On Quarterely and year to date
Audited Standalone Financials
The Board of Directors
Sumuka Agro Industries Limited Shop No. 1 & 7 Empress Chambers Plot No. 89 A& B Charkop Sector 1 Opp. NKGSB Bank Kandivali (W) Mumbai-400067
We have audited the accompanying statement of quarterly and year to date standalonefinancial results of Sumuka Agro Industries Limited (the "Company") for thequarter and year to date ended 31st March 2021 (Statement) attached herewith beingsubmitted by the Company pursuant to the requirement of Regulation 33 and 52 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as amended (ListingRegulation).
In our opinion and to the best of our information and according to the explanationsgiven to us the statement:
i. is presented in accordance with the requirements of the Listing Regulations in thisregard;
ii. gives a true and fair view in conformity with the applicable accounting standardsand other accounting principles generally accepted in India of the Net Profit and othercomprehensive income and other financial information of the Company for the quarter endedon 31st March 2021 and of the Net Profit and other comprehensive income and otherfinancial information of the Company for the year ended on 31st March 2021.
We have audited the accompanying standalone financial statements of Sumuka AgroIndustries Limited (the Company) comprising the Standalone Balance Sheet as at 31stMarch 2021 the Standalone Statement of Profit and Loss (including OtherComprehensive Income) the Standalone Cash Flow Statement and the Standalone Statement ofChanges in Equity for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information(hereafter Standalone Ind-AS Financial Statements').
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 Standalone Ind-AS Financial Statements givethe information required by the Companies Act 2013 (hereafter 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 31stMarch 2021 and its loss (including other comprehensive income) changes in equityand its cash flows for the year ended on that date.
Basis for Qualified Opinion
We draw your attention to "Clause P of Note 20" to the Standalone Ind-ASFinancial Statements which indicates that certain companies to whom the Company hadgiven significant loans and/or advances amounting in total to 19457091/-(19457091/-) whose names have been stricken-off from the list of registered companiesby the Registrar of Companies of Gujarat and Mumbai operating under the Ministry ofCorporate Affairs. These conditions indicate the existence of a material uncertainty ofrealising such loans/advances. Management has not provided for the losses arising out ofnon-realisation of such loans/advances and these loans are stated at their carryingamounts which constitutes a departure from the Accounting Standards prescribed underSection 133 of the Companies Act 2013. The Company's records indicate that had managementrecognised such losses in the statement of profit and loss for the year the carryingamounts of the loans/advances in the balance sheet would have been reduced by the saidamounts at 31st March 2021 and the net income and shareholders' equity wouldhave been reduced by the same amounts respectively.
We conducted our audit in accordance with the SAs specified under Section 143 (10) ofthe Companies Act 2013. Our responsibilities under those standards are further describedin the Auditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the ethical requirements thatare relevant to our audit of the financial statements as per the Code of Ethics issued byICAI and under the provisions of the Companies Act 2013 and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our qualified opinion.
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. Wehave determined the matters described below as the key audit matters to be communicatedin our report:
Due to the current Covid-19 pandemic and limitations of lockdown it was not feasibleto conduct physical verification of the closing inventory. However the Company enabledsuch verification through video call.
We obtained record of closing inventories and carried remote verification via videocall. Under the circumstances we found the verification process satisfactory.
Emphasis of Matter
We draw your attention to "Clause F of Note 20" in the Standalone Ind-ASFinancial Statements which indicates that the Company has accumulated losses of43750193/- ( 48039032/-) as on 31-3-2021 as against a positive net worth (Capitalplus Capital Reserves) of 59345132/- ( 59345132/-) illustrating a significanterosion in its net worth.
We draw your attention to the Standalone Balance Sheet of the Standalone Ind-ASFinancial Statements which indicates that the Company's liabilities substantially exceedits assets. Also refer "Clause N of Note 20" for management's evaluations andreasonable approximations of their Fair Value.
The Company's Board of Directors is responsible for matters stated in Section 134(5) ofthe Companies Act 2013 (the Act) with respect to the preparation of the said financialstatements that give a true and fair view of the financial position financial performanceand cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standardsspecified under Section 133 of the Act read with Companies (Indian Accounting Standards)Rules 2015. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial 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.
In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Our objectives are to obtain reasonable assurance about whether the Standalone Ind-ASFinancial 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 Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism 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.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the financialstatements.
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.
Report on other legal and regulatory requirements
(1) As required by the Companies (Auditor's Report) Order 2016 (CARO) issued by theCentral Government of India in terms of section 143 (11) of the Act we give in theAppendix A' a statement on the matters specified in paragraphs 3 and 4 of CARO tothe 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 book;
(c) The Standalone Balance Sheet the Standalone Statement of Profit and Loss(including other comprehensive income) and the Standalone Cash Flow Statement and theStandalone Statement of Changes in Equity dealt with by this Report are in agreement withthe books of account;
(d) In our opinion the aforesaid financial statements comply with the applicableAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) The matter under the Emphasis of Matter paragraph above in our opinion dependingon the potential outcome may have an adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors and takenon record by the Board of Directors none of the directors is disqualified as on 31stMarch 2021 from being appointed as a director in terms of Section 164 (2) of theAct.
(g) 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 Appendix B'.
(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 as explained bythe Board of Directors of the Company and based on the extent of information andexplanations made available to us:
(i) The Company does not have any pending litigations which would impact its financialposition;
(ii) The Company has not entered in any long term contracts including derivativecontracts;
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
(i) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act based on the extent ofinformation made available to us and according to explanations given to us the directorsare not paid any remuneration during the year.
|For Haren Shah & Co |
|Chartered Accountants |
|(FRN: 103501W) |
|(H. J. Shah) |
|(M. No. 35158) |
|Mumbai 30th June 2021 |
|UDIN: 21035158AAAAAG5582 |
Appendix A to Independent Auditors Report dated 30th June 2021 of SumukaAgro Industries Limited (referred to in paragraph 1 under the heading OtherLegal and Regulatory Requirements'):
In our opinion subject to the extent of information and explanations available orprovided to us we report that:
(i) Regarding fixed assets:
(a) The Company has maintained basic record showing particulars including quantitativedetails and situation of fixed assets.
(b) We are informed that the management has conducted physical verification of thefixed assets during the year and no material discrepancies were found on suchverification.
(c) The Company does not have any immovable properties.
(ii) We are informed that the management has conducted physical verification ofinventory during the year and any material discrepancies if noticed on such verificationhave been properly dealt with in the books of account.
(iii) The company has not granted any loans secured or unsecured to companies firmsLLP's or other parties covered in the register maintained under section 189 of the Actconsequently sub-clauses (a) to (c) of this clause are not applicable.
(iv) The Company has not given loans to its directors nor provided any guarantee orsecurity in connection with a loan to any other body corporate or person. The aggregateof investments made in other body corporates and loans and advances given (refer clauseL' and P' of Note 20) to other body corporates and persons are in excess oflimits specified under section 186 (2) and such loans/advances are interest free.
(v) The Company has not accepted any deposits in terms of directives issued by ReserveBank of India and the provisions of sections 73 to 76 of the Act and the rules framedthere under.
(vi) We are informed that the central government has not prescribed maintenance of costrecords under section 148(1) of the Act which has been relied upon.
(vii) In respect of statutory dues:
(a) We are informed that the laws relating to provident fund employees' stateinsurance sales tax service tax customs duty excise duty and cess are not applicableto the Company which has been relied on. The Company is generally regular in depositingundisputed statutory dues with the appropriate authorities during the year except referredto in clause "O of Note 20".
(b) Similarly there are no dues of income tax or value added tax that have not beendeposited on account of any dispute.
(viii) The Company has no dues payable to financial institution bank government ordebenture 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.
(x) We are informed that there have been no cases of fraud on or by the Company noticedor reported during the year which has been relied upon.
(xi) We are informed that the remuneration paid by the Company to its directorsincluding KMP during the year is in accordance with the provisions of section 197 of theAct which has been relied upon.
(xii) We are informed that the Company is not a Nidhi company which has been reliedupon.
(xiii) We are informed that the transactions with related parties (refer in clauseI' of Note 20) are in compliance with sections 177 and 188 of the Act (to theextent applicable) which has been relied upon and appropriate disclosures as per Ind-AS24 have been provided in the standalone financial statements.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year.
(xv) We are informed that the Company has not entered into non-cash transactions withdirectors or persons connected with him which has been relied upon.
(xvi) The Company is not required (refer clause K' of Note 20) to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.
Appendix B to the Independent Auditors Report of even date Report on the InternalFinancial Controls under section 143(3)(i) of the Act
We have audited the internal financial controls over financial reporting of SumukaAgro Industries Limited as of 31st March 2021 in conjunction with ouraudit of the Standalone Ind-AS financial statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI).
These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding 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 Act.
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 issued by the Institute ofChartered Accountants of India and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India.
Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch 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 depend on the auditor's judgement 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 ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 and as per the information and explanations provided to us and based onour examination of the records in accordance with the essential components of internalcontrols stated in the said Guidance Note and further subject to our observations underemphasis of matter' in our report of even date on standalone financial statementsthe Company has in all material respects a system of internal checks on its day to daytransactions which acts as an informal internal financial control system over financialreporting which commensurate with its size and nature of its business is adequate andoperating effectively as at 31st March 2021.
|For Haren Shah & Co |
|Chartered Accountants |
|(FRN: 103501W) |
|(H. J. Shah) |
|Proprietor (M. No. 35158) |
|Mumbai 30th June 2021 |
|UDIN: 21035158AAAAAG5582 |