You are here » Home » Companies » Company Overview » Gayatri Sugars Ltd

Gayatri Sugars Ltd.

BSE: 532183 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE622E01023
BSE 00:00 | 30 Sep 2.44 -0.02
(-0.81%)
OPEN

2.35

HIGH

2.58

LOW

2.34

NSE 05:30 | 01 Jan Gayatri Sugars Ltd
OPEN 2.35
PREVIOUS CLOSE 2.46
VOLUME 90811
52-Week high 5.11
52-Week low 2.34
P/E
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2.35
CLOSE 2.46
VOLUME 90811
52-Week high 5.11
52-Week low 2.34
P/E
Mkt Cap.(Rs cr) 11
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 Audit of the Financial Statements

Qualified Opinion

We have audited the Financial Statements of Gayatri Sugars Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2021 and the Statementof Profit and Loss (including Other Comprehensive Income) theStatement of Changes inEquity and the Statement of Cash Flows for the year then ended and notes to the FinancialStatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "theFinancial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matter described in the Basis for QualifiedOpinion section of our report 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 31st March 2021 and the loss andother comprehensive loss changes in equity and its cash flows for the year ended on thatdate.

Basis for Qualified Opinion

As stated in note 26.16 to the accompanying Financial Statements regarding the HighCourt dismissing the writ petition filed by the Company challenging the levy ofelectricity duty by the State Government on consumption of electricity by captivegenerating units the subsequent dismissal of special leave petition by the HonorableSupreme Court and the pending matter before the Board for Industrial and FinancialReconstruction being abated. As stated in the said note the Company has treated theestimated duty amount aggregating to Rs.283.99 Lakhs as a contingent liability and noprovision has been made in respect of the same.

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.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the Financial Statementsunder the provisions of the Companies Act 2013 and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our Qualified audit opinion on theFinancial Statements.

Material Uncertainty Related to Going Concern

We draw attention to Note 26.15 of theFinancial Statements which states that during theyear the company has incurred a loss of Rs.2846.34 Lakhs and as at 31st March 2021 theaccumulated losses have completely eroded the Net-worth of the Company and the Company'scurrent liabilities exceed the current assets by Rs.15928.38 Lakhs.The FinancialStatements have been prepared on a going concern basis based on a Comfort letter providedby the promoters for continues support to the Company to meet its financial obligation inorder to enable the Company to continue its operations in the foreseeable future.

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

Emphasis of Matters

(Note Nos. referred hereunder are with reference to respective Notes forming part ofthe Financial Statements)

We draw attention to the following matters :

i) As stated in Note No. 26.14regarding petition filed by Sugar Development fund (SDF)through its Monitoring Institution IFCI Limited before the Hon'ble Debt Recovery Tribunal-1 Hyderabad for recovery of Principal amount along with accrued interest thereon.

ii) As stated in Note No. 26.18 which describes the uncertainties and the possibleeffects of Covid-19 on the operations of the Company.

Our opinion is not modified in respect of the above matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Financial Statements for the year ended 31st March 2021.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matter described in the Basis for Qualified Opinionparagraph above to be the key audit matter to be communicated in our report.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and analysis Boards Report including annexures to Board's Report Businessresponsibility Report Corporate Governance and Shareholder's Information but does notinclude the Financial Statements and our auditor's report thereon.

Our opinion on the Financial Statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of theFinancial Statements our responsibility is to readthe other information and in doing so consider whether such other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and those Charged with Governance for theFinancialStatements

The Company's Board of Directors are responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performancetotal comprehensive income changes in equity and cash flows of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India. 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 design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the Financial Statements the Board of Directors are responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of theFinancialStatements 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 control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 auditor's report to the related disclosures inthe Financial Statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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

a) We have sought and except for the matter described in the Basis of Qualified OpinionParagraph Above obtained all the information and explanations which to the best of ourknowledge 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 Changes in Equity and the statement of Cash Flow 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 of QualifiedOpinion Paragraph above in our opinion the aforesaid Financial Statements comply withthe Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. As stated in Note No. 26.2 of the Financial Statements the Company has disclosedthe impact of pending litigations on its financial position in its financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For M O S & Associates LLP
Chartered Accountants
Firm's Registration No.001975S/S200020
Sd/-
Oommen Mani
Place : Hyderabad Partner
Date : 22nd June 2021 Membership No. 234119
UDIN : 21234119AAAABZ8765

ANNEXURE "A" TO THE AUDITOR'S REPORT

The Annexure referred to in the Independent Auditors' Report to the members of theCompany on the Financial Statements for the year ended 31st March2021 we report that:

(i) In respect of Fixed Assets:

a. In our opinion and as per the information and explanations given to us the Companyhas maintained proper records showing particulars including quantitative details andsituation 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 sections of 185 and 186 of the Act to theextent applicable in respect of grant of loans making investments and providingguarantees and securities.

(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 tothe Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government under section 148(1) of the Companies Act 2013 and are of the opinionthat prima facie the prescribed cost records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.

(vii) In respect of statutory dues

a. According to the information and explanations given to us and based on ourexamination of records of the Company amounts deducted/ accrued in the books of accountsin respect of statutory dues including provident fund income tax value added tax goodsand service tax cess and other material statutory dues have not been regularly depositedduring the year by the Company with appropriate statutory authorities though the delays indeposit have not been serious.

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 31stMarch 2021 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 2008 to 2013 80.28
Andhra Pradesh Tax on Entry of Goods into Local Areas Act 2001 Entry Tax Hon'ble High Court for the State of Telangana Various periods covering the period 2011 to 2017 14.37

viii. Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the Company has defaulted in repayment of loans orborrowings to financial institution bank or Government as on the Balance Sheet date asunder.

Lender name Principal Rs.in lakhs Period of default (In days) Interest Rs.in lakhs Period of default (In days)
Banks and Financial Institutions
Union Bank - Covid Loan 65.97 1 to 86 7.69 1 to 59
Union Bank - Soft Loan (Erstwhile Andhra Bank) 12.13 1 to 90 2.01 1 to 89
Union Bank - Corporate Loan (Erstwhile Andhra Bank) 39.60 1 to 90 4.40 1 to 89
Union Bank of India - Soft Loan 22.35 1 to 86 4.91 1 to 85
Union Bank of India - FITL 42.85 31 to 60 1.60 1 to 59
Bank of Baroda - Covid Loan 14.89 1 to 31 152 1 to 26
Bank of Baroda - Soft loan 20.00 1 to 89 5.07 1 to 88
Bank of Baroda - Corporate Loan 21.75 1 to 89 5.52 1 to 88
Bank of Baroda - FITL 53.42 1 to 59 1.40 1 to 28
Punjab National Bank - Soft Loan 1.72 1 to 57 0.27 4 to 56
State Bank of India - Covid Loan 12.44 1 to 31 1.32 1 to 30
State Bank of India - Soft loan 5.57 1 to 60 0.69 1 to 29
State Bank of India - Corporate Loan 6.05 1 to 60 0.67 1 to 29
State Bank of Incia - FITL 96.00 31 to 60 1.07 1 to 59
Sugar Development Fund Term Loan 1991.60 557 to 2690 2208.38 1 to 2690
Non-Convertible Debentures
Union Bank - NCD (Erstwhile Andhra Bank) 53.03 1 8.59 1
Bank of Baroda - NCD 75.41 1 12.22 1
Punjab National Bank - NCD 45.51 1 7.38 1
State Bank of India - NCD 34.57 1 5.60 1

(ix) According to information and explanations given to us the company has not raisedmoneys by way of public offer (including debt instrument). 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 purposed for which therewere obtained.

(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 asstated in note no. 26.17 of the Financial Statements the company has obtained theapproval in accordance the provisions of Section 197 read with Schedule V to the Act forthe remuneration paid by the company for the year ended 31st March 2021.

(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 given 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
Sd/-
Oommen Mani
Place : Hyderabad Partner
Date : 22nd June 2021 Membership No. 234119
UDIN:21234119AAAABZ8765

ANNEXURE "B" TO THE AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

Qualified Opinion

We have audited the internal financial controls over financial reporting of GayatriSugars Limited ("the Company") as of 31st March 2021 in conjunction with ouraudit of theFinancial Statements of the Company for the year ended on that date.

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 below 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 31st March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India. 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 31st March 2021 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.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our auditmaterial weakness have been identified as at March 2021 relating to Managements assessmentof estimating potential liability relating to a disputed matter as described in note no.26.16 to theFinancial Statements. A "material weakness" is a deficiency or acombination of deficiencies in internal financial control over financial reporting suchthat there is a reasonable possibility that a material misstatement of the company'sannual or interim financial statements will not be prevented or detected on a timelybasis.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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.

For M O S & Associates LLP
Chartered Accountants
Firm's Registration No.001975S/S200020
Sd/-
Oommen Mani
Place : Hyderabad Partner
Date : 22nd June 2021 Membership No. 234119
UDIN: 21234119AAAABZ8765

.