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Auditor Report of Jyoti Overseas Ltd.

Mar 31, 2014

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Mar 31, 2011

We have audited the attached Balance Sheet of M/S. JYOTI OVERSEAS LIMITED., INDORE (M.P.) as at March 31st, 2011 and also Profit & Loss Account and the Cash Flow Statement of the Company 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 conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2) As required by the Companies (Auditor's Report) order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we 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 and Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the Books of accounts.

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement read with Notes dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(e) The Company is a Sick Industrial Company within the meaning of Sick Industrial Companies (Special Provisions ) Act,1985. However, in view of the facts indicated in note no. 3 in schedule 19, the accounts of the Company have been prepared on going concern basis.

(f) Attention is drawn to the following notes in schedule 19 to accounts whose impact on Company's Loss/reserves is indicated in the respective notes below:

i) Note no. 7 regarding non availability of balance confirmation certificate from some of the Debtors, Creditors and Loans & Advances; ii) Note No. 2 & 3 regarding non ascertainable effect, if Company is not able to continue as a going concern, iii) Note No. 24 regarding provision of gratuity on accrual basis and non ascertainment of liability as per actuarial valuation as required by AS 15. iv) Note no. 4 for non provision of Interest on Term Loans taken by the Company from Financial Institutions of Rs. 322.98 Lacs for the Year and total amount not provided for till the date of Balance Sheet Rs. 4346.03 Lacs.

Without considering item no. (i) ,(ii) & (iii) above, whose impact on Company's loss/reserves is not presently ascertainable, had the impact of item no. (iv) been considered, a) Loss for the year would have been higher by Rs. 322.98 Lacs and consequently term Loans would have been higher by same amount, b) If the Total amount would have been provided for, the accumulated Losses would have been higher by Rs. 4346.03 Lacs and Consequently Secured Loans would have been higher by Same amount.

(g) On the basis of information and explanations given to us, we report that none of the directors is disqualified as on the date of Balance Sheet date from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956;

(h) Subject to the above and read together with other notes on Accounts, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with 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 affairs of the Company as at 31st March, 2011;and

(b) In the case of the Profit and Loss Account, of the Loss for the year ended on that date; and

(c) In the case of Cash flow Statement of the Cash Flows of the Company For the year ended on that date.

ANNEXURETOTHE AUDITOR'S REPORT

With reference to the Annexure referred to in paragraph 2 of our report of even date to the members of M/S. JYOTI OVERSEAS LIMITED, for the year ended on 31st March, 2011, We report that, in our opinion and to the best of our information and explanations furnished to us and the books and records examined by us in the normal course of Audit:

1. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. As explained to us, the fixed assets have been physically verified by the management during the year, which in our opinion is reasonable, having regard to the size of the Company and nature of its asset We were informed that no material discrepancies were noticed on such physical verification.

c. There has been no disposal of substantial part of the Fixed Assets during the year & the going concern status of the Company is not affected.

2. a. Inventories have been physically verified by the management at reasonable intervals during the year.

b. In our opinion, 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. The discrepancies noticed on verification between physical stock and book stock were not material having regard to the size of the operations of the company and have been properly dealt with in Books of Accounts.

3. a. The Company has taken Loan from One party covered in the register maintained under section 301 of the Act, At the year end Outstanding balance of such loan taken aggregated to Rs. 67.26 Lacs and the maximum Amount involved during the year was Rs. 74.76 Lacs, Further Company has not granted Loans to Companies, firms or other parties covered in the register maintained under Section301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, the Loans are Interest free and other terms and conditions of the aforesaid Unsecured loans taken by the Company are not prima facie prejudicial to the interest of the Company.

c. In respect of Loans taken by the Company, the payment of Principal amount is regular.

d. In respect of Loans taken by the Company, these were no overdue amount. The Company has not given the Loan.

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

5. Based on the Audit Procedures applied by us and according to the information and explanations given to us, there were no transactions that need to be entered into the register maintained in pursuance of section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public within the meaning of Section 58 A and 58 AA of the Companies Act, 1956 and the rules framed there under. Accordingly, there have been no proceedings before the Company Law Board in this matter nor any order has been passed.

7. In our opinion, the Internal Audit System is generally adequate and commensurate with the size of the Company.

8. The Central Government has prescribed maintenance of cost records under section 209(1) (d) of the Companies Act,1956 in respect of manufacturing activity of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however made a detailed examination of the same with a view to determine whether these records are complete and correct.

9. a. According to the records of the Company, undisputed Statutory dues including Income Tax, Wealth Tax, Customs Duty, Excise Duty, Provident fund and other statutory dues except for Sales Tax, Entry Tax, Professional Tax and Cess duty have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no arrears of undisputed amounts payable in respect of the aforesaid dues were outstanding as on the date of Balance sheet for a period of more than six months from the date they become payable except for MPCT/CST Rs. 43,48,239, Entry Tax Rs. 1,20,17,890, Professional Tax Rs. 5,22,097 and Cess duty Rs. 2,13,140.

b. According to the information and explanations given to us, the dues in respect of Sales Tax that has not been deposited with the appropriate authorities on account of disputes as on the date of the Balance Sheet and the forum where the disputes are pending are as under:

Sr. Name of Nature of Forum where Amount for Amount No. the Statue the Dues dispute is Which dispute Not pending. is pending is pending Deposited (Rs. in lacs) (Rs. in lacs)

1. M.P. Comm. Tax Act MPCT High Court 158.40 158.40 Year 99-00 to 04-05

2. M.P. Comm. Tax Act Entry Tax High Court, Indore 40.69 40.69 1997-98

10. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has not incurred any cash losses during this financial year, but the company incurred cash loss in the immediately preceding financial year.

11. The Company has defaulted in repayment of dues to ARCIL and EXIM Bank. The entire amount of outstanding Rs. 2678.11 Lacs and interest not provided for of Rs. 4346.03 Lacs is in default.

12. According to the information and explanations given to us, the Company during the year has not granted Loans and Advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a nidhi/mutual benefit fund/ society to which the provisions of special statue relating to chit fund are applicable.

14. The Company is not dealing or trading in Share, Securities, Debentures and other investments..

15. According to the information and explanation given to us, The Company has not given any guarantees for Loans taken by others from Banks or Financial Institutions.

16. The Company has not raised any term loans during the year & the term loan outstanding at the beginning of the year, were applied for the purpose for which they were raised.

17. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that Prima facie the Company has not utilised the funds raised from short term sources towards Long term investment and vice versa.

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

19. The Company did not have issued debentures and therefore question of creating of Securities does not arise.

20. The Company has not raised any money by way of Public issue during the year.

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

For S. P. MOONDRA & CO.,

CHARTERED ACCOUNTANTS

(S.P. MOONDRA)

PROPRIETOR

PLACE : INDORE M. NO. 073747

DATED THE : 25th August, 2011 FRN No.04879C


Mar 31, 2009

We have audited the attached Balance Sheet of M/S. JYOTI OVERSEAS LIMITED., INDORE (M.P.) as at March 31, 2009 and also Profit & Loss Account and the Cash Flow Statement of the Company 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 conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2) As required by the Companies (Auditors Report) order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we 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 and Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the Books of accounts.

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement read with Notes dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(e) The Company is a Sick Industrial Company within the meaning of Sick Industrial Companies (Special Provisions ) Act, 1985. However, in view of the facts indicated in note no. 3 in schedule 19, the accounts of the Company have been prepared on going concern basis.

(f) Attention is drawn to the following notes in schedule 19 to accounts whose impact on Companys Loss/reserves is indicated in the respective notes below:

i) Note no. 7 regarding non availability of balance confirmation certificate from some of the Debtors, Creditors and Loans & Advances;

ii) Note no. 4 for non provision of Interest on Term Loans taken by the Company from Financial Institutions of Rs. 322.98 Lacs for the Year and total amount not provided for till the date of Balance Sheet Rs. 3700.07 Lacs.

Without considering item no.

(i) above, whose impact on Companys loss/reserves is not presently ascertainable, had the impact of item no.

(ii) been considered,

a) Loss for the year would have been higher by Rs. 322.98 Lacs and consequently term Loans would have been higher by same amount,

b) If the Total amount would have been provided for, the accumulated Losses would have been higher by Rs. 3700.07 Lacs and Consequently Secured Loans would have been higher by Same amount.

(g) On the basis of information and explanations given to us, we report that none of the directors is disqualified as on the date of balance sheet date from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(h) Subject to the above and read together with other notes on Accounts, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with 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 affairs of the Company as at 31st March, 2009; and

(b) In the case of the Profit and Loss Account, of the Loss for the year ended on that date; and

(c) In the case of Cash flow Statement of the Cash Flows of the Company for the year ended on that date.

With reference to the Annexure referred to in paragraph 2 of our report of even date to the members of M/s.JYOTI OVERSEAS LIMITED, for the year ended on 31st March, 2009, We report that, in our opinion and to the best of our information and explanations furnished to us and the books and records examined by us in the normal course of Audit:

1. a. The Company has maintained proper records showing full particulars

including quantitative details and situation of fixed assets.

b. As explained to us, the fixed assets have been physically verified by the management during the year which in our opinion is reasonable, having regard to the size of the Company and nature of its asset We were informed that no material discrepancies were noticed on such physical verification.

c. There has been no disposal of substantial part of the Fixed Assets during the year & the going concern status of the Company is not affected.

2. a. Inventories have been physically verified by the management at

reasonable intervals during the year.

b. In our opinion, 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. The discrepancies noticed on verification between physical stock and book stock were not material having regard to the size of the operations of the company and have been properly dealt with in Books of Accounts.

3. a. The Company has taken Loan from One party covered in the

register maintained under section 301 of the Act, At the year end Outstanding balance of such loan taken aggregated to Rs. 74.76 Lacs and the maximum Amount involved during the year was Rs. 74.76 Lacs, Further Company has not granted Loans to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, the Loans are Interest free and other terms and conditions of the aforesaid Unsecured loans taken by the Company are not prima facie prejudicial to the interest of the Company.

c. In respect of Loans taken by the Company, the payment of Principal amount is regular.

d. In respect of Loans taken by the Company, there were no overdue amount.The Company has not given the Loan.

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

5. Based on the Audit Procedures applied by us and according to the information and explanations given to us, there were no transactions that need to be entered into the register maintained in pursuance of section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public within the meaning of Section 58 A and 58 AA of the Companies Act, 1956 and the rules framed there under. Accordingly, there have been no proceedings before the Company Law Board in this matter nor any order has been passed.

7. In our opinion, the Internal Audit System is generally adequate and commensurate with the size of the Company.

8. The Central Government has prescribed maintenance of cost records under section 209(1) (d) of the Companies Act,1956 in respect of manufacturing activity of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however made a detailed examination of the same with a view to determine whetherthese records are complete and correct.

9. a. According to the records of the Company, undisputed Statutory

dues including Income Tax, Wealth Tax, Customs Duty, Excise Duty and other statutory dues except for Provident fund, Sales Tax, Entry Tax, Professional Tax and Cess duty have been generally regularly deposited with the appropriate authorities. As informed to us, the Company did not have any dues on account of employees state Insurance. According to the information and explanations given to us, no arrears of undisputed amounts payable in respect of the aforesaid dues were outstanding as on the date of Balance sheet for a period of more than six months from the date they become payable except for Provident fund Rs. 2,10,873 , MPCT/CST Rs. 1,43,19,163, Entry Tax Rs. 73,08,770, Professional Tax Rs. 5,07,859 and Cess duty Rs. 2,13,140.

b. According to the information and explanations given to us, the dues in respect of Sales Tax .Income Tax .Wealth Tax, Service Tax, Custom Duty .Excise Duty and Cess that have not been deposited with the appropriate authorities on account of disputes as on the date of the Balance Sheet and the forum where the disputes are pending are as under:

Sr. Name of Nature of Forum where Amountfor Amount No. the Statue the Dues dispute is Which dispute Not pending. is pending is pending Deposited (Rs. in lacs) (Rs. in lacs) 1. Central Excise Act Excise Duty CESTAT, Delhi 80.73 80.73 2. Income Tax Act Income Tax CIT Appeal-I 5.40 5.40 A.Y. 1991-92 6.60 6.60 A.Y. 1993-94 12.00 12.00 3. M.P. Commercial Tax MPCT Addl. Act Commissioner Comm. Tax (Revision) Year 03-04 130.8 130.8 4. M.P. Comm. Tax Act MPCT Year 99-00 to 02- 03 68.93 68.93 5. M.P. Comm. Tax Act Entry Tax -do- 35.03 35.03 6. M.P. Comm. Tax Act Entry Tax High Court, Indore 1997-98 7. M.P. Comm. Tax Act MPCT High Court, Indore 2003-04 43.46 43.46

10. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during this financial year and immediately preceding this financial year.

11. The Company has defaulted in repayment of dues to ARCIL and EXIM Bank. The entire amount of outstanding 2678.11 Lacs and interest not provided for of Rs. 3700.07 Lacs is in default.

12. According to the information and explanations given to us, the Company during the year has not granted Loans and Advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a nidhi/mutual benefit fund/ society to which the provisions of special statue relating to chit fund are applicable.

14. The Company is not dealing or trading in Share, Securities, debentures and other investments.

15. According to the information and explanation given to us, The Company has not given any guarantees for Loans taken by others from Banks or Financial Institutions.

16. The Company has not raised any term loans during the year & the term loan outstanding at the beginning of the year , were applied for the purpose for which they were raised.

17. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that Prima facie the Company has not utilised the funds raised from short term sources towards Long term investment and vice versa.

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

19. The Company did not have issued debentures and therefore question of creating of Securities does not arise.

20. The Company has not raised any money by way of Public issue during the year.

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

For S. P. MOONDRA & CO., CHARTERED ACCOUNTANTS (S.P. MOONDRA) PLACE : INDORE PROPRIETOR DATED THE: 31st August, 2009 M. NO. 073747

 
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