Mar 31, 2018
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of Sakthi Sugars Limited (âthe Companyâ), 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.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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.
Auditorâs 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 auditorsâ 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 Companyâs 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 Companyâs 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 (Auditorâs Report) Order, 2016 (âthe Orderâ), 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 âAnnexure Aâ 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 âAnnexure Bâ; and
(h) With respect to the other matters to be included in the Auditorâs 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 Auditorsâ Report
Re : SAKTHI SUGARS LIMITED (the âCompanyâ)
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 Auditorsâ Report
Referred to in paragraph 14(g) of the Independent Auditorsâ 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 (âthe Actâ)
1. We have audited the internal financial controls over financial reporting of M/s. Sakthi Sugars Limited (âthe Companyâ) 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.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs 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 (âICAIâ).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 companyâs 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.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) 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 auditorâs 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. A companyâs 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 companyâs 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 companyâs 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