The Members of
Balrampur Chini Mills Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Balrampur ChiniMills Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2021 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Cash Flow Statement for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory notes for the year ended on that date(hereinafter referred to as "the standalone financial statements").
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 Companies Act 2013 (" the Act") in the manner so required and give atrue and fair view in conformity with the Indian Accounting Standards prescribed undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended ("Ind AS") and other accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2021 and its profit(including other comprehensive income) changes in equity and its cash flows for the yearended on that date.
BASIS FORO PINION
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the "Auditors' Responsibilities for the Audit of the StandaloneFinancial
Statements" section of our report. We are independent of the Company in accordancewith 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 standalonefinancial statements under the provisions of the Act and the Rules thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion on the standalone financialstatements.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended 31st March 2021. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have considered the matters describedbelow to be the key audit matters for incorporation in our report.
We have fulfilled the responsibilities described in the Auditors' responsibilities forthe audit of the standalone financial statements section of our report including inrelation to these matters. Accordingly our audit included the performance of proceduresdesigned to respond to our assessment of the risks of material misstatement of thestandalone financial statements. The result of our audit procedures including theprocedures performed to address the matters below provide the basis for our opinion onthe accompanying standalone financial statements.
|Sl. No. Key audit matters ||Addressing the Key Audit Matters |
|1. Valuation and determination of Inventory ||Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the inventory include the following: |
|As on 31st March 2021 the Company has inventory of sugar with the carrying value of H 201416.00 Lacs which forms significant part of the total assets of the Company. The inventory of sugar is valued at the lower of cost and net realizable value. ||Evaluating the accounting policy followed for valuation of inventory of sugar and appropriateness thereof with respect to relevant accounting standards in this respect. |
|Significant judgement is involved in determining the cost of production of sugar which is dependent upon variability in seasonal factors including number of sugarcane crushing days recovery of sugar from cane and valuation of the products incidental to production of sugar. ||Review of the process of physical verification of sugar and its reconciliation with the book stock. |
|the realizable price of sugar which is factored by minimum sale price monthly quota and fluctuation in domestic and international selling prices. ||Understanding and testing the design and operating effectiveness of controls as established by the management in determination of cost of production and net realizable value of inventory of sugar and consistency with respect to policy followed in this respect. |
| ||Assessing the adequacy of the method used relevance and reliability of data and the systems & procedures followed for arriving at the cost of sugar inventory. |
| ||Review of the selling price of sugar prevailing at the year end and subsequent to the same both in the domestic and international market and directives of the Government concerning minimum sale price monthly quota and related export obligations and initiative taken by the company ensuring the compliances thereof. |
|2. Recognition of Deferred tax assets and liabilities ||Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the recognition of deferred tax assets include the following |
|Deferred tax assets pertaining to MAT Credit entitlement amounting to H 17807.52 Lacs recognised in earlier year has been continued in this year. Recognition of deferred tax assets and liabilities is based on expected utilization and/ or reversal thereof considering the management's projection of future taxable income of the company. This involves estimation of future operations and profitability based on assumptions and anticipations which may be in variance with the actual happening. ||Evaluation of the temporary differences and utilization/ reversal of deferred tax assets and liabilities based on internal forecasts by the management and resultant impact on future taxable income of the Company. |
| ||The above includes critical review of underlying assumptions for consistency and arriving at reasonable level of probability on the matters with due regard to the current and past results and performances as required in terms of Ind AS 12 Income Taxes and principles in this regard. |
| ||Review of management's assumption with respect to profit in future periods and taxability thereof and placing reliance on such assumptions and projections given the current scale of operations and prevailing conditions and situations. |
INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITORS' REPORT THEREON
The Company's Board of Directors is responsible for the preparation of otherinformation. The other information comprises the information included in the Annual Reportbut does not include the standalone financial statements consolidated financialstatements and our auditors' report thereon. Our opinion on the standalone financialstatements does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated. If based on the work we have performed we concludethat there is a material misstatement of this other information we are required to reportthat fact. We have nothing to report with respect to the above.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONEFINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards specified under section 133 of the Act read with relevant rules asamended. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the 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 ofthe standalone 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 of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors' report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal controls;
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls;
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management;
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern;
Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. Further to our comments in the annexure referred to in the paragraph above asrequired 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 purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account;
d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Indian Accounting Standards) Rules 2015 as amended from time to time;
e) On the basis of the written representations received from the Directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act;
f) With respect to the adequacy of the internal financial controls with reference tothe standalone 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 internal controlwith reference to the standalone financial statements of the Company.
3. With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:
i. Pending litigations (other than those already recognised in the standalone financialstatements) having material impact on the financial position of the Company have beendisclosed in the standalone financial statements as required in terms of accountingstandards and provisions of Companies Act 2013 refer note 35(1)(a) and 35(3)(b) tothe standalone financial statements.
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the company.
4. With respect to the reporting under section 197(16) of the Act to be included in theAuditors' Report in our opinion and according to the information and explanations givento us the remuneration (including sitting fees) paid by the Company to its Directorsduring the current financial year is in accordance with the provisions of section 197 ofthe Act and is not in excess of the limit laid down therein.
Annexure "A" to the Independent Auditors' Report
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report to the members of M/s Balrampur Chini Mills Limited ofeven date) i. In respect of the Company's property plant and equipment
a. The Company has maintained proper records showing full particulars includingquantitative details and situations of its property plant and equipment.
b. During the year property plant and equipment have been physically verified by themanagement according to a regular program of verification which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Asinformed no material discrepancies were noticed on such verifications.
c. According to the information and explanations given to us and based on ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note No. 4 on Property plant and equipment to standalone financialstatements are held in the name of the Company. The title deeds of immovable propertiespertaining to eight sugar units have been kept under the custody of Security Trusteeappointed and the balance with the Bank and the necessary confirmations in this respecthad been received.
ii. As informed the inventories of the Company have been physically verified by themanagement during the year at reasonable intervals and no material discrepancies werenoticed on such physical verification. The discrepancies noted during the year have beenproperly dealt with in the books of the account.
iii. The Company has not granted any loans secured or unsecured to companies firms orparties covered in the register maintained under Section 189 of the Act. Accordinglyparagraph 3 (iii) of the Order is not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 186 of the Act with respect to theinvestments made. As the Company has not granted any loan to parties wherein Directors areinterested provisions of section 185 is not applicable to the Company.
v. The Company has not accepted any deposits from public covered under Sections 73 to76 or any other relevant provisions of the Act and rules framed thereunder.
vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records under Section148 (1) of the Act in respect of the Company's products to which the said rules are madeapplicable and are of the opinion that prima facie the prescribed records have beenmaintained. We have however not made a detailed examination of the said records with aview to determine whether they are accurate or complete.
vii. According to the information and explanations given to us and based on ourexamination of the books of account:
a. During the year the Company has generally been regular in depositing withappropriate authorities undisputed statutory dues including Provident Fund InvestorEducation Protection Fund Employees' State Insurance Income Tax Custom Duty CessGoods and Services Tax (GST) and other statutory dues as applicable to it.
b. The details of disputed dues of income tax or sales tax or service tax or duty ofcustoms or duty of excise and value added tax if any as at 31st March 2021 are asfollows:
|Name of the Statute ||Nature of Dues ||Amount ( H in Lacs) ||Period to which the amount relates ||Forum where dispute is pending |
|The Central Sales Tax Act 1956 ||Central Sales Tax ||1.08 ||2009-10 ||Dy. Commissioner (Appeal) Balrampur |
viii. In our opinion and based on the information and explanations given to us by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto Government financial institutions or banks. The Company has not issued any debenturesduring the year nor has any outstanding since the opening of the financial year. ix. Inour opinion and according to the information and explanations given to us the Company hasnot raised any money by way of initial public offer or further public offer (includingdebt instruments) or any term loan during the year. Accordingly paragraph 3(ix) of theOrder is not applicable.
x. During the course of our examination of books and records of the Company carried outin accordance with generally accepted auditing practices in India and according to theinformation and explanations given to us we have neither come across any instance offraud by the Company or any fraud on the Company by its officers or employees noticed orreported during the year nor have we been informed of any such cases by the management.
xi. According to the information and explanations given 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 sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting 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 as represented to usby the management and based on our examination of the records of the Company the Companyhas not entered into non-cash transactions with directors or persons connected with them.Accordingly paragraph 3(xv) of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure "B" to the Independent Auditors' Report
(Referred to in paragraph (f) under Report on Other Legal and RegulatoryRequirements' of our report of even date)
Report on the Internal Financial Controls with reference to standalone financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls with reference to standalone financialstatements of Balrampur Chini Mills Limited ("the Company") as at 31st March2021 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS WITH REFERENE TO THESTANDALONE FINANCIAL STATEMENT
The Board of Directors of the company is responsible for establishing and maintaininginternal financial controls based on the internal control with reference to standalonefinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal
Financial Controls over Financial Reporting ("the Guidance Note") issued bythe Institute of Chartered Accountants of India (ICAI). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note issued by ICAI and the Standardson Auditing prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to thestandalone financial statements was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to the standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to the standalone financial statements included obtaining an understandingof internal financial controls with reference to standalone financial statementsassessing 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 judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
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 systemwith reference to standalone financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIALSTATEMENTS
A company's internal financial control with reference to the standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of the standalone financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial control with reference to the standalone financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of the standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the standalone financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONEFINANCIAL STATEMENTS
Because of the inherent limitations of internal financial controls with reference tothe standalone financial 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 the standalone financial statements to future periods aresubject to the risk that the internal financial control with reference to the standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlswith reference to the standalone financial statements and such internal financial controlswith reference to the standalone financial statements were operating effectively as at31st March 2021 based on the internal control with reference to standalone financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.
FOR LODHA & CO.
Firm's Registration No.- 301051E
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| ||R. P. SINGH |
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|Place of Signature: Kolkata ||Membership No.- 052438 |
|Date: 01st June 2021 ||UDIN:21052438AAAABR8904 |