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 ÂSpecific
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