To the Members of SHREE HANUMAN SUGAR & INDUSTRIES LTD
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of SHREE HANUMAN SUGAR &INDUSTRIES LTD ("the Company") which comprise the balance sheet as at 31stMarch 2020 and the statement of Profit and Loss and the statement of cash flows for theyear then ended and notes to the financial statements including a summary of significantaccounting 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 2020 and profit/loss and its cash flows forthe year ended on that date.
Basis for Qualified Opinion
Non compliance of sections 194-A 192 194-I & 194-J of Income Tax Act 1961 withrespect to (i) TDS on Interest other than interest on securities (ii) Salary (iii) Rentand (iv) Fee for professional & Technical services respectively. The Company has notdeducted TDS in respect of the above and has not deposited to the credit of CentralGovernment.
-Generally Accepted Accounting Principles :-
The Company has not complied with Generally Accepted Accounting Principles and has notfollowed Accounting Standards - 15 for accounting of Gratuity Leave liabilities and otherretirement benefits towards employees bonus in the preparation of Financial Statement.The estimated liability on account of retirement gratuity has not been ascertained and notprovided for in the accounts.
-Amounts receivable and payable :-
The balance of Sundry Debtors Sundry Creditors Advances lying in Loans & Advancesaccount Advances Taken from parties are taken as appearing in books of account and theseare subject to confirmation by respective parties. In view of non-reconciliation /confirmation and also in view of pending dispute with some of the parties (as informed bythe management) we are not in a position to comment on the correctness of the outstandingbalances and resultant impact thereof on the financial statements for the period underaudit.
-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.
- Non compliance of provisions of Companies Act 2013 :
Non compliance of section 73 to 76 of Companies Act 2013 with respect to not-providinginterest on borrowed fund & refund of advances received from customers for supply ofgoods & services. The interest on the borrowed funds have not been charged alsoadvance money received from customers for supply of goods & services and remainingoutstanding for a period exceeding 365 days have not been refunded to the respectivecustomers. Moreover there is a non-compliance of Section 123 of the Companies Act 2013by the Company.
The resultant impact if any arising out of above observations which may haveconsequential effect on the year's profit and Loss & Net Current Assets position ofthe company at the yearend has neither been ascertained nor provided for in these accountsand operating results for the year are over stated and /or under -stated to the extentthereof.
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 of Related to Going Concern
The cane crushing was operated till the season 2012-13.Thereafter the cane crushing_remained in operative due to technical problems as well as much gap between the cost ofproduction and its realization .Further company has incurred a net loss of Rs 55.12 Lacsin current year and Rs 79.47 Lacs in previous Financial year. Therefore as per our viewthe financial Statement for the FY 19-20 should be prepared 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: -
During the year total Revneue from Operation of the company is Rs 150.00 Lacs from Saleof Construction Right but has incurred a net loss of Rs 55.12 Lacs-We would like to informthat company is dealing in two Segment (1) Sugar & (2) Construction (Sale ofConstruction Right).The Cane crushing was operated till the season 2012-13thereafter thecane crushing remained in operative due to technical problems as well as much gap betweenthe cost of production and its realization.The price of raw materials and finished goodsboth are controlled by state/central Government .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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
We are independent of the Group in accordance with the ethical requirements that arerelevant to our audit of the financial statements and we have fulfilled our other ethicalresponsibilities in accordance with these requirements.
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 mattersspecified in 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 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 paid by the Company to its directors during the current year is in accordancewith the provisions of section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under section 197(16) which arerequired 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 does not have any pending litigations which would impact its financialposition.
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.
| ||For Saraf Manoj & Co. |
| ||Chartered Accountants |
| ||FRN: 323473E |
|Place:-Kolkata ||Manoj Kumar Agarwal |
|Date: 25/07/2020 ||(PARTNER ) |
|UDIN: 20062489AAAABA4102 ||Membership 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 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. a. The company did not carry trade or manufacturing activities during the Currentreporting period and its plant were not in operation as informed by the management .Asinformed to us the inventories were physically verified during the year by the managementat reasonable intervals and no material discrepancy were noticed on such physicalverification however we are not in a position to substantiate the same since relevantinventory records could not be produced for our verification.
b.. In view of the limited information made available to us we are not in a positionto state whether the procedure for physical verification of inventory followed by themanagement were reasonable and adequate.
C. it is stated by the management that there were changed in the opening and closinginventory of the company only due to sale of Construction rights and the company hasmaintained proper records of its inventories and no material discrepancies were noticed onphysical verification.
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. According to the information and explanations given to usthe company has acceptedadvances for supply of goods and services which were outstanding for more than 365 days asat the balance sheet date and also has not complied with provision of section 73 to 76 ofthe companies Act2013 in respect of such advances except of the above the company hasnot accepted any deposit from the public within the meaning of section 737475 & 76of the companies Act2013 and the rules framed there under and do not have any unclaimeddeposit .To the best of our knowledge and according to the information and explanationgiven to us no order has been passed by the Company Law Board or National Company LawTribunal or Reserve Bank of India or any court or any other tribunal in regard to theabove matter.
vi. As per information & explanation given by the management maintenance of costrecords has not been specified by the Central Government under sub-section (1) of section148 of the Companies Act 2013.
vii. a. According to the records of the company undisputed statutory dues includingProvident Fund Investor Education and Protection Fund Employees' State InsuranceIncome-tax Sales-tax Service Tax Goods and Service tax Custom Duty Excise Duty valueadded tax cess and any other statutory dues to the extent applicable have generally beenregularly deposited with the appropriate authorities. According to the information andexplanations given to us there were no outstanding statutory dues as on 31st March 2020for a period of more than six months from the date they became payable except :
|Name of the Dues ||Amount (Rs in lakhs) |
|Gratuity ||73.31 |
|Provident Fund ||113.68 |
|Purchase Tax ||5.67 |
|Zonal Development Council ||1.92 |
|TDS on Salary ||16.81 |
|TDS on Legal Fee ||0.09 |
|TDS on Directors Sitting Fee ||0.06 |
|TDS on Service Charges ||3.03 |
|Dividend Distribution Tax ||9.44 |
b. According to the records of the Company the dues outstanding of income-taxsales-tax service tax goods and service tax duty on custom duty of excise value addedtax and cess on account of any dispute are as follows:
|Assessment Year ||Nature of the Dues ||Amount (Rs. In lakhs) ||Nature of Disputes Pending before the Income Tax Authorities & other |
|2009-10 ||143(1)(a) ||248090.00 ||Rs 248090/- (FBT) To be adjusted against refund for Assessment year 1998-99 of Rs 10.00 lakhs. |
|2009-10 ||143(1)(a) ||852668.00 ||Rs 852668/- (IT) -To be adjusted against refund for Assessment year 1998-99 of Rs 10 lacs. |
|2010-11 ||143(1)(a) ||15381100.00 ||Rectification pending U/s 154 |
|2012-13 ||271(1)(c) ||21549297.00 ||Appeal Pending before the CIT (A) |
|2012-13 ||271 (1)(b) ||10000.00 ||Appeal Pending before the CIT (A) |
|2013-14 ||143(3) ||126588560.00 ||Appeal Pending before the CIT (A) |
|2013-14 ||271(1)(b) ||10000.00 ||Appeal Pending before the CIT (A) |
|2010-11 ||Amount payable to Zonal Development Council on behalf of Starte Government of Bihar ||489000.00 ||MotihariChamparan (Certificate Office) |
|2012-13 ||Amount payable to Zonal Development Council on behalf of Starte Government of Bihar ||231000.00 ||MotihariChamparan (Certificate Office) |
|2005-16 to 2019-20 ||Municipal Tax ||390000.00 ||MotihariChamparan (Municipality) |
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 if any has been paid in accordance with the requisite approvalsmandated by 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.
| ||For Saraf Manoj & Co. |
| ||Chartered Accountants |
| ||FRN: 323473E |
|Place:-Kolkata ||Manoj Kumar Agarwal |
|Date: 25/07/2020 ||(PARTNER ) |
|UDIN: 20062489AAAABA4102 ||Membership No. 062489 |