The Members of Bannari Amman Sugars Limited Report on the Audit of theFinancial Statements
1. We have audited the accompanying financial statements of BannariAmman Sugars Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2021 and the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and Statement of Cash Flows for the year thenended on that date and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2021 the profitincluding other comprehensive income changes in equity and its cash flows for the yearended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules there under 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.
Key Audit Matters
4. Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the 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 the matter described below to be the key auditmatters to be communicated in our report.
|Description of Key Audit Matter ||Description of Auditor's Response |
|4.1 Determination of net realizable value of inventory of sugar as at the year ended March 31 2021 || |
|(Refer to the accompanying note no.7 forming integral part of the Financial Statements) ||We understood and tested the design and operating effectiveness of controls as established by the management in determination of net realizable value of inventory of sugar. |
|As on March 31 2021 the Company has inventory of sugar with the carrying value of Rs.87462.17 lakhs. The inventory of sugar is valued at the lower of Weighted Average cost and net realizable value. ||We considered various factors including the actual selling price prevailing around and subsequent to the year end minimum selling price & monthly quota and other notifications of the Government of India initiatives taken by the Government with respect to sugar industry as a whole. |
|We considered the value of the inventory of sugar as a key audit matter given the relative size of the balance in the financial statements and significant judgement involved in the consideration of factors such as minimum sale price monthly quota fluctuation in selling prices and the related notifications of the Government in determination of net realizable value. ||Based on the above procedures performed the management's determination of cost and net realizable value of the inventory of sugar as at the year-end is considered to be reasonable. |
Information Other than the Financial Statements and Auditor's ReportThereon
5. The Company's Board of Directors is responsible for the preparationof the other information. The other information comprises the Management Discussion andAnalysis Board's Report including Annexures to Board's Report Corporate Governance andShareholder's Information but does not include the financial statements and our auditor'sreport thereon.
6. Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
7. In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. Based onthe work we have performed on other information if we conclude that there is a materialmisstatement if any of this other information we are required to report that fact. Wehave nothing to report in this regard
Responsibilities of Management and Those Charged with Governance forthe Financial Statements
8. The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian accountingStandards specified under section 133 of the Act read with Companies (Indian AccountingStandard) Rules 2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
9. In preparing the financial statements the Board of Directors isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
10. Those Board of Directors is also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
11. Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's 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 financial statements.
12. As part of an audit in accordance with SAs we exerciseprofessional judgement and maintain professional skepticism throughout the audit.
a) Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
b) Obtain an understanding of internal controls relevant to the auditin order to design audit procedures that are appropriate in the circumstances. Undersection 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.
c) Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
d) 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
e) Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
13. 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.
14. We also provide those charged with governance with a statement thatwe have 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.
15. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
16. 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 of the Companies Act2013 we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
17. As required by Section 143(3) of the Act we report 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 have beenkept 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 OtherComprehensive Income) the Statement of Changes in Equity and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standard) Rules 2015 as amended
e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".
g) With respect to the matter to be included in the Auditors' Reportunder Section 197(16) of the Act: In our opinion and according to the information andexplanations given to us the remuneration paid by the Company to its directors during thecurrent year is in accordance with the provisions of Section 197 of the Act.
h) With respect to the other matters to be included in the Auditor'sReport 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 itsfinancial position in its financial statements - Refer Note No.35 to the financialstatements;
ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
Annexure - A to the Independent Auditors' Report
Referred to in paragraph 16 of the Independent Auditor's Report of evendate to the members of Bannari Amman Sugars Limited on the financial statements for theyear ended March 31 2021
I. a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.
b) The Company has a regular programme of physical verification of itsproperty plant and equipments by which all property plant and equipment are verified ina phased manner. In accordance with this programme certain property plant and equipmentwere verified by the management during the year and no material discrepancies were noticedon such verification. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets.
c) In our opinion and according to the information and explanationsgiven to us and on the basis of examination of the records of the company the title deedsof immovable properties are held in the name of the company. In respect of immovableproperties taken on lease and disclosed as right-of-use-assets in the financialstatements the lease agreements are in the name of the company.
ii. The inventory has been physically verified by the management atreasonable intervals during the year.
No material discrepancy was noticed on physical verification ofinventories by the management as compared to book records.
iii. In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the books of account the Company hasnot granted any loans secured or unsecured to companies firms Limited Liabilitypartnerships or other parties listed in the register maintained under section 189 of theAct. Consequently the provisions of paragraph 3(iii) of the Order are not applicable tothe Company.
iv. In our opinion and according to the information and theexplanations given to us the Company has not granted any loans or provided any guaranteesor securities to the parties covered under the section 185 of the Act. The Company hascomplied with the provisions of section 186 of the Act in respect of investments made orloans or guarantee or security provided.
v. The Company has not accepted any deposits from the public.
vi. As per the information and explanation given by the managementmaintenance of cost records has been prescribed by the Central Government and we are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained under section 148(1) of the Act by the company.
vii. a) According to the information and explanations given to us andon the basis of our examination of the records of the Company the undisputed statutorydues including provident fund Employee's State Insurance Income tax Goods and ServiceTax duty of customs duty of excise and any other material statutory dues asapplicable have been regularly deposited during the year by the Company with theappropriate authorities.
b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund Employee's State InsuranceIncome tax Goods and Service Tax duty of customs duty of excise and other materialstatutory dues were in arrears as at March 31 2021 for a period of more than six monthsfrom the date they became payable.
c) According to the information and explanations given to us thecompany has no disputed dues of income tax or duty of customs or duty of excise or goodsand service tax that have not been deposited on account of matters pending beforeappropriate authority.
viii. According to the information and explanations given to us theCompany has not defaulted in repayment of dues to financial institutions banks andGovernment during the year. The company has not issued any debentures.
ix. The Company has not raised any money by way of Initial Public Offeror further public offer (including Debt instruments) during the year. According to theinformation and explanations given to us the term loans availed during the year have beenapplied for the purposes for which those were obtained.
x. According to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees has been noticed or reportedduring the year.
xi. According to the information and explanations given to us and basedon the examination of the records 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 explanationsgiven to us the Company is not a Nidhi
Company. Accordingly paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the financial statements as required bythe applicable Indian Accounting Standards.
xiv. According to the information and explanations given to us andbased on our examination of the records the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review. Accordingly paragraph 3(xiv) of the Order is not applicable.
xv. According to the information and explanations given to us and basedon our examination of the records the Company has not entered into non-cash transactionswith the Directors or persons connected with them. Accordingly paragraph 3(xv) of theOrder is not applicable.
xvi. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
Accordingly the paragraph 3(xvi) of the Order is not applicable to theCompany.
Annexure - B to the Independent Auditors' Report
Referred to in paragraph 17(f) of the Independent Auditor's Report ofeven date to the members of Bannari Amman Sugars Limited on the financial statements forthe year ended March 31 2021.
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act')
1. We have audited the internal financial controls over financialreporting of Bannari Amman Sugars Limited ("the Company") as of March 31 2021in conjunction with our audit of the financial Statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting 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 ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding 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 Act.
3. Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system over financial reporting andtheir operating effectiveness. Our audit of internal financial controls over financialreporting included obtaining an understanding of internal financial controls overfinancial reporting assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that:
a) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
b) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorization of management and directors of thecompany; and
c) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
7. Because of the inherent limitations of internal financial controlsover financial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
| ||For P K NAGARAJAN & Co. |
| ||Chartered Accountants |
| ||Firm Reg. No: 016676S |
| ||VIGNESA SOMATHURAI PANDIAN |
| ||Partner |
|Place : Coimbatore ||M.No. 241168 |
|Date : 24.05.2021 ||UDIN:21241168AAAAAR8925 |