Key Audit Matters

1. Suspected Fraud Involving Vendor Payments

  • Internal examination identified suspected irregular vendor payments from previous years
  • External firm appointed for independent investigation, final outcome still awaited
  • Branch Auditor of Northern Region identified additional doubtful transactions aggregating Rs 162.42 lakhs relating to financial years 2022-23 to 2024-25
  • Management has recognized Rs 162.42 lakhs as recoverable from concerned vendors and simultaneously created provision for the same
  • Investigation ongoing as of report date, final outcome and consequential impact not ascertainable

2. Evaluation of Uncertain Tax Positions

  • Holding Company has tax matters under dispute requiring judgment to determine possible outcomes
  • Referred to in Note No. 42.4(a) to Consolidated Financial Statements

3. Debtors and Receivables Issues

  • Significant balances outstanding in trade receivables overdue for more than three years
  • Unadjusted credit balances in customer accounts
  • Balances in unallocated receipts accounts pending reconciliation and adjustment
  • High transaction volumes and geographical spread increase complexity

Emphasis of Matter

Auditors drew attention to several uncertainties:

1. Note No. 23: Other Trade Payable includes sundry creditors for expenses amounting to Rs 322.57 Lakhs (PY Rs 322.57 Lakhs) of E&P Division, Kolkata, lying unpaid since long as matters are under litigation

2. Note No. 36: Additional impairment loss of Rs 14.50 Lakhs relating to dry warehouse and cold storage facility at AMTZ Vizag considered in current financial year. Board of Directors at meeting held on 15th May 2025 approved closure of SBU ROFS with disposal of related fixed assets. Independent valuer assessed fair value of Property, Plant and Equipment across various geographies. Based on valuation report, company recognized impairment loss of Rs 806.64 Lakhs during current financial year. Aggregate amortization loss of Rs 821.14 Lakhs disclosed as separate line item under Other Expenses.

3. Note No. 42.6: Trade receivables, loans and advances and deposits for which confirmations not received from parties are subject to reconciliation and consequential adjustments

4. Vishakhapatnam Port Logistics Park Limited (VPLPL): Subsidiary company has continuous financial losses, weak financial ratios, and negative working capital indicating material uncertainty about going concern. Financial statements prepared on going concern basis based on management's confirmation on business revival.

5. Note No. 42.14: Suspected misuse/unauthorized redemption of digital loyalty coupons under Balmerol Connect Plus Programme for SBU - Greases & Lubricants, involving approximately Rs 16.56 lakhs. Matter under further investigation/review by management, internal committee constituted.

Other Entities in Consolidated Financial Statements

  • 1 subsidiary included with total assets of Rs 15,196.85 Lakhs as at 31 March 2026, total revenues of Rs 1,896.63 Lakhs, total Net loss after tax of Rs 1,570.78 Lakhs
  • 3 Joint Ventures & 1 Associate with Group's share of net profit after tax of Rs 6,791.26 Lakhs for year ended 31 March 2026
  • Branch audits: Northern, Southern and Western Regions with total assets of Rs 162,648.90 Lakhs and total revenues of Rs 237,265.57 Lakhs

CAG Directions Compliance (Annexure-A)

1. Employee Benefit Trust Investments: Investments in bank fixed deposits, government securities, savings deposits and mutual funds valued at cost-plus accrued interest and NAV. Valuation methodology reasonable with no material misstatements.

2. IT Systems: Accounting transactions processed through SAP ERP software with periodic security audits through empanelled external agencies. No material weaknesses found.

3. Government Grants: Received Grant-in-Aid of Rs 671.59 Lakhs from Ministry of Food Processing Industries for cold chain facilities. Treated as deferred income, Rs 37.80 Lakhs (PY Rs 52.47 Lakhs) credited to income statement.

4. Risk Management: Company identified key risk areas and formulated risk management policy, though not benchmarked against global framework. Data assets not identified or valued.

5. Regulatory Compliance: Company generally compliant with various regulations except fines imposed for non-compliance with Regulation 17(1) of Listing Regulations by stock exchanges for quarters ended 30th June 2025, 30th September 2025, 31st December 2025, and 31st March 2025 totaling Rs 67.15 Lakhs. Company made representations requesting waiver.

Internal Financial Controls - Qualified Opinion (Annexure-B)

Material weaknesses identified in internal financial controls:

1. Deficiencies in customer and vendor balance confirmations including unallocated receipts requiring strengthening

2. Western region branch reported deficiencies in design and operating effectiveness of controls over issuance, monitoring, reconciliation and redemption of digital loyalty coupons

3. Control environment not effective in preventing or detecting pre-scanned coupons and unauthorized redemption, resulting in risk of loss

Dividend Information

  • Final dividend paid during year ended 31 March 2026 in respect of previous year declaration in accordance with section 123 of Act
  • Board declared interim dividend for year ended 31st March 2026 in accordance with section 123(3)
  • Board proposed final dividend for year ended 31 March 2026 subject to member approval at AGM