sand plast india ltd Auditors report


To The Members of SAND PLAST (INDIA) LTD

Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of SAND PLAST (INDIA) LTD ("the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of

Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind As financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse audit opinion.

Basis for Adverse Opinion

1. We have analyzed the following factors:-

a) The Company incurred a net loss of Rs. 22,34,864 /- for the year ended 31st March, 2018 (Previous year Rs. 4,82,863/-) and accumulated loss as on 31st March, 2018 stands to Rs. 20,06,68,722/-. As on 31st March, 2018, the Companys current liabilities exceeded its current assets by Rs. 5,46,30,139/- (Previous year Rs. 5,23,95,275/-).

b) The Company had stopped production from March 2015 onwards at its only working plant at DVB Ash Pond, Adjacent to Nagla Machi CNG Station, Opp. Indraprastha Park Gate No. 4, Ring Road, New Delhi-110002.

c) Company had taken secured loan from Punjab National Bank & HUDCO whose principle outstanding balance was Rs. 1,09,50,000/- & 3,94,50,000/- respectively as on 31.3.2018,

Company has defaulted in repayment of said loans and become NPAs previously. Bank has taken the possession of Land/Building situated at NH-8, Village Goonti, Tehsil- Behror, Alwar, Rajasthan and sold it in the Year 2013-14. Being no information made available to the company regarding sale of property and remaining outstanding balances and in absence of outstanding position, company has not accounted for said transaction and continued to showing Land/Building as Fixed Assets and Loan balances as Borrowing. Certain other assets such as F&F, P&M located at such land/building also not available with the company, however still shown under Fixed Assets. Company is not charging Depreciation on such building, P&M, F&F and other assets which is now not available with the company. Title of the assets is also not clear in favour of the company.

The financial statements (and notes thereto) do not disclose this fact. Appropriateness of the going concern basis, is dependent on the ability of the company to generate adequate finances to meet its obligations and to operate profitably which in our opinion after considering aforesaid factors indicate material uncertainty on the ability of the Company to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business. If the Company is treated not to be a going concern, then the valuation of assets has to be not merely on the basis of historical cost less depreciation or impairment but at a value which the assets would fetch, if the same are lower than the value presently shown. The Company has not attempted to assess the realizable value of the assets and therefore financial results for the year ended 31st March, 2018 have been prepared on a going concern basis and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to amounts or classification of liabilities that may be necessary if the Company is unable to continue as a going concern.

2. The Company was having bank loan balance of Rs. 1,09,50,000/- from PNB and Rs. 3,94,50,000/- from HUDCO. As informed by the management, banks were not providing bank statements or balance certificates or any authenticate documents in support of balance with banks. Accordingly, we could not verify the bank / FI loan balances. Further, Company has also not recognized interest expenses on such loans during the year. In the absence of records and details we could not verify the same.

3. In the opinion of the management, accounts receivable, loans and advances have a value on realization in the ordinary course of business, at least equal to the amount at which they are stated in the Balance sheet unless specifically provided for. During the financial year ended 31st March 2018, company has not sought confirmations on margin money account, trade receivable, trade payable and other receivables/ payables. Accordingly, the balances appearing under, trade payables, trade receivables and other receivables/ payables are subject to reconciliation & confirmation. The financial impact of same is not ascertainable and to that extent we do not have any information in respect of such balances.

4. The Company has not complied with provisions of Income Tax Act, 1961 by non-filing Income Tax Returns from FY 2014-15 onwards. Proper records are not made available to us for our verification and to compute Income Tax and related statutory liabilities. In this situation, we are unable to comment upon the non-provision of statutory liabilities for current year as well as for the earlier years.

5. The company has not complied with various statutory provisions such as VAT/CST Act, TDS, excises etc. in respect of filing of returns and deposition of due taxes with the Government Authority.

6. The company has not complied with the provisions of Ind AS-37 "Provisions, Contingent Liabilities and Contingent Assets" and Ind AS-17 "Leases".

7. The company has not disclosed the contingencies in off balance sheet item.

8. Company has been discontinued/suspended from trading by the BSE Limited due to non-compliance of certain clauses of the listing agreement. The Company has not submitted quarterly / annual compliances within the time as per the Regulations of SEBI(LORD). However, Companies accounts are reviewed upto 31.12.2014 in accordance with SEBI Guidelines and also filed with the SEBI with in time. Books of Accounts have been prepared on the basis of Indian Accounting Standards (IND AS) specified under section 133 of the act, read with the companies (Indian Accounting Standards) Rules, 2015.

Adverse Opinion

In our opinion, because of the omission of the information mentioned above in the Basis for Adverse Opinion paragraph, the Ind AS financial statements do not give the information required by the Companies Act, 2013 in the manner so required and also do not give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March, 2018, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 (the "order") issued by the

Central Government in India in terms of sub-section (11) of section 143 the Act, We give in

"Annexure A", a statement on the matters specified 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, except for the possible effects of the matter described in the Basis for Adverse Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) Except for the possible effects of the matter described in the Basis for Adverse Opinion paragraph above, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;;

d) Except for the matter described in the Basis for Adverse Opinion paragraph above, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Indian Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended:

I) The Company has not complied with Ind AS 36, introduced w.e.f. 1st April, 2004 while preparing the financial statements. The Management has not assessed technically the Plant and Machineries at New Delhi Unit to decide about its impairment or carrying Value, since March 2015, company has stopped production. The carrying amount of the assets was not reviewed for indication of impairment of assets on basis of internal/external factors.

II) The Company has not complied with Ind AS 12, Income Taxes. The company failed to file Income Tax Returns for the F.Y. 2014-15 onwards. In absence proper documents and records of Income tax, we could not quantify the Income Tax liability for which provision not made. Deferred Tax Assets/Deferred Tax Liabilities are not provided for in the books of accounts, in absence of proper working and database from the management. We could not quantify the non-provision for DTL or disclosures regarding DTA; a. On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164(2) of the Act. Director of the company has been opted for CODS scheme and filed the requisite form and paid the requisite fees to Ministry of Corporate affairs however, name has not been removed from defaulter list.

b. Except as stated above in the Basis of Opinion Paragraph, with respect to the adequacy of the

Internal Financial Control over financial reporting with reference to these Ind AS financial statements of the company and the operating effectively of such controls, refer to our Separate

Report in "Annexure-B" to this report;

c. The remarks relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Adverse Opinion paragraph above; proper books of accounts have been maintained;

d. With respect to the other matters to be included in the Auditors Report in accordance with

Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) Management informed that there are no litigations pending with any department which may have financial effect in future thats why Company has not disclosed the impact of pending litigations on its financial position in its financial statements. but as per our opinion the company has not filled Income Tax Return since FY 2014-15, company has not done Tax Audit for the previous years also, No sales tax return filed from the F.Y. 2014-15 and onwards, Demands from Sales Tax department, Excise Department for various assessment years which shows some matter might be under litigation and its exact status and its probable effect on financial statement is not disclosed by the management with us.;

ii) Except for the possible effects of the matter described in the Basis for Adverse Opinion paragraph above, the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.;

iii) As per the information and explanation made available with us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For D. Khanna & Associates

Chartered Accountants

FRN: 012917N

Sd/-

[Ramesh Mundhara]

Partner

M.No:- 426751

Date: 30.05.2018

ANNEXURE "A" TO INDEPENDENT AUDITORS REPORT

Annexure referred to in Paragraph 1 under the heading of "report on other legal and regulatory requirements" of our report of even date for F.Y. 2017-18

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) The Company has phased programme of physical verification of its fixed assets at reasonable intervals, which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. During the year, the management has physically verified fixed assets and no material discrepancies were noticed on such physical verification. However we are unable to comment on fixed assets situated at Behror in the absence of necessary records. (c) In our opinion and according to the information and explanation made available with us there has been no significant disposal of fixed assets except as stated above. Title deed of Land, Building, Plant and Machinery, Furniture and Fixture and other assets situated at Behror has not made available to us and as informed from the management Land and Building has been sold out by the PNB and HUDCO without communicating with them. However, the same has been recorded in the books of accounts. (ii) As per the information and explanation given to us, the Companys management has carried out physical verification of inventory at regular intervals. No material discrepancies were noticed on such physical verification. (iii) (a) The Company has granted loans, the principal and interest thereof are re-payable on demand, to a company covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grants and loans are not prejudicial to the interest of the company. (b) The company has granted loans that are re-payable on demand, to a company covered in the register maintained under section 189 of the Companies Act, 2013. The loans granted are repayable on demand. We are informed that the company has not demanded repayment of any such loan and interest during the year and thus, there has been no default on the part of the parties to whom the money has been lent. (c) As per the information and explanation given by the management, there are no overdue amounts in respect of the loan granted to a company covered in the register maintained under section 189 of the Companies Act, 2013.

(v) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans to directors including entries in which they are interested and in respect of loans and advances given, investment made and guarantees and securities given have been complied with by the company.

(vi) The company has not accepted any deposits during the year; hence reporting under this clause is not applicable.

(vi) We have been informed that the Central Government has not specified maintenance of cost records under section 148(1) of the Companies Act, 2013, for the products manufactured by the Company.

(vii)(a) According to the information and explanations given to us and on the basis of records produced before us, the Company is not regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, value added tax with different authorities, cess and other material statutory dues applicable to it. As on the last day of financial year following undisputed dues become payable for a period of more than six months:

Dues Amount
Excise Liability 22,11,329
Sales Tax 4,44,460
Service Tax 11,66,589
TDS 1,19,400

(c) As per Information and explanations furnished to us and on verification of records produced, there are disputed statutory dues outstanding as at 31st March, 2018, which have not been deposited with the respect of Sales Tax which are as follows:

NAME OF STATUTE DUE NATURE OF THE DUES AMOUNT (RS.) Relevant Year (F.Y.) Forum Where Pending
CST Rajasthan Sales Tax 4,820
Rajasthan Sales Tax Sales Tax 21,99,175

Information Not Available

Excise Duty Excise liability 82,782
Income Tax Income Tax 93,66,350 2009-10 CIT (A), Alwar
Income Tax Income Tax 1,24,905 2008-09 CIT (A), Alwar

(viii) In our opinion and according to the information and explanations given to us, as per books of accounts the Principle dues of the HUDCU-Rs. 3,94,50,000 /-and PNB- Rs. 1,09,50,000/- at the end of financial year. However, the possession of Land hypothecated for this loan has taken by the PNB and HUDCO and sold out without informing to the management. Statement of the same loan is also not made available hence the due amount could not be verified. (ix) Based on examination of books of accounts and information and explanation given to us, no money raised during the year by way of initial public offer and company has not obtained term loans during the financial year.

(x) According to the information and explanations given to us and on the basis of our examination of the records of the Company, no material fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year. (xi) The company is not a Nidhi Company; hence reporting under this clause is not applicable.

(xii) All the transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 and the details have not been disclosed in the Financial Statements as required by the applicable Ind AS.

(xiii) The company has made preferential allotment or private placement of shares, application of money of the same has been received in earlier years. Applicable form has also not been filed with MCA and no any allotment has been made of fully or partly convertible debentures

(xiv) The managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

(xv) The company has not entered into any non-cash transactions with directors or persons connected with him under the provisions of section 192 of Companies Act, 2013.

(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For D Khanna & Associates

Chartered Accountants

FRN: 012917N

Sd/-

[Ramesh Mundhara]

Partner

M.No. 426751

Date: 30.05.2018

Place: Jaipur

"ANNEXURE B" TO THE INDEPENDENT AUDITORS REPORT

Referred to in our report of even date to the members of Sand Plast (India) Limited on the accounts for the year ended 31st March 2018

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Sand Plast (India) Limited (‘the Company) as on 31st March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting with reference to these Ind AS financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over

Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these Ind AS financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial control system over financial reporting with reference to these Ind AS financial statements and their operating effectiveness. Our audit of internal financial control over financial reporting included obtaining an understanding of internal financial control over financial reporting with reference to these Ind AS financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting

Meaning of Internal Financial Controls over Financial Reporting with reference to these Ind AS financial statements

A Companys internal financial control over financial reporting with reference to these Ind AS financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control over financial reporting with reference to these Ind AS financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting with reference to these Ind AS financial statements

Because of the inherent limitations of internal financial controls over financial reporting with reference to these Ind AS financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these Ind AS financial statements to future periods are subject to the risk that the internal financial controls over financial reporting with reference to these Ind AS financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, except as stated in the Basis of Adverse Opinion of the Main Audit Report and in the Annexure A the Company has, in all material respects, an adequate internal financial controls system over financial reporting with reference to these Ind AS financial statements and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal controls over financial reporting criteria established by the Company considering the components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.

For D Khanna & Associates

Chartered Accountants

FRN: 012917N

Sd/-

[Ramesh Mundhara]

Partner

M.No. 426751

Date: 30.05.2018

Place: Jaipur