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Auditor Report of K S Oils Ltd.

Mar 31, 2015

We have audited the accompanying financial statement of K.S.OILS LIMITED ('the company') which comprise the balance sheet as at 31st March 2015 and the Statement of Profit & Loss and the cash fow statement for the period 1st April 2014 to 31 March 2015 and a summary of significant 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 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 design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 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 except with regard to the matters discussed below where we have not been able to perform the audit in conformity with the relevant auditing standard on account of unavailability of adequate documents/information

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the 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.

Basis for qualified opinion

1. As regards trade receivables, inventory, costs, production margin and sales price of goods sold, we state that:

a) The company has made provision for bad and doubtful debts for Rs.4736 Lacs (Previous year 87987) on the basis of the management evaluation.

In absence of confirmation of balances trade receivable as on 31.03.2015 , provision to be made if any for adverse variation in the carrying amount of these balances are not quantified.

b) Position of inventory is as per management as more details in note no.36. As explained in the note, we could not observe inventory count as required under SA 501(Revised) 'Audit evidence –Specific Consideration for selected Items'.

c) Attention is invited to Note 35 on the explanation of the management with regard to abnormal variations/fluctuations in costs, production margin and sales price. We are unable to comment on these, being a technical matter.

2. In the absence of details of testing for impairment of certain assets viz. Production plants which were not operational/fully operational during the period, we are unable to state whether provision, if any, is required to be made in this regard.

3. Out of transactions of purchase and sales of goods selected on a sample basis; in some cases, full supporting documents were not made available for our verification.

4. Loan and Advances include advances aggregating Rs38424 Lacs given to some of the suppliers which include advances Rs.26514 Lacs outstanding for more than a year. Relevant documents and confirmations of balances are yet to be obtained.

5. The company has given loans of Rs.1295 Lacs to its step-down subsidiary K S OILS SDN BHD. The net worth of the subsidiary is eroded significantly for the accounting period ended March 31, 2015 due to accumulated losses of Rs. 549 Lacs . No provision has been made for any doubtful recovery as it is not ascertainable.

6. Company has taken an average rate (for goods for trading and manufacturing) to determine the value of cost of goods. Consequently, the result of such trading transactions and the closing inventory of such goods have not been disclosed separately. This is also not in conformity with the requirement of Revised Schedule VI.

7. The company had been served demand notice under section U/s 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of security Interest Act, 2002 on dated 26th Dec.2013 for Wind Energy Business and 4th March 2014 for Edible Oil Business for payment of Outstanding principal amount including interest etc. within 60 days from the date of notice.

As stated in the Note no.33, pending quantification of interest payable, penalty, other financial charges, the ultimate liability for financial charges and related impact on reported loss is not| quantifiable for the period and the Company has not provided interest liability for the current financial year.

8. The financial statements of company have been prepared on a going concern assumption, though the company has incurred a net loss of Rs. 22987 Lacs during the twelve months period ended March 31, 2015 and its net worth has eroded totally, CDR of the company has been called off and it has been served SARFAESI Notices by bankers & financial institutions for payment of loans. This situation indicates the existence of a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern and therefore it may be unable to realize its assets and discharge its liabilities in normal course of business. The Company's ability to continue as a going concern is dependent upon the factors mentioned in Note 37.

9. Attention is invited to the following Notes forming part of the financial statements:

a) Note no. 30 With regard to certain contingent liabilities, whose impact is not ascertainable.

b) Note no. 31 with regard order of settlement passed in the favor of company the Appeal of Income Tax department is pending before M.P. High court Gwalior.

c) Note no. 38 (a) & (b) With regard to manner of utilization of fund raised through preferential allotment of equity shares in previous years.

d) Note no. 39 With regard to the declared dividend Balance of Rs.90 Lacs has not been transferred to separate bank account.

Qualified opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matters described in

paragraphs 1 to 8 above, and the resulting effects of all these on the relevant assets, liabilities and the loss for the period which are not quantifiable 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:

(i) In the case of the Balance sheet of the State of affairs of the Company as at 31st March 2015.

(ii) In the case of the Profit & Loss Account, of the 'LOSS' for the year ended on that date.

(iii) In the case of the Cash Flow Statement, of the cash fow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 issued by the Company Law Board in terms of Sub-Section(11) of Section143,dated 10,April 2015 of the Companies Act,2013, we give in Annexure a statement on matters specified in paragraphs 3 and 4 of the said Order.

2. As required by section 143(3) of the Act, we report that:

a. Except as stated in our comments under Basis of Qualified Opinion ,we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion the aforesaid financial statements complies with the Accounting Standards specified in section 133 of the Companies Act, 2013, read with Rule 7 of the companies (Accounts) Rule 2014; However as explained above ,we are unable to comment upon the complete compliance with accounting standard AS 1" Disclosure of Accounting Policies," AS 2 " valuation of Inventory ", AS 9 " Revenue Recognition", AS 28 Impairment of Assets" and AS 29 Provision, Contingent Liabilities and Contingent Assets.

e. On the basis of the written representations received from the directors as on 31 March 2015 taken on record by the Board of Directors, none of the directors (except Mr. Ramesh Chand Garg) is disqualified as on 31 March 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 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 positions in its financial statements as referred in note no. 30 to the financial Statements.

ii. The Company did not have long-term contracts including derivative contracts as such the question of commenting on any material foreseeable losses thereon arise.

iii. According to the information and explanations given to us there was no delay in transferring amounts , required to be transferred , to the Investor Education and Protection Fund by the Company.

Annexure to auditors; Report

The Annexure referred to in Auditors' report of even date to the members of K. S. OILS Limited on the financial statements for the twelve months period ended March 31, 2015.

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

(b) During the period, fixed assets have been physically verified by the management on the test basis. Such verification was made at reasonable intervals. We are informed that no material discrepancies were noticed on such observation.

(ii) (a) As informed to us, inventory has been physically verified during the year by the management. In our opinion, the frequency of verification needs to be increased in relation to the size of the company and the nature of its business.

(b) As mentioned in paragraph 2(b) of the Auditors' report and as also stated in note 36, we are unable to comment upon reasonableness and adequacy of the procedures of physical verification of inventory followed during such verification.

(c) In our opinion and according to the information and explanation provided to us by the Company and as mentioned in paragraph 1 (b) of the Auditors' Report, the Company has not maintained proper records of inventory, as major of the inventory remained unmoved during the year. In the absence of availability of appropriate information, we are unable to comment upon further adjustments, if any, is required to be made in such regard.

(iii) During current year the Company has not granted any unsecured loan to company covered in the register maintained under section 189 of the Companies Act, 2013.

(a) The earlier loans granted along with interest thereon were re payable on demand. However no principal/interest has been received during the year.

(b) As the Company has not demanded repayment of any such loan/interest, therefore there are no overdue amounts.

(iv) In our opinion and according to. the information and explanations given to us, in addition to our comments in paragraph 1(b) & (c), 3 and 6, of the Auditors' Report, the existing internal control procedures are required to be made adequate 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. In our opinion there is a continuing failure to correct major weakness in the internal control system.

(v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the provision of Sections 73 to 76 or any other relevant provision of the Companies Act, 2013 and the rules framed there under.

(vi) The Central Government has prescribed maintenance of cost records under section 148 (1) (d) of the Companies Act, 2013 in respect of Company's Vanaspati, Refined Vegetable Oils and Power Generation'. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records, and are of the opinion that prima facie, the prescribed accounts and records have not been made and maintained.

(vii) In respect of statutory Dues:

(a) According to the records of the Company, 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, if any applicable to it, have not been regularly deposited with appropriate authorities and there have been material delays in numerous number of cases. The Arrears of outstanding dues at the last day of financial year concerned for a period of more than six months from the date they became payable are as under:

Name of the Nature of the Amount Period Due Date Date of statute dues (Rs. in Lacs) to which the payment amount relates

Income Tax Tax Deducted 12.36 Period related Various dates Paid 10.31 Act at Source to 2014-15 Lacs up to 2/11/2015

Employee State ESIC 2.66 Period related Various dates Insurance Act to 2012-15

Employees Provident 77.29 Period related to Various dates Paid 4.70 Lacs Provident Fund Fund 2012-15 up to and Misce llaneous 30/09/15 Provisions Act

Central Excise & Excise Duty 2.73 Period related to Various dated Custom Act 2013-15

Service Tax Service Tax 59.74 Period related to Various dated Paid Rs. 14.23 2013-15 Lacs up to 7/10/201

State Sales Tax VAT 877.13 Period related to Various dated 2013-15

State Sales Tax WCT 0.56 Period related to Various dated 2012-15

State Sales Tax Entry Tax 98.98 Period related to Various dated 2012-15

(b) Details of Dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of custom & Excise, Value Added Tax, Cess which have not been deposited as on march 31, 2015 on account of disputes are given below

Name of the Nature of the dues Amount Period Forum where dispute is pending statute (Rs. in lacs) to which amount relate

Sales Tax Act Sales Tax / CST 11 1998-99 High Court

Sales Tax Act Sales Tax / CST 6 2003-04 Revenue Board

Sales Tax Act Sales Tax / CST 3 2003-04 Revenue Board

Sales Tax Act Sales Tax / CST 4 2007-08 Deputy Commissioner Appeal, Gwalior

Sales Tax Act Sales Tax / CST 119 2008-09 Deputy Commissioner Appeal, Gwalior

Sales Tax Act Sales Tax / CST 52 2010-11 Additional Commissioner, Gwalior

Madhya Pradesh VAT 13 2007-08 Deputy Commissioner Appeal, VAT Act Gwalior

Madhya Pradesh VAT 19 2008-09 Tax Board Bhopal VAT A c t

Madhya Pradesh VAT 4560 2007-08 Hon'ble Settlement Commission , VAT Act Bhopal

Madhya Pradesh VAT 10 2009-10 Additional Commissioner, Gwalior VAT Act

Madhya Pradesh VAT 202 2010-11 Additional Commissioner, Gwalior VAT Act

Madhya Pradesh VAT 264 2010-11 Additional Commissioner, Gwalior VAT Act

Entry Tax Act Entry Tax 41 2006-07 Deputy Commissioner Appeal, Gwalior

Entry Tax Act Entry Tax 10 2007-08 Deputy Commissioner Appeal,Gwalior

Entry Tax Act Entry Tax 1205 2007-08 Hon'ble Settlement Commission ,Bhopal

Entry Tax Act Entry Tax 1 2009-10 Tax Board Bhopal

Entry Tax Act Entry Tax 3 2009-10 Additional Commissioner, Gwalior

Entry Tax Act Entry Tax 668 2009-10 Additional Commissioner, Gwalior

Entry Tax Act Entry Tax 196 2010-11 Additional Commissioner, Gwalior

Central Excise Act Excise Duty 24 2001-02 High Court

Central Excise Act Excise Duty 3 2002-03 High Court

(C) According to the records of the Company, there are no amounts that are due to be transferred to the investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1of 1956) and rules made there .

(viii) Even after not considering the qualifications which are not quantifiable, 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 in this year and also in the immediately preceding financial year.

(ix) As mentioned in paragraph 7 of the Auditors' report and as also stated in note 33 the company has defaulted in repayment of dues to bank and financial institutions. According to the information and explanations given to us the amount and period of default could not be given as details such as overdue interest, penalties, damages, cost etc. as considered in their SERFASI Notice by lenders and other parties have not been mentioned or made available to the company. Further the Company has not provided any interest liability for the current period due to non- charging of interest by majority of banks and unavailability of their statements of accounts.

(x) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the period

(xi) No Term loan was raised during the year.

(xii) 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 Ladha G. D. & Co.

Chartered Accountants

Firm Registration number: 010962C

New Delhi Nitin Paharia

Dated: December 5, 2015 Partner

Membership number: 409770


Mar 31, 2014

We have audited the accompanying financial statement of K.S.OILS LIMITED ('the company') which comprise the balance sheet as at 31st March 2014 and the Statement of Profit & Loss and the cash flow statement for the fifteen month of the period 01 January 2013 to 31 March 2014 and a summary of significant policies and other explanatory information.

Management's Responsibility for the financial Statements

Management is responsible for the preparation of these financial statements that give true & fair view of the financial position, financial performance and cash flows of the company in accordance with the Accounting standards referred to in subsection (3C) of section 211 of the companies ,Act 1956(" the act") .This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of 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 conducted our audit in accordance with standards on Auditing issued by the institute of chartered accountants of India except with regard to the matters discussed below where we have not been able to perform the audit in conformity with the relevant auditing standard on account of unavailability of adequate documents/information. Those standards require that we comply with ethical requirement and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 consider internal control relevant to the company's preparation and presentation of the financial statement that give a true and fair view in order to design audit procedure that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also include evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statement.

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

Basis for qualified opinion

1. As regards trade receivables, inventory, costs, production margin and sales price of goods sold, we state that:

a) The company has made provision for bad and doubtful debts for Rs. 87987 Lacs (Previous year 52173) on the basis of the report of the Independent Chartered Accountant appointed by the lead bank dated 28th March, 2014 and management evaluation.

In absence of confirmation of balances trade receivable as on 31.03.2014 , provision to be made if any for adverse variation in the carrying amount of these balances are not quantified.

b) Position of inventory is as per report of Independent Chartered Accountant appointed by the lead bank /management as more details in note no.36. As explained in the note, we could not observe inventory count as required under SA 501(Revised) 'Audit evidence -Specific Consideration for selected Items'.

c) Attention is invited to Note 35 on the explanation of the management with regard to abnormal variations/fluctuations in costs, production margin and sales price. We are unable to comment on these, being a technical matter.

2. In the absence of details of testing for impairment of certain assets viz. Production plants which were not operational/fully operational during the period, we are unable to state whether provision, if any, is required to be made in this regard.

3. Out of transactions of purchase and sales (including consignment sales) of goods selected on a sample basis; in some cases, full supporting documents were not been made available for our verification.

4. Loan and Advances include advances aggregating Rs 31422 Lacs given to some of the suppliers which include advances Rs.15745 Lacs outstanding for more than a year. Relevant documents and confirmations of balances are yet to be obtained.

5. The company has given loans of Rs.1407 Lacs to its step-down subsidiary K S OILS SDN BHD. The net worth of the subsidiary is eroded significantly for the accounting period ended March 31, 2014 due to accumulated losses of Rs. 834 Lacs. No provision has been made for any doubtful recovery as it is not ascertainable.

6. Company has taken an average rate (for goods for trading and manufacturing) to determine the value of cost of goods. Consequently, the result of such trading transactions and the closing inventory of such goods have not been disclosed separately. This is also not in conformity with the requirement of Revised Schedule VI.

7. The company had been served demand notice under section U/s 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of security Interest Act, 2002 on dated 26th Dec.2013 for Wind Energy Business and 4th March 2014 for Edible Oil Business for payment of Outstanding principal amount including interest etc. within 60 days from the date of notice.

As stated in the Note no.33, pending quantification of interest payable, penalty, other financial charges, the ultimate liability for financial charges and related impact on reported loss is not quantifiable for the period.

8. The financial statements of company has been prepared on a going concern assumption, though the company has incurred a net loss of Rs. 1,51,039 Lacs during the fifteen months period ended March 31, 2014 and it's net worth has eroded totally, CDR of the company has been called off and it has been served SARFAESI Notices by bankers & financial institutions for payment of loans. This situation indicates the existence of a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern and therefore it may be unable to realize its assets and discharge its liabilities in normal course of business. The Company's ability to continue as a going concern is dependent upon the factors mentioned in Note 37.

9. Attention is invited to the following Notes forming part of the financial statements:

a) Note no. 30 With regard to certain contingent liabilities, whose impact is not ascertainable.

b) Note no. 31 with regard order of settlement passed in the favour of company the Appeal of Income Tax department is pending before M.P High court Gwalior.

c) Note 32 (d) With regard to Subsequent events occurring after balance sheet date the company has sold 82 windmills of 67.2 MW for Rs. 176.84 Cr

d) Note no. 38 (a) & (b) With regard to manner of utilization of fund raised through preferential allotment of equity shares in previous year.

e) Note no. 39 With regard to the declared dividend Balance of

Rs.350 Lacs (including Rs.260 Lacs due to promoters) has not been transferred to separate bank account.

Qualified opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matters described in paragraphs 1 to 8 above, and the resulting effects of all these on the relevant assets, liabilities and the loss for the period which are not quantifiable 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:

(i) In the case of the Balance sheet of the State of affairs of the Company as at 31st March 2014.

(ii) In the case of the Profit & Loss Account, of the 'LOSS' for the year ended on that date.

(iii) In the case of the Cash Flow Statement, of the cash flow for the year 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. Except as stated in our comments under Basis of Qualified Opinion ,we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;However as explained above ,we are unable to comment upon the complete compliance with accounting standard (AS) 1" Disclosure of Accounting Policies," AS 2 " valuation of Inventory ", AS 9 " Revenue Recognition", AS 28 Impairment of Assets" and AS 29 Provision ,Contingent Liabilities and Contingent Assets.

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, namely Mr. Pramod Kumar Mandloi, Mr. R.S. Sisodia ,Mr. B.N. Singh , Mr. Sourabh Garg and Mr. Ramesh Chand Garg are 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. However Mr. Ramesh Chand Garg has been Reappointed as Managing Director after obtaining permission from Registrar of Companies Madhya Pradesh, Gwalior.

Annexure to auditors; Report

The Annexure referred to in Auditors' report of even date to the members of K. S. OILS Limited on the financial statements for the fifteen months period ended March 31,2014.

(i) (a) As informed to us, the Company is in the process of compiling proper, records showing full particulars, including quantitative details and situation of fixed assets.

(b) During the period, fixed assets have been physically verified by the management. Such verification needs to be made at reasonable intervals. We are informed that no material discrepancies were noticed on such observation.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the period.

(ii) (a) As informed to us, inventory has to be physically verified by the management. Furthermore, as stated in paragraph 1(b) of the Auditors' Report and also as stated in note 36, the same as been verified (excluding stocks with third parties and stock lying at certain locations) by an independent firm of Chartered Accountants appointed by the lead banker and banker. In our opinion, the frequency of verification needs to be increased in relation to the size of the company and the nature of its business.

(b) /4s mentioned in paragraph 1(b) of the Auditors' report and as also stated in note 36, we are unable to comment upon reasonableness and adequacy of the procedures of physical verification of inventory followed during such verification.

(c) In our opinion and according to the information and explanation provided to us by the Company and as mentioned in paragraph 1 (b) of the Auditors' Report, the Company is required to Maintain proper records of inventory. In the absence of availability of appropriate information, we are unable to comment upon further adjustments, if any, is required to be made further in such regard.

(iii) (a) In one of the earlier years, the Company has granted unsecured loan to one company covered in the register maintained under section 301 of the Companies Act, I 956. The maximum amount involved during the period was Rs. 1,511 Lacs and the year-end balance of loans granted to such party was Rs. 1,407 Lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(c) The loans granted along with interest thereon are re-payable on demand. As informed, during the period the Company has not demanded repayment of any such loan along with interest thereon, thus there has been no default on the part of, the parties to whom the monies has been lent.

(d) As the Company has not demanded repayment of any such loan, there is no overdue amount which is of more than rupees one Lacs.

(e) The Company, had taken unsecured loan from one of the party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the period was Rs. 4100 Lacs and the year-end balance of loans taken from such party was Nil.

(f) The loan taken was interest free, and other terms and conditions for such loan are not, prima facie, prejudicial to the interest of the Company.

(g) There is no repayment schedule attached to the loan, hence we are unable to comment upon timely repayment of the same.

(iv) In our opinion and according to. the information and explanations given to us, in addition to our comments in paragraph 1(b) & (c), 3 and 6, of the Auditors' Report, the existing internal control procedures are required to be made adequate 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. In our opinion there is a continuing failure to correct major weakness in the internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of the transactions made in pursuance of such contracts or arrangements exceeding value of rupees five Lacs entered into during the financial year, in the absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

(vii) The Company has an internal audit system, the scope and coverage of which, in our opinion requires to be enlarged and strengthen to be commensurate with the size and nature of its business.

(viii) The Central Government has prescribed maintenance of cost records under section 209 (1) (d) of the Act in respect of Company's "Vanaspati, Refined Vegetable Oils and Power Generation'. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records, and are of the opinion that prima facie, the prescribed accounts and records have not been made and maintained.

(ix) (a) 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, if any applicable to it, have not been regularly deposited with appropriate authorities and there have been material delays in numerous number of cases.

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

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

Income Tax Tax Deducted 249.65 Period 2011-14 Act at Source

Employee State ESIC 4.92 Period related Insurance Act to 2012-14

Employees Provident 39.96 Period related to Provident Fund Fund 2012-14 and Miscellaneous Provisions Act

Central Excise & Excise Duty 5.58 Period related to Custom Act 2013-14

Service Tax Service Tax 16.64 Period related to 2013-14

State Sales Tax WCT 5.29 Period related to 2013-14

State Sales Tax VAT 886.75 Period related to 2012-14

Sate Sales Tax Entry Tax 99.13 Period related to 2012-14



Name of the statute Due Date Date of payment

Income Tax Act Various dates Rs.249.65 Lacs Paid on 5/4/2014

Employee State Insurance Act Various dates Rs.1.29Lacs paid on various dates

Employees Provident Fund and Miscellaneous Provisions Act Various dates Rs. 7.68 Lacs paid on 07/11/14

Central Excise & Custom Act Various dated Rs. 5.58 lacs Paid 12/11/2014

Service Tax Various dated Rs. 7.27 lacs paid on various dates

State Sales Tax Various dated Rs. 5.29 lacs paid on various date

State Sales Tax Various dated Not yet Paid

State Sales Tax Various dated Not yet Paid

(c) According to the records of the Company, the dues outstanding of income-tax, sales tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty and Cess on account of any dispute, are as follows:

Name of the Nature of the dues Amount statute (Rs. in lacs)

Sales Tax Act Sales Tax / CST 11

Sales Tax Act Sales Tax / CST 6

Sales Tax Act Sales Tax / CST 3

Sales Tax Act Sales Tax / CST 4

Sales Tax Act Sales Tax / CST 119

Sales Tax Act Sales Tax / CST 52

Madhya Pradesh VAT 13 VAT Act

Madhya Pradesh VAT 19 VAT Act

Madhya Pradesh VAT 4560 VAT Act

Madhya Pradesh VAT 10 VAT Act

Madhya Pradesh VAT 202 VAT Act

Madhya Pradesh VAT 264 VAT Act

Entry Tax Act Entry Tax 41

Entry Tax Act Entry Tax 10

Entry Tax Act Entry Tax 1205 Bhopal

Entry Tax Act Entry Tax 1

Entry Tax Act Entry Tax 3

Entry Tax Act Entry Tax 668

Entry Tax Act Entry Tax 196

Central Excise Act Excise Duty 24

Central Excise Act Excise Duty 3

Name of the statute Period Forum where dispute is pending to which amount relate

Sales Tax Act 1998-99 High Court

Sales Tax Act 2003-04 Revenue Board

Sales Tax Act 2003-04 Revenue Board

Sales Tax Act 2007- 08 Deputy Commissioner Appeal, Gwalior

Sales Tax Act 2008- 09 Deputy Commissioner Appeal, Gwalior

Sales Tax Act 2010-11 Additional Commissioner, Gwalior

Madhya Pradesh VAT Act 2007- 08 Deputy Commissioner Appeal, Gwalior

Madhya Pradesh VAT Act 2008- 09 Tax Board Bhopal

Madhya Pradesh VAT Act 2007-08 Hon'ble Settlement Commission, Bhopal

Madhya Pradesh VAT Act 2009- 10 Additional Commissioner, Gwalior

Madhya Pradesh VAT Act 2010- 11 Additional Commissioner, Gwalior

Madhya Pradesh VAT Act 2010-11 Additional Commissioner, Gwalior

Entry Tax Act 2006- 07 Deputy Commissioner Appeal, Gwalior

Entry Tax Act 2007- 08 Deputy Commissioner Appeal, Gwalior

Entry Tax Act Bhopal 2007-08 Hon'ble Settlement Commission ,

Entry Tax Act 2009-10 Tax Board Bhopal

Entry Tax Act 2009-10 Additional Commissioner, Gwalior

Entry Tax Act 2009- 10 Additional Commissioner, Gwalior

Entry Tax Act 2010- 11 Additional Commissioner, Gwalior

Central Excise Act 2001- 02 High Court

Central Excise Act 2002- 03 High Court

(x) Even after not considering the qualifications which are not quantifiable, the Company's accumulated losses at the end of the financial period of fifteen months the net worth is negative. Further, the Company has incurred cash, losses during the current and immediately preceding financial period.

(xi) The company has defaulted in repayment of dues to bank and financial institutions.Accordingto theinformation and explanations given to us the amount and period of default could not be given as details such as overdue interest, penalties, damages, cost etc. as considered by lenders in their SERFASI Notice has not been mentioned or made available to the company. Further details are given note no.33 the notes to account.

(xii) According to information and explanation given to us and based on the documentation and records produced to us, the Company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 as amended are not applicable to the Company.

(xiv) In our opinion and according to information and explanation given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the period

(xvi) In our opinion, the term loans which were raised in earlier periods have been applied for the purpose for which the loans were raised.

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

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the period.

(xix) The Company did not issue any debentures during the period.

(xx) The Company has not raised money by way of public issue during the period.

(xxi) 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 Ladha G. D. & Co.

Chartered Accountants Firm Registration number: 010962C

New Delhi Nitin Pahariya

Dated: 1st August, 2015 Partner

Membership number: 409770




Dec 31, 2012

1. We have audited the attached Balance Sheet of K. S. OILS LIMITED (''the Company'') as at December 31, 2012 and also the Statement of Profit and Loss and the Cash Flow statement for the eighteen months period 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.

2. We conducted our audit in accordance with auditing standards generally accepted in India, except with regard to the matters discussed below where we have not been able to perform the audit in conformity with the relevant auditing standards on account of unavailability of adequate documents/ information. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of "The Companies Act, 1956. of India (the ''Act'') and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. As regards trade receivables, inventory, costs, production margin and sales price of goods sold, we state that:

a) As per the report of the Independent Chartered Accountant dated 17th March, 2013 (for the period up to 30th October 2012) appointed by the lead bank, trade receivable aggregating Rs. 42,212 Lacs have been provided for bad and doubtful debts in addition to the amounts aggregating Rs. 9,333 Lacs which was already provided by the management. However trade receivables from a party are also adjusted against trade payables to other parties without any contractual arrangement between such parties and significant amounts of provision for bad and doubtful debts are being provided for, though they were confirmed by the parties earlier.

b) Position of inventory is as per report of Independent Chartered Accountants appointed by the lead bank as more detailed in Note 36. Consequently the Company has made provision of Rs. 13,263 lacs for slow moving items and for variance noticed during physical verification. As explained in the Note, we could not observe-inventory count as required under SA 501 (Revised) ''Audit Evidence-Specific Considerations for Selected Items''.

c) Attention is invited to Note 35 on the explanation of the management with regard to abnormal variations/fluctuations in costs, production margin and sales price. We are unable to comment on these, being a technical matter.

5. In the absence of details for testing the impairment of certain assets viz. Production plants which were not operational/fully operational during the period, we are unable to state whether provision, if any, is required to be made in this regard.

6. Out of transactions of purchase and sales (including consignment sales) of goods selected on a sample basis; in some cases, full supporting documents were not been made available for our verification.

7. Loans and Advances include advances aggregating Rs. 14,367 Lacs given to some of the suppliers which include advances Rs. 3,863 Lacs outstanding for more than a year. Relevant documents and confirmations of balances are yet to be obtained.

8. The company has given loans of Rs. 1,211 Lacs to its step-down subsidiary K S Oils Sdn Bhd. The net worth of the subsidiary is eroded significantly and for the accounting period ended December 31, 2012 it has accumulated losses of Rs. 817 Lacs. In view thereof, we are unable to state whether provision, if any, is required to be made for such loans.

9. Company has taken an average rate (for goods for trading and manufacturing) to determine the value of cost of goods. Consequently, the result of such trading transactions and the closing inventory of such goods have not been disclosed separately. This is also not in conformity with the requirement of schedule VI .

10. With regard to preparation of financial statements on a going concern assumption, the Company has incurred a net loss of Rs. 1,37,203 Lacs during the eighteen months period ended December 31, 2012 and the Company''s net worth is also eroded substantially. The Company''s ability to continue as a going concern is dependent upon the factors mentioned in Note 37.

11. Attention is invited to the following Notes forming part of the financial statements:

a) Note no. 30 With regard to certain contingent liabilities, whose impact is not ascertainable.

b) Note no.31 With regard to the Companies application to the settlement commission and the order of the settlement commission settling all the cases.

c) Note no. 32 With regard to recognition of interest liability at the rates sanctioned under the Corporate Debt Restructring scheme as against original contracted rates of loan facilities.

d) Note no. 38 (a) & (b) With regard to manner of utilization of funds raised through preferential allotment of equity shares in previous year.

e) Note no. 39 With regard to the declared dividend balance of Rs. 365 Lacs (including Rs. 260 lacs due to promoters) which has not been transferred to a separate bank account.

12. Further to our comments in the annexure referred to in paragraph 3 above and subject to matters reported in Paragraph 2,4 to 7 & 9 above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. Proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii. The Balance sheet, Statement of Profit and Loss and Cash Flow statement dealt with by this report are in agreement with the books of account;

iv. The Balance Sheet, Statement of Profit and Loss and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. However as explained above, we are unable to comment upon the complete compliance with Accounting Standard (AS) 2 "Valuation of Inventories", AS 9 "Revenue Recognition", AS 28 "Impairment of Assets" and AS 29 "Provision, Contingent Liabilities and Contingent Assets;

v. All directors of the company are disqualified as on December 31, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.;

vi. In our opinion and to the best of our information and according to the explanations given to us, subject to our comments in Paragraphs 2 & 4 to 10 above, and the resulting effects of all these on the relevant assets, liabilities and the loss for the period which are not quantifiable, the said accounts give the information required by the Act in the manner so required and also give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in case of the Balance Sheet of the state of affairs of the Company as at December 31, 2012;

b) in the case of the Statement of Profit and Loss, of the loss for the period ended on that date; and

c) in the case of Cash Flow Statement, of the cash flows for the period ended on that date.

Annexure to Auditors'' Report

[Referred to in paragraph 3 of the Auditors'' report of even date to the members of K. S. OILS Limited on the financial statements for the eighteen period ended December 31, 2012]

(i) (a) As informed to us, the Company is in the process of compiling proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) During the period, fixed assets have been physically verified by the management. Such verification needs to be made at reasonable intervals. We are informed that no material discrepancies were noticed on such observation.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the period.

(ii) (a) As informed to us, inventory has to be physically verified by the management. Furthermore, as stated in paragraph 4 (b) of the Auditors'' Report and also as stated in note 36, the same has been verified (excluding stocks with third parties and stock lying at certain locations) by an independent firm of Chartered Accountants appointed by the lead banker. In our opinion, the frequency of verification needs to be increased in relation to the size of the company and the nature of its business.

(b) As mentioned in paragraph 4(b) of the Auditors'' report and as also stated in note 36, we are unable to comment upon reasonableness and adequacy of the procedures of physical verification of inventory followed during such verification.

(c) In our opinion and according to the information and explanation provided to us by the Company and as mentioned in paragraph 4 (b) of the Auditors'' Report, the Company is required to maintain proper records of inventory. Further, during the period, as stated in the said paragraph, on account of the discrepancy observed in the nature of non existing and slow moving inventory by such Independent Professional, the Company has made provision of Rs. 13,263 Lacs. In the absence of availability of appropriate information, we are unable to comment upon further adjustments, if any, is required to be made further in such regard.

(iii) (a) In one of the earlier years, the Company has granted unsecured loan to one Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the period was Rs. 1,469 Lacs and the year-end balance of loans granted to such party was Rs. 1,211 Lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(c) The loans granted along with interest thereon are re-payable on demand. As informed, during the period the Company has not demanded repayment of any such loan along with interest thereon, thus there has been no default on the part of the parties to whom the monies has been lent.

(d) As the Company has not demanded repayment of any such loan, there is no overdue amount which is of more than rupees one Lacs.

(e) The Company, had taken unsecured loan from one of the parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the period was Rs. 5,000 Lacs and the year-end balance of loans taken from such party was Rs. 2,640 Lacs.

(f) The loan taken was interest free, and other terms and conditions for such loan are not, prima facie, prejudicial to the interest of the Company.

(g) There is no repayment schedule attached to loan, hence we are unable to comment upon timely repayment of the same.

(iv) In our opinion and according to the information and explanations given to us, in addition to our comments in paragraph 4 (b) & (c), 6, and 9, of the Auditors'' Report, the existing internal control procedures are required to be made adequate 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. In our opinion there is a continuing failure to correct major weakness in the internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of 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 have been so entered.

(b) In respect of the transactions made in pursuance of such contracts or arrangements exceeding value of rupees five Lacs entered into during the financial year, in the absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

(vii) The Company has an internal audit system, the scope and coverage of which, in our opinion requires to be enlarged and strengthen to be commensurate with the size and nature of its business.

(viii) The Central Government has prescribed maintenance of cost records under section 209 (1) (d) of the Act in respect of Company''s ''Vanaspati, Refined Vegetable Oils and Power Generation''. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records, and are of the opinion that prima facie, the prescribed accounts and records have not been made and maintained.

(ix) (a) 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, if any applicable to it, have not been regularly deposited with appropriate authorities and there have been material delays in numerous number of cases. Further, for certain locations we are informed that the Company is in the process of getting registration for employees'' state insurance and hence the E.S.I.C dues have not been deducted and deposited with the required authorities.

(x) Even after not considering the qualifications which are not quantifiable, the Company''s accumulated losses at the end of the financial period of eighteen months are more than fifty percent of its net worth. Further, the Company has incurred cash losses during the current and immediately preceding financial period.

(xi) On the basis of the records made available and the information and explanation given to us, the Company has applied for the Corporate Debt Restructuring as more detailed in note no. 32 and details of default made by the Company are as mentioned below. Further during the current period, the Company has not issued any debentures.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 as amended are not applicable to the Company.

(xiv) In our opinion and according to information and explanation given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the period.

(xvi) In our opinion, the term loans which were raised in earlier periods have been applied for the purpose for which the loans were raised.

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

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company did not issue any debentures during the period.

(xx) The Company has not raised money by way of public issue during the period.

(xxi) 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 Haribhakti & Co.

Chartered Accountants

Firm Registration No.103523W

Sd/-

Sumant Sakhardande

Partner

Membership No.34828

Place: Mumbai

Date: July 26, 2013


Mar 31, 2010

1. We have audited the attached Balance Sheet of K S OILS LIMITED (the Company) as at 31st March, 2010 and also the Profit and Loss account and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the paragraph 3 above, we report that

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act,1956.

v. On the basis of the written representations received from the directors, as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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, 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 flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT [Referred to in paragraph 3 of the Auditors Report of even date to the members of K S Oils Limited on the financial statements for the year ended 31st March, 2010]

(ii) (a) The Company is in the process of maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, fixed assets were physically verified by the management during the year. We are informed that no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

(iii) (a) The Company has granted loan to one Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1,649.05 Lacs and the year-end balance of loans granted to such parties was Rs. 1,649.05 Lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(c) The loans granted along with interest thereon are re-payable on demand. As informed, during the year the Company has not demanded repayment of any such loan along with interest thereon, thus, there has been no default on the part of the parties to whom the money has been lent.

(d) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, the existing internal control procedures are required to be made adequate 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 weakness in internal control system of the Company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of 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 have been so entered.

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

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of Sections 58A and 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 apply.

(vii) In our opinion and according to the information and explanations given to us, the Company needs to strengthen its existing internal audit system so as to make it commensurate with the size and nature of its business.

(viii) The Central Government has prescribed maintenance of cost records under section 209 (1) (d) of the Act in respect of Companys Vanaspati, Refined Vegetable Oils and Power Generation. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the i maintenance of cost records, and are of the opinion that prima facie, the prescribed accounts and records have I not been made and maintained.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax and other material statutory dues, if any, applicable to it. However, for certain locations we are informed that the company is in the process of getting registration for employees state insurance and hence the E.S.I.C. has not been deducted and deposited with the required authorities.

(b) According to the information and explanation given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute except for the dues in relation to sales tax and excise duty as disclosed hereunder:

Name of the Nature of the Amount Period Forum where dispute is pending Statute dues and (Rs. in lacs) period to which it relates

Sales Tax Act Sales Tax 10.74 1998-99 High Court

Sales Tax Act Sales Tax 5.59 2003-04 Revenue Board

Sales Tax Act Commercial Tax 3.24 2003-04 Revenue Board

Sales Tax Act Commercial Tax 3.60 2007-08 Revenue Board

Sales Tax Act Commercial Tax 130.56 2006-07 Deputy Commissioner Appeal,Gwalior

Sales Tax Act Commercial Tax 12.54 2006-07 Deputy Commissioner Appeal,Gwalior

Sales Tax Act Commercial Tax 40.54 2006-07 Deputy Commissioner Appeal,Gwalior

Central Excise Act Excise duty 24.11 2001-02 High Court

Central Excise Act Excise duty 2.55 2002-03 High Court

Income Tax Act Income Tax 4.36 2006-07 Commissioner (Appeals)

Income Tax Act Income Tax 14.76 2007-08 Commissioner (Appeals)

(x) The company does not have any accumulated losses at the year end. Further, the company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the records of the Company and according to the information and explanations provided to us, we are of the opinion that the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing/ trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

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

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

(xviii) According to the information and explanations given to us, while converting warrants allotted on a preferential basis during the earlier year, the Company has made allotments of equity shares to the parties listed in the register maintained under Section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company.

(xix) The Company did not issue any debentures during the year.

(xx) During the year the company has not raised any money through public issue.

(xxi) 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 M/s. BDO Haribhakti & Co.

Chartered Accountants

Firm Registration No.103523W

Chetan Desai Place: Mumbai Partner

Date: 4th September, 2010. Membership No.17000

 
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