The Members of
Shree Hanuman Sugar & Industries Limited
Report on Financial Statements
We have audited the accompanying financial statements of SHREE HANUMAN SUGAR &INDUSTRIES LIMITED ("the company") which comprise the Balance Sheet as at 31stMarch 2018 the Statement of Profit and Loss including the statement of OtherComprehensive Income Cash Flow statement and the Statement of Change in Equity for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.
Management's Responsibility forthe 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 financial statements that give a true and fair view of the financial positionfinancial performance including Other Comprehensive Income Cash flows and the Statementof Changes in Equity of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards (Ind AS) specified under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended.This responsibilities also includes maintenance of adequate accounting records inaccordance with the provisions of the other Act for safeguarding of 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 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 financial statements based on ouraudit. 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 undertheprovisions of the Act and rules made there under. We conducted our audit in accordancewith the Standards on Auditing issued by the Institute of Chartered Accountants of Indiaas specified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 accounting policies used and the reasonableness of the accountingestimates made by the Company's Director as well as evaluating the overall presentationof the financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the FinancialStatements.
Basis for qualified opinion
Non compliance of sections 194-A 192194-1 & 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 Indian Accounting Standards 19 for accounting of Gratuity Leave liabilities andother retirement benefits towards employees bonus in the preparation of FinancialStatement. The estimated liability on account of retirement gratuity has not beenascertained and not provided 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 ScheduleII of The Companies Act 2013. The amount of un-provided depreciation for the currentperiod ended 31st March 2018 is Rs. 693.93 Lacs (previous year - Rs. 706.19Lacs) and upto the period ended 31st March 2018 is Rs. 2705.16 Lacs (ascomputed by management) could not be verified since relevant records were not produced forour verification. Moreover the adjustment to be made in Retained Earnings amounting toRs. 694.23 Lacs due to transitional depreciation calculated on the basis of useful life asprescribed in Part C of Schedule II of the Companies Act 2013 in respect of the assetswhich have completed their useful life has not been made in the Accounts.
> 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 & Loss and Net Current Asset position of theCompany at the year end has neither been ascertained nor provided for in these accoun tsand operating results for the year are over-stated and/or understated to the extentthereof.
Subject to our observation given above:
In our opinion and to the best of our information and according to the explanationsgiven to us the Financial Statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31st 2018 its Profit/loss including Other Comprehensive Income its Cash Flows and theStatement of Changes in Equity 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 in terms of sub-section (11) of section 143 of the Actand based on our comments in the auditor's report of the Company we give in the AnnexureA a statement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
2. 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 purposes of our audit.
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 Statement of Profit and Loss including Other ComprehensiveIncome the Cash flow Statement and Statement of Changes in Equity dealt with by thisReport 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 Companies (Indian AccountingStandards) Rules 2015 as amended:
e) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in termsof Section 164(2) of the Companies Act 2013.
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; 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 in our opinionand 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 2018 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.
For Agarwal Gupta Nokari & Rustagi Associates
F.R. No. 310041E
CA Bhal Chandra Khaitan
Membership No. 017387
Date: 30th May 2018
Annexure Atothe Independent Auditors' Report
(Referred to in paragraph 10 under 'Report on Other Legal and Regulatory Reguirements'section of our report of even date)
1. In respect of itsfixed assets
a) We are informed that the Company has maintained proper records showing fullparticulars including quantitative details and situation of its major items of fixedassets and summarized records of items of small value on the basis of availableinformation. Howeversuch records could not be produced forour verification due to lock outin 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 not granted during theyear unsecured loans to companies firms or otherparties covered in the Register maintained under Section 189 of the Companies Act 2013and there is no amount outstanding at the end of theyear.
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 ofThe Companies Act 2013 in respect of such advances. Except of the above the Company hasnot accepted any deposits from the public within the meaning of Sections 73 74 75 and 76of The Companies Act 2013 and the rules framed there under and do not have any unclaimeddeposits. To the best of our knowledge and according to the information and explanationsgiven to us no order has been passed by the Company Law Board or National CompanyLawTribunal or Reserve Bank of India or any Court or any otherTribunal in regard to theabove matter.
6. As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (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 2018 for a period of more than sixmonths from the date they became payable except as mentioned hereunder:
|Particulars ||Rs. in Lacs |
|Gratuity ||92.85 |
|Provident Fund ||112.96 |
|Purchase Tax ||5.67 |
|Zonal Development Council ||1.91 |
|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 |
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 BEFORETHEINCOMETAX AUTHORITIES |
|2004-05 ||143(1) ||3941 ||Interest of Rs. 3941/- charged u/s 234 AB & C but subsequently assessment made on a Total Incomeof Rs. NIL-Nodemand |
|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(1)(3) ||248090 ||Rs. 248090/- (FBT) - To be adjusted against refund for Assessment Year 1998-99 of Rs. 10 lacs |
|2009-10 ||143(1)(3) ||946970 ||Rs. 946970/- (IT) - To be adjusted against refund for Assessment Year 1998-99 of Rs. 10 lacs |
|2010-11 ||143(1)(3) ||15381100 ||Rectification pending u/s 154 |
|2012-13 ||144 ||22718500 ||No demand as the assessment made has been set aside by the CIT vide his order u/s 264 dtd 27.03.2017 |
|2012-13 ||271(l)(c) ||21549297 ||Appeal Pending before the CIT(A) |
|2012-13 ||27 l(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 forexpressing 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 and explanationsgiven by the management the company has not paid any managerial remuneration during theyear. Accordingly the provisions of clause 3 (xi) of the Order are not applicable to theCompany and hence not commented upon.
12. The Paragraph 3(xii) of the order is not applicable since the Company is not aNidhi 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 explanations given to us by the management theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year under review. Accordingly the provisions ofclause 3 (xiv) of the Order are not applicable to the Company and hence not commentedupon.
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) ofthe Order 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.
For Agarwal Gupta Nokari & Rustagi Associates
F.R. No. 310041E
CA Bhal Chandra Khaitan
Membership No. 017387
Date: 30th May 2018
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 Reguirements'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 Act")
We have audited the internal financial controls over financial reporting of ShreeHanuman Sugar & Industries Limited ("the Company") as of 31stMarch 2018 in conjunction with ouraudit of the financial statements of the Company fortheyear 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 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 under the 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 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.
Ouraudit 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 judgment 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 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 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 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 over financial reporting and such internal financial controlsystem over financial reporting were operating effectively as at 31st March2018 based on the internal financial control system 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.
For Agarwal Gupta Nokari & Rustagi Associates
F.R. No. 310041E
Bhal Chandra Khaitan
Membership No. 017387
Place: Kolkata Date: 30th May 2018