INDEPENDENT AUDITORS REPORT
The Members of SC Agrotech Ltd
(Formerly known as Sheel International Ltd.) Delhi
Report on the Financial Statements
We have audited the accompanying financial statements of SC Agrotech Ltd ("theCompany") which comprise the Balance Sheet as at 31st March 2016 theStatement of Profit and Loss for the year and the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statement
The Company s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial position andfinancial performance of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. 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.
Our responsibility is to express an opinion on these financial statements based on ouraudit. 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 andthe disclosures in the financial statements.
The procedures selected depend on the auditor s judgment including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Company s preparation of the financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstancesbut not for the purpose of expressing an opinion on whether the Company has in place anadequate internal financial control system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company s Directors as well as evaluating the overall presentation of the financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2016 and its profit for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1- As required by the Companies (Auditor s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure "A" a statement on the mattersspecified in the paragraph 3 and 4 of the Order to the extent applicable.
2- As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books and the company does nothave any branches from which it is required to obtain proper returns adequate for thepurpose of this audit.
(c) The Balance Sheet and the Statement of Profit and Loss dealt with by this Reportare in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
(e) The observation or comments by the auditor has not any adverse effects on thefinancial statement of the company.
(f) On the basis of the written representations received from the directors as on March31 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of Section164(2) of the Act.
(g) With respect to the adequacy of the internal financial controls over financialreporting the company and operating effectiveness of such controls refer to our separatereport in annexure "B".
(h) There is no such qualification or adverse remarks regarding maintenance of accountsand other matters therewith.
(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 in our opinionand to the best of our information and according to the explanations given to us:
i. On the basis of written representations received from management as on March 312016 The Company is not involved in any litigations pending as at 31st March2016 on its financial positions in its financial statements.
ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the
ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT
(Annexure Referred to in paragraph (1) of "Report on Other Legal and RegulatoryRequirements "of the Independent Auditors Report of even date to the members of SCAgrotech Ltd. on the financial statements for the year ended on March 31 2016.)
i. (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of Fixed Assets.
(b) The fixed assets have been physically verified by the management during the yearwhich in our opinion is reasonable having regard to the size of the Company and thenature of fixed assets. No material discrepancies were noticed during the year on suchphysical verification.
26 Annual Report 2015-16
(c) The title deeds of immovable property are held in the name of company.
ii. Physical verification of inventory has been carried out during the year atreasonable intervals by the management. Proper records of its inventories have beenmaintained and no material discrepancies were noticed.
iii. According to information and explanation given to us the Company has neithergranted any loan secured or unsecured to companies firms and LLPs or other partiescovered in the register maintained under section 189 of the Companies Act 2013 henceother Para(a) (b) and (c) of this clause is not applicable.
iv. In respect of Loans Investments Guarantees and Security the provisions ofsection185 & 186 of the Companies Act 2013 has been complied with.
v. The Company has not accepted any deposit during the year within the meaning ofSection 73 to Section 76 of the Companies Act
2013 read with the Rules framed there under therefore the provisions of the Companies(Auditors Report) order 2016 are not applicable to the company.
vi. The Central Govt. has not prescribed the maintenance of cost records as per section148 (1) of the Companies Act 2013 for any of the service rendered/trading business by thecompany.
vii. a) According to the information and explanation given to us and on the basis ofour verification of records of the company the company is generally regular in depositingwith appropriate authorities undisputed applicable statutory dues including value addedtax Service tax cess and any other statutory dues applicable to it. According to theinformation and explanation given to us there are no material undisputed amounts payablein respect of statutory dues which have remained outstanding as on March 31st2016 for a period of more than six months from the date from which they became payable.
b) According to the records of the company and information and explanation given to usthere are no dues of sales tax or wealth tax or duty of customs or duty of excise or valueadded tax or cess which has not been deposited on the account of dispute with appropriateauthorities
viii. According to the records of the company examined by us and the information andexplanation given to us the company has not defaulted in repayment of dues to anyfinancial institution or bank or debenture holder.
ix. The Company has not raised any money through initial public offer (including debtinstruments) and no term loan has taken during the year. The clause is not applicable.
x. There is no any fraud by the company or any fraud on the company by its officers oremployees has been noticed or reported during the year.
xi. The company has paid remuneration to directors which are under the limit of section197 of the Companies Act 2013.
xii. The clause is not applicable.
xiii. All the transactions with the related parties are in compliance with section 177and 188 of the Companies Act 2013 and applicable details have been disclosed in financialstatements etc.
xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review.
xv. The company has not entered into non cash transactions with directors or personsconnected with him and there are no contraventions to section 192 of the Companies Act2013.
xvi. The Company is not required to be registered under section 45-IA of the RBI Act1934 and registration procedure is not applicable.
Annexure B to the Auditors Report
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of SC AgrotechLtd. (Formerly known as Sheel International
Ltd. (the Company) as of 31 March 2016 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.
Managements 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 (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the Company spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company s 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 deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. 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 were established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe
Company s internal financial controls system over 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 ofthe Management and directors of the Company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition use or dispositionof the Companys assets that could have a material effect on the financialstatements.
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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
SC Arotech Limited (Formerly known as Sheel International Ltd.) (the company) is alimited company domiciled in India. Company had been incorporated in 28.11.1990 and listedin Delhi Stock Exchange and Bombay Stock Exchange. Nature of business of company isgrowing & harvesting of plant and trading of plant.
Note No. 1
SUMMARY OF SIGNIFICIANT ACCOUNTING POLICIES
a) Basis of Preparation
The Financial statements has been prepared in accordance with Indian Generally AcceptedAccounting Principles (GAAP) under the historical cost conventions on the accrual basisexcept for certain financial instruments which are measured at fair values. GAAP comprisesmandatory accounting standards as prescribed under section 133 of Companies Act 2013('the Act') read with rule 7 of the Companies (Accounts) Rules 2014 the provision of theAct(to the extent notified) and the guidelines issued by the Security and Exchange boardof India (SEBI). Accounting policy have been consistently applied except where a newlyissued accounting standard is initially adopted or a revision to an existing accountingstandard requires a change in the accounting policy hitherto in use. All assets andliabilities have been classified as current or non- current as per the Company's normaloperating cycle and other criteria set out as Act and guidelines. Based on the nature ofproducts and the time between acquisition of assets for processing and their realizationin cash and cash equivalents the Company has ascertained its operating cycle as 12 monthsfor the purpose of current/ non-current classification of assets and liabilities.
b) Revenue Recognition
Revenue is primarily derived from selling Agri products and from franchisee fees.Revenue from sale of goods is recognized when all the significant risks and rewards ofownership in the goods are transferred the buyer as per the terms of the contract theCompany retains no effective control of the goods transferred to a degree usuallyassociated with ownership and no significant uncertainty exists regarding the amount ofthe consideration that will be derived from the sale of goods. Sales are recognized net oftrade discounts rebates sales taxes and excise duties (on goods manufactured andoutsourced). Franchisee fee has been accounted on accrual basis.
c) Provisions and Contingent liabilities
A provision is recognized if as a result of a past event the group has a presentlegal obligation that is reasonably estimable and it is probable that an outflow ofeconomic benefits will be required to settle the obligation. Provision are determined bythe best estimate of the outflow of economic benefits will be required to settle theobligation at the reporting date. where no reliable estimate can be made a disclosure ismade as contingent liability. A disclosure for a contingent liability is also made whenthere is a possible obligation or a present obligation that may but probably will notrequire an outflow of resources. Where there is a possible obligation or a presentobligation in respect of which the likelihood of outflow of resources is remote noprovision or disclosure is made.
d) Retirement/post retirement benefits
The company has the employee less than statutory limit as per prescribed by variousStatutory Acts and requirement of AS 15 and no contribution to ESI or PF has been madeduring the year and no provision of any other fund has been created during the year.
e) Tangible Assets
Tangible Assets are stated at cost less accumulated depreciation and impairmentsubsequent expenditures related to an item of tangible asset are added to its book valueonly if they increase the future benefits from the existing asset beyond its previouslyassessed standard of performance.
f) Intangible Assets
Intangible assets are stated at acquisition cost net of accumulated amortization andaccumulated impairment losses if any. Basically the expenditure on trade mark has beenidentified as value of intangible goods and does not represent the cost of this asset sothat the expenses incurred on regn and other administrative expenses has been depreciatedat 1/10 basis to spread the cost among 10 years and future benefit component as per AS-26has not been taken here.
g) Depreciation and amortization
Depreciation on tangible assets is provided on the straight line method over the usefullives of assets estimated by the management. Depreciation for assets purchased/sold duringa period is proportionately charged. Intangible Assets are amortized over their respectiveindividual estimated useful life on a straight line basis commencing from the date theasset is available to the group for use.
|ASSET CLASS ||Useful lives |
|Factory Building RCC Frame ||60 Years |
|Office Building ||30 Years |
|Intangible - Trade Marks ||10 Years |
The management periodically assesses using external and internal sources whetherthere is an indication that an asset may be impaired. An impairment loss is recognizedwherever the carrying value of an asset exceeds its recoverable amount. The recoverableamount is higher of the asset's net selling price or value in use which means the presentvalue of the future cash flows expected to arise from the continuing use of the asset andits eventual disposal. An impairment loss for an asset other than goodwill is reversed ifand only if the reversal can be related objectively to an event occurring after theimpairment loss was recognized. The carrying amount of an asset other than goodwill isincreased to its revised recoverable amount would have been determined (net of anyaccumulated amortization or depreciation) had no impairment loss been recognized for anasset in prior years.
i) Deferred Tax Provisions
Tax expense for the year comprises current tax and deferred tax.
Current tax is measured at the amount expected to be paid to (recovered from) thetaxation authorities using the applicable tax rates and tax laws. Deferred tax isrecognized for all the timing differences. Subject to the consideration of prudence inrespect of deferred tax assets. Deferred tax assets and liabilities are measured using thetax rates and tax laws that have been enacted or substantively enacted by the BalanceSheet date. Deferred tax assets are recognized and carried forward only to the extent thatthere is a reasonable certainty that sufficient future taxable income will be availableagainst which such deferred tax assets can be realized. In situations where the Companyhas unabsorbed depreciation or carry forward losses all deferred tax assets arerecognized only if there is virtual certainty supported by convincing evidence that theycan be realized against future taxable profits. The carrying amount of deferred tax assetsis reviewed at each balance sheet date for any write down or reversal as consideredappropriate. Current tax assets and current tax liabilities are offset when there is alegally enforceable right to set off the recognized amounts and there is an intention tosettle the asset and the liability on a net basis. Deferred tax assets and deferred taxliabilities are offset when there is a legally enforceable right to set off assets againstliabilities representing current tax and where the deferred tax assets and deferred taxliabilities relate to taxes on income levied by the same governing taxation laws.
j) Foreign Currency Transactions
No foreign currency transactions has been made during the year and there is no outflowor inflow of foreign currency.
k) Cash and Cash Equivalents
Cash and Cash Equivalents comprises cash and cash-on-deposit with banks and financialinstitutions. The group considers all highly liquid investments with a remaining maturityat the date of purchase of three months or less and that are readily convertible to knownamounts of cash to be cash equivalents.
l) Use of Estimates
The preparation of the financial statements in conformity with the generally acceptedaccounting principles requires that the management makes estimates and assumptions thateffect the reported amounts of assets and liabilities disclosures of contingentliabilities as at the date of financial statements and the reporting amounts of revenueand expenses during the reported period. Actual results could differ from those estimates.
m) Segment Reporting
Accounting Standard - 17 "Segment Reporting" issued by "The Institute ofChartered Accountants of India" is not applicable to this company as the company doesnot have any branches or segment for which this Accounting Standard can be applied duringthe year.
n) Earning Per Share
Basic earning per share is computed by dividing the net profit after tax by theweighted average number of equity shares outstanding during the period. Diluted earningper share is computed by dividing the profit after tax by weighted average number ofequity shares considered for de`riving basic earning per share and also the weightedaverage number of equity shares that could have been issued upon conversion of alldilutive potential equity shares.
|Particulars || |
| || |
|Profit After Tax(in Rupees) || |
|Total number of equity share of Rs 10 each || |
|Basic Earnings Per Share || |
|Total weighted average number of equity share of Rs 10 each || |
|Diluted Earning Per Share || |
|o) Contingent Liabilities || || |
|Particulars || |
| || |
|Charge Created on Assets by Jayshee Investment Pvt. || |
|Ltd. 12.10.2011 || || |
p) Related Party Disclosures
|Name of the person ||Nature of Transaction ||Amount ||Designation |
|Nittin Maheshwari ||Remuneration ||Nil ||Managing Director |
|Nayadita Sharma ||Remuneration ||Nil ||Independent Director |
|Mahesh Chandra Acharya ||Remuneration ||Nil ||Independent Director |
|Rahul Kumar ||Remuneration ||162000 ||Director |
|Anil Kumar ||Remuneration ||Nil ||Independent Director |
|Ajay Rawat ||Remuneration ||75000 ||Company Secretary |
Disclosure according to Section 186 of Company Act2013.
|Particulars ||Nature of Transaction || |
|Jayshee Investment Pvt. Ltd. ||Unsecured Loan || |
q) Additional Information required as per schedule III of Companies Act 2013
|Auditors Remuneration || |
|Audit fee(Including Tax Audit) || |
|Fee for other certificates || |
r) Figures have been rounded off at the nearest rupees. s) Figures of theprevious year have been regrouped reclassified wherever necessary to make it comparablewith this Current year figures.
SC Agrotech Limited
(Formerly known as Sheel International Limited)
RZ-1484/28 GROUND FLOOR TUGLAKABAD EXTN. DELHI-110019