To the Members of
SHREE HANUMAN SUGAR & INDUSTRIES LTD Reports on the Financial Statements Qualified Opinion
We have audited the accompanying Financial Statements of "M/S. SHREE HANUMAN SUGAR & INDUSTRIES LTD" (the "Company"), which comprise of the Balance Sheet as at 31st March, 2022, the related Statement of Profit and Loss(including Other Comprehensive Income), and the Cash Flow Statement for the year ended and the statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information which we have signed under reference to this report.
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, and profit/loss, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
a) TDS Compliance
Non Compliance of sections 192,194A, 194J of The Income Tax Act’1961 with respect to TDS on salary; TDS on interest other than interest on securities; TDS on fees for professional & technical services respectively; the company has neither deducted tax nor deposited to the credit of the Central Government.
b) Ind AS 19
Company has not complied with Ind AS 19 for accounting of Gratuity, Leave Liabilities and other retirement benefits towards employees in preparation of the financial statements.
c) Provision of Depreciation on its Fixed Assets:
The company has not provided for depreciation on Fixed Assets since 2014, including the period covered under this audit.
d) Interest Non provision on Borrowings
The company has not provided for interest expense on borrowings and advances received from parties. This has resulted in non compliance of Sec 73 to Sec 76 of Companies Act 2013. The management has not been able to provide confirmation statements regarding certain parties.
e) Account Receivable & Payable
The balance of Other Current Assets; Trade Payables and Other Current Liabilities are taken as appearing in the books of accounts. In view of non-reconciliation/confirmation and also in view of pending dispute with some of the parties (as informed by the management),we are not in a position to comment on the correctness of the outstanding balances and resultant impact on the financial statements for the period under audit.
The resultant impact if any arising out of the above observations which may have consequential effect on the year’s profit/loss and net asset position of the company at the yearend has neither been ascertained nor provided for and operating results for the year are overstated and/or understated to the extent thereof.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Ind AS financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty of Going Concern
The Company has ceased its operations from FY2012-13.Thereafter, the plant remained inoperative due to technical problems as well as gap between the cost of production and its realization. The company has incurred loss of Rs. 5975.95 Lacs in current year as compared to Rs.47.10 Lacs for the previous year. The losses are very high on account of several write off of non recoverable advances, damaged inventory etc. We are hereby of the view that the financial statements for the current year should be prepared on Non-Going Concern Basis.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the Ind AS financial statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
The company is engaged in two segments 1) Sugar & 2) Construction .The company has ceased its operations from FY2012-13.Thereafter, the plant remained inoperative due to technical problems as well as gap between the cost of production and its realization. The company has incurred loss of Rs.5975.95 Lacs (before taking the effect of revaluation of assets) in current year as compared to Rs.47.10 Lacs for the previous year.
Information Other than the Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report including Annexure to Board’s Report, Business Responsibility Report, Corporate Governance and Shareholder’s Information, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, 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 IndAS financial statements
The Company’s 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, change in equity and cash flows of the Company in accordance with the Indian Accounting Standards (Ind AS) and accounting principles generally accepted in India, 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 implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Ind AS financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company’s financial reporting process.
Auditor’s Responsibilities for the Audit of Ind AS Financial Statement
Our objectives are to obtain reasonable assurance about whether the Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design 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 whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Ind AS 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’s report. However, future events or conditions may cause the Compa ny to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Ind AS financial statements, including the disclosures, and whether the Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative 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 financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be 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, 2020("The Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013 we give in the 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 Companies Act, 2013 we report that:
a) We have sought and obtained all the information and explanations which, to the best of 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 the Company so far as appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement and the Statement of Changes in Equity dealt with by this report are in agreement with the books of account;
d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
e) On the basis of written representations received from the directors , as on 31st March,2022, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2022 from being appointed as a director in terms of sub-section (2) of Section 164 of the Companies Act, 2013;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure- B";
g) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanation given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provision of Section 197 read with Schedule V of the Companies Act, 2013; and
h) With respect to the other matters included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and information and according to the explanation given to us:-
i) The Company has disclosed the impact of pending litigations on its financial position in its Ind AS Financial Statements.
ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
|For B D S & Co.|
|Firm Registration No. 326264E|
|(Bharat D Sarawgee)|
|Membership No.: 061505|
|Date:23rd Day of August, 2022|
Annexure - A to the Auditors’ Report of Shree Hanuman Sugar Limited
ADDITIONAL INFORMATION ANNEXED TO THE INDEPENDENT AUDITORS’
As required by the Companies (Auditor’s Report) Order, 2020, issued by the Company Law Board in terms of section 143(11) of the Companies Act, 2013, and on the basis of such checks as we considered appropriate and as per the information and explanations given to us during the course of audit, we further state that:
i.(a)In respect of the Company’s Property, Plant and Equipment and Intangible Assets:
- The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment
- The Company has maintained proper records showing full particulars of intangible assets.
(b) The Company has not conducted physical verification of Property, Plant and Equipment in the current year, which, in our opinion, is unreasonable having regard to the size of the Company and the nature of its assets.
(c) Property tax receipts and agreement for land on which building is constructed, registered sale deed / transfer deed/ conveyance deed were not provided to us hence we are unable to comment on the title in respect of immovable properties disclosed in the financial statements included under Property, Plant and Equipment as held in the name of the Company as at the balance sheet date.
(d) The Company has revalued its Property, Plant and Equipment and intangible assets during the year. The change is 10% or more in aggregate for each class of asset in PPE amounting to Rs.13862.32 Lacs. The valuation has been conducted by an independent valuer taking into consideration the requirement of relevant Ind As and the effective date of revaluation is 30.03.2022.
(e) No proceedings have been initiated during the year or are pending against the Company as at March 31, 2022 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder as explained by the management.
(ii) In respect of the Company’s Inventory:
(a) The inventory has not been physically verified during the year by the management. There is no manufacturing activity in the plant during the current reporting period. In our opinion, it is unreasonable going by the nature of inventory.
(b) The Company has not been sanctioned working capital limits in excess of Rs 5 crore, in aggregate, at any points of time during the year, from banks or financial institutions on the basis of security of current assets and hence reporting under clause 3(ii)(b) of the Order is not applicable.
(iii) In respect of the Company’s Investment:
(a)The Company has not made investments in, companies and firms, and had not granted unsecured loans or advances in the nature of loans or stood guarantee, or provided security to any other entity, during the year, and hence reporting under clause 3(iii) of the Order is not applicable.
(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.
(v) In our opinion and according to the information and explanations given to us, the Company has accepted following advances for supply for goods and services which are outstanding for more than 365 days as at the balance sheet and the company has not complied with the provisions of Section 73 to 76 of the Companies Act’2013.
|Particulars||As at 31-03-22||As at 31-03-21|
|Liabilities Against Expenses||4,70,810.00||6,32,016|
|Advance Against Sale of Land||7,45,92,135||5,89,31,483|
|Advance Against Sale of Scrap||31,50,000||24,50,000|
|Adv. For Sale of 5th & 6th Fl. Pretoria St.||1,00,00,000||1,00,00,000|
|Ashwin Kumar Sharma||-||7,00,000|
|Audit Fees Payable||1,25,000||59,000|
|Hari Shankar Pathak||-||6,50,000|
|Provision For Lease Rent taken from Bettiahraj||21,125||-|
To the best of our knowledge and according to the information and explanation given to us no order has been passed by NCLT or RBI or any other Court or Tribunal in the above matter
(vi) Maintenance of cost records has not been prescribed by the Central Government under sub section (1) of section 148 of the Companies Act, 2013
(vii) (a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employee’s State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Goods and Service Tax, Cess and any other statutory dues applicable to it with the appropriate authorities. No undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March, 2022 for a period of more than six months from the date they became payable except for the following:
|Name of the Statute||Amt (Rs.in Lacs)|
|Dividend Distribution Tax||9.44|
|Zonal Development Council||2.95|
|TDS on Director Sitting Fees||0.06|
|TDS on Legal Fees||0.09|
|TDS on Salary||7.21|
|TDS on Service Charge||3.02|
(b) According to the information and explanations given to us, and on the basis of our examination there are no material disputed dues on account of Sales Tax, Service Tax, Custom Duty, Excise duty, Value Added Tax, Goods and Service Tax and any other statutory dues that have not been deposited with appropriate authorities on account of any dispute except for the below:
|Nature of Dispute Pending||Assessment Year||Amount in Lacs as at 31.03.22|
|Adjustment against refund of 98-99 of Rs 10 lacs- FBT||2009-10||2.48|
|Adjustment against refund of 98-99 of Rs 10 lacs-IT||2009-10||7.02|
|Rectification pending u/s 154||2010-11||153.81|
|Appeal pending- 271(1)(C)||2012-13||215.59|
|Appeal pending- 271(1)(C)||2013-14||1265.99|
|Assessment ex-party under section 147 (Pending Appeal)||2015-16||446.33|
(viii)There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).
(ix)(a)In our opinion and as per information and explanations given to us, the Company has not defaulted in repayment of Loans and borrowings or in the payment of interest thereon on any dues to financial institution, bank, government.
(b)In our opinion and as per information and explanations given to us the company is not declared wilful defaulter by any bank or financial institution or other lender
(c)In our opinion and as per information and explanations given to us no term loans were taken during the current year.
(d)In our opinion and as per information and explanations given to us the funds raised on short term basis have not been utilised for long term purposes.
(e)The company does not have any subsidiary or associates or joint ventures hence, the provisions of clause 3 (ix)(e) and (f) of the Companies (Auditors’ Report) Order, 2020 are not applicable to the Company.
(x)(a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3(x)(a) of the Order is not applicable.
(b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.
(xi)(a) No fraud by the Company and no material fraud on the Company has been noticed or reported during the year.
(b)No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report.
(c)No whistle blower complaints received by the Company during the year (and upto the date of this report), hence not applicable.
(xii) The Company is not a Nidhi Company and hence reporting under this of the Order is not applicable.
(xiii) In our opinion, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 with respect to applicable transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.
(xiv) (a) In our opinion based on our examination, the Company is required to have an Internal Audit System under section 138 of the Companies Act 2013 but Internal Audit is not being carried out in the reporting period due to suspension of company operation.
(xv)In our opinion during the year the Company has not entered into any non-cash transactions with its Directors or persons connected with its directors. and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.
(xvi)(a) In our opinion, the Company is not required to be registered under section 45 -IA of the Reserve Bank of India Act, 1934. Hence, reporting under clause 3(xvi)(a), (b) and (c) of the Order is not applicable.
(b) In our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3(xvi)(d) of the Order is not applicable.
(xvii)The Company has incurred cash losses of Rs 5975.95 lacs during the financial year covered by our audit and Rs 47.10 lacs in the immediately preceding financial year.
(xviii) The Previous Statutory Auditor resigned before the completion of the Statutory Audit of the reporting period. There were no objections or any additional concerns raised by the outgoing auditor.
(xix) On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, we have observed that the company continued to be non operational and no major development has happened over previous reporting period, there is no certainty that Company is capable of meeting its liabilities existing at the date of balance sheet We further state that our reporting is based on the facts up to the date of the audit report . (xx) The Company is not eligible for any Corporate Social Responsibility under section 135 of the Companies Act 2013 hence reporting under clause (xx) of the Order is not applicable.
(xxi)The Company does not have any Subsidiary or associate and Consolidated Audit report is not applicable hence reporting under clause (xxi) of the Order is not applicable
|For B D S & Co.|
|Firm Registration No. 326264E|
|(Bharat D Sarawgee)|
|Membership No.: 061505|
|Date: 23rd Day of August, 2022|
Annexure - B to the Auditors’ Report
Report on the Internal Financial Controls 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 M/s. SHREE HANUMAN SUGAR & INDUSTRIES LTD ("the Company") as of 31 March 2022 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s 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 company’s 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.
Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting 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 Institute of Chartered Accountants of India. 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 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 controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditor’s 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 Company’s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting 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 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
Because of the inherent limitations of internal financial controls over financial reporting, 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 to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2022, 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.
|For B D S & Co.|
|Firm Registration No. 326264E|
|(Bharat D Sarawgee)|
|Membership No.: 061505|
|Date: 23rd Day of August, 2022|