To the Members of
SATHAVAHANA ISPAT LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of SATHAVAHANA ISPAT LIMITED("the Company") which comprise the Balance Sheet as at March 31 2020 and theStatement of Pro t and Loss including Other Comprehensive Income the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion section below the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 and its loss totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
Basis for Qualified Opinion
(a) We draw your attention to note no. 36 to the Ind AS financial statements where inmanagement has considered outstanding trade receivables Supplier advances capitaladvances and other financial assets of Rs. 357902819/- Rs. 50154609/- Rs.17363284/- Rs.15702486/- (As at March 31 2019 - Rs. 442713012/- Rs.44012281/- Rs. 21530656/- and 32156145/-) respectively for period more thanone-year as good and fully recoverable as at the balance sheet date. For reasons stated inthe aforesaid note and due to confirmations being not available and pendingreconciliation adjustments we are unable to comment on the recoverability of thesereceivables advances and its consequential effect on these financial statements.
This matter was also qualified in our report on the financial statements for the yearended March 31 2019.
(b) We draw your attention to Note no 37 to the Ind AS financial statements regardingsubstantial amount of statutory dues related to Income tax Employee's provident fundEmployee's state insurance act gratuity and professional tax amounting to Rs.108339226/- (As at March 2019: Rs 49045618/-) have become overdue and remain unpaid.Interest penalty if any in respect of the same has remained unascertained and unaccountedfor.
This matter was also qualified in our report on the financial statements for the yearended March 31 2019.
(c) We Draw attention to Note no 40 to the Ind AS Financial statements regardingnon-moving inventories Since shut down of the operations at factory located atHaresamudram amounting to Rs. 211890759/- (As at 31 March 2019: Rs. 219657180/-).There is no substantial movement in the stock since operations closed at factory asmentioned in aforesaid note Management believes that no adjustments to the carrying valueof the inventories is required as those are regularly monitored maintained and in usable/saleable condition. As per Indian Accounting Standard - 2 'Inventories' are to be Valuedat the lower of cost and net realisable value. Due to pending corroborative evidence toassess the net realisable value we are unable to comment on the realisable valueof these Inventories together with consequential impact.
(d) We draw your attention to Note no 42 to the financial statements regarding overduepayables aggregating to Rs. 22816437/- as at March 31 2020 (2019 - Rs. 20961669/-)included in 'Creditor for capital works' which is outstanding to a non-resident companyfor more than three years and for which the Company is yet to obtain approval from theAuthorised Dealer or Reserve Bank of India (RBI) to remit the aforesaid amounts. Anypenalties that may be levied by RBI in the aforesaid liabilities in the financialstatements are presently not ascertainable.
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibility for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our qualified opinion on the financial statements.
Material uncertainty related to Going Concern
We draw attention to Note 33 to the financial statements which indicates that theCompany has incurred a net loss of Rs. 3107611427/- during the year ended March 312020(Year Ended March 31 2019 - Rs. 2277776344/-)and as of that date the Company'scurrent liabilities exceeded its current assets by Rs. 13629602436/- (As at March 312019 - Rs. 10232697002/-). These events or conditions along with other matters as setforth in Note 33 indicate that a material uncertainty exists that may cast significantdoubt on the Company's ability to continue as a going concern. However the financialstatements of the Company have been prepared on a going concern basis for the reasonsstated in the said Note.
Our opinion is not modified in respect of this matter.
Emphasis of Matter
i. We draw your attention to Note 27D of the Ind AS Financial Statements whichdescribes the management's assessment of the financial impact of the events arising out ofCoronavirus (Covid-19) pandemic for which a definitive assessment of the impact in thesubsequent period is dependent upon the circumstances as they evolve.
ii. We draw attention to Note no 13 (1) of Ind AS financial statements where incompany chose to classify the term loans as long term and short term in accordance withthe existing loan covenants until the revised restructure payment schedule is finalised byconsortium bankers as mentioned in note no 33.
iii. Capital work in progress amounting to Rs. 288530530/- is carried forward formore than three years pending capitalisation as mentioned in note no 3(ia) managementPlans to capitalise the same on approval of restructuring of borrowing banks
iv. We Draw attention to Note No 41 of IND AS Financial statements with respect todifference in Interest accrued and due under "other financial liabilities"between Balance confirmation obtained by us and Balance as per books amounted to Rs.680283250/- which was not accounted on account of the reasons explained in the saidnote.
Our opinion is not modified in respect of this matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matter described in the Basis for Qualified Opinion section and MaterialUncertainty Related to Going Concern section of our report we have determined the mattersdescribed below to be the key audit matters to be communicated in our report.
|Key Audit Matter ||Auditor's Response |
|1. Impairment of Plant and Equipment: ||Principal audit procedures performed: |
|Refer to note no 33 of the IND AS financial statements Company operations at ferrous division have been impacted and the plant was under shut down since 12th June 2017. The operations of Metallurgical Coke facility and power generation is also partially operated. ||Our procedures included discussion with mana- gement and those charged with governance on the reasonableness of the assumptions along with performing the following procedures: |
|The company has plant and machinery with net book value of Rs. 5523056683/- as at March 31 2020. (Refer note no: 3 of the IND AS financial statements) || Reviewed the Techno economic Viability study report performed by the expert appointed by the company's management and also reviewed the assumptions carried out in preparation of cash flow projections prepared and sensitive analysis for chan- ges in assumptions used in cash flows. |
|With challenging financial conditions conti- nuing the Company's performance and prospects could be impacted increasing the risk that Plant and Equipment may be impaired. || Verified the Valuation certificates obtained by the management from two independent registered valuers for the entire Plant and machinery of the company. |
|For the Cash generating units that contain Financial constraints the determination of recoverable amount being the higher of fair value less costs to sell and value-in-use. (Impairment of Assets (Ind AS) 36). || We further challenged management regar- ding the appropriateness of the judgments/ assumptions w.r.t to timing of cash flows and discount rate applied. |
| Management obtained the Valuation certificates from two independent registered valuers. And || |
| Management also carried out Techno economic Viability study of entire plant by appointing Independent technical expe- rts. The study has assessed the techno economic viability of the Project through a detailed techno financial analysis of the venture and evaluation of the constraints and future potential of the unit and assessing the technical commercial and financial viability study of the proposed Debt Restructuring proposal of the com- pany. || |
|Based on the above procedures' management concluded no impairment of plant and machinery is required. || |
|These conclusions are dependent upon significant management judgements in respe- ct of: || |
|Estimated resale values provided by an independent external valuer; and || |
|Estimated discount rates applied to future cash flows and on timing and approval of future capital by lenders. || |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Directors report including theannexures to directors' report Corporate governance and Management Discussion andanalysis (MD & A) but does not include the financial statements and our auditor'sreport thereon. The Directors report including the annexures to directors' reportcorporate governance and Management Discussion and analysis (MD & A) reports areexpected to be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information andwe will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility isto read the other information expected to be received after the report date and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.
When we read the Directors report including the annexures to directors' reportCorporate governance and Management Discussion and analysis (MD & A) if we concludethat there is a material misstatement therein we are required to communicate the matterto those charged with governance as required under SA 720 'The Auditor's responsibilitiesRelating to Other Information'.
Responsibilities of Management and Those charged with Governance for the FinancialStatements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibility 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 the financialstatements 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 financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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 the 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.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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 Section 143(3) of the Act based on our audit we report that:
a) We have sought and except for the matters described in the Basis for QualifiedOpinion section 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 matters described in the Basis forQualified Opinion section above in our opinion proper books of account as requiredby law have been kept by the Company.
c) The Balance Sheet the Statement of Pro t and Loss including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) Except for the possible effects of the matters described in the Basis forQualified Opinion section above in our opinion the aforesaid financial statementscomply with the Ind AS specified under Section 133 of the Act.
e) The matters described in the Basis for Qualified Opinion section above andMaterial uncertainty related to Going Concern section above in our opinion may have anadverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.
g) 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 A". Our report expresses qualified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting for the reasons stated therein.
h) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
i) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements -(Refer Note No 29 to the financialstatements).
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
| ||For MAJETI & CO |
| ||Chartered Accountants |
| ||Firm's Registration No: 015975S |
|Place: Hyderabad ||Kiran Kumar Majeti |
|Date: July 18 2020 ||Partner |
| ||Membership |
| ||UDIN: 20220354AAAABE9816 |
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(g) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SATHAVAHANAISPAT LIMITED ("the Company") as of March 31 2020 in conjunction with ouraudit of the financial statements of the Company for the year ended 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". 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.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified opinion on the Company's internal financial controlssystem over 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 audit thefollowing material weaknesses have been identified in the operating effectiveness of theCompany's internal financial controls over financial reporting as at March 31 2020:
a) Refer note no 36 of the financial statements in respect of long outstanding overduetrade receivables and advances whereby evidences of control over monitoring /assessingrecoverability of such over dues including assessment of provision of provision fordoubtful trade receivables and advances were not operating effectively. This couldpotentially result in the company not recognising a provision for doubtful/old overduetrade receivables.
b) The Company's internal financial controls over Physical verification of Inventorieson periodical basis located at Factory are not operating effectively which couldpotentially result in loss of inventory which may not be timely detected and may lead tomaterial misstatements in the Company's financial statements.
c) The Company's internal financial controls over updating the customers /vendorsmaster data with present addresses were not operating effectively.
d) The Company's internal financial controls over timely recording of the journalentries were not operating effectively. We have observed delays in recording of theentries which potentially results in delay of preparation of financial statements.
A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects maintained adequate internal financialcontrols over financial reporting as of March 31 2020 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" and except for the possible effects of the material weaknessesdescribed in Basis for Qualified Opinion paragraph above on the achievement of theobjectives of the control criteria the Company's internal financial controls overfinancial reporting were operating effectively as of March 31 2020.
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 financialstatements of the Company for the year ended March 31 2020 and these material weaknessesdo not affect our opinion on the said standalone Ind AS financial statements of theCompany.
| ||For MAJETI & CO |
| ||Chartered Accountants |
| ||Firm Registration Number: 015975S |
| ||Kiran Kumar Majeti |
| ||Partner |
| ||Membership No.: 220354 |
|Place: Hyderabad ||UDIN NO: 20220354AAAABE9816 |
|Date: July 18 2020 || |
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
I. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of 3 years in which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Based on programme the company did physical verification of assets during theprevious year and as such no physical verification was required to be carried out by theManagement during the year.
(c) The title deeds of immovable properties as disclosed in Note 3 on Property Plantand Equipment to the financial statements are held in the name of the Company.
ii. As explained to us inventories were physically verified after the year end (Onaccount of the COVID-19 related lockdown restrictions) by the management and no materialdiscrepancies were noticed on physical verification and roll backward procedures to March31 2020 from stock take date. Physical verification of inventories on periodical basisat reasonable intervals located at Factories are not operating effectively during theyear.
iii. The Company has not granted any loans secured or unsecured to companies rmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.
iv. The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186. Therefore theprovisions of Clause 3(iv) of the said Order are not applicable to the Company.
v. The Company has taken advances from customers which were outstanding for morethan one year amounting to Rs. 8664817/- in terms of Section 73 of Companies Act 2013read together with Companies (Acceptance of Deposits) Rules 2014 (Rule 2(1)(Xii) (a))such advances are liable to be treated as deposits and hence the Company is in violationof the same. Except for compliance with the aforesaid amount The Company has notaccepted any deposits from the public within the meaning of Sections 73 74 75 and 76 ofthe Act and the Rules framed there under to the extent notified. According to theinformation and explanations given to us no order has been passed by the Company LawBoard or National Company Law Tribunal or Reserve Bank of India or any Court or any otherTribunal on the Company in respect of the aforesaid deposits.
vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is not regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax Goods and Services Tax and cess and other material statutory dues as applicable withthe appropriate authorities. The extent of the arrears of statutory dues outstanding as atMarch 31 2020 and outstanding a period of more than six months from the date they becomepayable are as follows:
|Name of the statute ||Nature of dues ||Outstanding More than six months Amount (Rs) ||Total Amount (Rs) ||Period to which it relates ||Due date ||Date of Payment |
|Income Tax Act 1961 ||Tax Deducted at source ||8677647 ||14029518 ||April 2019 to March 2020 ||on 7th day of next month ||Not yet Paid |
|Income Tax Act 1961 ||Tax Collected at source ||38105 ||62762 ||April 2019 to March 2020 ||on 7th day of next month ||Not yet Paid |
|Employees' Provident Funds & Miscellaneous Provisions Act 1952 ||Provident Fund ||45745786 ||46284406 ||July 2017 to March 2020 ||on 15th of next month ||Not yet Paid |
|Employee state Insurance Act ||Employees State Insurance ||12391660 ||12855261 ||April 2018 to March 2020 ||on 15th of next month ||Not yet Paid |
|Andhra Pradesh Tax on Professions Trades Callings and Employments Act 1987 ||Professional Tax ||124360 ||1311460 ||April 2017 to March 2020 ||on 10th of next month ||Not yet Paid |
|Karnataka Tax on Professions Trades Callings and Employments Act 1976 ||Professional Tax ||494210 ||618210 ||April 2017 to March 2020 ||on 10th of next month ||Not yet Paid |
|Telangana Tax on Profession Trades Callings and Employment Act 1987 ||Professional Tax ||133350 ||158950 ||Feb 2018 to March 2020 ||on 10th of next month ||Not yet Paid |
|Payment of Gratuity Act 1972 ||Gratuity ||Nil ||33018659 ||Mar-20 ||Immediate ||Not yet Paid |
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of service-tax value added tax which have notbeen deposited on account of any dispute. The particulars of dues of income tax salestax duty of excise duty of customs as at March 31 2020 which have not been depositedon account of a dispute are as follows:
|Name of the statute ||Nature of dues ||Amount (Rs.) ||Period to which the amount relates ||Forum where the dispute is pending |
|Central Sales Tax 1956 ||Sales Tax ||2329595 ||2005-06 ||Sales Tax Appellate Tribunal Hyderabad |
|Income Tax Act 1961 ||Interest on Dividend Distribution Tax ||1379100 ||2009-10 ||Deputy Commissioner of Income Tax Hyderabad |
|Central Excise Act 1944 ||Excise duty and penalty ||386056 ||September 2011 -March 2015 ||The commissioner of central excise and customs Belgaum |
|Customs Act 1962 ||Customs duty and penalty ||104795907 ||2012-13 ||The Customs Excise and Service Tax Appellate Tribunal Hyderabad |
|Andhra Pradesh Value Added tax Act 2005 ||Penalty on Late Payment ||447276 ||March 2017 to May 2017 ||High court of Andhra Pradesh Amaravati |
|Central Sales Tax 1956 ||Penalty on Late Payment ||2004728 ||March 2017 to May 2017 ||High court of Andhra Pradesh Amaravati |
|Central Sales Tax 1956 ||Non- submissison of C-Forms ||5282708 ||2014-15 to 2015-16 ||Appeal Pending Before H'ble App. Dep. Commissioner (CT) Tirupathi |
|Andhra Pradesh Tax on Entry of Goods into Local Areas Act 2001 ||Dues of Entry Tax ||446229 ||2014-15 to 2016-17 ||Appeal Pending Before H'ble App. Dep. Commissioner (CT) Tirupathi |
|Central Sales Tax 1956 ||Non- submission of C-Forms ||388623 ||2011-12 ||Commercial Taxes Officer- Enforcement Bellary |
|Employees' Provident Funds and Miscelaneous Provisons Act 1952 ||Damages on late payment ||690499 ||October 2017 to june 2018 ||Regional PF Commissioner -II/ Regional Office Ballari. |
|Employees' State Insurance Act 1948 ||Interest on non payment ||577938 ||May 2017 to October 2017 ||Sub Regional Office Tirupati |
viii. According to the records of the Company examined by us and the information andexplanations given to us The Company has delayed in repayment of principle and interestas mentioned below for the period from March 2017 to March 2020 aggregating Rs.2936613034/-
|Term Loans (Refer note 13 to the financial statements) ||Nature of dues ||Amount of default ||Period of default and remains unpaid as at balance sheet date |
| || ||(Rs.) || |
|From Banks || || || |
|Canara Bank ||Principal ||742803487 ||59-1096 Days |
|Canara Bank ||Interest ||582878415 ||59-1155 Days |
|State Bank of India ||Principal ||603896471 ||1-1097 Days |
|State Bank of India ||Interest ||433299147 ||1-1096 Days |
|Andhra Bank ||Principal ||537143795 ||1-1097 Days |
|Andhra Bank ||Interest ||447909462 ||1-1096 Days |
|From Financial Institutions || || || |
|Industrial Finance Corporation of India ||Principal ||645445455 ||60-1066 Days |
|Industrial Finance Corporation of India ||Interest ||514603205 ||60-1066 Days |
|Working capital Borrowings ||Fund based limit ||Balance outstanding as at March 31 2020 ||Overdrawn balance* |
|(Refer note 13 to the financial statements) ||(Sanctioned) || || |
| ||(Rs.) ||(Rs.) ||(Rs.) |
|From Canara Bank ||264000000 ||3177096751 ||2913096751 |
|From State Bank of India ||402000000 ||2306694718 ||1904694718 |
|From Andhra Bank ||264000000 ||2511255826 ||2247255826 |
|Total ||930000000 ||7995047295 ||7065047295 |
*Overdrawn balance mainly on account of devolvement of letters of credit and interestaccrued there on.
ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.
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 have we been informed of any such case by theManagement.
xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (IND AS) 24 Related Party Disclosures specified under Section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
| ||For MAJETI & CO |
| ||Chartered Accountants |
| ||Firm Registration Number: 015975S |
| ||Kiran Kumar Majeti |
| ||Partner |
| ||Membership No.: 220354 |
|Place: Hyderabad ||UDIN NO: 20220354AAAABE9816 |
|Date: July 18 2020 || |