We have audited the accompanying standalone financial statements of
SIMBHAOLI SUGARS LIMITED ("the Company"), which comprise the Balance
Sheet as at March 31, 2015, the Statement of Profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of the
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 position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
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 frauds and other irregularities; selection
and application of appropriate 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 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
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 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 financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the 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 financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the 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
IIn 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, of the state of affairs of the Company as
at March 31, 2015, and its loss and its cash flows for the year ended
on that date.
Emphasis of Matter
We draw attention to the following matters in the Notes to the
financial statements:
1. Note 20 in the financial statements which indicates that the
Company has accumulated losses and its net worth has been fully eroded,
the Company has incurred a net cash loss during the current and
previous year(s) and, the Company's current liabilities exceeded its
current assets as at the balance sheet date. These conditions, along
with other matters set forth in Note 20, indicate the existence of a
material uncertainty that may cast significant doubt about the
Company's ability to continue as a going concern. However, the
financial statements of the Company have been prepared on a going
concern basis for the reasons stated in the said Note.
2. Note 4 to the financial statements relating to sale of power
co-generation divisions of the Company in an earlier year and the
balance interest bearing consideration of Rs. 8,180.15 lacs
outstanding as on March 31, 2015, which would be discharged in the
manner laid down under the Business Transfer Agreements (BTAs). Out of
this, consideration amounting to Rs. 5,682.19 lacs is to be discharged
in cash on or before the date falling forty eight months from the date
of the BTAs or on achieving the closing in terms of the Joint Venture
Agreement with Sindicatum Captive Energy Pte Limited, whichever is
earlier.
3. Note 20(b) which sets out the position regarding sugarcane subsidy
aggregating Rs. 4,738.67 lacs accounted by the Company in these
financial statements. As indicated in this note, necessary adjustments
to subsidy so accounted for would be made on settlement and receipt
thereof from the State Government.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, 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 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 it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) The going concern matter described in sub-paragraph
(1) under the Emphasis of Matters paragraph above, in our opinion, may
have an adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164
(2) of the Act.
(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 the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements. Refer note 6 and note
18 to the financial statements;
ii. The Company did not have any material foreseeable losses on
long-term contracts including derivative contracts;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory
Requirements' section of our report of even date)
(i) In respect of the Company's fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The Company has a programme of physically verifying all its fixed
assets over a period of three years, which in our opinion is reasonable
having regard to the size of the Company and nature of its fixed
assets. In accordance with this programme, certain fixed assets were
physically verified by the Management during the year. According to the
information and explanations given to us the discrepancies noticed on
such verification between the physical balances and the fixed assets
records were not material and have been properly dealt with in the
books of account.
(ii) In respect of the Company's inventories:
(a) Inventories have been physically verified during the year by the
Management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) According to the information and explanations given to us, the
Company has, during the year, granted interest free unsecured loans
aggregating Rs 1,515.46 lacs to a wholly owned subsidiary covered in
the register maintained under section 189 of the Act. At the year end,
the outstanding loan granted to a wholly owned subsidiary aggregates to
Rs 2,394.81 lacs. In respect of such loans:
(a) According to the information and explanations given to us, the
above loan is repayable on demand and has I not been recalled during
the year.
(b) According to the information and explanations given to us, there
are no overdue amount remaining outstanding as at the year end.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchases of inventory and fixed assets and the sale of goods and
services. During the course of our audit, we have not observed any
major weakness in such internal control system.
(v) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended and prescribed by the Central Government under sub-section
(1) of Section 148 of the Companies Act, 2013, and are of the opinion
that, prima facie, the prescribed cost records have been made and
maintained. We have, however, not made a detailed examination of the
cost records with a view to determine whether they are accurate or
complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Wealth Tax, Sales Tax, Value Added Tax and
other material statutory dues applicable to it and not been regular in
depositing dues of Provident Fund, Income-tax, Service Tax, Customs
Duty, Excise Duty and Cess with the appropriate authorities. As
explained to us, the provisions of the Employees' State Insurance Act,
1948 are not applicable to the Company.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other
material statutory dues in arrears as at March 31, 2015 for a period of
more than six months from the date they became payable.
(c) Details of dues of Excise Duty, Service Tax, Value Added Tax and
Sales Tax (Trade Tax) which have not been deposited as on March 31,
2015 on account of disputes are given below:
Statute Nature of Forum where Period to Amount, Amount
the dues dispute is which the involved paid under
pending amount (Rs. lacs) protest
relates (Rs. lacs)
U P.
Trade
Act Trade tax Trade Tax
Appellate 1984-1985 0.43 0.43
Tribunal 1995-1996 3.18
Central
Excise Excise
duty Commissioner 2006-2007 39099 45.03
Act (Appeals) 2012-2013 558
Customs,
Excise & 2002-2003 0.70 0.70
Service tax
Appellate 2004-2005 0.28 0.28
Tribunal 2005-2006 2.77 2.77
2010-2011 9.37 6.56
2007-2011 0.37 -
High Court, 2005-2006 2.78 -
Allahabad 1979-1980 11.01 11.01
Fnance Service Customs,
Excise &
Act,
1994 Tax Service tax
Appellate 2006-2007 83.06 14.87
Tribunal
State
Excise Excise
Duty High Court, 2001-2002 9.26 -
Duty Allahabad
* Amount as per demand orders including interest and penalty wherever
indicated in the order.
We are informed that there are no disputed dues in respect of
Income-tax, Customs Duty, Wealth Tax and Cess.
In the following instances the concerned statutory authority is in
appeal against the favourable order received by the Company.
Statute Nature of Forum where Dispute Period to Amount
Dues is pending which the involved
amount (Rs. lacs)
relates
Central
Excise Excise Duty Customs, Excise & 2008-09 71.69
Act Service tax
Appellate
Tribunal
High Court,
Allahabad 1995-1996 9.92
U P.
Trade Trade tax High Court,
Allahabad 1996-97 59.96
Tax Act
Finance
Act, Service
1994 tax Customs,
Excise &
Service 2006-07 0.42
tax Appellate
Tribunal
(d) In our opinion and according to the information and explanations
given to us, the amount required to be transferred to investor
education and protection fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules made
thereunder has been transferred to such fund within time.
(viii) The accumulated losses of the Company at the end of the current
year are not less than fifty percent of its net worth and the Company
has incurred cash losses during the financial year covered by our audit
and in the immediately preceding financial year.
(ix) On the basis of our audit procedures and as per the information
and explanations given by the management, the Company has delayed
repayment of dues to banks and financial institutions in respect of
term loans, working capital demand loans and interest liabilities.
Lenders Amount (including interest) Period of delays
(Rs. lacs)
Banks and
financial 1,399.15 01-30 days
institutions 848.30 31-60 days
649.29 61-90 days
551.02 Above 90 days
34,102.57 Not yet paid
The Company has not issued any debentures during the year.
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantee given by the
Company for loan taken by others from banks is not, prima facie,
prejudicial to the interests of the Company.
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained.
(xii) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud by the Company and
no material fraud on the Company has been noticed or reported during
the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 015125N)
Jaideep Bhargava
GURGAON Partner
May 30, 2015 (Membership No. 090925) |