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SBEC Sugar Ltd.

BSE: 532102 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE948G01019
BSE 00:00 | 17 Jan SBEC Sugar Ltd
NSE 05:30 | 01 Jan SBEC Sugar Ltd
OPEN 9.95
PREVIOUS CLOSE 9.95
VOLUME 1
52-Week high 9.95
52-Week low 6.08
P/E
Mkt Cap.(Rs cr) 47
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 9.95
CLOSE 9.95
VOLUME 1
52-Week high 9.95
52-Week low 6.08
P/E
Mkt Cap.(Rs cr) 47
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SBEC Sugar Ltd. (SBECSUGAR) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS’ REPORT

To The Members of SBEC Sugar Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of SBEC SugarLimited ("the company")which comprise the balance sheet as at 31st March 2018the statement of profit and loss including the statement of other comprehensive incomethe cash flow statement and the statement of changes in equity for the year then endedand a summary of 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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 and theCompanies (Indian Accounting Standards) Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance 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 the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Ind AS financial statements that give a material misstatement whether dueto fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based 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 of the standalone Ind AS financial statements in accordance withthe Standards on Auditing issued by of Chartered Accountants of India as 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 performingprocedures to obtain audit evidence about the amounts and the disclosures in the financialstatements. The procedures selected depend on the auditor’s judgment including theassessment of the risks of the material misstatement of the Standalone Ind AS financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company’s preparation of theStandalone Ind AS financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the Standalone Ind AS financial statements. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a Ind ASfinancial statements.

Basis of qualified opinion

1) During the quarter the company has not made provision for interest on latepayment of cane dues amounting to Rs 931.31 lac for sugar season 2017-18 and Rs 3540.85for sugar season 2016-17 had the company made provisions the expense and loss for thequarter and year ended 31stMarch 2018 would have been higher by Rs 4472.16 lac and itsconsequential impact on EPS.

2) The company had executed a deed of assignment with a subsidiary company"SBEC Bioenergy Limited" to transfer its claim and all securities and chargescreated by Modi Industries Limited in its favour for a consideration of Rs12500 lacs ofwhich

Rs. 8300 lacs were to be received as per the mutually agreed instalments within aperiod of five years from the date of execution of the deed. The company has not receivedany amount out of balance amount of Rs 8300 lacs till the end of March 31st '2018. Sincethe period of five years has already elapsed it may affect the ultimate recoverability ofthe carrying value of the said amount due from SBEC Bioenergy Limited. These financialstatements do not include any adjustments that might result from the uncertainty mentionedabove.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the affects of matter described in the Basis for Qualified Opinionparagraph the aforesaid financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India;

a) in the case of the Balance Sheet of the state of affairs of the Company as at March31 2018;

b) in the case of the Statement of Profit and Loss of the Loss for the year ended onthat date; and

c) in the case of the Cash Flow Statement of the cash flows for he year ended on thatdate.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a) Note no (d)of the standalone Audited Financial Statement regarding interest paymenton cane dues where the High Court vide its order dated 9th March 2017 has set aside thedecision of State Government for the waiver of Interest for the year 2012-13 2013-14 and2014-15 and asked the Cane Commissioner to take a final call in the matter pending finalorder the Company has not made provision for interest on the late payment of cane duesfor years 2012-13 2013-14 and 2014-15. The Hon'ble Supreme Court vide its order dated23rd April 2018 has upheld the Hon'ble High Court order dated 9th March 2017.

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 ("theOrder") issued by the Central Government of India in terms of Sec- tion 143(11) ofthe Act we give in the "Annexure A" a statement on the matters specifiedin paragraphs 3 and 4 of he Order.

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 purpose 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 statement of profit and loss including the statement of othercomprehensive income the cash flow statement and statement of changes in equity dealtwith by this Report are in agreement with the books of account;

d) In our opinion the aforesaid Standalone Ind AS financial statements the AccountingStandards specified under comply with Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and the Companies (Indian Accounting Stan- dards) Rules2015 as amended;

e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 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 effective- ness of such controls refer to ourseparate Report in "Annexure C".

g) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 28 to the financial statements.

(ii) The Company did 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 Company.

For K. K. Jain & Co.
Chartered Accountants
Firm Regn. No. 002465N
Sd/-
(Simmi Jain)
Place: New Delhi Partner
Dated: 29th May 2018 Membership No.-086496

Annexure "A" To The Indepndent Auditors’ Report To The Member Of SBECSugar Ltd. Dated May 29 2018

Report on the matters specified in paragraph 3 of the Companies (Auditor’s Report)Order 2016 ("the Order’) issued by the Central

Government of India in terms of section 143(11) of the Companies Act 2013 ("theAct") as referred to in paragraph 1 of ‘Report on Other Legal and RegulatoryRequirements’ section

i. (a) The Company has maintained proper records showing particulars includingquantitative details and situation of fixed assets.

(b) Though the Company has a programme of physical verification of its fixed assets inphased manner which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets however the Fixed assets have not been physicallyverified by the management during the year therefore discrepancies if any could not bedetermined.

(c) According to information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in fixed assets are held in the name of the company.

ii. The inventory has not been physically verified by the management during the year.

iii. According to the information and explanations given to us the company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii) (a) to (c) of the Orderare not applicable to the company and hence not commented upon.

iv. In our opinion and according to the information and explanations given to us thereare no loans investments guarantees and securities granted in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.

v. The Company has not accepted any fresh deposits from the public within the meaningof directives issued by the Reserve Bank of India and provisions of sections 73 to 76 orany other relevant provisions of the Companies Act 2013 and the rules framed thereunderare not applicable.

vi. We have broadly reviewed the records including the books of account maintained bythe company pursuant to the rules prescribed by the Central Government for the maintenanceof cost records under sub-section (1) of section 148 of the Companies Act 2013 in respectof company’s products and are of the opinion that prima facie the prescribed accountsand records have been made and maintained.

vii. (a) According to the records of the Company undisputed statutory dues includingprovident fund employees’ state insurance income tax sales tax service tax dutyof customs duty of excise value added tax cess and other material statutory dues havegenerally been regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us and as per the books andrecords examined by us the particulars of statutory dues of the specified statue as atthe year which have not been deposited on account of a dispute are referred to in Annexure"B".

viii. According to the records of the Company examined by us and the information andexplanations given to us in our opinion the Company has not defaulted in repayment ofits dues to Governments banks and financial institutions. The Company has not taken anyloans from debenture holders.

ix. Based on our audit procedures and according to the information and explanationsgiven to us the Company has not raised any money by way of initial public offer / furtherpublic offer. Further based on our audit procedures and according to the information andexplanations given to us and on an overall examination of the balance sheet we reportthat monies raised by way of term loans were applied for the purposes for which those wereraised.

x. During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India we have neithercome across any instance of fraud on or by the Company noticed or reported during theyear nor have we been informed of such case by the management

xi. Based on our audit and according to the information and explanations given to uswe report that the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Therefore the provisions of clause 3(xii) of the orderare not applicable to the Company and hence not commented upon.

xiii Based on our audit procedures and according to the information and explanationsgiven to us transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.

xv. Based on our audit procedures and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with directors orpersons connected with him.

xvi. According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Re- serve Bank of India Act 1934.

For K. K. Jain & Co.
Chartered Accountants
Firm Regn. No. 002465N
Sd/-
(Simmi Jain)
Place: New Delhi Partner
Dated: 29th May 2018 Membership No.-086496

ANNEXURE "B" TO AUDITORS’ REPORT

Referred in Paragraph VII(B) of Annexure "A" a statement on the mattersspecified in the Companies (Auditors’ Report) Order 2016 for the year ended 31stMarch 2018.

Name of The Statue Name of Dues Amount (Rs. in Lacs) Period to which amount relates Forum where dispute is pending
UP VAT Act 2008 VAT imposed on bagasse given to M/s SBEC Bioenergy 43.47 2008-09 Appeal filed before Honorable High Court by Commercial Tax department against order passed by Member Commercial Tax Tribunal Meerut
Finance Act 1994 Service Tax Credit Taken on Modinagar Site 3.49 2014-15 Appeal filed before CESTAT Allahabad
Finance Act 1994 Service Tax on Commission 150.88 2003-04 CESTAT has sent back the case to Commissioner Appeals Meerut-1 for Remand
Central Excise 1944 Cenvat Credit taken on HR plates Angles Shape section 13.88 2012-13 Appeal filed before Commissioner Appeal-1 Central Excise& Service Tax Meerut.
Central Excise 1944 Excise duty on removal for Ba- gasse & Press Mud 75.24 2015-16 Appeal filed before Commissioner Appeal-1 Central Excise& Service Tax Meerut.
Finance Act 1994 Service tax Credit taken in in- voice beyond 6 month 8.59 Dec 2013 – Dec 2014 Application filed before Assistant Commissioner Division-1 Meerut on 25.02.16
Finance Act 1994 Service Tax on Lease Rent 16.83 01.04.2008 - 01.12.2010 Appeal Allowed by way of Remand by CESTAT Delhi
Finance Act 1994 Service Tax on Lease Rent 7.24 2012-13 Appeal Allowed by way of Remand by CESTAT Delhi
Central Excise 1944 Cenvat Credit taken on HR plates Angles Shape section 15.54 2015-17 SCN Reply Submitted before Deputy Commis- sioner Division Shamli. Tax Meerut.
Finance Act 1994 Service Tax Credit taken on Sugar Sales Commission 11.08 2015-16 SCN Reply Submitted before Additional Com- missioner Meerut.
Finance Act 1994 Service Tax Credit taken on Sugar Sales Commission 2.45 2015-16 SCN Reply Submitted before Superintendent Central Excise RangeBaraut.
Finance Act 1994 Service Tax Credit taken on Sugar Sales Commission 38.21 2016-17 & 2017-18 SCN Reply Submitted before Deputy Commis- sioner Division Shamli.

Annexure ‘C’ To The Independent Auditor’s Report Of Even Date on theStandalone (IND AS) Financial Statements Of SBEC Sugar Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") as referred to in paragraph 2(f) of‘Report on Other Legal and Regulatory Requirements’ section

We have audited the internal financial controls over financial reporting of SBEC SugarLimited ("the Company") as of March 31 2018 in conjunction with our audit ofthe 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 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 the Company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor’s Responsibility

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 as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

An 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 internalfinancial reporting assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor’s judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficientand appropriate to provide a basiscontrols over 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 princi- over financial reporting includes those policies andprocedures that (1) pertain to the maintenance ples.Acompany'sinternalfinancial of recordsthat in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material 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 controlreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

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 2018 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.

For K. K. Jain & Co.
Chartered Accountants
Firm Regn. No. 002465N
Sd/-
(Simmi Jain)
Place: New Delhi Partner
Dated: 29th May 2018 Membership No.-086496