To the Members of EASTERN SUGAR & INDUSTRIES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of EASTERN SUGAR & INDUSTRIESLIMITED ("the Company") which comprise the Balance Sheet as at March 312018the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Financial 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
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 thereunder.
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 theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
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 ScheduleII of The Companies Act 2013.
The possible loss if any arising out of above which might have consequential effect onthe year's Profit & Loss and Net current Assets Position of the company at the yearend has neither been ascertained nor provided for in these accounts.
Subject to our observation given above:
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis for Qualifiedopinion paragraph abovethe aforesaid financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in india:
a) In the case of the Balance Sheet of the state of affairs of the company as at 31March 2018. b) In the case of the Statement of Profit and Loss of the profit of thecompany for the year ended on that date and c) In the case of the Cash Flow Statement ofthe cash flows of the company 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 ("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) Except for whathave been stated in Basis for Qualified Opinion We have sought and obtained all theinformation and explanations which to the best of our knowledge and belief were necessaryfor the purposes of our audit. b) In our opinion proper books of account as required bylaw 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 and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account d) In our opinion theaforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. e) Onthe basis of the written representations received from the directors as on 31st March2018 taken on record by the Board of Directors none of the directors is disqualified ason 31st March 2018 from being appointed as a director in terms of Section 164 (2) of theAct. 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 other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us: i. The Company has disclosed the impact of pendinglitigations on its financial position in its financial statements Refer Note Xiii to thefinancial statements; ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses. iii. There wereno amounts which were required to be transferred to the Investor Education and ProtectionFund by the Company.
|Place: Kolkata ||For Saraf Manoj & Co. |
|Date: 30th May 2018 ||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: i a. The company has maintained proper records showing fullparticulars including quantitative details and situation of its fixed assets. b. Asexplained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on such verification. c. Nodisposal of a substantial part of the fixed assets of the company has taken place duringthe reporting period . ii. As explained to us inventories have been physically verifiedduring the year by the management at reasonable intervals. No material discrepancy wasnoticed on physical verification 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 section 185and 186 of the Companies Act 2013 have been complied with. v. The company has notaccepted any deposits from the public covered under sections 73 to 76 of the CompaniesAct 2013. vi. As per information & explanation given by the management maintenanceof cost records as specified by the Central Government under sub-section (1) of section148 of the Companies Act 2013 has been maintained. vii. a. The company is not regular indepositing undisputed statutory dues including Provident Fund Investor Education andProtection Fund Employees' State Insurance Income-tax Sales-tax Service Tax CustomDuty Excise Duty value added tax cess and any other statutory dues . b. According tothe information and explanations given to us disputed amount payable in respect of incometax service tax sales tax customs duty excise duty value added tax and cess whicheverapplicable for a period of more than six months from the date they became payable aregiven below:-
|Name of the Statute ||Nature of Dues ||Period to which amount relates ||Amount (In Lacs) |
|Income Tax Act1961 ||Income Tax Interest etc ||AY 2011-12 ||584.05 |
|Income Tax Act1961 ||Income Tax Interest etc ||AY 2012-13 ||220.62 |
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 fraud by thecompany or any fraud on the Company by its officers or employees has been noticed orreported during the year. xi. According to the information and explanations given to us.we report that managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct. 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 tous all transactions with the related parties are in compliance with sections 177 and 188of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements etc. as required by the applicable accounting standards. xiv. Thecompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year under review. xv. Provisions of section 192of Companies Act 2013 have been complied with in case of non-cash transactions entered bythe company with directors or persons connected with him xvi The company is not requiredto be registered under section 45-IA of the Reserve Bank 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 of Section143 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 2018 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.