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Gayatri Sugars Ltd.

BSE: 532183 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE622E01023
BSE 00:00 | 18 Jan 2.88 0
(0.00%)
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2.81

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2.99

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2.75

NSE 05:30 | 01 Jan Gayatri Sugars Ltd
OPEN 2.81
PREVIOUS CLOSE 2.88
VOLUME 17722
52-Week high 15.00
52-Week low 2.67
P/E 1.18
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2.81
CLOSE 2.88
VOLUME 17722
52-Week high 15.00
52-Week low 2.67
P/E 1.18
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gayatri Sugars Ltd. (GAYATRISUGARS) - Auditors Report

Company auditors report

To the Members of Gayatri Sugars Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of GayatriSugars Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2018 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flows and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements to give a true and fair view of the financialposition financial performance (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015(as amended).This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of 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 Standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

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 of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the standalone IndAS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our qualified audit opinion on the standalone Ind AS financialstatements.

Basis for Qualified Opinion

We invite attention of the members to the matters detailed in Note 28.15 to theaccompanying standalone Ind AS financial statements regarding the High Court dismissingthe writ filed by the Company challenging the levy of electricity duty by the StateGovernment on consumption of electricity by captive generating units the sub sequentialdismissal of special leave petition by the Honorable Supreme Court and the pending matterbefore the Board for Industrial and Financial Reconstruction (BIFR) being abated. Asstated in the said note the Company has treated the estimated duty amount aggregating Rs283.99 Lakhs as a contingent liability and no provision has been made in respect of thesame.

In view of the above we are unable to comment on the ultimate outcome of the matterand the consequential impact if any on these financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us subject to the effects of the matter described in the Basis of QualifiedOpinion paragraph the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2018 and its profit including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Emphasis of Matters

(Note No's referred hereunder are with reference to respective notes forming part ofstandalone Ind AS financial statements) We draw member's attention to the following matteras stated in Note 28.16 regarding the preparation of financial statements on a goingconcern basis.

Our Opinion is not qualified in respect of the above matter.

Other Matters

The financial statements of the Company as at and for the year ended 31stMarch 2017 and 31st March 2016 have been audited by the Company's previousauditor who vide their report dated 29th May 2017 for the year ended 31stMarch 2017 expressed a qualified opinion in respect of levy of electricity duty by thestate government on sale and consumption of electricity by captive generation units andtreatment of the same as a contingent liability. The figures for the year ended 31st March2017 and the opening Balances as on 1st April 2016 included in this financialstatements under report were drawn up and restated in accordance with Ind AS based onpreviously audited financial statements as at and for the year ended 31stMarch 2017 and 31st March 2016 respectively and have been regrouped and/orreclassified wherever necessary.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the "Annexure A" a statement on the matters specified in paragraphs 3and 4 of the Order.

2. As required by Section 143 (3) of the Act we report that:

(a) We have sought and except for the matter described in the Basis of QualifiedOpinion paragraph above obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) Except for the possible effects of the matter described in the Basis of QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome the Statement of Cash Flows and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account;

(d) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion the aforesaid standalone Ind AS financialstatements comply with the Indian Accounting Standards specified under Section 133 of theAct and Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) The Going Concern matter described under Emphasis of Matters paragraph above inour opinion may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in termsof Section 164 (2) of the Act;

(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(h) 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". Our report expresses a qualified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(i) 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 knowledge and belief and according to the informationand explanations given to us:

i. As stated in Note No. 28.2 of the Standalone Ind AS financial statements theCompany has disclosed the impact of pending litigations on its standalone Ind AS financialstatements.

ii. As per the information and explanations given by the Company the Company did nothave any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses.

iii. As per the information and explanations given by the Company there has been nodelay in transferring the amounts which are required to be transferred to InvestorEducation & Protection Fund.

iv. The disclosures regarding details of specified bank notes held and transactedduring 8th November 2016 to 30th December 2016 has not been madesince the requirement does not pertain to financial year ended 31st March 2018.

For M O S & Associates LLP
Chartered Accountants
(Firm's Registration No.001975S/S200020)
(Oommen Mani)
(Partner)
(Membership No. 234119)
Place : Hyderabad
Date : 18th May 2018

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in the Independent Auditors' Report to the members of theCompany on the standalone Ind AS financial statements for the year ended 31stMarch 2018 we report that:

i. In respect of Fixed Assets: a. In our opinion and as per the information andexplanations given to us the Company has maintained proper records showing particularsincluding quantitative details and situation of fixed assets;

b. The management of the company has verified the fixed assets at reasonable intervalsduring the year. According to the information and explanations given to us no materialdiscrepancies were noticed on such physical verification.

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.

ii. According to the information and explanations given to us the inventories havebeen physically verified during the year by the management. In our opinion the frequencyof such verification is reasonable. The discrepancies noticed on physical verification ofinventories as compared to the book records which in our opinion were not material havebeen properly dealt with.

iii. According to the information and explanation given to us the Company has notgranted loans secured or unsecured to companies firms Limited Liability Partnership orother parties covered in the register maintained under section 189 of the Companies Act2013 (‘the Act'). Accordingly the provisions of clause 3 (iii) (a) 3(iii) (b)3(iii) (c) of the order are not applicable.

iv. According to information and explanations given to us and in our opinion thecompany has complied with the provisions of section 185 and 186 of the Act to the extentapplicable in respect of grant of loans making investments and providing guarantees andsecurities.

v. According to the information and explanations given to us the Company has notaccepted any deposits from public within the meaning of Sections 73 to 76 of the Act andthe Companies (Acceptance of Deposits) Rules 2014 (as amended) during the year.Accordingly the provisions of clause 3(v) of the Order are not applicable to the Company.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended and prescribed by the CentralGovernment under section 148(1) of the Companies Act 2013 and are of the opinion thatprima facie the prescribed cost records have been made and maintained. We have howevernot made a detailed examination of the cost records with a view to determine whether theyare accurate or complete.

vii. In respect of statutory dues a. According to the information and explanationsgiven to us and based on our examination of records of the Company amounts deducted/accrued in the books of accounts in respect of statutory dues including provident fundincome tax value added tax goods and service tax cess and other material statutory dueshave been regularly deposited during the year by the Company with appropriate statutoryauthorities except for dues relating to Cane Development Council Fund and Income Tax.

b. According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax goods and service tax duty of custom duty of excise value added tax Cessand other material statutory dues were outstanding at the year end for a period of morethan six months from the date they became payable except as given below;

Name of the statute Nature of Dues Period to which the amount relates Amount involved
Rs in lakhs
Income Tax Act 1961 Dividend Distribution Tax 2006-07 8.03

c. According to the information and explanation given to us there are no dues of Salestax Income Tax Wealth Tax Service Tax Customs Duty Goods and Service Tax and Cesswhich have not been deposited as on 31st March 2018 on account of any dispute except thefollowing:

Name of the statute Nature of Dues Forum where dispute is pending Period to which the amount relates Amount involved
Rs in lakhs
Central Excise Act 1944 Excise Duty (excluding interest and penalty) Customs Excise and Service Tax Appellate Tribunal Various periods covering the period 2006 to 2010 58.54
Customs Excise and Service Tax Appellate Tribunal Various periods covering the period 2008 to 2013 80.28

viii. Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the Company has not defaulted in repayment ofloans or borrowings to any financial institution bank or Government as on the BalanceSheet date except as under.

Lender name Principal Period of default Interest Period of default
Rs in lakhs (In days) Rs in lakhs (In days)
Andhra Bank – Excise duty term loan 52.75 2-61 9.58 2-61
Andhra Bank – Soft Loan 36.40 2-61 18.61 2-61
Andhra Bank – Corporate Loan 39.60 2-61 17.12 2-61
Union Bank of India - Excise duty term loan 32.33 2-61 6.45 2-61
Union Bank of India – Soft Loan 22.35 2-61 11.07 2-61
Bank of Baroda - Excise duty term loan 29.00 2-61 6.37 2-61
Bank of Baroda – Soft loan 20.00 2-61 10.50 2-61
Bank of Baroda – Corporate Loan 21.75 1-60 6.87 2-61
Punjab National Bank - Excise duty term loan 7.49 1-60
Punjab National Bank – Soft Loan 5.15 1-60 2.25 1-60
Punjab National Bank - Corporate loan 5.60 1-60 2.01 1-60
Sugar Development Fund Term Loan 1792.44 134-1595 1232.03 134-1595
State Bank of India – FCNRDTL 7.42 1
State Bank of India – FCNRTL 3.73 1

ix. According to information and explanations given to us the company has not raisedmoneys by way of public offer (including debt instruments). Based on our audit proceduresand according to the information and explanations given to us in our opinion the Termloans availed by the Company were prima facie applied for the purpose for which theywere obtained. However a cheque received towards unsecured loan of ‘ 565 lakhs isnot presented for realisation.

x. During the course of our examination of the books and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the company or on the company by its officers or employeesnoticed or reported during the year nor we have been informed of any such case by themanagement.

xi. In our opinion and according to the information and explanations given to us thecompany has paid or provided for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company provisions of clause 3(xii) of the Orderare not applicable to the Company.

xiii. According to the information and explanations given to us and based onexamination of records of the Company transactions with related parties are in complianceof Sections 177 and 188 of the Act where applicable and details of such transactions havebeen disclosed in the financial statements as required by the applicable AccountingStandards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made preferential allotmentor private placement of shares or fully or partly convertible debentures and hencereporting under clause (xiv) of the order is not applicable to the company.

xv. According to the information and explanations given to us and based on examinationof records of the Company the Company has not entered into any non-cash transaction withdirectors or persons connected with them. Hence Clause 3(xv) of the Order is notapplicable for the current year under report.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and accordingly the provisions of Clause 3(xvi) of the Order arenot applicable to the Company.

For M O S & Associates LLP
Chartered Accountants
(Firm's Registration No.001975S/S200020)
(Oommen Mani)
(Partner)
(Membership No. 234119)
Place : Hyderabad
Date : 18th May 2018

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in the Independent Auditors' Report to the members of theCompany on the standalone Ind AS financial statements for the year ended 31stMarch 2018:

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 GayatriSugars Limited ("the Company") as of 31st March 2018 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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 procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the 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 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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.

Basis for Qualified opinion

According to the information and explanations given to us and based on our auditmaterial weaknesses have been identified as at March 31 2018 relating to inadequateinternal financial controls over financial reporting in respect of certain reconciliationsbetween various accounting systems and period-end adjustments as fully described in Note28.19 to the financial statements and Management's assessment of estimating potentialliability relating to a disputed matter as described in Note 28.16 to the financialstatements. A ‘material weakness' is a deficiency or a combination of deficienciesin internal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

Opinion

In our opinion to the best of our information and according to the explanations givento us except for the possible effects of the material weaknesses described in Basis forQualified Opinion paragraph above on the achievement of the objectives of the controlcriteria the Company has maintained in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as of March 31 2018 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India. We have considered the material weaknesses identified and reportedabove in determining the nature timing and extent of audit tests applied in our audit ofthe financial statements of the Company for the year ended March 31 2018 and thesematerial weaknesses did not affect our opinion on the said financial statements of theCompany except in respect of the qualification relating to the Management's assessment ofestimating potential liability relating to a disputed matter in respect of which we haveissued a qualified opinion on the financial statements of the Company.

For M O S & Associates LLP
Chartered Accountants
(Firm's Registration No.001975S/S200020)
(Oommen Mani)
(Partner)
(Membership No. 234119)
Place : Hyderabad
Date : 18th May 2018