Mar 31, 2018
Report on the Ind AS financial statements
We have audited the accompanying standalone financial statements of Bajaj Hindusthan Sugar Limited (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Ind AS financial statements
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 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 accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, 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 disclosures in the financial statements. The procedures selected depend on the auditorâs judgement, 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 Companyâs preparation of the 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018 of its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Material Uncertainty Related to Going Concern
As stated in Note No. 44 of the standalone financial statements, Company has incurred losses in current year and in past years resulting into reduction of considerable net worth to that extent. As at the year end, Company has overdue instalments of certain debts and dues payable to farmers for sugar cane purchases. The above factor indicates a material uncertainty, which may cast significant doubt about the Companyâs ability to continue as a going concern. However, based on the various corrective measures taken by Company including the restructuring of debts as stated in the said note, management is of the view that going concern of the accounting is appropriate.
Our opinion is not modified in respect of this matter.
Matter of Emphasis
As stated in Note No. 35 (e) of the standalone financial statements and as per representation given to us by the management of the Company, Optionally Convertible Debentures (OCDs) issued to lenders under S4A scheme carry yield to maturity (YTM) to be paid at agreed yield rate as premium at the time of redemption. The OCDs provide option to lenders a right to convert the outstanding OCDs into equity shares at a price determined in accordance with applicable laws (including ICDR regulations). Since premium to be paid is contingent on the occurrence of the event of redemption of OCDs, the YTM of â110.87 crore from the date of allotment of OCD till the year end is treated as contingent liability and would be accounted for as finance cost at the time of redemption of respective OCDs.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure-Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive income, Cash Flow Statement and 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act;
(e) The matters described under the material uncertainty related to going concern paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;
(f) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013;
(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 to this report.
(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 on its financial position in its Ind AS financial statements - Refer Note 35 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; and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure âAâ referred to in paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date
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, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.
(c) According to the information and explanations given to us, the immovable properties of the Company have been mortgaged with the lenders and the original title deeds are deposited with the lenderâs trustee. Based on the confirmation given by the trustee and verification of the copies of the title deeds / lease deeds in respect of immovable properties of free hold land, buildings and immovable properties of land that have been taken on lease and disclosed as fixed assets in the financial statement are held in the Companyâs name or in the Companyâs erstwhile name or in the name of companies amalgamated with the Company in past.
ii. In respect of its inventories:
As explained to us, physical verification of inventories have been conducted at reasonable intervals by the management, which in our opinion is reasonable, having regard to the size of the Company and nature of its inventories. No material discrepancies noticed on such verification of inventories as compared to the book records.
iii. On the basis of the audit procedures applied by us, and according to the information and explanations given to us on our enquiries on this behalf and records produced to us for our verification, the Company has not given loans and advances to Companies covered in the register maintained under Section 189 of the Act.
iv. In respect of loans, investments, guarantees and security, the Company has complied with the provisions of Sections 185 and 186 of the Act.
v. According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Therefore, the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.
vi. To the best of our knowledge and as explained, the Company has maintained the cost records specified under Companies (cost records and audit) Rules, 2014 issued under sub section (1) of Section 148 of the Act, in respect of Companyâs products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.
vii. In respect of Statutory dues:
(a) According to the records of the Company, undisputed statutory dues including Goods and Services Tax, Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it have been generally regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2018 for a period of more than six months from the date of becoming payable.
(b) On the basis of our examination of accounts and documents on records of the Company and information and explanations given to us upon enquires in this regard, the disputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Custom Duty and Excise Duty/Cess not deposited with the appropriated authorities are as under:
Name of statute |
Nature of dues |
Amount (Rs. in Crore) |
Period |
Forum where dispute is pending |
Central Sales |
Sales Tax, |
22.41 |
Various year from 2010-11 to 2016-17 |
Commissioner Sales Tax/VAT |
Tax Act, 1956 and Sales Tax Act/VAT Act of various states |
VAT and Entry Tax |
47.65 |
Various year from 1982-83 to 2013-14 |
Sales Tax Appellate Tribunal |
3.42 |
Various year from 1989-90 to 2010-11 |
High Court |
||
Central Excise Act, 1944 |
Excise and Service Tax |
2.40 |
Various year from 1977-78 to 2015-16 |
Commissioner of Central Excise (Appeals) |
7.06 |
Various year from 1981-82 to 2013-14 |
Central Excise and Service Tax Appellate Tribunal |
||
5.59 |
Various year from 2004-05 to 2005-06 |
Supreme Court |
||
0.05 |
High Court |
|||
Total |
88.58 |
viii. In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of dues to financial institutions, banks and government during the year. The lender-wise details of the default as on March 31, 2018 is tabulated as under:-
Particulars |
Amount of Default as at March 31, 2018 (Rs. in Crore) |
|
Principal* |
Interest** |
|
Allahabad Bank |
13.56 |
3.22 |
Bank of Baroda |
3.28 |
0.92 |
Bank of India |
1.93 |
0.43 |
Bank of Maharashtra |
9.67 |
2.18 |
Canara Bank |
6.58 |
1.78 |
Central Bank of India |
9.32 |
2.48 |
Corporation Bank |
8.00 |
1.23 |
IDBI Bank Ltd. |
11.83 |
2.13 |
Indian Overseas Bank |
2.93 |
0.72 |
Oriental Bank of Commerce |
10.49 |
2.09 |
Punjab National Bank |
19.68 |
4.95 |
State Bank of India |
31.57 |
7.16 |
UCO Bank |
4.25 |
1.06 |
IDBI Bank |
- |
0.12 |
Total |
133.09 |
30.47 |
* The Principal amount is due for repayment on March 31, 2018 and has been not paid.
** The Interest amount is due for repayment on March 31, 2018 and has been paid thereafter in April 2018.
ix. The Company has not raised money by way of initial public offer or further public offer (including debt instruments) or term loan during the year and hence clause (ix) of paragraph 3 of the Order is not applicable to the Company.
x. Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per 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 year.
xi. In our opinion and according to the information and explanations given to us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. In our opinion, Company is not a nidhi Company. Therefore, the provisions of clause (xii) of paragraph 3 of the Order are not applicable to the Company.
xiii. In respect of transactions with related parties:
In our opinion and according to the information and explanations given to us, all transactions with related parties are in compliance with Sections 177 and 188 of the Act and their details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
xiv. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures except for allotment of optionally convertible debentures during the year to the lenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) adopted by the Joint Lenderâs Forum (JLF) as stated in Note 16.1 to the standalone financial statement. In respect of the same, in our opinion, the Company has complied with the requirements of Section 42 of the Act and Rules framed thereunder. Further, the debentures have been issued by conversion of existing loans and no additional amounts are raised. Therefore, the question of utilisation of amounts raised does not arise.
xv. In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transaction with the directors or persons connected with him and covered under Section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company.
xvi. To the best of our knowledge and as explained, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure âBâ to the Independent Auditorsâ Report Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the Internal Financial Control over financial reporting of Bajaj Hindusthan Sugar Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year then ended.
Management Responsibility for the Internal Financial Controls
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 (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to 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
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.
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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
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
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 (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) 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 (3) 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
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
In our opinion, the Company has, in all material respects, an adequate internal financial controls 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 ICAI.
For Chaturvedi & Shah
Chartered Accountants
Firm Registration No. 101720W
Jignesh Mehta
Partner
Membership No. 102749
Mumbai
Dated: May 26, 2018
Mar 31, 2017
To the Members of Bajaj Hindusthan Sugar Limited
Report on the financial statements
We have audited the accompanying standalone financial statements of Bajaj Hindusthan Sugar Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Ind AS financial statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and change 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, read with Rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the design, implementation and maintenance of adequate internal financial control 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, 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 there under. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, 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 disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, of its loss including other comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure-A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive income, Statement of Changes in Equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;
(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 35 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 and Protection Fund by the Company;
iv. The Company has provided requisite disclosures in the standalone financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O.3407(E) dated November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the Management, we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.
Annexure "A" referred to in paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date
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, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.
c. According to the information and explanations given to us, the immovable properties of the Company have been mortgaged with the lenders and the original title deeds are deposited with the lender''s trustee. Based on the confirmation given by the trustee and verification of the copies of the title deeds/lease deeds in respect of immovable properties of free hold land, buildings, immovable properties of land that have been taken on lease and disclosed as fixed assets in the financial statement are held in the Company''s name or in the Company''s erstwhile name or in the name of companies amalgamated with the Company in past as at balance sheet date.
ii) In respect of its inventories:
As explained to us, physical verification of inventories have been conducted at reasonable intervals by the management, which in our opinion is reasonable, having regard to the size of the Company and nature of its inventories. No material discrepancies noticed on such verification of inventories as compared to the book records.
iii) On the basis of the audit procedures applied by us, and according to the information and explanations given to us on our enquiries on this behalf and records produced to us for our verification, the Company has not given loans and advances to companies covered in the register maintained under Section 189 of the Act.
iv) In respect of loans, investments, guarantees and security, the Company has complied with the provisions of Sections 185 and 186 of the Act.
v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Therefore, the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.
vi) To the best of our knowledge and as explained, the Company has maintained the cost records specified under Companies (Cost Records and Audit) Rules, 2014 issued under sub section (1) of Section 148 of the Act, in respect of Company''s products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.
vii) In respect of Statutory dues:
a. According to the records of the Company, undisputed statutory dues including provident fund, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it have been generally regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2017 for a period of more than six months from the date of becoming payable.
b. On the basis of our examination of accounts and documents on records of the Company and information and explanations given to us upon enquiries in this regard, the disputed amounts payable in respect of income tax, sales tax, service tax, customs duty and excise duty/cess not deposited with the appropriate authorities are as under:
Name of statute |
Nature of dues |
Amount (Rs, in Crore) |
Period |
Forum where dispute is pending |
Central Sales |
Sales Tax, |
8.85 |
Various year from 2001-02 to 2016-17 |
Commissioner Sales Tax/VAT |
Tax Act, 1956 and Sales Tax Act/VAT Act of various states |
VAT and Entry Tax |
47.65 |
Various year from 1982-83 to 2014-15 |
Sales Tax Appellate Tribunal |
3.42 |
Various year from 1989-90 to 2010-11 |
High Court |
||
Central Excise Act, 1944 |
Excise and Service Tax |
0.25 |
Various year from 1977-78 to 2015-16 |
Commissioner of Central Excise (Appeals) |
16.35 |
Various year from 1981-82 to 2013-14 |
Central Excise and Service Tax Appellate Tribunal |
||
5.59 |
Various year from 2004-05 to 2005-06 |
Supreme Court |
||
Total |
82.11 |
viii) In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of dues to financial institutions, banks and government during the year. The Lender-wise details of the default as on March 31, 2017 is tabulated as under:-
Particulars |
Amount of Default as at March 31, 2017 (Rs, in Crore) |
|
Principal* |
Interest** |
|
Allahabad Bank |
31.13 |
7.06 |
Bank of Baroda |
7.55 |
1.71 |
Bank of India |
4.45 |
1.01 |
Bank of Maharashtra |
22.25 |
5.05 |
Canara Bank |
15.13 |
3.42 |
Central Bank of India |
22.89 |
5.16 |
Corporation Bank |
10.27 |
2.32 |
IDBI Bank Ltd. |
20.61 |
4.65 |
Indian Overseas Bank |
6.67 |
1.50 |
Oriental Bank of Commerce |
20.32 |
4.62 |
Punjab National Bank |
42.15 |
9.63 |
State Bank of Hyderabad |
7.24 |
1.64 |
State Bank of India |
50.26 |
11.09 |
State Bank of Patiala |
12.46 |
2.83 |
UCO Bank |
9.80 |
2.23 |
Total |
283.18 |
63.91 |
The Company has not issued debentures.
*The Principal amount is due for repayment as on the balance sheet date and has been not paid.
** The Interest amount is due for repayment as on balance sheet date and has been paid within 30 days.
ix) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) or term loan during the year and hence clause (ix) of paragraph 3 of the Order is not applicable to the Company.
x) Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per 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 year.
xi) In our opinion and according to the information and explanations given to us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii) In our opinion Company is not a nidhi Company. Therefore, the provisions of clause (xii) of paragraph 3 of the Order are not applicable to the Company.
xiii) In respect of transactions with related parties:
In our opinion and according to the information and explanations given to us, all transactions with related parties are in compliance with Sections 177 and 188 of the Act and their details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
xiv) In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and hence clause (xiv) of paragraph 3 of the Order is not applicable to the Company.
xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transaction with the directors or persons connected with him and covered under Section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company.
xvi) To the best of our knowledge and as explained, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure "B" to the Independent Auditors'' Report
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the Internal Financial Control over financial reporting of Bajaj Hindusthan Sugar Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year then ended.
Management Responsibility for the Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of Internal Financial Controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate Internal Financial Controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the Internal Financial Controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) 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 authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
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
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, 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 ICAI.
For Chaturvedi & Shah
Chartered Accountants
Firm Registration No. 101720W
Jignesh Mehta
Partner
Membership No. 102749
Mumbai
Dated: May 25, 2017
Mar 31, 2016
Report on the Financial Statements
We have audited the accompanying financial statements of Bajaj Hindustan Sugar Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, 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.
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 standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the 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 fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error
Auditor''s responsibility
Our responsibility is to express an opinion on these 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 there under.
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 disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, 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 March 31, 2016, and its loss and its cash flows for the year ended on that date.
Emphasis of matter
As stated in Note 41 of the accompanying financial statements, the Company carries investment of Rs, 693.72 crore by way of beneficial interest in trust. Also, Company has investment of Rs, 720.52 crore in Preference shares and Debentures of Phenil Sugars Limited. The realizable value of these investments has reduced substantially. For the reasons stated in the note and in view of long term nature of these investments, in the opinion of the management no provision for permanent diminution in value of these investments is considered necessary.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act, we give in the Annexure "A" a statement on the matters specified in paragraphs 3 and 4 of the Order,
2. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.
c. The matter described in the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company,
d. 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.
e. In our opinion, 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.
f. On the basis of written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164(2) of the Act.
g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rules 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 35 to the financial statements.
ii. The Company did not have any long term contracts including derivative contracts that require provision under any law or accounting standards 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 and Protection Fund by the Company,
Annexure "A" referred to in paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date
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, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.
c. According to the information and explanations given to us, the immovable properties of the Company have been mortgaged with the lenders and the original title deeds are deposited with the lender''s trustee. Based on the confirmation given by the trustee and verification of the copies of the title deeds / lease deeds in respect of immovable properties of free hold land, buildings, immovable properties of land that have been taken on lease and disclosed as fixed assets in the financial statement are held in the Company''s name or in the Company''s erstwhile name or in the name of companies amalgamated with the Company in past as at balance sheet date.
ii) In respect of its inventories :
As explained to us, physical verification of inventories have been conducted at reasonable intervals by the management, which in our opinion is reasonable, having regard to the size of the Company and nature of its inventories. No material discrepancies noticed on such verification of inventories as compared to the book records.
iii) On the basis of the audit procedures applied by us, and according to the information and explanations given to us on our enquiries on this behalf and records produced to us for our verification, the Company has not given loans and advances to companies covered in the register maintained under Section 189 of the Act.
iv) In respect of loans, investments, guarantees and security, the Company has complied with the provisions of Sections 185 and 186 of the Act.
v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Therefore, the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.
vi) To the best of our knowledge and as explained, the Company has maintained the cost records specified under Companies (Cost Records and Audit) Rules, 2014 issued under sub section (1) of Section 148 of the Act, in respect of Company''s products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.
vii) In respect of Statutory dues :
a. According to the records of the Company, undisputed statutory dues including Provident Fund, Income-Tax, Sales-Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it have been regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2016 for a period of more than six months from the date of becoming payable.
b. On the basis of our examination of accounts and documents on records of the Company and information and explanations given to us upon enquiries in this regard, the disputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Customs Duty and Excise Duty/Cess not deposited with the appropriate authorities are as under:
Name of Statute |
Nature of Dues |
Amount (Rs, in Crore) |
Period |
Forum where dispute is Pending |
Central Sales Tax Act, 1956, |
Sales Tax, VAT & Entry |
27.26 |
Various Years from 1997-98 to 2014-15 |
Deputy/ Joint Commissioner/ Commissioner (Appeals) |
and Sales Tax |
Tax |
48.76 |
Various Years 1982-83 to 2013-14 |
Sales Tax Appellate Tribunal |
Act / VAT Act of various states |
1.80 |
Various Years from 1989-90 to 2010-11 |
High Court |
|
Central Excise Act, 1944 |
Excise and Service Tax |
0.21 |
Various Years from 2005-06 to 2012-13 |
Commissioner of Central Excise (Appeals) |
126.14 |
Various Years from 2005-06 to 2012-13 |
Central Excise and Service Tax Appellate Tribunal |
||
1.03 |
Various Years from 2005-06 to 2013-14 |
High Court |
||
5.59 |
Various Years from 2004-05 to 2005-06 |
Supreme Court |
||
Income Tax Act, 1961 |
Income Tax |
9.59 |
Assessment Year 2006-07 & 2007-08 |
Commissioner of Income Tax (Appeal) |
Total |
220.38 |
viii) Based on our audit procedures, information and explanations given by the management and considering the corrective action plan for restructuring of credit facilities of the Company approved under JLF route in accordance with the applicable framework and guidelines issued by RBI, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and government. The Company has not issued debentures.
ix) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) or term loan during the year and hence clause (ix) of paragraph 3 of the Order is not applicable to the Company,
x) Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per 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 year,
xi) In our opinion and according to the information and explanations given to us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause (xii) of paragraph 3 of the Order are not applicable to the company.
xiii) In respect of transactions with related parties:
In our opinion and according to the information and explanations given to us, all transactions with related parties are in compliance with Sections 177 and 188 of the Act and their details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
xiv) In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment or private placement of fully or partly convertible debentures during the year and hence clause (xiv) of paragraph 3 of the Order is not applicable to the Company,
xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transaction with the directors or persons connected with him and covered under Section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company,
xvi) To the best of our knowledge and as explained, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure "B" to the Independent Auditors'' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the Internal Financial Control over financial reporting of Bajaj Hindusthan Sugar Limited ("the company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year then ended.
Management responsibility for the Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor''s responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) 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 authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
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
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, 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 ICAI.
For Chaturvedi & Shah
Chartered Accountants
Firm Registration No. 101720W
Jignesh Mehta
Partner
Membership No. 102749
Mumbai
Dated: May 30, 2016
Mar 31, 2015
We have audited the accompanying financial statements of BAJAJ
HINDUSTHAN SUGAR LIMITED
("the Company"), which comprise the Balance Sheet as at March 31, 2015,
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.
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 standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provision of the Act for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities; selection and
application of the appropriate accounting policies; making judgements
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
fair 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 disclosures in the financial statements. The procedures
selected depend on the auditor's judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, 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 March 31, 2015, and its loss and its cash flows for the year ended
on that date.
Emphasis of matter
1. We draw attention to note 36 (I) (a) (iv) and note 40 of the
accompanying financial statements in respect of contingency related to
recompense payable in lieu of bank sacrifice, the outcome of which is
materially uncertain and cannot be determined currently.
2. As stated in note 42 of the accompanying financial statements, the
Company carries investment of Rs. 693.72 crore by way of beneficial
interest in trust. Also, Company has investment of Rs. 720.52 crore in
Preference shares and Debentures of Phenil Sugars Limited. The
realisable value of these investments has reduced substantially. For
the reasons stated in the notes and in view of long term nature of
these investments, management does not expect any provision for
permanent diminution in value of these investments.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b. In our opinion, proper books of account as required by law have been
kept by the Company so far as 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, 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 written representations received from the directors
as on March 31,2015 taken on record by the Board of Directors, none of
the directors is disqualified as on March 31,2015, from being appointed
as a director in terms of Section 164(2) of the Act.
f. With respect to the other matters to be included in the Auditor's
Report in accordance with Rules 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 36(I)(a) to
the financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts that require provision under any law or accounting
standards for which there were any material foreseeable losses.
iii. There were no amounts which are required to be transferred to the
Investor Education and Protection Fund by the Company during the year.
ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE
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, all the fixed assets have been physically
verified by the management in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
physical verification.
ii) In respect of its inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and 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 inventories as compared to the book records.
iii) On the basis of the audit procedures applied by us, and according
to the information and explanations given to us on our enquiries on
this behalf and records produced to us for our verification, the
Company has not given loans and advances to companies covered in the
register maintained under Section 189 of the Act.
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 nature of its business for the
purchases of inventories 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 weaknesses in such internal control
system.
v) According to the information and explanations given to us, the
Company has not accepted any deposits within the meaning of provisions
of Sections 73 to 76 or any other relevant provisions of the Act and
the rules framed thereunder. Therefore, the provisions of Clause (v)
of paragraph 3 of the Order are not applicable to the Company.
vi) To the best of our knowledge and as explained, the Company has
maintained the cost records specified under Companies (Cost Records and
Audit) Rules, 2014 issued under sub Section (1) of Section 148 of the
Act, in respect of Company's product to which the said rules are made
applicable and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the records with a view to determine
whether they are accurate.
vii) In respect of Statutory dues :
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any
other statutory dues applicable to it have been regularly deposited
with appropriate authorities. According to the information and
explanations given to us, no undisputed amounts payable in respect of
the aforesaid dues were outstanding as at March 31, 2015 for a period
of more than six months from the date of becoming payable.
b) On the basis of our examination of accounts and documents on records
of the Company and information and explanations given to us upon
enquiries in this regard, the disputed amounts payable in respect of
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and Excise
Duty/Cess not deposited with the appropriated authorities are as under:
Name Nature Amount Period Forum where dispute is
of statute of dues Rs in pending
crore)
Central Sales Tax, 2.80 Various Deputy/ Joint
Sales Tax VAT & Years from Commissioner/
Act, 1956, Entry Tax 1997-98 to Commissioner
and Sales 2013-14 (Appeals)
TaxAct/ 57.50 Various Sales Tax
VAT Act of
Years Appellate
Various 1982-83 to Tribunal
states 2013-14
3.52 Various High Court
Years from
1989-90 to
2010-11
Central Excise and 1.26 Various Commissioner
Excise Service Years from of Central
Act, 1944 Tax 1981-82 to Excise (Appeals)
2012-13
18.74 Various Central Excise
Years from and Service tax
2002-03 to Tribunal
2012-13
0.31 Various High Court
Years from
1981-82 to
2010-11
5.59 Various Supreme Court
Years from
2004- 05 to
2005- 06
Income Income 9.59 Assessment Commissioner
Tax Tax Years 2006-07 of Income Tax
Act, 1961 & 2007-08 (Appeal)
8.90 Various Commissioner
Assessment of Income Tax
Years from (Appeal)
2010-11 to
2015-16
(TDS)
Total 108.21
c) There were no amounts which are required to be transferred to the
Investor Education and Protection Fund by the Company during the year.
viii) 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 the audit and in the
immediately preceding financial year.
ix) Based on our audit procedures, information and explanations given
by the management and considering the corrective action plan for
restructuring of existing credit facilities of the Company approved
under JLF route in accordance with the applicable framework and
guidelines issued by RBI, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions and banks.
The Company has not issued debentures.
x) In our opinion and according to the information and explanations
given to us, the Company has given guarantee for loans taken by
subsidiary/ associate from Banks. The terms and conditions where of in
our opinion are not prima facie prejudicial to the interest of the
Company.
xi) Based on the information and explanation given to us by the
management, the term loans were applied for the purpose for which the
loans were obtained.
xii) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we have not
come across any instance of material fraud on or by the Company,
noticed or reported during the period, nor have been informed of such
case by the management.
For Chaturvedi & Shah
Chartered Accountants
Registration No.: 101720W
Amit Chaturvedi
Partner
Membership No. 103141
Place: Mumbai
Dated: May 28, 2015
Mar 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of BAJAJ
HINDUSTHAN LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31, 2014, and the Statement of Prof t and Loss and Cash Flow
Statement for the eighteen months period then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
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") read with the General Circular
15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs
in respect of 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
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.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal 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 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. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, 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 Prof t and Loss, of the loss of the
Company for the period ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the period ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. 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 Prof t and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, Statement of Prof t and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956, read with
the General Circular 15/2013 dated September 13, 2013 of the Ministry
of Corporate Affairs in respect of section 133 of the Companies Act,
2013;
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 Companies Act, 1956.
ANNEXURE REFERRED TO IN INDEPENDENT
AUDITOR''S REPORT
RE: BAJAJ HINDUSTHAN LIMITED (''THE COMPANY'')
[Referred to in paragraph (1) under the heading ("Report on Other Legal
and Regulatory Requirements") of our Report of even date.]
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets;
b) As explained to us, all the foxed assets have been physically
verified by the management in a phased periodical manner as per regular
programme of verification, which in our opinion is reasonable, having
regard to the size of the Company and nature of its assets. No material
discrepancies were noticed on such physical verification;
c) In our opinion, the Company has not disposed off substantial part of
its fixed assets during the period and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) As explained to us, the inventory has been physically verified by
the management at reasonable intervals, during the period;
b) As explained 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) According to the inventory records produced to us for our
verification, we are of the opinion that the Company is maintaining
proper records of inventory. The differences between the physical
verification of inventories, as compared to book records, though not
material, have been properly dealt with in the books of account.
3. In respect of loans, secured or unsecured, granted or taken by the
Company to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has given unsecured loans to three subsidiary companies.
In respect of the said loans, the maximum amount outstanding at any
time during the period is Rs. 1097.56 crore and the year end balance
is Rs. 1097.56 crore;
b) In our opinion and according to information and explanations given
to us, the rate of interest, where applicable and the other terms and
conditions of the loans given by the Company, are not, prima facie
prejudicial to the interest of the Company;
c) The principal amounts are repayable on demand and there is no
repayment schedule. The interest is payable on demand;
d) In respect of said loans, the interest is payable on demand and
therefore the question of overdue amount doesn''t arise;
e) The Company has not taken any loan during the period from companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
applicable.
4. 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 and fixed assets and for the sale of goods.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
5. In respect of contracts or arrangements referred to in Section 301
of the Companies Act, 1956:
a) On the basis of the audit procedures applied by us, and according to
the information and explanations given to us on our enquiries on this
behalf and the records produced to us for our verification, the
contracts or arrangements that need to be maintained under Section 301
of the Companies Act, 1956 have been so entered;
b) The transaction so entered, aggregating in excess of Rs. 5,00,000/- in
respect of each party during the period, have been, in our opinion, as
per the information and explanations given to us, made at prices, which
are reasonable having regard to the prevailing market prices available
at which transactions for similar goods have been made with other
parties at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued under
Section 58A, 58AA or any other relevant provisions of the Companies
Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975 with
regard to the deposit accepted from the public. According to the
information and explanations given to us, 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.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 in respect of Company''s product to which the said rules are
made applicable and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the records with a view to determine
whether they are accurate.
9. In respect of statutory dues:
a) According to the records of the Company, the Company has been
generally regular in depositing with statutory authorities, undisputed
statutory dues, including provident fund, income-tax, sales-tax,
wealth-tax, service tax, customs duty, cess and other material
statutory dues applicable to it. According to the information and
explanations given to us, no undisputed amounts payable in respect of
aforesaid dues were outstanding, as at March 31, 2014 for a period of
more than six months from the date they became payable.
b) On the basis of our examination of documents on records of the
Company and information and explanations given to us upon our inquiries
in this regard, the disputed amounts payable in respect of Income tax,
Sales tax, Wealth tax, Service tax, Customs duty and Excise Duty/Cess
not deposited with the appropriate authorities are as under:
Name Nature Amount Period Forum where
of the of ( Rs. in for dispute is
Statute Dues crore) which pending
amount
relates
Central Sales 15.57 Various Deputy/Joint
Sales Tax, years from Commissioner/
Tax Act, VAT 1997-98 Commissioner
1956 and to (Appeals)
and Entry 2012-13
Sales Tax Tax
Act/VAT
Act of
various
states
44.36 Various Sales Tax
years from Appellate
1982-83 Tribunal
to
2012-13
1.80 Various High Court
years from
1989-90
to
2009-10
Central Excise 5.30 Various Commissioner
Excise and years
from of Central
Act, Service 1981-82 to Excise
1944 Tax 2012-13 (Appeals)
19.29 Various Central Excise
years from and Service
1981-82 to Tax Appellate
2011-12 Tribunal
0.93 Various High Court
years from
1989-90
to
2009-10
12.42 Various Supreme Court
years from
2004-05
to
2005-06
Total 99.67
10. The Company has accumulated losses at the end of the financial
period, which are less than fifty percent of its net worth. The Company
has incurred cash losses during the period covered under the audit, but
has not incurred cash losses in the immediately preceding financial
year.
11. Based on the information and explanations given by the management,
we are of the opinion that the Company has not defaulted in repayment
of dues to financial institutions and banks. The Company has not issued
debentures
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities
13. 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
paragraph 4 of the Order are not applicable.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. The Company has given guarantee for loans taken by its erstwhile
subsidiary/associate from banks. The terms and conditions whereof in
our opinion are not prima facie prejudicial to the interest of the
Company.
16. Based on the information and explanation given to us by the
management, the term loans were applied for the purpose for which the
loans were raised.
17. 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.
18. The Company has not made during the period any preferential
allotment of shares to Companies, firms, parties covered under register
maintained under Section 301 of the Companies Act, 1956.
19. In our opinion and according to the information and explanations
given to us, the Company has not issued any secured debentures during
the period covered by our report. Accordingly, provisions of clause
(xix) of paragraph 4 of the Order are not applicable.
20. The Company has not raised any money by public issues during the
period.
21. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we have not
come across any instance of material fraud on or by the Company,
noticed or reported during the period, nor have been informed of such
case by the management.
For and on behalf of
CHATURVEDI & SHAH
Firm Registration No. 101720W
Chartered Accountants
Amit Chaturvedi
Partner
Membership No. 103141
Place: Mumbai
Date: May 16, 2014
Sep 30, 2012
We have audited the attached Balance Sheet of BAJAJ HINDUSTHAN LIMITED
(''the Company'') as at September 30, 2012, the Statement of Profit and
Loss and the Cash Flow Statement for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Company''s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
1. We have conducted our audit in accordance with the Auditing
Standards generally accepted in India. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditor''s Report) Order 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
3. Further to our comments in the Annexure referred to above, 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 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 appears from our examination of those
books;
c) The Balance Sheet, the 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, 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;
e) On the basis of written representations received from the Directors
as on September 30, 2012 and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on September
30, 2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts 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:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at September 30, 2012;
(ii) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE RE:
BAJAJ HINDUSTHAN LIMITED (THE COMPANY'')
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets;
b) As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner as per regular
programme of verification, which in our opinion is reasonable, having
regard to the size of the Company and nature of its assets. No material
discrepancies were noticed on such physical verification;
c) In our opinion, the Company has not disposed of substantial part of
its fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) As explained to us, the inventory has been physically verified by
the management at reasonable intervals, during the year;
b) As explained 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) According to the inventory records produced to us for our
verification, we are of the opinion that the Company is maintaining
proper records of inventory, if any, referred to above, as compared to
book records, though not material, have been properly dealt with in the
books of account.
3. In respect of loans, secured or unsecured, granted or taken by the
Company to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has given unsecured loans to three subsidiary companies
of which one of the subsidiary company was merged with the Company. In
respect of the said loans, the maximum amount outstanding at any time
during the year is Rs. 1,018.73 crore and the year end balance is Rs.740.70
crore;
b) In our opinion and according to the information and explanations
given to us, the rate of interest, where applicable and the other terms
and conditions of the loans given by the Company, are not, prima facie
prejudicial to the interest of the Company;
c) The principal amounts are repayable on demand and there is no
repayment schedule. The interest is payable on demand;
d) In respect of said loans, the same is repayable on demand and
therefore the question of overdue amount doesn''t arise;
e) The Company has not taken any loan during the year from companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
applicable.
4. 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 and fixed assets and for the sale of goods.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
5. In respect of contracts or arrangements referred to in section 301
of the Companies Act, 1956:
a) On the basis of the audit procedures applied by us, and according to
the information and explanations given to us on our enquiries on this
behalf and the records produced to us for our verification, the
contracts or arrangements that need to be maintained under Section 301
of the Companies Act, 1956 have been so entered;
b) The transaction so entered, aggregating in excess of Rs. 5,00,000/- in
respect of each party during the year, have been, in our opinion, as
per the information and explanations given to us, made at prices, which
are reasonable having regard to the prevailing market prices available
at which transactions for similar goods have been made with other
parties at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued under
section 58A, 58AA or any other relevant provisions of the Companies
Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975 with
regard to the deposit accepted from the public. According to the
information and explanations given to us, 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.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 in respect of Company''s product to which the said rules are
made applicable and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the records with a view to determine
whether they are accurate.
9. In respect of statutory dues:
a) According to the records of the Company, the Company has been
generally regular in depositing with statutory authorities, undisputed
statutory dues, including Provident Fund, Income tax, Sales tax, Wealth
tax, Service tax, Customs duty, cess and other material statutory dues
applicable to it. According to the information and explanations given
to us, no undisputed amounts payable in respect of aforesaid dues were
outstanding, as at September 30, 2012 for a period of more than six
months from the date they became payable;
b) On the basis of our examination of documents on records of the
Company and information and explanations given to us upon our inquiries
in this regard, the disputed amounts payable in respect of Income tax,
Sales tax, Wealth tax, Service tax, Customs duty and Excise Duty/Cess
not deposited with the appropriate authorities are as under:
Name Nature Amount Period Forum where
of the of (Rs. in for dispute is
Statute Dues crores) which pending
amount
relates
Central Sales 25.34 Various Deputy/Joint
Sales Tax, years from Commissioner/
Tax Act, VAT 1997-98 Commissioner
1956 and to 2011- (Appeals)
and Entry 12
State Tax
Sales Tax
Act/VAT
Act of
various
states
1.23 Various Sales Tax
years from Appellate
1982-83 Tribunal
to 2011-12
0.43 Various High Court
years from
1989-90 to
2006-07
Central Excise 3.02 Various Commissioner
Excise and years from of Central
Act, Service 1981-82 to Excise
1944 Tax 2011-12 (Appeals)
26.38 Various Central Excise
years from and Service
1981-82 to Tax Appellate
2010-11 Tribunal
Total 56.40
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year
11. Based on the information and explanations given by the management,
we are of the opinion that the Company has not defaulted in repayment
of dues to financial institutions, banks and debenture holders.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. 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 Companies (Auditor''s Report) Order 2003, (as amended) are not
applicable to the Company
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. The Company has given guarantee for loans taken by its one
subsidiary company from banks; the terms and conditions whereof in our
opinion are not prima facie prejudicial to the interest of the Company
16. Based on the information and explanations given to us by the
management, the term loans were applied for the purpose for which the
loans were obtained.
17. 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.
18. The Company has not made during the year any preferential
allotment of shares to companies, firms, parties covered under register
maintained under section 301 of the Companies Act, 1956.
19. In our opinion and according to the information and explanations
given to us, the Company has not issued any secured debentures during
the period covered by our report. Accordingly, provisions of clause
(xix) of the Companies (Auditor''s Report) Order, 2003 are not
applicable.
20. The Company has raised monies by way of right issue of equity
shares during the year. We have verified the end use of monies raised
by rights issues of equity shares and the same has been disclosed in
Note 41.
21. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we have not
come across any instance of material fraud on or by the Company,
noticed or reported during the year, nor have been informed of such
case by the management.
For and on behalf of
CHATURVEDI & SHAH
Firm Registration Number : 101720W
Chartered Accountants
Amit Chaturvedi
Partner
Membership No. 103141
Place: Mumbai
Date: November 26, 2012
Sep 30, 2010
We have audited the attached Balance Sheet of BAJAJ HINDUSTHAN LIMITED
as at 30th September, 2010, and the related Profit and Loss Account and
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.
1. We have 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 financial statements. An Audit also includes
assessing the accounting principles used and signifcant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides reasonable basis for
our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 (CARO,
2003), (as amended) issued by the Central Government of India in terms
of Section 227(4A) of the Companies Act,1956, we annex hereto a
Statement on the matters specified in paragraph 4 and 5 of the said
Order.
3. Further to our comments in the Annexure referred to in paragraph 2
above, 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 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 appears from our examination of such
books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by the report are in agreement with the books of account of
the Company;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the Accounting Standards referred to in
section 211 (3C) of the Companies Act, 1956, to the extent applicable;
(e) On the basis of the written representations received from the
Directors, as on 30th September, 2010 and taken on record by the Board
of Directors, we report that none of the Directors are disqualifed as
on 30th September, 2010, from being appointed as a Director in terms of
Clause (g) of sub-section (1) of Section 274 of the Companies Act,
1956;
(f) 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
notes thereon, give the information required by the Companies Act,
1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India :
(a) in the case of the Balance Sheet, of the state of the affairs of
the Company as at 30th September, 2010;
(b) in the case of the Profit and Loss Account, of the Profit for the
year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash fows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE Re :
BAJAJ HINDUSTHAN LIMITED (ÃÃthe Company")
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fxed
assets.
b) As explained to us, all the fxed assets have been physically verifed
by the management in a phased periodical manner, which in our opinion
is reasonable, having regard to the size of the Company and nature of
its assets. No material discrepancies were noticed on such physical
verifcation.
c) In our opinion, the Company has not disposed off substantial part of
its fxed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) As explained to us, the inventories have been physically verifed by
the management at reasonable intervals during the year;
b) As explained to us, the procedures of physical verifcation of the
inventory followed by the management are, in our opinion, reasonable
and adequate in relation to the size of the Company and the nature of
its business;
c) According to the inventory records produced to us for our
verifcation, we are of the opinion that the Company is maintaining
proper records of its inventory. Further, discrepancies noticed on
physical verifcation of inventories, if any, referred to above, as
compared to book records, though not material, have been properly dealt
with in the books of account.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has given loans to three subsidiary companies. In
respect of the said loans, the maximum amount outstanding at any time
during the year is Rs. 2,193.23 crores and the same has been squared
off during the year.
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans given by the Company, are not prima facie prejudicial to the
interest of the Company.
c) The principal amounts are repayable on demand and there is no
repayment schedule. The interests is payable on demand.
d) In respect of the said loans, the same have been repaid during the
year. Therefore question of repayment overdue amount does not arise.
e) The Company has not taken any loan during the year from companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
applicable.
4. In our opinion and according to the information and explanations
given to us, there is generally adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to the purchase of inventory and fxed assets and
for the sale of goods. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system.
5. According to information and explanation given to us, there are no
contracts or arrangements referred to in section 301 of the Companies
Act, 1956 that need to be entered into the register maintained under
section 301. Therefore, the provisions of clause 5 (b) of the Companies
(Auditors Report) Order 2003, (as amended) is not applicable to the
Company.
6. In our opinion and according to the information and explanations
given to us the company has complied with the directives issued by the
provisions of section 58A, 58AA or any other relevant provisions of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975 with regard to the deposits accepted from the public. According to
the information and explanations given to us, 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.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 in respect of Companys products to which the said rules are
made applicable and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the records with a view to determine
whether they are accurate.
9. In respect of statutory dues:
a) According to the records of the Company, the Company has been
generally regular in depositing with statutory authorities, undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income tax, Sales tax,
Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it. According to the information
and explanations given to us, no undisputed amounts payable in respect
of income tax, sales tax, wealth tax, service tax, customs duty, excise
duty and cess were outstanding, at the year end for a period of more
than six months from the date they became payable.
b) On the basis of our examination of the documents and records of the
Company and the information and explanations given to us upon our
inquiries in this regard, there were no disputed amounts payable in
respect of Income-tax, Sales Tax, Wealth-tax, Service tax, Customs Duty
and Excise Duty/cess and not deposited with the appropriate authorities
other than those stated hereunder :
Name of the Nature of Dues Amount Period for Forum where
Statute (Rs. in which amount dispute is
crores) relates pending
Central Sales Sales Tax, 0.61 Various years Deputy/Joint
Tax Act, 1956 VAT and Entry from 1997-98 Commissioner
/Commi-
and State Sales Tax to 2009-10 ssioner
(Appeals)
Tax Act/VAT
Act of various
states
0.58 Various years Sales Tax
Appellate
from 1997-98 Tribunal
to 2007-08
0.63 Various years High Court
from 1985-86
to 2006-07
Central Excise Excise and 6.45 Various years Commissioner of
Act, 1944 Service Tax from 1999- Central Excise
2000 to 2009-10 (Appeals)
19.44 Various years Central Excise
and
from 1981-82 Service Tax
Appellate
to 2008-09 Tribunal
0.10 1994 High Court
Total 27.81
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
11. Based on the information and explanations given by the management,
we are of the opinion that the Company has not defaulted in repayment
of dues to financial institutions, banks and debenture holders.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. 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 Companies (Auditors Report) Order 2003, (as amended) are not
applicable to the Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. The Company has given guarantee for loans taken by its two
subsidiary companies from banks; the terms and conditions whereof in
our opinion are not prima facie prejudicial to the interest of the
company.
16. Based on the information and explanations given to us by the
management, the term loans were applied for the purpose for which the
loans were obtained.
17. According to the information and explanations given to us and on
overall examination of the balance sheet of the Company, we report that
no funds on short- term basis have been used for long- term investment.
18. The Company has not made any preferential allotment of shares to
companies/ firms/ parties covered in the register maintained under
section 301 of the Companies Act, 1956, except the shares issued during
the year against the warrants allotted during the previous year on
preferential basis to promoter group in according with the SEBI
preferential issue guidelines.
19. In our opinion and according to the information and explanations
given to us, the Company has not issued any secured debentures during
the period covered by our report. Accordingly, provisions of clause
(xix) of the Companies (Auditors Report) Order, 2003 are not
applicable.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For and on behalf of
CHATURVEDI & SHAH
Firm Registration No. 101720W
Chartered Accountants
RAJESH CHATURVEDI
Partner
Membership No. 45882
Mumbai,
December 20, 2010
Sep 30, 2009
We have audited the attached Balance Sheet of BAJAJ HINDUSTHAN LIMITED,
as at 30th September, 2009, and the related Profit and Loss Account and
Cash Flow Statement for the year ended on that date annexed thereto,
which we have signed under reference to this report. 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.
1. 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 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 reasonable basis for
our opinion.
2. As required by the Companies (Auditorsà Report) Order, 2003 (CARO,
2003), (as amended) issued by the Central Government of India in terms
of Section 227(4A) of the Companies Act,1956, we annex hereto a
Statement on the matters specified in paragraph 4 and 5 of the said
Order.
3. Further to our comments in the Annexure referred to in paragraph 2
above, 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 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 appears from our examination of such
books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by the report are in agreement with the books of account of
the Company;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the Accounting Standards referred to in
Section 211 (3C) of the Companies Act, 1956, to the extent applicable;
(e) On the basis of the written representations received from the
Directors, as on 30th September, 2009 and taken on record by the Board
of Directors, we report that none of the Directors is disqualified as
on 30th September, 2009, from being appointed as a Director in terms of
Clause (g) of sub-section (1) of Section 274 of the Companies Act,
1956;
(f) 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
notes thereon, give the information required by the Companies Act,
1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India :
(a) in the case of the Balance Sheet, of the state of the affairs of
the Company as at 30th September, 2009;
(b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITORS REPORT OF EVEN
DATE ON THE ACCOUNTS FOR THE YEAR ENDED 30TH SEPTEMBER, 2009 OF BAJAJ
HINDUSTHAN LIMITED
On the basis of such checks as we considered appropriate and in terms
of information and explanations given to us, we state that:- i) The
Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. Additions
and deductions made during the year as per Companys practice, will be
entered in the said records during the current year (i.e.2009-2010).
As explained to us, physical verification has been conducted by the
management during the year covering major portion of its fixed assets
in phased manner to cover all assets over a period of two years, which
in our opinion is reasonable having regard to the size of the Company
and nature of its assets. As informed, no material discrepancies were
noticed on such verification.
As per the information and explanation given to us on our enquiries,
the disposal of assets during the year were not substantial so as to
have an impact on the operations of the company, or affect its going
concern;
ii) (a) As explained to us, the inventories have been
physically verified by the management at reasonable intervals during
the year and/or at the close of the year;
(b) As explained to us, the procedures of physical verification of the
inventory followed by the management are, in our opinion, reasonable
and adequate in relation to the size of the Company and the nature of
its business;
(c) According to the inventory records produced to us for our
verification, we are of the opinion that the Company is maintaining
proper records of its inventory. Further, discrepancies noticed on
physical verification of inventories, if any, referred to above, as
compared to book records, though not material, have been properly dealt
with in the books of account;
iii) The Company has not taken/granted any loans, secured or unsecured
from/to Companies, firms or other parties listed in the register
maintained under Section 301 of the Companies Act, 1956, except loans
granted on current account to its Subsidiaries, the rate of interest
and terms and conditions were not prima-facie prejudicial to the
interest of the Company. The outstanding dues as at the year end from
Subsidiary Companys amounted Rs. 4013.02 Million.
iv) In our opinion and according to the information and explanations
given to us, there are generally adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to the purchase of inventory and fixed assets and
for the sale of goods. There was no sale of services during the year.
During the course of our audit, no major weaknesses in internal control
had come to our notice;
v) (a) On the basis of the audit procedures applied by us, and
according to the information and explanations given to us on our
enquiries on this behalf and the records produced to us for our
verification, the contracts or arrangements that need to be entered
into the register required to be maintained under Section 301 of the
Companies Act, 1956 have been so entered;
(b) The transactions so entered, aggregating in excess of Rs.5,00,000/-
in respect of each party during the year, have been, in our opinion, as
per the information and explanation given to us, made at prices, which
are reasonable, having regard to the prevailing market prices available
with the Company for such transactions or prices at which transactions
for similar goods have been made with other parties at the relevant
time;
vi) In our opinion, and according to the information and explanations
given to us, the Company has complied with the directives issued by the
provisions of Section 58A, 58AA or any other relevant provisions of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975 with regard to the deposits accepted from the public. According to
the information and explanations given to us, 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 Company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account
maintained by the Company pursuant to the rules made by the Central
Government for maintenance of cost records under Section 209(1)(d) of
the Companies Act, 1956 in respect of Companys products to which the
said rules are made applicable and are of the opinion that prima facie
the prescribed accounts and records have been made and maintained. We
have, however, not made a detailed examination of the records with a
view to determine whether they are accurate.
ix) (a) According to the records of the Company, the Company has been
generally regular in depositing with statutory authorities, undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employeesà State Insurance, Income tax, Sales tax,
Wealth tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it. According to the information
and explanations given to us, no undisputed amounts payable in respect
of Income Tax, Sales tax, Wealth tax, Service tax, Customs Duty Excise
Duty and cess were outstanding, at the year end for a period of more
than six months from the date they became payable.
(b) On the basis of our examination of the documents and records of the
Company and the information and explanations given to us upon our
inquiries in this regard, disputed amounts payable in respect of Income
tax, Sales Tax, Wealth tax, Service tax, Customs Duty and Excise Duty /
cess not deposited with the appropriate authorities are as follows:
Sr.
STATUTES FORUMS BEFORE WHOM PENDING TOTAL
No
Commissioner Tribunal High Supreme
Appeals Court Court
Rs. Rs. Rs. Rs. Rs.
1 Sales Tax / 13663 228308 3300612 - 3542583
Trade Tax
2 Excise
Duty 241496276 67090287 - - 308586563
x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
xi) Based on the information and explanations given by the management,
we are of the opinion that the Company has not defaulted in repayment
of dues to financial institutions, banks or debenture holders.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii) All investments held by the Company at the close of the year are
held in its own name.
xiv) The Company has given guarantee for loans taken by its subsidiary
from a bank, the terms and conditions whereof in our opinion are not
prima facie prejudicial to the interest of the Company.
xv) Based on the information and explanations given to us by the
management the term loans were applied for the purpose for which the
loans were obtained.
xvi) According to the information and explanations given to us and on
overall examination of the balance sheet of the Company, we report that
no funds on short-term basis have been used for long-term investment.
xvii) The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under
section 301 of the Companies Act, 1956. However, the Company has during
the year allotted warrants on preferential basis to promoter group in
accordance with the SEBI preferential issue guidelines.
xviii) According to the information and explanations given to us and
records examined by us, in respect of secured debentures issued during
the year, security/charge is pending for creation.
xix) The Company has not raised any money by public issues during the
year.
xx) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
In view of the nature of activities carried on by the Company clause
no. (xiii) of CARO, 2003 is not applicable to the Company.
For and on behalf of
DALAL & SHAH
Chartered Accountants
SHISHIR DALAL
Partner
Membership No. 37310
Mumbai,
15th December, 2009
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