onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards. From the matterscommunicated with those charged with governance we determine those matters that were ofmost significance in the audit of the standalone financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor's Report)Order2020("the Order") issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the Annexure A a statement on thematters specified in the paragraph 3 and 4 of the Order to the extent applicable.
2) As required by Section 143(3) of the Companies Act2013 wereport that:
a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;
b) in our opinion proper books of account as required by law hav
e been kept by the Company so far as it appears from our examination ofthose books;
c) the Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;
d) in our opinion the aforesaid financial statements comply with theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act2013 read with Rule 7 of Companies (Accounts) Rules 2014;
e) on the basis of written representations received from the directorsas on 31st March 2022 taken on record by the Board of Directors none of the directorsare disqualified as on 31st March 2022 from being appointed as a director in terms ofSection 164(2) of the Act;
f) with respect to the adequacy of internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure B" Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the company's internalfinancial controls with reference to financial statements;
g) With respect to Managerial Remuneration to be included in theAuditor's report under Section 197(16) In our opinion and according to the information andexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of Section 197 of the Act. The remuneration paidto any director is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.
h) With respect to the other matters to be included in the Auditor'sreport in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014asamended in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements - Refer Note 31& 32to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; iii. There hasbeen no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company;
iv. (a) The Management has represented that to the best of itsknowledge and belief no funds (which are material either individually or in theaggregate) have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other person orentity including foreign entity ("Intermediaries") with the understandingwhether recorded in writing or otherwise that the Intermediary shall whether directlyor indirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provideany guarantee security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented that to the best of its knowledgeand belief no funds (which are material either individually or in the aggregate) havebeen received by the Company from any person or entity including foreign entity("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and
(b) above contain any material misstatement. v. As stated in Note12(3) to the Standalone financial statements
(a) The final dividend proposed in the previous year declared and paidby the Company during the year is in accordance with Section 123 of the Companies Act2013 as applicable.
(b) The Board of Directors of the Company have proposed200 percentdividend for the year which is subject to the approval of the members at the ensuingAnnual General Meeting. Thedividend proposed is in accordance with section 123 of theCompanies Act 2013 as applicable.
| For M/s K.S RAO & Co. |
| Chartered Accountants |
| Firm Registration No. 003109S |
| K.VAMSI KRISHNA |
| Camp : Tanuku | Partner |
| Date : 28-05-2022 | ICAI Membership No:238809 |
| UDIN-22238809AJUYPH2138 |
ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 of our 'Report on Other Legal andRegulatory Requirements' section to the Members of The Andhra Sugars Limited of even date)We report that: (i) In respect of the Company's Property Plant and Equipment andIntangible Assets a. (A) The company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipmentand relevant details of right-of-use assets.
(B) The company does not have any intangible assets as on 31st March2022 and hence reporting under this clause is not required. b. The Property Plant andEquipment and right-of-use assets are physically verified by the management according to aphased program designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and the nature of itsassets. Pursuant to the program duringthe year under reportthe management has physicallyverified its Property Plant and Equipment and no material discrepancies have been noticedon such verification. c. Based on our examination of the property tax receipts leaseagreements for land and registered sale deed/transfer deed/conveyance deed in respect ofFree hold lands on which buildingswere constructed provided to us we report that thetitle in respect of self-constructed buildings and title deeds of all other immovableproperties (other than properties where the company is the lessee and the lease agreementsare duly executed in favour of the lessee) disclosed in the financial statements includedunder Property Plant and Equipment are held in the name of the Company as at the balancesheet date except the following (Refer note No. 3 of Standalone Financial Statements)
| Description of property | Gross carrying value | Held in name of | Whether pro- moter director or their relative or employee | Period Held | Reason for not being held in the name if company |
| Land (Plot no. 20 JNPC Parawada- Visakhapatnam) | Rs.2096.07 lakhs | -- | No | 2009 to till date | Agreement for sale was executed in favour of the Company on 28thMarch 2009. However final reg- istration will be done on successful completion of the project. |
d. The company has not revalued any Property Plant & Equipment(including right-of-use assets) and intangible assets during the year and hence reportingunder this clause is not applicable to that extent. e. No proceedings have been initiatedduring the year or are pending against the Company as at 31st March 2022 for holding anybenami property under the Benami Transactions (Prohibition) Act 1988 (as amended in 2016)and rules made thereunder.
(ii) (a) According to the information and explanation given to us theinventory has been physically verified by the management at reasonable intervals.Duringsuch verification the discrepancies noticed as compared to book records have been properlydealt with in the books of account. The discrepancies in each class of inventory does notexceed 10% of aggregate of each class of inventory.
(b) The company has been sanctioned working capital limits in excess ofRs.5 crore in aggregate from banks or financial institutions on the basis of security ofcurrent assets and the quarterly returns filed by the company are generally in agreementwith the books of accounts.
(iii) During the year the Company has not made investments in grantedany loans or advance in the nature of loans guarantee or security secured or unsecuredto companies firms Limited Liability Partnerships or other parties. Therefore theprovisions of clause 3(iii)(a) 3(iii)(b) 3(iii)(c) 3(iii)(d) 3(iii)(e) & 3(iii)fof the said Order are not applicable for the year under report.
(iv) In our opinion and according to the information and explanationsgiven to us the company has not granted any loans guarantees and security in accordancewith the provisions of section 185 of the Companies Act 2013. The company has compliedwith the provisions of Section 186 of the Companies Act 2013 in respect of loans andinvestments made by the company.
(v) In our opinion the company has complied with the provisions ofsection 73 to 76 and other applicable provisions of the Companies Act 2013 and Companies(Acceptance of Deposits) Rules 2014 with regard to the deposits accepted from the publicor amounts which are deemed to be deposits. According to the information furnished to usno Order has been passed on the company by the Company Law Board or National Company LawTribunal or Reserve Bank of India or any Court or any other Tribunal for non-compliancewith the provisions of Sections 73 to 76 of the Companies Act 2013.
(vi) We have broadly reviewed the books of account and recordsmaintained by the company at its Sugar units Caustic Soda division Caustic Potashdivision Sulphuric acid divisions Superphosphate division and Rectified Spirit ofDistillery division pursuant to the Rules made by the Central Government for themaintenance of Cost Records under section 148(1) of the Companies Act 2013 and we are ofthe opinion that prima faciethe prescribed accounts and records have been made andmaintained.
(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the company in our opinion the Companyis regular in depositing with the appropriate authorities the undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxSales tax Service TaxCustoms duty Excise Duty Value added Tax Cess and otherstatutorydues applicable to it with appropriate authorities; and According to the information andexplanations given to us no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income Tax Goods and Service Tax Sales tax Service TaxCustoms duty Excise Duty Value added Tax Cess and other statutory dues applicable to itwere in arrears as at 31st March 2022 for a period of more than six months from the datethey became payable except
| Sl. No. Name of the statute | Period | Amount (Rs. In lakhs) | Remarks |
| 1 Andhra Pradesh State Excise Act | Upto August 1976 | 3.58 (Establishment charges) | Pending receipt of demand by the Company |
| 2 Andhra Pradesh State Excise Act | August 1976 to March 2022 | 19.60 (Interest on above) | Pending receipt of demand by the Company |
(b) According to the information and explanations given to us therewere no amounts payable in respect of Provident Fund Employees' State Insurance IncomeTax Goods and Service Tax Sales tax Service Tax Customs duty Excise Duty Value addedTax Cess and other statutory dues applicable to itas at 31st March 2022 that have beendisputed by the company and hence were not remitted to the concerned authorities at thedate of the Balance Sheet under report except the dues mentioned hereunder
| Sl. No. Name of the statute | Nature of dues | Period | Amount (Rs. In lakhs) | Forum where the dispute is pending |
| 1 Water (Prevention and control of Pollution Cess Act 1977) | Cess | 01-04-78 to 1990-91 | 0.50 | Appellate Committee the Govt. of A.P |
| 2 Sales Tax laws in different states | Sales Tax | 2009-10 to 2017-18 | 127.22 | Different Appellate Authorities |
| 3 Goods and Service Tax Act 2017 | Goods and Service Tax | 2017-18 to 2018-19 | 48.05 | Appellate Joint Commissioner Vijayawada |
| 4 Income Tax Act 1961 | Income Tax | 2017-18 to 2019-20 | 32.73 | Commissioner of Income Tax Appeals |
| 5 Central Excise Act 1944 | Excise Duty | 2004-05 to 2017-18 | 798.27 | Different Departmental Appellate Authorities |
(viii) There were no transactions relating to previously unrecordedincome that have been surrendered or disclosed as income during the year in the taxassessments under the Income Tax Act 1961. Hence reporting under clause 3(viii) is notapplicable.
(ix) (a) According to the records of the company examined by us andthe information and explanations given to us there were no defaults in repayment of loansor other borrowings or in the payment of interest thereon to any lender during the yearunder report.
(b) The company has not been declared wilful defaulter by any bank orfinancial institution or other lender. (c) The Company has not raised any new term loansduring the year. Also there are no term loans outstanding at the beginning of theyear.Hence reporting under clause 3(ix)(c) is not applicable.
(d) On an overall examination of the financial statements of theCompany funds raised on short-term basis have prima facie not been used during the yearfor long-term purposes by the Company.
(e) On an overall examination of the financial statements of thecompany the company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries associates or joint ventures.
(f) The company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries associate or joint venture. Hence the reporting onclause 3(ix)(f) of the Order is not applicable.
(x) (a) The Company has not raised moneys by way of initial publicoffer or further public offer (including debt instruments) during the year and hencereporting under clause 3(x)(a) of the Order is not applicable.
(b) During the year the Company has not made any preferentialallotment or private placement of shares or convertible debentures (fully or partly oroptionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.
(xi) (a) No fraud by the company and nofraud on the company has beennoticed or reported during the year.
(b) No report under sub-section (12) of section 143 of the CompaniesAct has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government during the year and up to the date ofthis report.
(c) We have taken into consideration the whistle blower complaintsreceived by the Company during the year (and up to the date of this report) whiledetermining the nature timing and extent of our audit procedures.
(xii) The company is not a Nidhi Company and hence reporting underclause 3(xii) of the Order is not applicable.
The Andhra Sugars Limited
(xiii) In our opinion the Company is in compliance with section 177and 188 of the Companies Act 2013 with respect to applicable transactions with therelated parties and the details of related party transactions have been disclosed in thestandalone financial statements as required by the applicable accounting standards. (xiv)(a) In our opinion the company has an adequate internal audit system commensurate with thesize and the nature of its business.
(b) We have considered the internal audit reports for the year underaudit issued to the Company during the year and till date in determining the naturetiming and extent of our audit procedures.
(xv) In our opinion during the year the company has not entered intonon-cash transactions with directors or persons connected with its directors and henceprovisions of section 192 of the Companies Act 2013 are not applicable to the Company.
(xvi) (a) In our opinion the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934. Hence reporting under clause3(xvi)(a) (b) ad (c) of the Order is not applicable.
(b) In our opinion there is no core investment company within theGroup (as defined in the Core Investment Companies (Reserve Bank) Directions 2016 andaccordingly reporting under 3(xvi)(d) of the Order is not applicable.
(xvii) The Company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors of theCompany during the year.
(xix) On the basis of the financial ratios ageing and expected datesof realisation of financial assets and payment of financial liabilities other informationaccompanying the financial statements the auditor's knowledge of the Board of Directorsand management plans and based on our examination of the evidence supporting theassumptions nothing has come to our attention which causes us to believe that anymaterial uncertainty exists as on the date of the audit report indicating that company isnot capable of meeting its liabilities existing at the date of balance sheet as and whenthey fall due within a period of one year from the balance sheet date. We however statethat this is not an assurance as to the future viability of the Company. We further statethat our reporting is based on the facts up to the date of the audit report and we neithergive any guarantee nor any assurance that all liabilities falling due within a period ofone year from the balance sheet date will get discharged by the Company as and when theyfall due. (xx) (a) There are no unspent amounts towards Corporate Social Responsibility(CSR) on other than ongoing projects requiring a transfer to a Fund specified in ScheduleVII to the Companies Act in compliance with second proviso to sub-section (5) of Section135 of the said Act. Accordingly reporting under clause 3(xx)(a) of the Order is notapplicable for the year.
(b) There are no ongoing projects and hence no unspent amount requiredto be transferred to special account in compliance with the provision of sub-section 6 ofsection 135 of the Companies Act 2013.
| For M/s K.S RAO & Co. |
| Chartered Accountants |
| Firm Registration No. 003109S |
| K.VAMSI KRISHNA |
| Partner |
| Camp : Tanuku | Membership No:238809 |
| Date : 28-05-2022 | UDIN-22238809AJUYPH2138 |
Annexure - B to the Independent Auditors' Report
(Referred to in paragraph 2 (f) under 'Report on Other Legal andRegulatory Requirements' section of our report to the Members of The Andhra Sugars Limitedof even date) Report on the Internal Financial Controls under Clause (i) of Sub-section 3of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls with reference tofinancial statements of The Andhra Sugars Limited ("the Company") as of 31stMarch 2022 in conjunction with our audit of the standalone Ind AS financial statements ofthe Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tofinancial Statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia ('ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note on Audit of Internal Financial Controlsover Financial Reporting (the "Guidance Note") and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls both applicableto an audit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system with reference to financial statements.
Meaning of Internal Financial Controls with reference to FinancialStatements
A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to financial statements includes those policies andprocedures that (1) Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) Provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)Provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.
Inherent Limitations of Internal Financial Controls with reference toFinancial Statements
Because of the inherent limitations of internal financial controls withreference tofinancial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial Statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
Opinion
In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to financial statements and suchinternal financial controls with reference to financial statements were operatingeffectively as at 31st March 2022 based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
| For M/s K.S RAO & Co. |
| Chartered Accountants |
| Firm Registration No. 003109S |
| K.VAMSI KRISHNA |
| Partner |
| Camp : Tanuku | Membership No:238809 |
| Date : 28-05-2022 | UDIN-22238809AJUYPH2138 |
