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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Sakthi Sugars Ltd. இன் முடிவுகள்

Mar 31, 2018

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of Sakthi Sugars Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS Financial Statements

2. 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 Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

3. 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 Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

5. 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.

6. We conducted our audit of the Standalone Ind AS financial statements 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 Ind AS financial statements are free from material misstatement.

7. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 controls relevant to the Company’s 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 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 Standalone Ind AS financial statements.

8. 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.

Basis for Qualified Opinion

9. As per the agreement entered, no interest has been provided on the advance given to the Associate Company. Non-provision of interest at least to the extent of Interest on Government Securities is in contravention of sub-section (7) of Section 186 of the Act. Consequential impact of the same on the loss for the year/accumulated loss is not ascertainable. This matter was also qualified in the report of the predecessor auditor on the financial statements for the year ended March 31, 2017.

Qualified Opinion

10. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effect of the matters described in the Basis for Qualified Opinion Paragraph above, the aforesaid Standalone 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 accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31, 2018, and its loss(financial performance including other comprehensive income),and its cash flows for the year ended on that date.

Emphasis of Matter

11. Attention of the members is invited to Note No. 41 of the financial statements, wherein the directors have detailed the reasons for compiling the financial statements on a going concern basis. The appropriateness of the said basis is subject to the Company adhering to the steps for disposal of investments and non-core assets, restructuring of dues to lenders/creditors, rationalization of operation, etc. We have relied on the representations made to us by the management. Our opinion is not modified in this regard.

Other Matters:

12. The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening Balance Sheet as at April 01, 2016 included in these Standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Accounting Standards prescribed under Section 133 of the Act read with relevant rules issued thereunder as applicable, audited by the predecessor auditor whose report for the year ended March 31, 2017 and March 31, 2016 dated May 27, 2017 and May 30, 2016 respectively expressed a modified opinion on those standalone financial statements, as adjusted for the difference in the accounting principles adopted by the company on transition to the Ind AS, which have been audited by us. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

13. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in exercise of the powers conferred by 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, to the extent applicable.

14. 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 (including other comprehensive income), 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 Standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

(e) The matters described in the Basis for Qualified Opinion paragraph above, in our opinion, may not 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, 2018 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.

(g) 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”; and

(h) 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 as at March 31, 2018, on its financial position in its Standalone Ind AS financial statements as referred to in Note No.40(A) to the 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 are no amounts that are required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure - A to the Independent Auditors’ Report

Re : SAKTHI SUGARS LIMITED (the “Company”)

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such physical verification.

(c) The title deeds of immovable properties, as disclosed on Note No.2 on Property, Plant and Equipment to the standalone financial statements, are held in the name of the Company, except for land of Soya division acquired, pursuant to scheme of amalgamation having a carrying value of Rs.2438.28 lakhs as at March 31, 2018.

ii. As explained to us, inventories have been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification.

iii. The Company has granted unsecured loan in earlier years to the Associate Company covered in the register maintained under Section 189 of the Act and outstanding balance of which, as at the date of balance sheet, is Rs.2263.93 lakhs.

(a) As per the terms and conditions of the loan granted to the Associate Company, no interest is chargeable. Non-charging of interest is prejudicial to the interest of the company.

(b) The loan granted is repayable on demand and the repayment of the principal amount is as demanded and thus, there has been no default on the part of the party to whom the money has been lent.

(c) In respect of the aforesaid loan, as per the terms and conditions, there is no amount which is overdue for more than ninety days.

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, in respect of the investments made, security provided,and guarantee given. With respect to a loan given to the Associate, no interest has been charged in contravention of stipulations of sub-section (7) of Section 186 of the Act and with the exception of the above, Company has complied with the provisions of Section 185 and 186 of the Act. As per management representation, interest has not been charged as per the terms of agreement and considering the economic interest of the company in the entity.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the rules framed thereunder.

vi. We have broadly reviewed the cost records maintained by the company specified under sub-section (1) of Section 148 of the Act and are of the opinion that the prescribed accounts and records have been made and maintained.

vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company is generally regular in depositing undisputed statutory dues with appropriate authorities except undisputed statutory dues relating to provident fund and employee state insurance, that have not generally been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employee state insurance, income-tax, sales tax, service tax, duty of customs, duty of excise, value added tax,cess, goods and services tax and other material statutory dues were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of duty of customs and value added tax, which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, duty of excise and service tax as at March 31, 2018, which have not been deposited on account of dispute, are as follows:

Name of the Statute

Nature of dues

Amount (Rs.in lakhs)

Period to which the amount relates

Forum where the dispute is pending

The Income Tax Act, 1961

Penalty

1,521.44

AY 2009-10

Commissioner of Income Tax (Appeals), Coimbatore

Tamilnadu General Sales Tax Act, 1959

Sales Tax

1056.09

28.25

1983-84 to 1995-96, 1989-90 to 1992-93, 1989-90 to 1994-95, 2000-01

Madras High Court, Chennai

Additional Commissioner (CT)/(RP), Chennai.

The Central Excise Act, 1944

Excise Duty

5.49

874.08

105.43

2002-03 2006-07, 2008-2015 2006-2007, 2008-2010

Madras High Court, Chennai CESTAT, Chennai

Commissioner of Central Excise, Madurai

The Bihar & Orissa Excise Act, 1915

Excise Duty

12.63

2002-03

High Court of Orissa, Cuttack.

Finance Act, 1994

Service Tax

284.79

1.47

2005, 2006, 2007, 2008, 2009-2013 2014-15

CESTAT, Chennai.

Commissioner of Central Excise (Appeals), Salem

viii. According to the records of the Company examined by us and the information and explanations given by the management, the Company has not issued debentures. The defaults by the Company as at the balance sheet date in repayment of loans to banks, financial institutions and Government are as under:

(a) Default in repayment of loans to Banks:

Particulars

Amount of default as at 31.03.2018 (Rs.in lakhs)

Period of Default

Principal

Interest

Principal

Interest

Rupee Term Loan from Bank of India

234.33

536.72

June 2016 to December 2017

April 2016 to February 2018

Term Loan from Bank of India

234.37

536.72

June 2016 to December 2017

April 2016 to February 2018

Corporate Loan from Bank of India

118.31

270.44

June 2016 to December 2017

April 2016 to February 2018

Working Capital Term Loan from Bank of India

83.27

190.34

June 2016 to December 2017

April 2016 to February 2018

Working Capital Term Loan from Bank of India

174.68

399.30

June 2016 to December 2017

April 2016 to February 2018

Funded Interest Term Loan from Bank of India

55.26

126.27

June 2016 to December 2017

April 2016 to February 2018

Funded Interest Term Loan from Bank of India

184.58

437.06

June 2016 to December 2017

April 2016 to February 2018

Rupee Term Loan from Punjab National Bank

2,718.20

2,146.76

October 2012 to January 2018

February 2013 to February 2018

Funded Interest Term Loan from Punjab National Bank

279.88

224.11

October 2012 to January 2018

February 2013 to February 2018

FCCB Term Loan from Axis Bank Limited

1,275.60

220.03

August 2017 to February 2018

August 2017 to February 2018

FCCB Term Loan from Bank of India

330.00

754.02

June 2016 to December 2017

April 2016 to February 2018

Soft Loan from Axis Bank Limited

-

47.91

--

January 2018 to February 2018

SEFASU Loans from Bank of India

2,243.25

483.38

October 2016 to February 2018

June 2017 to February 2018

SEFASU Loans from Indian Overseas Bank

1,724.50

497.68

April 2016 to February 2018

December 2016 to February 2018

(b) Default in repayment of loans to Financial Institutions:

Particulars

Amount of default as at 31.03.2018 (rs.in lakhs)

Period of Default

Principal

Interest

Principal

Interest

Asset Reconstruction Company (India) Limited [HDFC Bank Limited]

100.90

596.86

May 2016 to February 2018

May 2016 to February 2018

Asset Reconstruction Company (India) Limited [Canara Bank]

505.70

2,022.10

May 2016 to February 2018

May 2016 to February 2018

Asset Reconstruction Company (India) Limited [State Bank of India]

411.99

1,660.27

May 2016 to February 2018

May 2016 to February 2018

Asset Reconstruction Company (India) Limited [IDBI Bank]

151.20

911.52

May 2016 to February 2018

May 2016 to February 2018

Asset Reconstruction Company (India) Limited [Indian Overseas Bank]

325.94

1,325.31

May 2016 to February 2018

May 2016 to February 2018

Edelweiss Asset Reconstruction Company Limited [IDFC]

624.00

1,548.48

March 2017 to December 2017

March 2017 to December 2017

Asset Reconstruction Company (India) Limited [Allahabad Bank]

1,451.66

1,255.03

April 2013 to January 2018

April 2013 to February 2018

Edelweiss Asset Reconstruction Company Limited [Oriental Bank of Commerce]

174.25

1,779.86

March 2017 to December 2017

March 2017 to December 2017

(c) Default in repayment of loan to Government:

Particulars

Amount of default as at 31.03.2018 Rs.in lakhs)

Period of Default

Principal

Interest

Principal

Interest

Sugar Development Fund Loan

4,336.23

2,662.33

May 2013 to February 2018

May 2011 to February 2018

ix. The Company has neither raised any money by way of initial public offer or further public offer (including debt instruments) nor availed any term loan during the year. Accordingly, paragraph 3(ix) of the Order is not applicable.

x. According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not paid/provided any managerial remuneration during the year. Accordingly, paragraph 3(xi) of the Order is not applicable.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

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

xiv. During the year under review, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

xv. 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.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.

Annexure - B to the Independent Auditors’ Report

Referred to in paragraph 14(g) of the Independent Auditors’ Report of even date to the members of Sakthi Sugars Limited on the standalone Ind AS financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act’)

1. We have audited the internal financial controls over financial reporting of M/s. Sakthi Sugars Limited (“the Company”) as of March 31,2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. 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 Act.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on the Company’s 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 Act, 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 was established and maintained and if such controls operated effectively in all material respects.

4. 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.

5. 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

6. A company’s 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 company’s internal financial control over financial reporting includes those policies and procedures that:

(a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(b) 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 authorisations of management and directors of the company; and

(c) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. 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.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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 PK. NAGARAJAN & Co.,

Chartered Accountants

Firm Registration Number: 016676S

P.K. NAGARAjAN

Coimbatore Partner

May 30, 2018 Membership Number: 025679


Mar 31, 2015

We have audited the accompanying financial statements of SAKTHI SUGARS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss , 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 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 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 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 auditors' 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 operative 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 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 qualified audit opinion on the financial statements.

Basis for Qualified Opinion

The Company has not provided for the interest and guarantee commission claim of Rs.5444.38 lakhs (Rs. 4410 lakhs) made by its holding company. in our opinion, the losses of the Company are under stated to that extent. This matter was also qualified in our report on the financial statements for the year ended 31.03.2014.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters stated in the Basis for Qualified Opinion paragraph, the aforesaid 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 31st March, 2015, and its Loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note No:37 (a) and (b) to the financial statements which specifies the claims disputed/challenged by the company.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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 Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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, except for the effect of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid 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) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March , 2015, from being appointed as a director in terms of Section 164(2) of the Act.

(f) In our opinion, the matter described in the Basis for Qualified Opinion paragraph above, may not have an adverse effect on the functioning of the company.

(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 37 (a) and (b) to the 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 Protection Fund by the Company.

Annexure referred to the Independent Auditors' report of even date

Re : SAKTHI SUGARS LIMITED (the "Company")

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

ii. (a) Physical verification of the inventory has been conducted at reasonable intervals by the management.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventories. No material discrepancies were noticed on physical verification of inventory.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act.

iv. There is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v. In our opinion and according to the information and explanations given to us the company has not accepted any deposits from the public.

vi. We have broadly reviewed the cost records maintained by the Company specified under sub-section (1) of Section 148 of the Companies Act, and are of the opinion that, the prescribed accounts and records have been made and maintained.

vii. (a) According to the information and explanations given to us and the the records of the company verified by us, undisputed statutory dues, including provident fund, employees' state insurance, income-tax, sales-tax, service tax, duty of excise, duty of customs, value added tax, cess and other statutory dues have not generally been regularly deposited with appropriate authorities though the delays in deposit have not been serious. There are no such statutory dues as at the last day of the financial year, remaining in arrears for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us and records of the Company, the statutory dues that have not been deposited on account of dispute are as under:

Name of the Nature of Amount Period to which Statute dues (Rs. in lakhs) the amount relates

The Income Income Tax 7.60 AY 2010-11 Tax Act, 1961

Tamilnadu Sales Tax 1119.44 1983-84 to 1995-96 General Sales 28.25 2000-01 Tax Act, 1959

The Central Excise Duty 1916.49 2002-03, 2006-07 Excise Act, 1944 804.59 2006-07, 2008-2010 9.13 2006-07, 2009, 2009-2011 12.63 1992-93

Finance Act, 1994 Service Tax 335.65 2005, 2006, 2007, 2008 & 2009-2011 33.52 2006, 2009-10, 2010-11 & 2011-12

Name of tha statute Forum where the dispute is pending

The Income Tax Act.1961 Commissioner of Income Tax (Appeals) Coimbatore.

Tamilnadu General Tax Act.1959 Madras High Court, Additional Commissioner (CT)/(RP), Chennai.

The central Excise Act.1944 Madras High Court, Chennai. CESTAT, Chennai. Commissioner of Central Excise (Appeals). High Court of Orissa, Cuttack . Finance Act.1994 CESTAT, Chennai. Commissioner of Central Excise (Appeals).

(c) The amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Act and rules made there under has been transferred to such fund within time.

viii. In our opinion, the company's accumulated losses at the end of the financial year are more than fifty percent of its Net worth. The Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

ix. Defaults by the Company in repayment of dues to financial institutions and banks are as under:

(a) Default in repayment of dues to Banks:

Particulars Amount of Default Period of Default Amount since paid (Rs. in lakhs) (Rs. in lakhs)

Principal 8414.85 Since April 2012 121.16 (May 15)

Interest 5873.20 Since April 2012 858.84 (May 15)

(b) Default in repayment of dues to an Institution:

Particulars Amount of Default Period of Default Amount since paid (Rs. in lakhs) (Rs. in lakhs)

Principal 10193.46 Since January 2012 Nil

Interest 5997.58 Since January 2012 483.30 (May 15)

(c) The Company has not accepted any debentures.

x. The Company has given guarantees for loans taken by other corporate. Based on the management representation and other details obtained, we are of the opinion that the terms and conditions of the guarantees are not prejudicial to the interest of the company.

xi. Term loans availed during the year have been applied for the purpose for which the loans were obtained.

xii. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For P.N. RAGHAVENDRA RAO & Co.

Chartered Accountants

Firm Registration Number : 003328S

P.R.VITTEL

Place : Coimbatore Partner

Date : 28.05.2015 Membership Number : 018111


Mar 31, 2014

1. We have audited the accompanying financial statements of Sakthi Sugars Limited (the "Company"), which comprise the Balance Sheet as at March 31,2014, the Statement of Profit and Loss and Cash Flow Statement 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.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these 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 Standards notified under ''the Companies Act, 1956'' (the "Act") read with the General Circular 15/2013 dated September 13, 2013 of Ministry of Corporate Affairs in respect of the section 133 of the Companies Act 2013. This responsibility includes the design, implementation and maintenance of internal control 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

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. 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. In making those risk assessments, the auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

6. In our opinion, a sum of Rs.40.40 Crores included in Other Non-current Assets requires to be written off and the loss of the Company is under stated to that extent.

7. The Company has not provided for the interest and guarantee commission claim of Rs.44.10 Crores by its holding company. Hence in our opinion, the losses of the Company are under stated to that extent.

Qualified Opinion

8. In our opinion, and to the best of our information and according to the explanations given to us, except for the effect of the matters stated in the Basis for Qualified Opinion paragraph, the 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, 2014;

(b) in the case of the Statement of Profit and Loss, of 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.

Emphasis of Matter

9. We draw attention to Note No, 38(A) (iii) to the financial statement which specifies the claim challenged by the Company. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government in terms of sub-section (4A) of Section 227 of the Act (hereinafter referred to as 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 4 and 5 of the Order.

11. As required by Section 227(3) of the Act, we report 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 and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, except for the matters referred to in the Basis for Qualified Opinion paragraph, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated September 13, 2013 of Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013; and

(e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

Annexure referred to in paragraph 10 of our report of even date

Re : Sakthi Sugars Limited (the "Company")

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

(c) The Company has not disposed off substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

ii. (a) As explained to us, inventories have been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. (a) According to the information and explanations given to us, 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. Accordingly, the provisions of clause 4(iii) (a) to (d) of the Companies (Auditor''s Report) Order, 2003 ("CARO" or "Order") are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has taken unsecured loan amounting to Rs.57.44 crores from companies covered in the register maintained under section 301 of the Act. The maximum amount involved during the year is Rs.240.15 crores. The terms and conditions of the loan are not prima facie prejudicial to the interest of the company.

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, for the purchase of inventory, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

v. (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public during the year. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal with respect to acceptance of fixed deposits.

vii. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

ix. (a) According to the information and explanations given to us and the records of the Company verified by us, undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, excise duty, customs duty, cess and other material statutory dues as applicable, have been generally regularly deposited with the appropriate authorities during the year though there are slight delays in certain occasions.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales tax, wealth-tax, service tax, excise duty, customs duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us and records of the Company, the statutory dues that have not been deposited on account of any dispute are as under:

Name of the Nature of Amount Period to which Statute dues (Rs. in the amount relates Crores)

The Income Income Tax 60.85 2009-10 & 2010-11 Tax Act, 1961 0.46 2008-09

Tamilnadu Sales Tax 11.19 1983-84 to 1995-96 General Sales 0.28 2000-01 Tax Act, 1959

The Central Excise Duty 11.66 2002-03, 2006-07 Excise 4.45 2006-07, 2008-2010 Act, 1944 0.09 2006-07, 2009, 2009-2011 0.13 1992-93

Finance Act, Service Tax 3.56 2005, 2006, 2007 & 1994 2008,2009-2011 0.18 2006, 2009-10, 2010-11 & 2011-12 (Appeals).

PWD, State Water Charges 9.04 1964-65 to 1999-2000 Govt. of & 1993-94 to 2014 Tamilnadu

Orissa Water Charges 0.06 2004-05, 2005-06 Irrigation Act, 1959

Tamilnadu State 4.47 April 2004 to June 2007 Prohibition Administrative Act, 1937 Fees

Name of the Forum where the Statute dispute is pending

The Income Commissioner of Income Tax Tax Act, 1961 (Appeals) Coimbatore. Income Tax Appellate Tribunal, Chennai.

Tamilnadu Madras High Court, Chennai. General Sales Additional Commissioner (CT)/(RP), Tax Act, 1959 Chennai.

The Central Madras High Court, Chennai. Excise CESTAT, Chennai. Act, 1944 Commissioner of Central Excise (Appeals). High Court of Orissa, Cuttack.

Finance Act, CESTAT, Chennai. 1994 Commissioner of Central Excise PWD, State Madras High Court, Chennai. Govt. of Tamilnadu

Orissa High Court of Orissa, Cuttack. Irrigation Act, 1959

Tamilnadu Supreme Court. Prohibition Act, 1937

x. In our opinion, the Company''s accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

xi. According to the records of the Company examined by us and the information and explanations given by the management, the defaults by the Company as at the balance sheet date in repayment of dues to banks and to an institution are as under:

a) Default in repayment of dues to Banks:

Particulars Amount of Period of Default Amount since paid Default (Rs. in Crores) (Rs. in Crores)

Principal 101.10 April 2012 to 0.90 February 2014 (3rd May, 2014)

Interest 55.56 April 2012 to 0.32 February 2014 (3rd May, 2014)

b) Default in repayment of dues to an Institution:

Particulars Amount of Period of Default Amount since paid Default (Rs. in Crores) (Rs. in Crores)

Principal 14.37 January 2012 to Nil February 2014

Interest 5.41 January 2012 to Nil February 2014

c) The Company has not issued any debentures during the year.

xii. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

xv. The Company has given guarantees for loans taken by its subsidiaries the outstanding amounts as at March 31, 2014 is Rs.423.29 crores (Previous year Rs.375.05 crores). Based the Management representation, we are of the opinion that the terms and conditions of the guarantees are not prejudicial to the interest of the Company.

xvi. In our opinion, term loans availed during the year have been utilized for the purpose for which they were raised.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii. According to the information and explanations given to us, the Company has made preferential allotment of shares, during the year, to a company covered in the register maintained under section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the company.

xix. In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year.

xx. As informed to us, the Company has not raised any money by public issue during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable to the Company.

xxi. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For P N RAGHAVENDRA RAO & Co Chartered Accountants (Firm Regn. No. : FRN003328S)

P R VITTEL Coimbatore Partner 30th May 2014 M.No. 018111


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of Sakthi Sugars Limited (the "Company"), which comprise the Balance Sheet as at March 31,2013, the Statement of Profit and Loss and Cash Flow Statement 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.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these 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 Standards referred to in sub-section (3C)of Section 211 of''the Companies Act, 1956'' (the "Act"). This responsibility includes the design, implementation and maintenance of internal control 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

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. 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. In making those risk assessments, the auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements 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 Management, as well as evaluating the overall presentation of the financial statements.

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

Audit Qualification

6. In our opinion, a sum ofRs. 50.51 Crores included in Other Non-current Assets requires to be written off and the loss of the Company is under stated to that extent.

Opinion

7. In our opinion, and to the best of our information and according to the explanations given to us, except for the effect of the matter stated in paragraph 6 above, the 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 31,2013;

(b) in the case of the Statement of Profit and Loss, of 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.

8. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government in terms of sub-section (4A) of Section 227 of the Act (hereinafter referred to as 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 4 and 5 of the Order.

9. As required by Section 227(3) of the Act, we report 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 ouraudit;

(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 and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, except for the matter referred to in paragraph 6 above, 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 sub-section (3C) of Section 211 of the Act; and

(e) On the basis of written representations received from the directors as on March 31,2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

Annexure referred to in paragraph 8 of our report of" even date

Re .Sakthi Sugars Limited (the "Company")

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

(c) The Company has not disposed off substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

ii. (a) As explained to us, inventories have been physically verified by the management at regular intervals during the year. In ouropinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. (a) According to the information and explanations given to us, 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. Accordingly, the provisions of clause 4(iii) (a) to (d) of the Companies (Auditor''s Report) Order, 2003 ("CARO" or "Order") are not applicable to the Company.

(b) According to information and explanations given to us, the Company has taken unsecured loan amounting to Rs.125 crores loans from a company covered in the register maintained under section 301 of the Act. The Maximum amount involved during the year is Rs. 215 crores. The terms and conditions of the loan were not prima facie prejudicial to the interest of the company.

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, for the purchase of inventory, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

v. (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public during the year. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal with respect to acceptance of fixed deposits.

vii. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

ix. (a) According to the information and explanations given to us and the records of the Company verified by us, undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, excise duty, customs duty, cess and other material statutory dues as applicable, have been generally regularly deposited with the appropriate authorities during the year though there are slight delays in few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales tax, wealth-tax.service tax, excise duty, customs duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and records of the Company, the statutory dues that have not been deposited on account of any dispute are as under:

Nature of the Amount Period to which Forum where the dispute disputed dues (Rs. in Crores) the amount relates is pending

Income Tax 63.26 2004-05, 2006-07 & 2009-10 Commissioner of Income Tax (Appeals) Coimbatore.

0.46 2008-09 Income Tax Appellate Tribunal, Chennai.

Sales Tax 1.28 1993-94 Sales Tax Appellate Tribunal, Coimbatore

8.03 1989-90 to 1992-93 Madras High Court, Chennai.

0.28 2000-01 Additional Commissioner (CT)/(RP), Chennai.

Excise Duty 11.66 2002-03, 2006-07 Madras High Court, Chennai.

4.45 2006-07,2008-2010 CESTAT, Chennai.

0.22 2006-07, 2007-08, 2009-2011 Commissioner of Central Excise (Appeals).

0.13 1992-93 High Court of Orissa, Cuttack.

Service Tax 3.54 2005,2006,2007 & 2008 CESTAT, Chennai.

0.14 2006, 2009-10, 2010-11 & Commissioner of Central

2011-12 Excise (Appeals).

State Administrative 4.47 April 2004 to June 2007 Supreme Court. Fees

x. In our opinion, the Company''s accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year the Company had not incurred cash loss.

xi. According to the records of the Company examined by us and the information and explanations given by the management,

c) The Company has not accepted any debentures during the year.

xii. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

xv. The Company has given guarantees for bank loans taken by subsidiaries and the outstanding amount of such loans as at the balance sheet date is Rs. 375.05 crores (Previous year: Rs.408.85 crores). Based on the management''s representation, we are of the opinion that the terms and conditions of the guarantees are not prejudicial to the interest of the company.

xvi. In our opinion, term loans availed during the year have been utilised for the purpose for which they were raised.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii. During the year, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act.

xix. In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year.

xx. As informed to us, the Company has not raised any money by public issue during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable to the Company.

xxi. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For P N RAGHAVENDRA RAO & Co

Chartered Accountants

(ICAI Regn. No. : FRN003328S)

R VITTEL

Coimbatore Partner 28th May 2013 M. No. 018111


Mar 31, 2012

We have audited the attached Balance Sheet of Sakthi Sugars Limited as at 31st March 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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.

I. As required by the Companies (Auditor's Report) Order 2003 issued by the Central Government of India in terms of sub-section (4a) of section 227 of the Companies Act, 1956, we furnish below a statement on the matters specified in paragraphs 4 and 5 of the said Order.

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year at reasonable intervals and no material discrepancies were noticed on such physical verification.

c. The Company has not disposed off substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

ii. In respect of its inventories:

a. As explained to us, inventory has been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. 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. Accordingly, clauses 4(iii)(a) to (g) of the Order are not applicable to the company.

During the year the company has taken unsecured loans totalling to Rs. 147.87 crores from two companies covered in the register maintained under section 301 of the Act (Maximum amount outstanding is Rs.165.87 crores).The terms and conditions of the loan are prima facie not prejudicial to the interest of the company.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in the internal control system.

v. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register maintained under that section.

b. In our opinion and according to the information and explanations furnished to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The company has not accepted any fixed deposits during the year. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal with respect to acceptance of fixed deposits.

vii. In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

viii. We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained.

ix. In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues such as Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth Tax, Service tax, Customs Duty, Excise duty and Cess have been deposited with the appropriate authorities with delay on certain occasions. There are no arrears of such statutory dues outstanding for a period of more than six months as at 31st March 2012.

b. The disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as under:

Particulars Period to which the Forum where dispute Amount matter pertains is pending (Rs. in Crores)

Income Tax 2008-09 Income Tax Appellate Tribunal, Chennai. 0.46

2009-10 Commissioner of Income Tax (Appeals), Coimbatore 53.86

Sales Tax 1993-94 Sales Tax Appellate Tribunal 1.28

1989-90 to 1992-93 High Court of Madras 8.03

1990-91 to 1996-97, 2000-01 Addl.Commissioner (CT) (RP) 3.15

Excise Duty Excise Duty:

2002-03, 2006-07 High Court of Madras 11.66

2008-09, 2009-10 CESTAT, Chennai 4.32

2007-08, 2009-2011 Commissioner of Central Excise (Appeals) 0.07

2002-2003 High Court of Orissa, Cuttack 0.13

Service Tax:

2005, 2006, 2007 & 2008 CESTAT, Chennai 3.92

Water Charges 1964-65 to 1999-2000 and 1993-94 to 2011 High Court of Madras 8.67

2004-05,2005-06 High Court of Orissa, Cuttack 0.06

State Admini strative April 2004 to June 2007 Supreme Court 4.47 fees

x In our opinion, even considering the quantifiable effect of qualification cited in Para II, the accumulated losses at the end of the financial year are less than 50% of its net worth. The company has not incurred cash loss during the current financial year and has incurred cash loss during the previous year.

xi According to the records of the company examined by us and the information and explanations given to us, the defaults by the company as at 31st March 2012 to banks and an institution are as under :

To Banks

Particulars Rs. in crores Period of default Since paid (Rs. in crores)

Principal 74.74 June 2011 to February 2012 74.63 (4.4.2012 & 10.4.2012)

Interest 25.71 June 2011 to February 2012 25.71 (4.4.2012 & 10.4.2012)

To an Institution

Particulars Rs. in crores Period of default Since paid (Rs. in crores)

Principal 8.62 June 2011 to February 2012 5.75 (4.4.2012 & 10.4.2012)

Interest 3.06 June 2011 to February 2012 2.04 (4.4.2012 & 10.4.2012)

The Company has not defaulted in repayment of dues to debenture holders.

xii In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

xiii The Company is not a chit fund or a nidhi/mutual benefit fund/society.

xiv The company is not dealing or trading in shares, securities, debentures and other investments.

xv. The company has given guarantees for bank loans taken by subsidiaries and the outstanding amount of such loans as at 31st March 2012 is Rs.408.85 crores (Previous year Rs.374.70 crores). Based on the Management's Representation, we are of the opinion that, the terms and conditions of the guarantees are not prejudicial to the interest of the company.

xvi In our opinion, the term loans have been applied for the purpose for which they were raised.

xvii According to the information and explanations given to us and on overall examination of the Balance Sheet of the company, we are of the opinion that during the period the company has not utilised funds raised on short term basis for long term investments.

xviii During the year, the Company has not made any preferential allotment of shares to companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix In our opinion and according to the information and explanations given to us, the company has not issued any debentures during the year.

xx The Company has not raised any money by way of public issue during the year.

xxi In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

II. In our opinion, a sum of Rs.60.61 crores included in Other Non Current Assets requires to be written off and the loss of the company is understated to that extent.

III. Further to our comments under Para I and II 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 accounts, 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 accounts;

iv. In our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards, referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors of the Company 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, the said accounts read together with the Significant Accounting Policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

a. In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2012.

b. In so far as it relates to the Statement of Profit and Loss, of the LOSS of the Company for the year ended on that date; and

c. In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

For P.N. RAGHAVENDRA RAO & Co.

Chartered Accountants

(ICAI Regn. No. : FRN003328S)

P.R.VITTEL

Coimbatore Partner

30th May 2012 M.No.018111


Mar 31, 2011

We have audited the attached Balance Sheet of Sakthi Sugars Limited as at 31st March 2011, the Profit and Loss Account and also the Cash Flow Statement for fifteen months ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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.

I. As required by the Companies (Auditor's Report) Order 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we furnish below a statement on the matters specified in paragraphs 4 and 5 of the said Order.

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year at reasonable intervals and no material discrepancies were noticed on such physical verification.

c. The Company has not disposed off substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

ii. In respect of its inventories:

a. As explained to us, inventory has been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. The company has not granted any loans secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, clauses 4(iii) (a) to (g) of the Order are not applicable to the company.

The company has taken unsecured loans totalling to Rs.18 crores from a company covered in the register maintained under section 301 of the Act. The terms and conditions of the loan are prima facie not prejudicial to the interest of the company.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in the internal control system.

v. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register maintained under that section.

b. In our opinion and according to the information and explanations furnished to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, in respect of the deposits accepted by the company from the public, the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Companies Act, 1956 and other relevant provisions of the Act and the rules framed thereunder, wherever applicable, have been complied with. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii. In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

viii. The Central Government has prescribed maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained.

ix. In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues such as Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess have been regularly deposited with the appropriate authorities. There are no arrears of such statutory dues outstanding for a period of more than six months as at 31 st March 2011.

b. The disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as under :

Particulars Period to which the matter pertains

Income Tax 2008-09

Sales Tax 1993-94, 2000-01 & 2001-02

1989-90 to 1992-93

2000-01, 1990-91 to 1996-97

2002-03 to 2004-05

Excise Duty Excise Duty:

2002-03, 2006-07

2005-06

2007-08

1992 to 2005

Service Tax:

2005, 2006, 2007 & 2008

2005 to 2008

2008

Water Charges 1964-65 to 1999-2000 and 1993-94 to 2011

2004-05, 2005-06

State Administrative April 2004 to June 2007 fees

Particulars Forum where dispute Rs. in is pending Crores

Income Tax Commissioner of Income Tax (Appeals) 1.76

Sales Tax Sales Tax Appellate Tribunal 1.63

High Court of Madras 8.03

Addl.Commissioner (CT) (RP) 3.15

Joint Commissioner (CT), Coimbatore 0.64

Excise Duty High Court of Madras 11.66

CESTAT, Chennai 7.68

Commissioner of Central Excise (Appeals) 0.04

High Court of Orissa, Cuttack 0.12

CESTAT, Chennai 2.62

Commissioner (Appeals), Madurai 0.15

Commissioner(Appeals), Salem 0.78

Water Charges High Court of Madras 8.10

High Court of Orissa, Cuttack 0.06

State Administrative Supreme Court 4.47 fees

x In our opinion, even considering the quantifiable effect of qualification cited in Para II, the accumulated losses at the end of the financial year are less than 50% of its net worth. The company has incurred cash losses during the financial year and cash profit for the previous year.

xi According to the records of the company examined by us and the information and explanations given to us, the defaults by the company to banks and an institution is as under:

From Banks

Particulars Rs. in Crores Period of default Since paid (Rs. in Crores)

Principal 4.31 January & February 2011 4.31

Interest 12.01 January & February 2011 12.01

From an Institution

Particulars Rs. in Crores Period of default Since paid (Rs. in Crores)

Interest 0.69 January & February 2011 0.69

There are no defaults with respect to debentures.

xii In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

xiii The Company is not a chit fund or a nidhi/mutual benefit fund/society.

xiv The company is not dealing or trading in shares, securities, debentures and other investments.

xv. The company has given guarantees for bank loans taken by subsidiaries and the outstanding amount of such loans as at 31st March 2011 is Rs. 374.70 crores. Based on the Management's Representation, we are of the opinion that, the terms and Conditions of the guarantees are not prejudicial to the interest of the company.

xvi In our opinion, the term loans have been applied for the purpose for which they were raised.

xvii According to the information and explanations given to us and on overall examination of the Balance Sheet of the company, we are of the opinion that during the period the company has not utilised funds raised on short term basis for long term investments.

xviii During the year, the Company has not made any preferential allotment of shares to companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix In our opinion and according to the information and explanations given to us, the company has issued debentures and security or charge has been created in respect of debentures issued.

xx The Company has not raised any money by way of public issue during the year.

xxi In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

II. In our opinion, the Funded Interest under CDR scheme amounting to Rs. 80.81 Crores requires to be written off and the loss of the company is understated to that extent.

III. Further to our comments under Para I and II 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 accounts, as required by law, have been kept by the Company, so far as appears from our examination of those books;

iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

iv. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards, referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified, as on 31st March 2011, 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, the said accounts read together with the Significant Accounting Policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

a. In so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

b. In so far as it relates to the Profit and Loss Account, of the LOSS of the Company for the period ended on that date; and

c. In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the period ended on that date.

For P.N. RAGHAVENDRA RAO & Co. Chartered Accountants Firm Registration No. 003328S

P.R. VITTEL Partner M.No.018111

Coimbatore 30th May 2011


Dec 31, 2009

We have audited the attached Balance Sheet of Sakthi Sugars Limited as at 31st December 2009, the Profit and Loss Account and also 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.

We conducted our audit in accordance with 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.

I. As required by the Companies (Auditors Report) Order 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we furnish below a statement on the matters specified in paragraphs 4 and 5 of the said Order.

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year at reasonable intervals and no material discrepancies were noticed on such physical verification.

c. The Company has not disposed off substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

ii. In respect of its inventories:

a. As explained to us, inventory has been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. 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. Accordingly, clauses 4(iii)(a) to (g) of the Order are not applicable to the company.

The company has taken an interest free unsecured loan of Rs.4 Crores from a company covered in the register maintained under section 301 of the Act. The terms and conditions of the loan are primafacie not prejudicial to the interest of the company.

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 for the purchase of inventory, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in the internal control system.

v. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register maintained under that section.

b. In our opinion and according to the information and explanations furnished to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, in respect of the deposits accepted by the company from the public, the directives issued by the Reserve Bank of India and the provisions of sections 58Aand 58AAof the Companies Act, 1956 and other relevant provisions of the Act and the rules framed there under, wherever applicable, have been complied with. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii. In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

viii. The Central Government has prescribed maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained.

ix. In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues such as Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess have been generally regularly deposited with the appropriate authorities. There are no arrears of such statutory dues outstanding for a period of more than six months as at 31st December 2009.

b. The disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as under:

Particulars Period to which the Forum where dispute Rs.Crores matter pertains is pending

Income Tax 2005-06,2006-07 Appellate Tribunal 1.28 2002-03 Commissioner 4.88

1993-94, Sales Tax Appellate Tribunal 1.28 2000-01,2001-02 High Court of Madras 0.35 Sales Tax 1989-90 to 1992-93 High Court of Madras 8.03 2000-01 Addl. Commissioner 0.28

Excise Duty Excise Duty:

2007-08,2008-09 Commissioner/Dy.Commissioner 0.50

2006-07, 2008-09 CESTAT/Commissioner 19.72

2002-2004 Commissioner 0.94

1992-2005 High Court of Orissa, Cuttack 0.12

Service Tax:

2005-06 Commissioner 0.04

2007-08 CESTAT/Commissioner 1.43

2005-06,2006-07,2007-08 Commissioner 0.15

2007-08 CESTAT/Commissioner 0.95

2008-09 Commissioner 0.80

2008-09 Asst. Commissioner/Dy.Commissioner 0.34



Water Charges 1964-65 to 1999-2000 and High Court of Madras 5.80 1991-2008

2004-05,2005-06 High Court of Orissa, Cuttack 0.06

State Admin strative fee April 2004 to June 2007 Supreme Court 4.47

x. In our opinion, the company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

xi. According to the records of the company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks, financial institutions and debenture holders.

xii. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies (Auditors Report) Order 2003 is not applicable to the Company.

xiv. The company is not dealing ortrading in shares, securities, debentures and other investments.

xv. The company has given guarantee for loan from banks taken by a foreign subsidiary and the amount of loan outstanding is Rs.268.27 Crores. The loan of Rs.268.27 Crores is under restructuring process and on completion of such restructuring, the terms and conditions of the guarantee given may not be prejudicial to the interest of the company. The company has also given guarantee for bank loans taken by Indian subsidiaries, the outstanding of which amounts to Rs.174.72 Crores and the terms and conditions of the guarantee/s given for these loans are not prejudicial to the interest of the company.

xvi. In our opinion, the term loans have been applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that during the year the Company has not used funds raised on short- term basis for long-term investments.

xviii. During the year, the Company has not made any preferential allotment of shares to companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix. In our opinion and according to the information and explanations given to us, the company has issued debentures and security or charge has been created in respect of debentures issued.

xx. The Company has not raised any money by way of public issue during the year.

xxi. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

II. In our opinion, non-provision of interest to banks and institutions under CDR which has been converted into Funded Loan/ reversal of interest which has been converted into Funded Loan amounting to Rs.88.25 Crores is not in conformity with the Accepted Accounting Principles and consequently the profit during the year is overstated by Rs.88.25 Crores.

III. Further to our comments under Para I andllabove,wereportthat:

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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards, referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified, as on 31st December 2009, 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, the said accounts read together with the Significant Accounting Policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

a. In so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31st December 2009;

b. In so far as it relates to the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

c. In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

For P.N. RAGHAVENDRA RAO & Co. Chartered Accountants

Coimbatore P.R.VITTEL

29th March 2010 Partner

M.No.018111

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