To the Members of EASTERN SUGAR & INDUSTRIES LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of EASTERN SUGAR &INDUSTRIES LIMITED ("the Company") which comprise the balance sheet asat 31st March 2019 and the statement of Profit and Loss and the statement of cash flowsfor the year then ended and notes to the financial statements including 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 effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid financial statements give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as 31st March 2019 and profit/loss and its cash flows forthe year ended on that date.
Basis for Qualified Opinion
Non compliance of sections 194-A 192 & 192-J of Income Tax Act 1961 with respectto TDS on interest other than Interest on Securities Salary & Fee for professional& Technical Services respectively. The TDS on above have not been deducted anddeposited in time.
Generally Accepted Accounting Principles:
Non compliance of generally accepted accounting principles in accounting of GratuityLeave liabilities towards employees bonus Professional Taxes Trade License FeesInterest and penalty on delayed deposit of TDS & income from interest on securitiesand other deposits as they are accounted for on cash basis.
Provision of Depreciation on its Fixed Assets:
The Company has not provided depreciation on its Fixed Assets for the period coveredunder this audit. The Company has also not provided depreciation on transition to Schedule- II of The Companies Act 2013.
We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.
Material Uncertainty Related to Going Concern
Due to operational difficulties company has suspended its operation of Cane Crushingsince Fy 2004-05 & incurred a net loss of 124.48 lacs during the year ended 31.03.2019and also in preceding previous year . Therefore as per our view the financial statementsfor the FY 18-19 should be prepare on Non-Going Concern Basis.
Information other than the financial statements and auditors' report thereon
The Company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report but does not include the financial statementsand our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
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 we havedetermined the matters described below to be the key audit matters to be communicated inour report: -
No Revenue from Operations during the year & in Preceding Previous years onenquiry it was found that factory was taken on lease from M/s Shree Hanuman Sugar &Industries Limited w.e.f 1st June 1995.The lease was terminated on 30thJune 2006.The last cane crushing season was FY 2003-04.aH the fixed Assets of the companywill be acquired by the said company (erstshile Lessor) at their gross values appearing inthe books of the company as on the date of transfersubject to the approval of the lendinginstitutions for which they have agreed in-principle. We have taken the ManagementRepresentation in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
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 positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the accounting Standards specified undersection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
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.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities 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 standalone ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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 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 standalone ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalone indAS financial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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 standalone ins AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the 'Annexure A' a statement on the matters specifiedin paragraphs 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.
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are 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) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
f) 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 B'.
g) With respect to the matter to be included in the Auditor's Report under section197(16) In our opinion and according to the information and explanations given to us theremuneration if any paid by the Company to its directors during the current year is inaccordance with the provisions of section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under section 197(16) whichare required to be commented upon by us.
h) 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. The Company has pending litigations which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts forwhich 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 Company.
|Place: Kolkata ||For Saraf Manoj & Co. |
|Date: 29th May 2019 ||Chartered Accountants |
| ||F.R. No. 323473E |
| ||Manoj Kumar Agarwal |
| ||Partner |
| ||M. No. 062489 |
The Annexure referred to in paragraph 1 of Our Report on "Other Legal andRegulatory Requirements".
We report that:
We report that:
i. a. The company has maintained proper records showing full particulars includingquantitative details and situation of Its fixed assets.
b. As explained to us fixed assets have been physically verified by the management atreasonable Intervals; no material discrepancies were noticed on such verification.
c. The title deeds of Immovable properties are held In the name of the company.
ii. As explained to us Inventories have been physically verified during the year bythe management at reasonable Intervals. No material discrepancy was noticed on physicalverification of stocks by the management as compared to book records.
iii. According to the Information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms Limited Liability Partnerships or other parties listed Inthe register maintained under Section 189 of the Companies Act 2013. Consequently theprovisions of clauses III (a) (b) and (c)of the order are not applicable to the Company.
iv. In respect of loans Investments guarantees and security provisions of section185 and 186 of the Companies Act 2013 have been complied with.
v. The Company has not accepted any deposits from the public and hence the directivesIssued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
vi. As per Information & explanation given by the management maintenance of costrecords as specified by the Central Government under sub-section (1) of section 148 of theCompanies Act 2013 has been maintained. vII. a. According to the records of the companyundisputed statutory dues Including Provident Fund Investor Education and ProtectionFund Employees' State Insurance Income-tax Sales-tax Service Tax Goods and Servicetax Custom Duty Excise Duty value added tax cess and any other statutory dues to theextent applicable have generally been regularly deposited with the appropriateauthorities. According to the Information and explanations given to us there were nooutstanding statutory dues as on 31st March 2019 for a period of more than six months fromthe date they became payable.
b. According to the Information and explanations given to us there Is no amountpayable In respect of Income tax service tax sales tax customs duty excise duty valueadded tax and cess whichever applicable which have not been deposited on account of anydisputes.
|Name of the Statute ||Nature of Dues ||Amount (In Lacs) ||Period to which amount relates |
|Income Tax Act1961 ||Income Tax Interest etc ||584.05 ||AY 2011-12 |
|Income Tax Act1961 ||Income Tax Interest etc ||197.08 ||AY 2012-13 |
viii. In our opinion and according to the Information and explanations given by themanagement we are of the opinion that the Company has defaulted in repayment of dues toa financial Institution bank Government or debenture holders as applicable to thecompany.
ix. Based on our audit procedures and according to the Information given by themanagement the company has not raised any money by way of initial public offer or furtherpublic offer (Including debt Instruments) or taken any term loan during the year.
x. According to the Information and explanations given to us we report that no fraudby the company or any fraud on the Company by its officers or employees has been noticedor reported during the year.
xi. According to the Information and explanations given to us we report thatmanagerial remuneration has been paid in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Companies Act.
xii. The company Is not a Nidhi Company. Therefore clause (xii) of the order Is notapplicable to the company.
xiii. According to the Information and explanations given to us all transactions withthe related parties are In compliance with sections 177 and 188 of Companies Act 2013where applicable and the details have been disclosed In the Financial Statements etc. asrequired by the applicable accounting standards.
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. Provisions of section 192 of Companies Act 2013 have been complied with In case ofnon-cash transactions entered by the company with directors or persons connected with him
xvi. The company Is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Report on Internal Financial Controls Over Financial Reporting
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")
We have audited the Internal financial controls over financial reporting of EASTERNSUGAR & INDUSTRIES LIMITED ("the Company") as of March 31 2019 Inconjunction with our audit of the financial statements of the Company for the year endedon 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 responsibilities Includethe design Implementation and maintenance of adequate Internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of Its businessIncluding adherence to company's policies the safeguarding of Its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial Information as required underthe 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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of Internal financial controls both applicable to an audit ofInternal Financial Controls and both Issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate Internal financial controls over financial reporting was established andmaintained and If such controls operated effectively In all material 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 judgement 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 audit opinion on the Company's internal financial controls systemover 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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.
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 March 31 2019 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.
|Place: Kolkata ||For Saraf Manoj & Co. |
|Date: 29th May 2019 ||Chartered Accountants |
| ||F.R. No. 323473E |
| ||Manoj Kumar Agarwal |
| ||Partner |
| ||M. No. 062489 |