Genera Agri Corp Ltd.
|BSE: 590133||Sector: Others|
|NSE: N.A.||ISIN Code: INE993L01015|
|BSE 00:00 | 04 Mar||Genera Agri Corp Ltd|
|NSE 05:30 | 01 Jan||Genera Agri Corp Ltd|
|BSE: 590133||Sector: Others|
|NSE: N.A.||ISIN Code: INE993L01015|
|BSE 00:00 | 04 Mar||Genera Agri Corp Ltd|
|NSE 05:30 | 01 Jan||Genera Agri Corp Ltd|
Report on the Financial Statements
We have audited the accompanying standalone financial statements of M/s Genera AgriCorp Limited ("the Company") which comprise the Balance Sheet as at 31March 2017 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013("the Act") with respect to the preparation andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with relevant rules issued thereunder. 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.
Our responsibility is to express an opinion on these standalone financial statementsbased 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 there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts thedisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial controls relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
Basis for Qualified Opinion
a. The Company carries investments in its wholly owned subsidiaries amounting to Rs.351.38 lakhs which have not commenced any operations since inceptions and company may notfully recover its investments. The company has not made any provision for permanentdiminution in value of the investments. b. The Company had advanced certain amounts asInter-Corporate loans totaling Rs.1037.35 Lakhs which are outstanding since long time.Considering the fact that these are outstanding since long time and Companys effortsin recovering the same are not fully yielding desired results. The possible loss onaccount of this has not been recognized in the financial statements. c. The Company givenadvances for land farmers lease rental deposits and advances to staff totaling Rs.2421.59lakhs which are outstanding since long time during the year out of Rs.2421.59 lakhs theamount of Rs.1780.48 lakhs has identified as not recoverable the same was written off andaccordingly charged to the statement of profit and loss. The management is expecting therecovery of balance in the near future. d. The company efforts in recovering theoutstanding balance of trade receivables Rs 3482.53 lakhs are not yielding desiredresults. During the year the company has identified an amount of Rs.3184.04 lakhs is notrecoverable and the same charged to statement of profit and loss. The company is expectingthe recovery of balance in the near future.
According to the management it is not possible to estimate the losses and consequentlyquantify the amount of provision required in the above cases.
Had the company estimated and provided for the losses as mentioned (a) to (c) of abovethe profit stated in the statement of profit and loss would have been lower by suchamount; the carrying value of investments in the Balance sheet would have been lower bythe amount of provision with respect to item mentioned in paragraph (a) of the above; theamount of other non-current assets in the Balance sheet would have been lower by theamount of provision with respect to item mentioned in paragraph (b) of the above ; theamount of Long-term loans and advances in the Balance sheet would have been lower by theamount of provision with respect to item mentioned in paragraph (c) of the above.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the "Basis forqualified opinion" paragraph the aforesaid standalone 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 31 March 2017 and its profit and its cash flow for the yearended on that date.
Emphasis of Matter
Attention is invited to the following:-
(a) Note No 26 (Contingent Liabilities) relating to the show cause notice issued by theEnforcement Directorate on certain alleged lapses by the company relating to certainfilings under the provisions of Foreign Exchange Management Act the financial impact ofwhich is not quantifiable at the moment;
The corresponding penal consequences presently cannot be determined; accordingly noprovision for any liability and/or adjustment that may result has been made in thestandalone financial statements. Our opinion is not qualified in respect of the aforesaidmatters.
As per statutory records produced before us and explanations given to us our commentsare as follows:
The company is not appointed the Whole Time Company Secretary as required undersection 203 of the Companies Act 2013 and relevant rules made there under.
There was no Internal Auditors as required under section 138 of theCompanies Act 2013
We are unable to find the status of the Micro and Small Enterprises to whom thecompany owes which are outstanding more than 45 days at 31st March 2017.
Our opinion is not qualified in respect of the aforesaid matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theorder") issued by the Central Government in terms of Section 143(11) of the CompaniesAct 2013 (Act") we give in "Annexure B statement on the matters specifiedin paragraphs 3 & 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 matters described in the Basis for QualifiedOpinion and other matter paragraph obtained all the information and explanations which tothe best of our Knowledge and belief were necessary for the purposes of our audit;
(b) Except for the possible effects of the matters described in the Basis for QualifiedOpinion paragraph and other matter in our opinion proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks;
c The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;
(d) Except for the effects of the matters described in the Basis for Qualified opinionparagraph Emphasis matter and other matter paragraph above in our opinion the aforesaidstandalone Financial Statements comply with the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014;
(e) The matter described in the Basis for Qualified Opinion Paragraph above thematters described under the Emphasis of Matter paragraph and the matters described underthe Other Matters paragraph in our opinion may have an adverse effect on the functioningof the company;
(f) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms ofSection164 (2) of the Act;
(g) With respect to the adequacy of internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure A";
(h) 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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements refer note no 26 to the financial statements;
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company; and
(iv). The company has provided requisite disclosures in note 34 to these standalonefinancial statements as to holding of specified bank notes on November 8 2016 andDecember 30 2016 as well as dealings in Specified Bank Notes during the period fromNovember 8 2016 and December 302016. Based on our audit procedures and relying on themanagement representation regarding the holding and nature of cash transactions includingspecified bank notes we report that these disclosures are in accordance with the books ofaccounts maintained by the company and as produced to us by the management.
Annexures to the Independent Auditors Report
Annexure - A to the Independent Auditors report on the Internal FinancialControls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls over financial reporting of M/sGenera Agri Corp Limited ("the company") as of 31 March 2017 in conjunctionwith our audit of the financial statements of the company for the year ended on that date.
The Companys 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". 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 companys policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
Our responsibility is to express an opinion on the companys 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 aspects.
An 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 proceduresselected depend on the auditors judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the companys internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 thecompanys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting Because ofthe inherent limitations of internal financial controls over financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatement due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial control over financial reportingmay become inadequate because of changes in conditions or that the degree of compliancewith the policies or procedures may deteriorate.
According to the information and explanation given to us and based on our audit thefollowing material weakness have been identified as at March 312017.
a. The company did not have internal auditors as required by the companysact2013 which is one of the essential components of internal control with regards tothe potential for fraud when performing risk assessment.
b. The companys internal control system for statutory dues and returns were notoperating effectively which could potentially result in the company goes to the variouslegal cases for the above mentioned liability.
c. The company does not have proper internal control system for collection of amountfrom its trade receivables due to which heavy amount of bad debts are being written offduring the year thereby resulting in the reduction of net profit and net assets of thecompany during the year.
A material weakness is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the companys annual financial statementswill not be prevented or detected on a timely basis.
In our opinion except for the effects/possible effects of the material weaknessesdescribed above on the achievement of the objective of control criteria the company hasmaintained adequate and effective internal financial control system over financialreporting as at 31st March 2017 based on the internal control over financial reportingcriteria established by the company considering the essential components of internalfinancial control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India.
We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the standalonefinancial statements of the Company and these material weaknesses do not affect ouropinion on the standalone financial statements of the Company.
Annexure (B) to the Independent Auditors Report
Referred to in paragraph 2 under the heading "Report on other legal and regulatoryrequirements" of our report of even date to the financial statements of the companyfor the year ended March 31 2017:
(I) (a) The Company has not maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) As informed to us the Company had carried out the physical verification of FixedAssets during the year under review.
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) The management has conducted physical verification of inventory at reasonableintervals during the year. The discrepancies noticed on physical verification of theinventory is compared to books records which has been properly dealt with in the books ofaccount were not material.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms LLPs or other parties coveredin the register maintained under Section 189 of the Companies Act 2013. Accordingly theprovisions of clause 3(iii)(a)(b) and (c) of the Order are not applicable to the Companyand hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013In respect of loans investments guarantees and security.
(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public and hence the directives issued by the Reserve Bankof India and the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the Companies (Acceptance of Deposit) Rules 2015 with regard to the depositsaccepted from the public are not applicable.
(vi) As informed to us the maintenance of Cost Records has not been specified by theCentral Government under subsection (1) of Section 148 of the Act in respect of theactivities carried on by the company.
(vii)(a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company have not been regular indepositing undisputed statutory dues including Provident Fund Employees State InsuranceIncome-Tax Sales tax Service Tax Duty of Customs Duty of Excise Value added Tax Cessand any other statutory dues with the appropriate authorities.
According to the information and explanations given to us undisputed amounts payablein respect of the above were income tax pertaining to the financial year ended 31 March2014 amounting to 2.02 Lakhs and income tax pertaining to the financial year ended 31March 2015 amounting to 5.88 Lakhs were in arrears as at March 31 2017 for a period ofmore than six months from the date on when they become payable.
(b) According to the information and explanation given to us following are the dueamounts pertaining to the Income Tax which have not been deposited on account of disputefor which appeals are pending before the Honble Income Tax Appellate Tribunal.
(viii) The Company does not have any loans or borrowings from any financialinstitution banks government or debenture holders during the year. Accordinglyparagraph 3(viii) of the Order is not applicable.
(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
x) Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
(xiii)According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(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 any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv)According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi)In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.