Sita Shree Food Products Ltd Auditors Report.

INDEPENDENT AUDITOR’S REPORT

To,

The Members,

Sita Shree Food Products Ltd.,

INDORE

Report on the Standalone Financial Statements

We have audited the accompanying Standalone financial statements of Sita Shree Food Products Limited, which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (Including other comprehensive income), the statement of changes in equity and the statement of Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone 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 Standalone financial statements that give a true and fair view of the financial statements, financial performance including other comprehensive income, cash ows and changes in equity of the company in accordance with the Indian Accounting Standards (IND AS) prescribed under section 133 of the act, read with the companies (Indian Accounting Standards) Rules, 2015 , as amended, and other accounting principles generally accepted in India. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of the company and for preventing and detecting fraud & other irregularities; selection and application of appropriate accounting policies; making judgment and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of accounting records, relevant to the preparation and presentation of Standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Standalone financial statements based on our audit.

We have taken into account the provisions of the act, 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 there under and order issued under section 143(11) of the act.

We conducted our audit in accordance with the Standards on Auditing 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Standalone financial statements. 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. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the Standalone financial statements that give 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 company’s directors, as well as evaluating the overall presentation of the Standalone 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone 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 accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2018;

(b) In the case of the Profit and Loss Account, total other comprehensive income, for the year ended on that date;

(c) In the case of the statement of changes in Equity and;

(d) In the case of the Cash Flow Statement, of the cash ows for the year ended on that date

Emphasis of Matter

We draw attention to the following matters in the notes to the financial statement: a) Note 14 in the financial statement which indicates that the Company has accumulates losses and its net worth has been fully eroded, the company has incurred a net loss of 332970873/- during the current year and the company’s current liabilities exceeds its current assets as at the Balance Sheet date. The financial statements of the company have been prepared on a Going Concern basis. b) Note 24 in the financial statement which indicates the amount of revenue from operations which is Rs. (39884531)/- . There was a sales return from a party of Rs. 95249440/- during the year which was deteriorated and was sold as scrap at negligible value as it was un t for human/ animal consumption, and thus revenue from operations turned out to be negative in value.

Our opinion is not modified in respect of these matters. Other Matters

The comparative financial information of the Company for the year ended 31st March 2017 and the transition date opening balance sheet as at 1st April 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31st March 2017 and 31st March 2016 dated 30 May, 2017 and 6 June 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the IND AS, which have been audited by us.

As per the information and explanations gives to us by the management of the company, during previous year forensic audit was conducted by the Banks and financial institutions and on the basis of that audit a consortium meeting was held on 31st January 2018 with the management of the company, the minutes of which states that there were no adverse ndings in the FAR and lenders are ready to consider the OTS proposal of the company. We are unable to form any opinion regarding this matter as Forensic Audit Report was not provided to us.

Our opinion is not modified in respect of these matters. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure 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 to the extent applicable, that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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, Statement of Profit and Loss including other comprehensive income, statement of changes in Equity and statement of Cash Flow dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Indian Accounting Standards prescribed under section 133 of the act read with the companies (Indian Accounting Standards) Rules, 2015, as amended.

e. 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 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’. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the company’s internal financial control over financial reporting.

g. With respect to the other matters to be included in the Auditor’s report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 in our opinion and to best of our information and according to the explanation given to us.

1) The company has disclosed the impact of pending litigation on its financial position in its financial statements.

2) The company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

3) There has been no delay in transferring amounts, required to be transferred, to the investor’s education and protection fund by the company.

For: VINAY GANDHI & ASSOCIATES
CHARTERED ACCOUNTANTS
(Regn.No.014442C)
(VINAY GANDHI)
Place: Indore PROPRIETOR
Date: 30/05/2018 M.NO. 075972

ANNEXURE A TO THE AUDITORS REPORT

Annexure to the Auditor’s Report (referred to in paragraph 3 of our Report of even date to the members of Sita Shree Food Products Ltd., Indore on the Financial Statement for the year ended 31st March, 2018).

1.1. As informed to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

1.2. As informed to us, all the fixed assets have been physically verified during the year by the management at reasonable intervals and which is in our opinion is reasonable having regards to the size of the Company. No material discrepancies were noticed on such verification.

1.3. According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of Immovable Property are held in the name of the company. The discrepancies noticed on physical verification were not material and have been dealt in books of accounts.

2. The inventories have been physically verified during the year at reasonable intervals by the management. The discrepancies noticed on physical verification were not material and have been dealt in books of accounts.

3. According to the information and explanations given to us, the Company has received unsecured loans to 1/2/3 bodies corporate, covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company’s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations. (c) There is no overdue amount remaining outstanding as at the year-end.

4. In our opinion and according to the information and explanations given to us, there are no loans and guarantee granted in respect of the provisions of the Section 185 and 186 of the Companies Act, 2013; however based on our examination of the records of the Company we report that investments has been made in accordance with the provision of Section 186 of the Act.

5. According to the information and explanations given to us, the Company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.

6. We have broadly reviewed the cost records maintained by the Company pursuant sub-section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

7.1. The company is not regular in depositing undisputed & disputed statutory dues including Provident Fund Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities and we have been noticed that there are following arrears of outstanding statutory dues as at the last day of the financial year under Audit for a period of more than six months from the date they became payable as on 31.03.2018.

S.NO. STATUTORY LIABILITIES AMOUNT
1 INTEREST ON TAX 694077
2 PF PAYABLE 245512
3 PROFESSIONAL TAX EMPLOYEE 145400
4 DIVERSION TAX 383370
5 SERVICE TAX PAYABLE 37195
6 TDS 1960847
7 WORK CONTRACT TAX 600

7.2 Details of Dues of Income Tax, Sales tax which have not been deposited as at March31, 2018 On account of dispute are given below:

Nature of the statute Nature of dues Authorities where dispute is pending Period to which the amount relates Amount in Rs. Lakhs
M.P. Commercial tax Sales tax ACTO 2013-2014 47.90
M.P. Commercial tax Sales tax ACTO 2014-2015 486.00
The Income tax act 1961 Income Tax Commissioner 2011-12 801.61
The Income tax act 1961 Income Tax CIT(A) 2014-15 358.84

8.1 According to the information and explanations given to us, the Company has defaulted in repayment of term loan installment as well as interest on various credit facilities obtained by the company from banks and other financial institution. Banks & loan accounts of the company have been classified as NPA by Banks. The Company doesn’t have any borrowing by way of debentures from government.

8.2 Entire Net worth of the company has been eroded and the company suffers heavy losses. The accumulated losses is Rs.168,18,80,075/- as compared to Equity capital of company Rs. 27,83,41,740/-

9. To the best of our knowledge and belief and according to the information and explanations given to us and based on documents provided to us ,the company has not raised moneys by way of initial public offer or further public offer (including debt instruments)during the year or term loans and hence reporting under clause 3 (9) of the order is not applicable to the company.

10. During the course of our examination of the books of accounts and record of the company and according to the information and explanations given to us, we have neither come across any instance of material fraud on the company by its officers/employees or by the Company noticed or reported during the year nor have we been informed of any such case by the management.

11. Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

13. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with Section 177 and 188 of the Act where applicable and details of such transactions to the extent required has been disclosed in the financial statements as required by the applicable Indian accounting standards.

14. During the year, the company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under clause 3(14) of the order is not applicable to the company.

15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non- cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

16. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

For: VINAY GANDHI & ASSOCIATES
CHARTERED ACCOUNTANTS
(Regn.No.014442C)
(VINAY GANDHI)
Place: Indore PROPRIETOR
Date: 30/05/2018 M.NO. 075972