To the Members of Gayatri Sugars Limited
Report on the Audit of the Standalone Financial Statements
We have audited the Standalone Financial Statements of Gayatri Sugars Limited("the Company") which comprise the Balance Sheet as at 31st March 2019 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes tothe Financial Statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "the Standalone FinancialStatements").
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 Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31stMarch 2019 and the loss and other comprehensive income changes in equity and its cashflows for the year ended on that date.
Basis for Qualified Opinion
As stated in note 28.16 to the accompanying Standalone Financial Statements regardingthe High Court 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 ' 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 Standalone Financial Statements.
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(1 0) of the Companies Act 201 3. Our responsibilities under those SAsare further described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial 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 theStandalone Financial Statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our Qualified audit opinionon the Standalone Financial Statements.
Material Uncertainty Related to Going Concern
We draw attention to Note 28.1 7 of the Standalone Financial Statements which statesthat during the year the company has incurred a loss of ' 1946.66 Lakhs and as at 31stMarch 2019 the accumulated losses have completely eroded the Net-worth of the Companyand the Company's current liabilities exceed the current assets by ' 11786.80 Lakhs. TheStandalone Financial Statements have been prepared on a going concern basis based on aComfort letter provided by the promoters for continues support to the Company to meet itsfinancial obligation in order to enable the Company to continue its operations in theforeseeable future.
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 Standalone Financial Statements of the current period.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 QualifiedOpinion paragraph 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 Standalone Financial Statements and our auditor's report thereon.
Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
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 Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the Ind AS and other accounting principlesgenerally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the 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.
Those 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 StandaloneFinancial 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.
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 the StandaloneFinancial 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.
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 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 ourauditor's 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 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 201 6 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 201 3 we give in the "Annexure A" a statementon the matters specified 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) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASspecified 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 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 201 9 from being appointed as a director in terms ofSection 1 64(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. 28.2 of the Standalone Financial Statements the Company hasdisclosed the impact of pending litigations on its financial position in its financialstatements.
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 |
| ||Oommen Mani |
|Place : Hyderabad ||Partner |
|Date : 9th May 2019 ||Membership No. 234119 |