To The Membersof
Shree Hanuman Sugar & Industries Limited .
Report on Financial Statements
1. We have audited the accompanying financial statements of SHREE HANUMAN SUGAR &INDUSTRIES LIMITED ("the Company") which comprises of the Balance Sheet as at31st March 2017 the Statement of Profit & Loss and the Cash Flow Statement for theyear then ended and a summary of the significant accounting policies arid otherexplanatory information.
Management's Responsibility for the Financial Statements
2. The Company's Management is responsible for the matters stated in Section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company 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. Thisresponsibilities also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of assets of the Company and forpreventing and detecting frauds and other irregularities; making judgments and estimatesthat are reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the
. accuracy 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.
3. Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and rules made thereunder.
4. 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.
5. An audit involves performing procedures to obtain audit evidence about the amountsand the 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 the auditor considers internal control relevant tothe Company's preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances but not for the purposeof expressing an opinion on whether the Company has in place an adequate internalfinancial controls system over financial reporting and the operating effectiveness of suchcontrols.
6. An audit also includes evaluating the appropriateness of the accounting policiesused and the reasonableness of the accounting estimates made by the Management as well asevaluating the overall presentation ofthefinancial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
8. Basis for qualified opinion TDS Compliances:
Non compliance of sections 194-A 192 194-1 & 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 toSchedule-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 2013 bythe Company.
* The resultant impact if any arising out of above observations which may haveconsequential effect on the year's Profit & Loss and Net Current Asset position of theCompany at the year end 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.
' Subjecttoourobservationgiven above:
9. 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 above the 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 31stMarch 2017;
b) in the case of the Statement of Profit and Loss of the profit of the Company forthe year ended on that date; and
c) in the case of the Cash Flow Statement of the cash flows of the Company for theyear ended on that date.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditor's Report) Order 2015 ("the Order")issued by the Central Government in terms of sub-section (11) of section 143 of the Actand based on our comments in the auditors report of the Company we give in the Annexure astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
11. As required by Section 143(3) of the Act we report that:
a) Except for what have been stated in paragraph 6 viz. basis for qualified opinion wehave obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the
b) In our opinion Except for what have been stated in paragraph 6 viz. basis forqualified opinion proper books of account as required by law have been kept by the Companyso 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 Balance Sheet the Statement of Profit and Loss and the CashFlow Statement comply with the Accounting Standards specified under Section 133 of theAct 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 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164(2) of the Companies Act 2013.
f) With respect to the adequate of internal control over financial reporting of theCompany and the operating effectiveness of such control refertoourseparate report inAnnexure - B and
g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 iin ouropinion and to the best of our information and according to the explanations given to us:
(i) The Company has disclosed the impact if any of pending litigations as at 31stMarch 2016 on its financial position in its 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.
Annexure -A to the Independent Auditors' Report
(Referred to in paragraph 10 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
1. In respect of its fixed assets
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its major items of fixed assets and summarizedrecords of items of small value on the basis of available information. However suchrecords could not be produced for our verification due to lock out in the factory.
b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.
c) The title deeds of immovable properties are held in the name of the company.
2. In respect of its inventories
a) The company did not carry any trade or manufacturing activity 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 discrepancies were noticed on such verification howeverwe are not in a position to substantiate the same since relevant inventory records couldnot be produced for our verification.
b) In view of the limited information made available to us we are not in a position tostate 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 no changes in the opening &closing inventory of the Company and the Company has maintained proper records of itsinventories and no material discrepancies were noticed on physical verification.
3- In our opinion and according to the information and explanations given to us theCompany has granted unsecured loans to companies firms or other parties covered in theRegister maintained under Section 189 of the Companies Act 2013 and there is no amountoutstanding at the end of the year.
4. In our opinion and according to the information and explanations given to us theprovisions of section 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and security are applicable on the company and the company hasnot complied with the provisions of the said sections.
5. According to the information and explanations given to us the 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 provisions of section 73 to 76 of The Companies Act 2013 in respect of suchadvances. Except of the above the Company has not accepted any deposits from the publicwithin the meaning of Sections 73 74 75 and 76 of The Companies Act 2013 and the rulesframed thereunder and do not have any unclaimed deposits. To the best of our knowledge andaccording to the information and explanations given to us no order has been passed by theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any Courtor any other Tribunal in regard to the above matter.
6. As informed to us the maintenance of Cost Records has not been specified by theCentral Government under subsection (1) of Section 148 of the Act in respect of theactivities carried on by the company
7. The Company is not regular in depositing undisputed statutory dues Income TaxSales Tax Wealth Tax Service Tax Customs Duty Excise Duty Cess and other statutorydues with appropriate authority and no undisputed amount payable in respect of aforesaiddues were in arrears as at 31st March 2017 for a period of more than six months from thedate they became payable except as mentioned hereunder:
|Particulars ||Rs. in Lacs |
|Gratuity ||92.85 |
|Provident Fund ||112.24 |
|Purchase Tax ||5.67 |
|Zonal Development Council ||1.91 |
|TDSonSalary ||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 |
In respect of TDS the amounts mentioned above does not include cases where the Tax hasnot been deducted at Source. According to the records of the Company dues outstanding inrespect of Sales Tax Income Tax Custom Duty Wealth Tax Excise Duty and Cess on accountof any dispute are as follows:
|ASSESSMENT YEAR ||NATURE OF DUES ||AMOUNT (Rs) ||NATURE OF DISPUTES PENDING BEFORETHE INCOMETAX AUTHORITIES |
|2004-05 ||143(1) ||3941 ||Interest of Rs. 3941/-charged u/s 234 AB&C but subsequently assessment made on a Total Income of Rs. NIL- No demand |
|2005-06 ||143(1) ||26353 ||As per order u/s 143(3)/251 dated 16.05.2008 - Demand- NIL |
|2006-07 ||143(1) ||12736 ||As per order u/s 143(3) dtd 19.12.2008 - Demand - NIL |
|2009-10 ||143(l)(a) ||248090 ||Rs. 248090/- ( FBT) -To be adjusted against refund for Assessment Year 1998-99 of Rs. 10 lacs |
|2009-10 ||143(l)(a) ||946970 ||Rs. 946970/- (IT) -To be adjusted against refund for Assessment Year 1998-99 of Rs. 10 lacs |
|2010-11 ||143(l)(a) ||15381100 ||Rectification pending u/s 154 |
|2012-13 ||144 ||22718500 ||No demand as the assessment made has been set aside bytheCIT vide his order u/s 264 dated 27.03.2017 |
|2012-13 ||271(l)(c) ||21549297 ||Appeal Pending before the CIT(A) |
|2012-13 ||271(l)(b) ||10000 ||Appeal Pending before the CIT(A) |
|2013-14 ||143(3) ||126588560 ||Appeal Pending before the CIT(A) |
|2013-14 ||271(l)(c) ||10000 ||Appeal Pending before the CIT(A) |
The information contained herein are based on and are limited to the extent of detailsmade available to us.
8. According to the information and explanations given to us the Company has defaultedin repayment of dues to any financial institution or bank during the year covered by thisaudit. The Company has not issued any debentures.
9. Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
10. Based upon the audit procedures performed by us for expressing our opinion on thesefinancial statements and information and explanations given by the management we reportthat no fraud on or by the company has been noticed or reported during course of ouraudit.
11. Based upon the audit procedures performed and the information andexplanations given by the management the
company has not paid any managerial remuneration during the year. Accordingly theprovisions of clause 3 (xi) of the Order are not applicable to the Company and hence notcommented upon.
12. The Paragraph 3(xii) of the order is not applicable since the Company is not theNidhi Company.
13. In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14. Based on the information and expanations given to us by the management the Companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly the provisions of clause3 (xiv) of the Order are not applicable to the Company and hence not commented upon.
15. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv)oftheOrder are not applicable to the Company and hence not commented upon.
16. In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.
Annexure-B to the Independent Auditors' Report on the Financial Statement of theCompany
(Referred to in paragraph 11 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the
We have audited the internal financial controls over financial reporting of ShreeHanuman Sugar & Industries Limited ("the Company") as of 31st March 2017 inconjunction with our audit of the financial statements of the Company for the year endedonthatdate.
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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable 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 Mote") and the Standards on Auditing to the extent applicable toan audit of internal financial controls both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 dependonthe auditor's judgment including the assessment of the risks of materialmisstatement 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 systemoverfinancial 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 overfinancialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that 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 account ing principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 overfinancialreporting 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 control system overfinancial reporting and such internal financial controlsystem over financial reporting were operating effectively as at 31st March 2017 based onthe internal financial control system over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting (the "GuidanceNote") issued by the Institute of Chartered Accountants of India.
For Agarwal Gupta Nokari & Rustagi Associates Chartered Accountants F.R. No.310041E EShal Chandra Khaitan (Partner) Membership No. 017387
Place: Kolkata Date: 30th May 2017