JK Sugar Ltd Merged Auditor Reports

JK SUGAR LIMITED ANNUAL REPORT 2011-2012 AUDITORS REPORT TO THE MEMBERS OF JK SUGAR LIMITED 1. We have audited the attached balance sheet of JK SUGAR LIMITED, as at 31st March, 2012, and also the statement of profit and loss and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 {as amended by the Companies (Auditors Report) (Amendment) Order, 2004} issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 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 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to above, we report that: (i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; (ii) 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; (iii) The balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account; (iv) In our opinion, the balance sheet, statement of profit and loss and cash flow statement dealt with by this report comply with the accounting standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; (v) On the basis of written representations received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956; (vi) In our opinion and to the best of our information and according to the explanations given to us, said accounts give the information required by the Companies Act, 1956, 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 31st March, 2012; (b) In the case of the statement of profit and loss, the loss for the year ended on that date; and (c) In the case of the cash flow statement, of the cash flows for the year ended on that date. For S.S. KOTHARI MEHTA & CO. Chartered Accountants Firms Registration No. 000756N (CA K.K. Tulshan) Partner Membership No. 085033 Place : New Delhi Date : 30th May, 2012 ANNEXURE TO THE AUDITORS REPORT (As referred to in paragraph 3 of our report to the members of JK SUGAR LIMITED on the accounts as at & for the year ended 31st March 2012) 1. In respect of Its Fixed Assets: (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable. (c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year. 2. In respect of its inventory: (a) As explained to us, the inventories of finished and semi-finished goods and raw materials were physically verified during the year by the Management. (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. 3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the act. (b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties. 4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of a continuing failure to correct major weaknesses in the aforesaid internal control procedures. 5. (a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered. (b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time. 6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under. 7. In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business. 8. We have broadly reviewed the books of account maintained by the Company pursuant to the Order made by the Central Government of India for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prime facie, the prescribed records have been made and maintained. However, we have not made a detailed examination of the said records. 9. (a). According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income-tax, sales-tax, service tax, wealth-tax, customs duty, excise duty, cess and other statutory dues applicable to it. There are no undisputed amounts payable in respect of income tax, wealth tax, sales tax, service tax, customs duty and excise duty were outstanding, as at 31st March, 2012 for a period of more than six months from the date they became payable. (b). According to the records of the Company examined by us and the information and explanations given to us, there are no dues of sales tax, income tax, service tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute, other than the following:- Sl. Name of the Statue A B C No. & Nature of the dues 1. Income Tax Act, 1961: Income Tax 39.25 2004-05 Dy Commissioner of Income Tax Circle-4(1), Delhi 2. Service Tax under finance Act, 1994: Service Tax 3.23 Nov 04 to Custom, Excise on GTO Sep 07 & Service Tax Appellate Tribunal (CESTAT) 3. Central Excise Act, 1944: 10% of sale value 807.26 (Stay has April 03 to Custom, Excise & of electricity been granted by Dec. 07 Service Tax assuming CESTAT against Appellate electricity as the reversal of Tribunal a exempted goods CENVAT of Rs. (CESTAT) 5.26 Lacs towards exempted goods. The impugned order may not be tenable) (Also refer Note B.3 in Note No: 28) 4. Central Excise Act, 1944: Reversal of 1.13 Sept. 06 to Dy. Commissioner CENVAT credit Aug 07 Central Excise, taken on MS Bareilly plate/HR plate/Grand packing 5. Central Excise Act, 1944: Excise duty 58.42 (out of 2006-07 Custom, Excise payable on burnt this Rs. 48.42 & Service Tax molasses due to has already Appellate auto combustion been provided Tribunal in the season in the books) (CESTAT) 2006-07 6. Central Excise Act, 1944: Excise duty 2.69 Sept. 07 to Asstt. demands April 08 Commissioner Central Excise, Bareilly 7. Central Excise Act, 1944: Reversal of 2.71 Aug. 08 to Dy. Commissioner CENVAT Credit April 09 Central Excise, taken on HR Bareilly Coil/HR Plates 8. Central Excise Act, 1944: Reversal of 0.57 2010-11 Dy. Commissioner CENVAT Central Excise, Credit Bareilly taken on spares of cane carrier /Asbestos packing/ Jointing sheet A = Amount Due (Rs./Lakhs.) B = Period to which the amounts relates C = Forum where disput is pending 10. The accumulated losses of the company as at the close of the financial year amounts to Rs. 3324.50 lacs are not less than 50% of its net worth as on that date. The company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. 11. In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to banks, financial institutions and debenture holders. 12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to the company. 14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments. 15. According to the information and explanations given to us, corporate guarantee issued by the company for loan taken by others from banks is not prejudicial to the interest of the company. 16. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the term loans taken by the Company have been applied for the purpose for which they were obtained. 17. According to the information and explanations given to us and on the basis of an overall examination of the balance sheet of the Company, in our opinion, generally there are no funds raised by the company on short term basis, which have been used for long term investment. 18. During the year, the Company has made a preferential allotment of shares to a company covered in the register maintained under section 301 of the Companies Act, 1956. The price at which it is issued is not prejudicial to the interest of the company. 19. According to the information and explanations given to us, during the year covered by our audit report, the Company has not issued any debentures. 20. During the year covered by our audit report, the Company has not raised any money by public issue. 21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management. For S.S. KOTHARI MEHTA & CO. Chartered Accountants Firms Registration No. 000756N (CA K.K. Tulshan) Partner Membership No. 085033 Place : New Delhi Date : 30th May, 2012