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Dhampur Sugar Mills | Auditor's Report > Sugar > Auditor's Report from Dhampur Sugar Mills - BSE: 500119, NSE: DHAMPURSUG
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Dhampur Sugar Mills

BSE: 500119|NSE: DHAMPURSUG|ISIN: INE041A01016|SECTOR: Sugar
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Auditor's Report (Dhampur Sugar Mills) Year End : Mar '18

Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Dhampur Sugar Mills Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2018, and its profit/loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended March 2017 and the transition date opening balance sheet as at April 01, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended March 31, 2017 and March 31, 2016 dated May 25, 2017 and May 10, 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.

Our opinion is not modified in respect of these matters. 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 in terms of Section 143(11) of the Act, we give in”Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order ;

2. As required by Section143(3) of the Act, we report that

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been 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 Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such Controls, refer to our separate report in Annexure -’B’

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone Ind AS financial statements.

ii. The Company does not have any long-term contracts including derivative contracts for which there are any material foreseeable losses.

iii. As explained, there has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The Company has a phased program of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. The management has verified major fixed assets during the year and as explained there is no material discrepancy on such verification.

(c) The title deeds of the immovable properties, as disclosed in the financial statements, are held in the name of the company.

(ii) The inventories except goods in transit have been physically verified by the management at reasonable interval during the year. In our opinion and according to the information and explanations given to us, the frequency of such verification is reasonable. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to book records.

(iii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not granted any loan secured or unsecured to the companies, firms, limited liability partnership and other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly paragraph 3(iii) of the order is not applicable to the company.

(iv) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the company has not granted any loans, or provided any security or guarantee to the parties covered under Section 185 of the Companies Act, 2013. The Company has complied with the provisions of section 186 of the Companies Act, 2013 in respect of investment made or loans or guarantee or security provided to the parties covered under section 186 of the Companies Act, 2013.

(v) According to the information and explanations given to us, in our opinion, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and rules framed there under in respect of deposits accepted during the year. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in this connection.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost records and Audit) Rules, 2014 under section 148 of the Companies Act and are of the opinion that, prima facie, the prescribed cost record have been made and maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, investor education and protection fund, employees’ state insurance, income tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities except for demand raised by Income Tax Authorities at the time of processing of TDS return. There are no undisputed statutory dues as referred to above as at March 31, 2018 outstanding for a period of more than six months from the date they become payable except for demand raised by Income Tax Authorities at the time of processing of TDS return aggregating to ‘ 0.06 Crores. We have been informed by the Company that they are in process of getting these returns rectified and are hopeful that these demands will be substantially reduced after rectification.

(b) According to the information and explanations given to us, the particulars of Income tax, Service-tax, Sales-tax, Custom Duty, Excise Duty, Entry tax, Value Added Tax, which have not been deposited on account of any dispute, are as referred to Annexure -’A1’

(viii)According to the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of loans and borrowings to any financial institution, bank and government during the period. The Company has not borrowed any money by way of issue of debentures.

(ix) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the money raised by the Company by way of term loans have been applied for the purposes for which they were obtained.

(x) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company by its officers or employees was noticed or report during the year.

(xi) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company is not a Nidhi Company. Accordingly, the paragraph 3(xii) of the Order is not applicable to the Company.

(xiii)According to the information and explanations given to us and based on our examinations of the records, in our opinion, the transactions with related parties are in compliance with the provisions of sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (IndAS 24), Related Party Disclosures specified under Section 133 of the Act, read with Rule 15 of the Companies (Indian Accounting Standards) Rules, 2015.

(xiv)According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not raised funds by way of Private placement of Preferential Issues during the year.

xv) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not entered into any non-cash transactions as specified u/s 192 of the Act, with its directors or persons connected to him. Accordingly, the paragraph 3(xv) of the Order is not applicable to the Company.

(xvi)In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

(The Annexure - ‘A1’ referred to in our Independent Auditors’ Report to the members of the Company on the standalone financial statements for the year ended March 31, 2018)

(Rs.in crores)

S. No.

Name of the Statute

Nature of Dues

Amount in Rs.

Period to which the amount relates

Forum where the dispute is pending

1

Central Excise Act, 1944

Excise Duty

0.01

2003-04

Supreme Court

2

Central Excise Act, 1944

Excise Duty

0.02

2005-06

Supreme Court

3

Central Excise Act, 1944

Excise Duty

0.01

2012-13

Supreme Court

4

Central Excise Act, 1944

Excise Duty

#

2012-13

Supreme Court

Sub-total

0.04

1

Central Excise Act, 1944

Excise Duty

#

1998-99

High Court

2

Central Excise Act, 1944

Excise Duty

0.01

2001-02

High Court

3

Central Excise Act, 1944

Excise Duty

#

2004-05

High Court

4

Central Excise Act, 1944

Excise Duty

#

2004-05

High Court

5

Central Excise Act, 1944

Excise Duty

0.01

2004-05

High Court

6

Central Excise Act, 1944

Excise Duty

0.02

2005-06

High Court

7

Central Excise Act, 1944

Excise Duty

0.04

2010-11

High Court

8

Central Excise Act, 1944

Excise Duty

10.73

2011-12

High Court

Sub-total

10.81

1

Central Excise Act, 1944

Excise Duty

0.04

1995-96

CESTAT

2

Central Excise Act, 1944

Excise Duty

#

1996-97

CESTAT

3

Central Excise Act, 1944

Excise Duty

0.26

2005-06

CESTAT

4

Central Excise Act, 1944

Excise Duty

8.59

2006-07

CESTAT

5

Central Excise Act, 1944

Excise Duty

1.36

2007-08

CESTAT

6

Central Excise Act, 1944

Excise Duty

0.23

2007-08

CESTAT

7

Central Excise Act, 1944

Excise Duty

0.17

2007-08

CESTAT

8

Central Excise Act, 1944

Excise Duty

2.49

2008-09

CESTAT

9

Central Excise Act, 1944

Excise Duty

0.04

2009-10

CESTAT

10

Central Excise Act, 1944

Excise Duty

0.04

2009-10

CESTAT

11

Central Excise Act, 1944

Excise Duty

#

2009-10

CESTAT

12

Central Excise Act, 1944

Excise Duty

2.89

2010-11

CESTAT

13

Central Excise Act, 1944

Excise Duty

4.75

2010-11

CESTAT

14

Central Excise Act, 1944

Excise Duty

3.09

2010-11

CESTAT

15

Central Excise Act, 1944

Excise Duty

0.03

2010-11

CESTAT

16

Central Excise Act, 1944

Excise Duty

0.02

2010-11

CESTAT

17

Central Excise Act, 1944

Excise Duty

0.15

2011-12

CESTAT

18

Central Excise Act, 1944

Excise Duty

0.02

2011-12

CESTAT

19

Central Excise Act, 1944

Excise Duty

0.05

2011-12

CESTAT

20

Central Excise Act, 1944

Excise Duty

0.05

2011-12

CESTAT

21

Central Excise Act, 1944

Excise Duty

2.08

2014-15

CESTAT

22

Central Excise Act, 1944

Excise Duty

0.65

2014-15

CESTAT

23

Central Excise Act, 1944

Excise Duty

0.45

2015-16

CESTAT

11

Central Excise Act, 1944

Excise Duty

0.06

2017-18

CESTAT

12

Central Excise Act, 1944

Excise Duty

0.33

2017-18

CESTAT

3

Central Excise Act, 1944

Excise Duty

0.02

2017-18

CESTAT

4

Central Excise Act, 1944

Excise Duty

0.05

2017-18

CESTAT

5

Central Excise Act, 1944

Excise Duty

0.02

2017-18

CESTAT

6

Central Excise Act, 1944

Excise Duty

0.07

2017-18

CESTAT

Sub-total

28.00

1

Central Excise Act, 1944

Excise Duty

#

2001-02

Commissioner (Appeals)

2

Central Excise Act, 1944

Excise Duty

0.05

2001-02

Commissioner (Appeals)

3

Central Excise Act, 1944

Excise Duty

#

2004-05

Commissioner (Appeals)

4

Central Excise Act, 1944

Excise Duty

0.05

2009-10

Commissioner (Appeals)

5

Central Excise Act, 1944

Excise Duty

0.02

2011-12

Commissioner (Appeals)

6

Central Excise Act, 1944

Excise Duty

0.29

2011-12

Commissioner (Appeals)

7

Central Excise Act, 1944

Excise Duty

0.13

2015-16

Commissioner (Appeals)

8

Central Excise Act, 1944

Excise Duty

0.01

2015-16

Commissioner (Appeals)

9

Central Excise Act, 1944

Excise Duty

0.01

2015-16

Commissioner (Appeals)

10

Central Excise Act, 1944

Excise Duty

0.13

2016-17

Commissioner (Appeals)

Sub-total

0.69

1

Central Excise Act, 1944

Excise Duty

1.39

2017-18

Additional Commissioner (Appeals)

2

Central Excise Act, 1944

Excise Duty

0.45

2017-18

Additional Commissioner (Appeals)

1.84

Total Excise duty demands

41.38

1

Service Tax Law

Service Tax

0.56

2009-10

CESTAT

2

Service Tax Law

Service Tax

0.03

2010-11

CESTAT

Total Service tax demands

0.59

Total Excise duty & Service tax demands

41.97

1

U.P. Trade Tax Act, 1948

Trade Tax

0.01

1993-94

High Court

2

U.P. Trade Tax Act, 1948

Trade Tax

0.01

1994-95

High Court

3

U.P. Trade Tax Act, 1948

Trade Tax

0.04

1995-96

High Court

4

U.P. Trade Tax Act, 1948

Trade Tax

0.09

1996-97

High Court

5

U.P. Trade Tax Act, 1948

Trade Tax

0.10

1996-97

High Court

6

U.P. Trade Tax Act, 1948

Trade Tax

0.18

1997-98

High Court

7

U.P. Trade Tax Act, 1948

Trade Tax

0.35

1998-99

High Court

8

U.P. Trade Tax Act, 1948

Trade Tax

0.75

1999-00

High Court

9

U.P. Trade Tax Act, 1948

Trade Tax

0.04

1999-00

High Court

10

U.P. Trade Tax Act, 1948

Trade Tax

0.40

2000-01

High Court

11

U.P. Trade Tax Act, 1948

Trade Tax

0.02

2000-01

High Court

12

U.P. Trade Tax Act, 1948

Trade Tax

0.41

2001-02

High Court

13

U.P. Trade Tax Act, 1948

Trade Tax

0.16

2001-02

High Court

14

U.P. Trade Tax Act, 1948

Trade Tax

0.73

2002-03

High Court

15

U.P. Trade Tax Act, 1948

Trade Tax

0.15

2002-03

High Court

16

U.P. Trade Tax Act, 1948

Trade Tax

0.49

2003-04

High Court

17

U.P. Trade Tax Act, 1948

Trade Tax

0.07

2003-04

High Court

18

U.P. Trade Tax Act, 1948

Trade Tax

0.59

2004-05

High Court

19

U.P. Trade Tax Act, 1948

Trade Tax

0.26

2011-12

High Court

20

U.P. Trade Tax Act, 1948

Trade Tax

0.64

2011-12

High Court

Sub-total

5.49

1

U.P. Trade Tax Act, 1948

Trade Tax

0.72

1999-00

Commercial Tax Tribunal

2

U.P. Trade Tax Act, 1948

Trade Tax

1.12

1999-00

Commercial Tax Tribunal

3

U.P. Trade Tax Act, 1948

Trade Tax

0.43

2001-02

Commercial Tax Tribunal

4

U.P. Trade Tax Act, 1948

Trade Tax

2.65

2001-02

Commercial Tax Tribunal

5

U.P. Trade Tax Act, 1948

Trade Tax

5.49

2005-06

Commercial Tax Tribunal

6

U.P. Trade Tax Act, 1948

Trade Tax

0.05

2005-06

Commercial Tax Tribunal

7

U.P. Trade Tax Act, 1948

Trade Tax

2.75

2006-07

Commercial Tax Tribunal

8

U.P. Trade Tax Act, 1948

Trade Tax

0.04

2006-07

Commercial Tax Tribunal

5

U.P. Trade Tax Act, 1948

Trade Tax

0.63

2007-08

Commercial Tax Tribunal

6

U.P. Trade Tax Act, 1948

Trade Tax

0.60

2007-08

Commercial Tax Tribunal

7

U.P. Trade Tax Act, 1948

Trade Tax

1.18

2008-09

Commercial Tax Tribunal

8

U.P. Trade Tax Act, 1948

Trade Tax

1.77

2008-09

Commercial Tax Tribunal

9

U.P. Trade Tax Act, 1948

Trade Tax

0.66

2009-10

Commercial Tax Tribunal

10

U.P. Trade Tax Act, 1948

Trade Tax

1.08

2009-10

Commercial Tax Tribunal

Sub-total

19.17

1

U.P. Trade Tax Act, 1948

Trade Tax

0.01

2009-10

Additional Commissioner (Appeals)

2

U.P. Trade Tax Act, 1948

Trade Tax

0.07

2012-13

Additional Commissioner (Appeals)

3

U.P. Trade Tax Act, 1948

Trade Tax

0.73

2012-13

Additional Commissioner (Appeals)

4

U.P. Trade Tax Act, 1948

Trade Tax

0.10

2013-14

Additional Commissioner (Appeals)

5

U.P. Trade Tax Act, 1948

Trade Tax

1.77

2013-14

Additional Commissioner (Appeals)

6

U.P. Trade Tax Act, 1948

Trade Tax

0.35

2014-15

Additional Commissioner (Appeals)

7

U.P. Trade Tax Act, 1948

Trade Tax

0.65

2014-15

Additional Commissioner (Appeals)

Sub-total

3.68

Total Trade tax demands

28.34

1

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.82

1994-95

High court

2

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

1.06

1994-95

High court

3

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

1.25

1995-96

High court

4

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.37

1995-96

High court

5

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.88

2001-02

High court

4.38

1

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.02

2000-01

Commercial Tax Tribunal

2

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.51

2005-06

Commercial Tax Tribunal

3

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.43

2006-07

Commercial Tax Tribunal

4

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.02

2007-08

Commercial Tax Tribunal

5

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.21

2008-09

Commercial Tax Tribunal

6

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.89

2009-10

Commercial Tax Tribunal

Sub-total

2.08

1

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.02

2010-11

Additional Commissioner (Appeals)

2

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

2.85

2012-13

Additional Commissioner (Appeals)

3

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.43

2013-14

Additional Commissioner (Appeals)

4

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.05

2014-15

Additional Commissioner (Appeals)

Sub-total

3.35

Total Entry Tax demands

9.81

Total Trade Tax and Entry Tax demands

38.15

Report on the Internal Financial Control under clause (i) of subsection 3 of section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial control over financial reporting of Dhampur Sugar Mills Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone 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 internal financial controls based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s polices, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information , as required under the Companies Act, 2013 (“the Act”).

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial control over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Control Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence, we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial control system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that , in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the company; (2) provide reasonable assurance that transaction are recorded as necessary to permit preparation of financial statement in accordance with generally accepted accounting principles, and that receipt and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition , use ,or disposition of the company’s assets that could have a material effect on the financial statement.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial control over financial reporting were operating effectively as at March 31, 2018, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.

For Atul Garg & Associates For T R Chadha & Co LLP

Chartered Accountants Chartered Accountants

Firm Registration No.001544C Firm Registration No.006711N/N500028

Atul Garg Neena Goel

Partner Partner

Membership No. 070757 Membership No. 057986

Place: New Delhi Place: New Delhi

Date: May 09, 2018 Date: May 09, 2018

Source : Dion Global Solutions Limited
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