The Members of
Sir Shadi Lal Enterprises Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone financial statements of Sir Shadi LalEnterprises Limited ("the Company") which comprises the Balance Sheetas at March 31 2020 the Statement of Profit and Loss (including Other ComprehensiveIncome)the Statement of Changes in Equity and the statement of cash flows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (here in after referred to as"the standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act2013("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind As") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2020 and the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
BASIS FOR OPINION
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the standalone financial statements under the provisions of theCompanies Act 2013 and the Rules there under and we have fulfi lled 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 audit opinion on the standalone financial statements.
KEY AUDIT MATTERS
Key Audit Matters are those matters that in our professional judgment were of mostsignifi cance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as a wholeand informing our opinion thereon and we do not provide a separate opinion on thesematters. We have determined the matters described below to be the key audit matters to becommunicated in our audit report.
|Key Audit Matter ||Auditor's Response |
|1. The Net Worth of the company has been eroded on account of operational losses incurred by the company up to the F.Y. 2014-15 which was basically on account of low recovery of Sugar from Sugarcane. Whereas on account of improvement in the Sugar manufacturing unit during the season 2015-16 the recovery has substantially improved with the result that the Company has earned profit during the year 2016-17. The Company has also reported profit during the current year ending on 31.03.2020 Rs. 384.91 lakhs as compare to loss Rs. 3488.82 lakhs during the previous year ending on 31.03.2019. The Company is conti- nuously striving for improvement in the operational effi ciencies in other parameters. As such the Company will remain as a going concern and is likely to pay it's liabilities including Cane dues from expected generation of Cash Flow. However the accumulated losses of the Company as at 31.03.2020 were Rs 10060.37 Lakhs as against the paid up capital of Rs 525.00 Lakhs. ||Attention is invited to note no.44 of the Financial Statements wherein it is explained that the Company h a s significant accumulated losses which have resulted in erosion of the net worth of the Company as on 31st March 2020.The reasons for improvement explained by the Company in the said note no.44 that it will continue as a going concern and it will likely to pay its liabilities from expected generation of Cash Flow are in our opinion uncertain. We are unable to comment upon the said uncertainties. |
1. The Company has not maintained accounts on "Accrual Basis" to the extent:
i) of Rs. 8071.85 Lacs in respect of interest on late payment of Cane price which havenot been provided as Stated by the Company in Note No. 35 of the aforesaid StandaloneFinancial Statements.
ii) of liability (which is not determined by the Company) towards bonus relating toFinancial Year 2014-15 in accordance with revised Bonus Notifi cation dated 1stJanuary 2016 as stated by the Company in Note No.36 of the aforesaid FinancialStatements.
2. As Stated in Note No.37 to the Standalone Financial Statements the managements hasdecided not to make any further provision this year for Deferred Tax Assets. Themanagement in view of accumulated losses and in absence of virtual certainty about futureprofitability has decided not to account for the effect of Deferred Taxation for thisyear and continuing to carry forward the Deferred Tax Assets Rs. 6881.11 lakhs alreadyaccounted for in earlier years.
The Company's Board of Directors is responsible for the other information. ThisComprises the information included in the Director's report but does not include theFinancial Statements and 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 workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact.
We have nothing to report 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 Standalone Financial Statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the Ind AS and other accounting principlesgenerally accepted in India specified under section 133 of the Act read with theCompanies (Indian Accounting Standards)Rules2015as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of accounting policies; adequate Internal FinancialControls that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statement that give a true and fair view and are free from materialmisstatement 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 Standalone Financial Statement
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of Internalcontrol.
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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with Governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant defi ciencies 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 signifi cance in the audit of the Standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1) As required by the Companies (Auditor's Report) Order2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act we give in the "Annexure A" a Statement on the mattersspecified in paragraphs 3 and 4 of the 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 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 (including other comprehensiveincome)the Statement of changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid Standalone Financial Statements comply with the IndianAccounting Standards specified under Section 133 of the Act
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 Control over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B"
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) as amended.
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act. h) With respect to the othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 as amended in our opinion and to the best of ourinformation and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financialposition in its Financial Statements (Refer Note No. 35 of the Standalone financialstatements);
ii) The Company did not have any long term contracts including derivative contracts forwhich there were any foreseeable losses; and
iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
ANNEXURE " A" TO THE INDEPENDENT AUDITOR'S REPORT
Annexure "A" to The Independent Auditor's Report of even date of theStandalone Ind AS Financial Statements of Sir Shadi Lal Enterprises Limited for the yearended on 31st March 2020.
(Referred to in paragraph 1 of the Independent Auditors' Report of even date under theheading "Report on Other Legal and Regulatory Requirements" to the members of SirShadi Lal Enterprises Limited on the standalone Ind AS Financial Statements as of andfor the year ended March 31 2020.)
i. In respect of the Company's fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.
b) The Company's programme of physical verifi cation of all its fixed assets once inthree years is in our opinion reasonable having regard to the size of the Company andthe nature of its fixed assets. Pursuant to such programme a physical verifi cation offixed assets was carried out during the year and the discrepancies noticed between thebook record and physical inventory have been properly accounted for in the books ofaccount
c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties arestated to be held in the name of the Company. The original Title Deeds were not producedto us for our verifi cation and we were told that same are deposited as security withState Bank of India and District Co-Operative Bank.
ii. a) During the year the inventories have been physically verifi ed by themanagement except certain items of Shamli Distillery and material sent for job work andlying with third party. In our opinion the frequency of verifi cation is reasonable.
b) The discrepancies noticed on physical verifi cation between the physical stocks andthe book records were not material however the discrepancies noticed have been properlyaccounted for in the books of account.
iii. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the Register maintained under section 189 of the Act.Accordingly the provisions of clause 3 (iii) (a) to (c) of the Order are not applicableto the Company and hence not commented upon.
iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013with respect to loans investments guarantees and securities.
v. According to the information and explanations given to us the Company has notaccepted any deposit from the public during the year therefore the provisions of clause(v) of paragraph 3 of the Order is not applicable to the Company.
vi. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 prescribed by the Central Government underSection 148 (1) (d) of the Companies Act 2013 and are of the opinion that prima faciethe prescribed accounts and cost records have been maintained. We have however not madea detailed examination of the cost records with a view to determine whether they areaccurate or complete.
vii. a) According to the information & explanations given to us and on the basis ofour examination of the records of the Company there is no undisputed amounts payable inrespect of provident fund employees' State insurance income-tax value added taxwealth-tax Goods and service-tax customs duty excise duty cess and other materialstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date of becoming payable.
b) According to the records of the Company and the information and explanations givento us there are no amounts in respect of income-tax value added tax sales taxwealth-tax Goods and service-tax customs duty excise duty and cess which have not beendeposited with the appropriate authorities on account of any dispute other than mentionedin Annexure-1' to this report.
c) Except Goods & Service Tax the Company has generally been regular in depositingundisputed statutory dues including Provident Fund Employee's State Insurance IncomeTax Excise Duty Cess and other material statutory dues applicable to it with theappropriate authorities.
viii. Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the Company has not defaulted in repayment of duesto banks or Government during the year. The Company has no outstanding dues in respect offinancial institutions or debenture holders.
ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial Statements as required by the applicableAccounting Standards.
xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with Directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE B' TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SIR SHADILAL ENTERPRISES LIMITED ("the Company") as of March 31 2020 in conjunction withour audit of the Standalone Ind AS Financial Statements of the Company for the year endedon that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's 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 systemover 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 principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
(Annexure-1 as referred to in Para vii (b) of Annexure B' to the Auditors' Reportof even date to the members of Sir Shadi Lal Enterprises Limited on the accounts for theyear ended 31st March 2020).
Following are the particulars of disputed dues (provided/considered contingentliability as appropriate) as on 31.03.2020 on account of Income-Tax Sales-Tax andExcise matters that have not been deposited on account of dispute:-
|Name of the Statute ||Nature of Dues ||Amount (Rs. in Lakhs) ||Period to which the Amounts relates ||Forum where dispute is pending |
|Sales Tax Act ||Entry Tax ||3.38 ||2012-2013 ||Addl. Commissioner Appeal Muzaffarnagar |
|Central Excise Act ||Duty/Penalty ||0.68 ||2005-2006 ||Commissioner Appeal Muzaffarnagar |
| ||Penalty for Low ||1.85 ||1991-1992 ||Excise Commissioner Allahabad |
|U.P. Excise Ac ||Recovery duty/ Penalty ||55.42 ||1988-1989 ||Weight & Measurement Department |
| || || ||2011-2012 ||Saharanpur High Court Allahabad |
|National Company Law Tribunal ||Security Deposit for Appeal ||37.46 ||2012-2013 ||Competition Commission of Inida. |
| || || ||2013-2014 || |
We have been informed that apart from above; there are no dues in respect ofWealth-tax Goods and Service-tax and Custom Duty which have not been deposited onaccount of any dispute.