Mar 31, 2015
We have audited the accompanying financial statements of The Oudh Sugar
Mills Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with 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 judgements and estimates that
are reasonable and prudent; and the design, implementation and
maintenance of adequate internal financial control that were operating
effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatements, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing, issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the effectiveness of such
controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company's Directors, as well as evaluating the
overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified audit opinion on the financial
statements.
Basis for Qualified Opinion
As indicated in Note 14 to the financial statements, the Company has
recognized Deferred Tax Asset (DTA) (net) of Rs. 12,904.91 lacs
(including Rs. 3,777.71 lacs for the year) up to March 31, 2015, based on
the future profitability projections made by the management. In our
opinion, in the absence of virtual certainty about the above
projections, as required in terms of Accounting Standard - 22, had the
above impact been considered, loss for the year would have been Rs.
20,292.01 lacs (including DTA of Rs.. 9,001.60 lacs recognised up to
March 31, 2014) as against the reported loss of Rs. 7,387.10 lacs and
Reserves & surplus as at the balance sheet date would have been (-) Rs.
28,012.88 lacs as against the reported figure of (-) Rs. 15,107.97 lacs.
Our audit opinion on the financial statements for the previous year was
also qualified in respect of the above matter.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effect of the matter stated
in the Basis for Qualified Opinion paragraph, the financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as
at March 31, 2015, of its loss, and its cash flows for the year ended
on that date.
Emphasis of Matter
We draw attention to Note 40 to the financial statements, regarding
significant losses leading to material uncertainty about the Company's
ability to continue as a going concern and based on mitigating factor,
as fully described therein, the accompanying financial statements have
been prepared under the going concern assumption.
Report on Other Legal and Regulatory Reauirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) Except for the matter described in the Basis for Qualified Opinion
paragraph, we have sought and obtained all the information and
explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit;
(b) Except for the matter described in the Basis for Qualified Opinion
paragraph, in our opinion proper books of account as required by law
have been kept by the Company so far as it appears from our examination
of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) Except for the matter stated in the Basis for Qualified Opinion
paragraph, in our opinion, the aforesaid financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) The matters discussed in the Basis for Qualified Opinion and
Emphasis of matter paragraph above in our opinion, may have an adverse
effect on functioning of the Company.
(f) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of Section 164 (2) of the Act;
(g) The qualification relating to the maintenance of accounts and the
other matters connected therewith are stated in the Basis for qualified
opinion paragraph above.
(h) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 7 & 36 to
the financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
(Referred to in our report of even date to the members of The Oudh
Sugar Mills Limited as at and for the year ended 31st March, 2015)
(i) (a) The Company has maintained proper records showing full parti
-culars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(ii) (a) The management has conducted physical verification of inve
-ntory at reasonable intervals during the year.
(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 such physical verification.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
189 of the Companies Act, 2013. Accordingly, the provisions of clause
3(iii)(a) and (b) of the Order are not applicable to the Company and
hence not commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
During the course of our audit, we have not observed any major weakness
or continuing failure to correct any major weakness in the internal
control system of the Company in respect of these areas. There is no
sale of services during the year.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 148(1) of the Companies Act,
2013 in respect of its products and are of the opinion that prima
facie, the specified accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
same.
(vii) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees' state insurance, income-tax, sales-tax, wealth-tax,
service tax, custom duty, excise duty, value added tax, cess and other
material statutory dues applicable to it though there have been slight
delays in few cases.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, value
added tax, cess and other material statutory dues were outstanding, at
the year end, for a period of more than six months from the date they
became payable.
(c) According to the records of the Company, the dues outstanding in
respect of sales tax, income tax, custom duty, wealth tax, service tax,
excise duty, value added tax& cess on account of any dispute, are as
follows:-
Name of the statute Nature of dues Amount
(Rs. in lacs)
Bihar Finance Act, 1981 Tax on sale of Alcohol 4.19
for non submission of
declaration forms
U.P. Tax on Entry of
Goods Interest demand on Entry 0.74
Act,2007_ Tax on Sugar_
Central Sales Tax Act, 1956 Central Sales Tax demand 16.00
on Stock transfer
Taxability on alcohol sale 10.46
Demand for Sales Tax 9.31
due to non submission of
Declaration Forms_
Demand for VAT on sale of 12.35
country spirit and various
other matter
Central Excise Act,1944 Disallowance of Cenvat 4,372.31
Credit on Certain inputs /
capital items / input
services
Excise Duty on burnt /
waste 37.21
and loss on storage of
molasses etc._
Demand towards 43.47
differential amount of
sugar
cess on duty paid stock_
State Act Administration Charges on 116.29
Molasses
Name of the statute Period to which the Forum where dispute
amount relates is pending
Bihar Finance Act, 1981 1995-96 Appellate Tribunal, Patna
U.P. Tax on Entry of Goods 2008-09 Joint Commissioner Appeal
Act, 2007
Central Sales Tax Act, 1956 1999- 00,1993-94, Joint Commissioner
1996-97 to 1997-98,
High Court, Allahabad (Appeals) /
2007-08, 2008-09
1977-78 to 1981-82 High Court, Allahabad
Bench Lucknow
2003-04, 2006-2007 Appellate Tribunal,
Patna/ Lucknow
1985-86 to 1989-90, High Court, Lucknow,
Tribunal,
2001- 02, 2006-2007, Lucknow, 1st appeal
Sitapur,
2009-10 Hon'ble High Court,
Patna
Central Excise Act,1944 2000-01 to 2014-15 Commissioner
Appeal /CESTAT /
High Court, Allahabad
1977-78, 1991-92, Commissioner
(Appeals) / CESTAT
2002-03 to 2005-06 & / High Court,
Allahabad
2010-11
2007-08 CESTAT
State Act 2009-10 Supreme court of India
(d) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company in accordance
with the relevant provisions of the Companies Act,1956 (1 of 1956) and
rules made thereunder.
(viii) Without considering the consequential effects, if any, of the
matter stated in the Basis for Qualified Opinion paragraph of our
auditor's report, the Company's accumulated losses at the end of the
financial year are more than fifty percent of its net worth. The
Company has incurred cash loss in the current year and in the
immediately preceding financial year.
(ix) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions and banks or debenture holders.
(x) According to the information and explanations given to us, the
Company has given guarantees for loans taken by others from a bank, the
terms and conditions whereof, in our opinion, are not prima- facie
prejudicial to the interest of the Company. According to the informa
-tion and explanations given to us, the Company has not given any
guarantee for loans taken by others from other financial institutions.
(xi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
were obtained.
(xii) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R.Batliboi & Co. LLP
Chartered Accountants
Firm Registration Number: 301003E
per Kamal Agarwal
Place : Kolkata Partner
Date : 07th May 2015 Membership Number: 58652
Mar 31, 2014
We have audited the accompanying financial statements of The oudh Sugar
Mills Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2014 and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 read with
General Circular 8/2014 dated 4th April 2014, issued by the Ministry of
Corporate Affairs. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
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 the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements. 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
As indicated in Note 14 to the financial statements, the Company has
recognised Deferred Tax Asset (DTA) (net) of Rs. 9,001.60 lacs
(including Rs. 2,862.64 lacs for the year) up to March 31, 2014, based
on the future profitability projections made by the management. In our
opinion, in the absence of virtual certainty about the above
projections, as required in terms of Accounting Standard - 22, had the
above impact been considered, loss for the year would have been
14,461.58 lacs (including DTA of Rs.6,138.96 lacs recognised up to
March 31,2013) as against the reported loss of Rs. 5,459.98 lacs and
reserves & surplus as at the balance sheet date would have been (-) Rs.
16,484.42 lacs as against the reported figure of (-) Rs. 7,482.82 lacs.
Our audit opinion on the financial statements for the previous period
was also qualified in respect of the above matter.
QUALIFIED OPINION
In our opinion and to the best of our information and according to the
explanations given to us, except for the effect of the matter stated in
the Basis for Qualified opinion paragraph, the financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) order, 2003 ("the
order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) Except for the matter stated in the Basis for Qualified opinion
paragraph, in our opinion, the Balance Sheet, the Statement of Profit
and Loss, and the Cash Flow Statement comply with the Accounting
Standards notified under the Companies Act, 1956 read with General
Circular 8/2014 dated 4th April 2014 issued by the Ministry of
Corporate Affairs;
(e) on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
Annexure to the Independent Auditors'' Report
(REFERRED To IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF THE OUDH
SUGAR MILLS LIMITED AS AT AND FOR THE YEAR ENDED 31 ST March, 2014)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(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.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly the
provisions of clauses 4 (iii) (a) to (d) of the Companies (Auditor''s
Report) order, 2003 (as amended) are not applicable to the Company and
hence not commented upon.
(b) According to information and explanations given to us, 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. Accordingly, the provisions of clause
4(iii)(e) to (g) of the Companies (Auditor''s Report) order, 2003 (as
amended) are not applicable to the Company and hence not commented
upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
During the course of our audit, we have not observed any major weakness
or continuing failure to correct any major weakness in the internal
control system of the company in respect of these areas. There is no
sale of services during the year.
(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 the value of Rupees five lakhs entered into
during the financial year, are at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, the directives issued by
the Reserve Bank of india and the provisions of Sections 58A, 58AA or
other relevant provisions of the Companies Act, 1956 and the rules
framed thereunder, to the extent applicable, have been complied with by
the Company. We are informed by the management that no order has been
passed by the Company Law Board, National Company Law Tribunal or
Reserve Bank of India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956 in respect of its products and are of the opinion that prima
facie, the prescribed accounts and records have been made and
maintained.
(ix) (a) The Company has generally been regular in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, employees'' state insurance, income-tax, sales-tax,
wealth-tax, service tax, custom duty, excise duty, cess and other
material statutory dues with appropriate authorities.
(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, custom duty, excise duty, cess and
other material statutory dues were outstanding, at the year-end for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding in
respect of sales tax, income tax, custom duty, wealth tax, service tax,
excise duty and cess on account of any dispute are as follows :-
Name of the statute Nature of dues Amount
(Rs. in lacs)
Bihar Finance Act, 1981 Tax on sale of Alcohol for non- 4.19
submission of declaration forms
U.P. Tax on Entry of Interest demand on Entry Tax on 0.74
Goods Act, 2007 Sugar
Central Sales Tax Central Sales Tax demand on 6.40
Act, 1956 Stock transfer
Taxability on alcohol sale 10.46
Demand for Sales Tax due to 9.31
non-submission of Declaration
Forms
Demand for VAT on sale of 31.48
country spirit and various
other matter
Central Excise Act, Disallowance of Cenvat Credit on 1065.02
1944 Certain inputs / capital items /
input services
Excise Duty on burnt / waste and 39.09
loss on storage of molasses etc.
Demand towards differential amount 43.47
of sugar cess on duty paid stock
Name of the statute Period to which Forum where
the amount relates dispute is pending
Bihar Finance Act, 1981 1995-96 Appellate Tribunal, Patna
U.P. Tax on Entry of 2008-09 Joint Commissioner Appeal
Goods Act, 2007
Central Sales Tax 1999-00, 1993-94, Joint Commissioner
Act, 1956 1996-97, 1997-98, (Appeals) / High Court,
2007-08, 2008-09 Allahabad
1977-78 to 1981-82 High Court Allahabad
Lucknow Bench
2003-04, 2006-2007 Appellate Tribunal,
Patna / Lucknow
1985-86 to 1989-90, High Court,Lucknow/
2001-02, 2006-07, Patna, Tribunal, Lucknow,
2009-10 1st appeal Sitapur,
Central Excise Act, 2000-01 to 2013-14 Commissioner (Appeals) /
CESTAT / high Court,
Allahabad
1977-78, 1991-92, Commissioner (Appeals) /
2002-03 to 2005-06 CESTAT / high Court,
& 2010-11 Allahabad
2007-08 CESTAT
(x) The Company''s accumulated losses at the end of the financial year
are more than fifty percent of its net worth and it has incurred cash
loss during the year. however, it has not incurred cash losses in the
immediately preceding period.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to any bank and
financial institutions. Further, the Company did not have any
outstanding debentures during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantees for loans taken by others from a bank, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
were obtained.
(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 Rs.24,336 lacs raised on short-term basis have been used for
long-term investment (without considering permanent working capital)
mainly towards acquisition of fixed assets and repayment of loans.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. Batliboi & Co. LLP
Chartered Accountants
Firm Registration Number: 301003E
per Bhaswar Sarkar
Partner
Membership Number: 55596
Place : Kolkata
Date : 13th May, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of The Oudh Sugar
Mills Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013 and the Statement of Profit and Loss and Cash Flow
Statement for the nine months period then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
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 the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes 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
statements. 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
As indicated in Note 15 to the financial statements, the Company has
recognized Deferred Tax Asset (DTA) (net) of Rs. 6,138.96 lacs (after
adjusting reversal of Rs. 1,393.02 lacs during the period) up to March
31, 2013, based on the future profitability projections made by the
management. In our opinion, in the absence of virtual certainty about
the above projections, as required in terms of Accounting Standard -
22, had the above impact been considered, the reported profit of
Rs.2,908.02 lacs for the period (after adjusting DTA of Rs. 7,531.98
lacs recognised up to June 30, 2012) would turn into a loss of Rs.
3,230.94 lacs and the reserves and surplus balance would be Rs.(-)
8,164.97 lacs as against the reported figure of Rs.(-) 2,026.01 lacs as
on the balance sheet date.
Our audit opinion on the financial statements for the previous year was
also qualified in respect of the above matter.
Qualified opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effect of the matter stated in
the Basis for Qualified Opinion paragraph, the financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the period ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) except for the matter stated in the Basis for Qualified Opinion
paragraph, 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;
(e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(REFERRED TO IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF THE OUDH
SUGAR MILLS LIMITED AS AT AND FOR THE PERIOD ENDED MARCH 31, 2013)
(i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) All fixed assets have not been physically verified by the management
during the period but there is a regular programme of verification
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
c) There was no disposal of a substantial part of fixed assets during
the period.
(ii) a) The management has conducted physical verification of inventory
at reasonable intervals during the period.
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.
(iii) a) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, the provisions of clauses
4(iii) (a) to (d) of the Order are not applicable to the Company and
hence not commented upon.
b) According to information and explanations given to us, 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. Accordingly, the provisions of clauses 4(iii)
(e) to (g) of the Order are not applicable to the Company and hence not
commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the company in respect of these areas.
(v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the 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 the value of Rupees five lacs entered into
during the financial period, are at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956, and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1 )(d) of the Companies
Act, 1956 in respect of its products and are of the opinion that prima
facie, the prescribed accounts and records have 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 have generally been regularly
deposited with the appropriate authorities except for Cane Purchase Tax
of Rs.167.42 lacs relating to the sugar unit in Bihar which remains
unpaid as on the Balance sheet date, pending disposal by the State
Government of the representation made by the Bihar Sugar Mills
Association for its remission.
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,
wealth-tax, service tax, sales-tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the period end, for
more than six months from the date they became payable.
c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows :-
Name of the statute Nature of dues Amount
(Rs.in lacs)
Bihar Finance Tax on sale of Alcohol 4.19
Act, 1981 for non submission of
declaration forms
U.P. Tax on Entry of Interest demand on Entry 0.74
Goods Act, 2007 Tax on Sugar
Central Sales Tax Central Sales Tax demand 6.17
Act, 1956 on Stock transfer
Taxability on alcohol
sale 10.46
Demand for Sales Tax 3.36
due to non submission
of Declaration Forms
Name Period to which Forum where dispute
the amount is pending
relates
Bihar Finance 1995-96 Appellate Tribunal,
Patna
U.P. Tax on Entry of 2008-09 Joint Commissioner
Appeal
Central Sales Tax 1993-94 & 2007- Joint Commissioner
08 (Appeals) / High Court,
1981 - High Court, Allahabad
82 Lucknow Bench
Name of the statute Nature of dues Amount
(Rs in lacs)
Central Excise Act, Disallowance of
Cenvat 1078.17
1944 Credit on Certain
inputs
/capital items
/input services
Excise Duty on
burnt / 23.85
waste and loss
on storage
of molasses etc.
Demand towards
differential 43.47
amount of
sugar cess on
duty paid stock
Name Period to which Forum where dispute
the amount is pending
relates
Central Excise Act 2001 -02 to 2011 - Commissioner
12 (Appeals)/CESTAT/
High Court, Allahabad
1992-93,2002- Commissioner
03 to 2005-06 & (Appeals)/CESTAT/
2010-11 High Court, Allahabad
2007-08 CESTAT
(x) The Company''s accumulated losses at the end of the financial year
are more than fifty per cent of its net worth. The Company has not
incurred cash loss in the current period but it had incurred cash loss
in the immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution and bank. Further, the Company did not have any outstanding
debentures during the period.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, 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 Order, 2003 are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order, 2003 are not applicable to
the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from a bank, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
loans were obtained.
(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 Rs.20,587 lacs raised on short term basis have been used for long-
term investment (without considering permanent capital) mainly towards
acquisition of fixed assets.
(xviii) The Company has not made any preferential allotment of shares
during the period to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
period.
(xx) The company has not raised any money by way of public issue during
the period.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the period.
For S.R. Batliboi & CO. LLP
Firm Registration Number 301003E
Chartered Accountants
per R.K. Agrawal
Place: Kolkata. Partner
Date: 15th May, 2013 Membership Number: 16667
Jun 30, 2012
1. We have audited the attached Balance Sheet of The Oudh Sugar Mills
Limited ("the Company") as at 30th June, 2012 and also the Statement of
Profi t and Loss and the Cash Flow Statement for the year ended on that
date annexed thereto. These fi nancial 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 inaccordance 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 (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specifi ed in paragraphs 4
and 5 of the said Order.
4. Attention is drawn to Note 15 regarding recognition of Deferred Tax
Asset (DTA) (net) of 7,531.98 lacs (including 5,398.01 lacs recognised
in earlier years) up to 30th June, 2012 based on the future profi
tability projections made by the management. In our opinion in the
absence of virtual certainty required in terms of Accounting
Standard-22 of the aforesaid projections, had the impact of above been
considered, there would be a loss of 12,024.59 lacs as against the
reported loss of 4,492.61 lacs for the year and the reserve and surplus
balance would be (-) 12,472.59 lacs as against the reported figure of
(-) 4,940.61 lacs as on the balance sheet date.
In respect of above, the previous year's audit report was similarly
modifi ed.
5. Further to our comments in the Annexure referred to 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, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, 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, except for our comments in para 4 above;
v. On the basis of the written representations received from the
Directors, as on 30th June, 2012, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
30th June, 2012 from being appointed as a Director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, except for the effects of the matter
stated in paragraph 4 above, 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 30th June , 2012;
b) in the case of the statement of profit and loss, of the loss for the
year ended on that date; and
c) in the case of cash flow statement, of the cash fl ows for the year
ended on that date.
Annexure to the Auditors' Report (Referred to in our report of even
date to the members of The Oudh Sugar Mills Limited as at and for the
year ended 30th June, 2012)
(i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) All fixed assets have not been physically verified by the management
during the year but there is a regular programme of verifi cation
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
c) There was no disposal of substantial part of fixed assets during the
year.
(ii) a) The management has conducted physical verification of inventory
at reasonable intervals during the year.
b) The procedures of physical verifi cation 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.
(iii) a) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, the provisions of clause
4(iii) (a) to (d) of the Order are not applicable to the Company and
hence not commented upon.
b) According to information and explanations given to us, 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. Accordingly, the provisions of clause 4(iii)
(e) to (g) of the Order are not applicable to the Company and hence not
commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
During the course of our audit, we have not observed any major weakness
or continuing failure to correct any major weakness in the internal
control system of the Company in respect of these areas. There is no
sale of services during the year.
(v) a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the 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 the value of Rupees five lakhs entered into
during the financial year, are at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956, and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 in respect of its products and are of the opinion that prima
facie, the prescribed accounts and records have 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 have generally been regularly
deposited with the appropriate authorities.
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,
wealth-tax, service tax, sales-tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows
Name of the Nature of dues Amount Period to which the
Statute (in lacs) amount relates
Bihar Finance Tax on sale of 4.19 1995-96
Act, 1981 Alcohol for non
submission of
declaration forms
Central Sales Central Sales Tax 9.29 1993-94-to 2004-05
Tax demand on
Act, 1956 interstate sale
Taxability on
alcohol sale 4.15 1977-78 to 1981-82
Demand for Sales
Tax due to non 3.36 2003-04
submission of
Declaration Forms
Central Excise Disallowance of
Act, 1956 Cenvat Credit on 1,126.62 2001-02 to 2011-12
Certain inputs/
capital items
Excise Duty on
burnt / waste and 37.76 1992-93, 2002-03
loss on storage of
molasses etc. to 2005-06
Demand towards
differential
amount of 43.47 2007-08
sugar cess on
duty paid stock
Name of the statue Form where dispute is pending
Bihar Finance Act, 1981 Appeellate Tribunal, Patna
Central Sales Tax Act, 1956 Joint Commissioner Appeals
high Court, Allahabad
Appellate Tribunal Patna
central Excise Act, 1944 Commissioner [Appeals] / CESTAT /
/ High Court, Allahabad
Commissioner [Appeals] / CESTAT /
/ High court, Allahabad
CESTAT, New Delhi
(x) The Company's accumulated losses at the end of the financial year
are more than fifty per cent of its net worth and it has incurred cash
losses in the current and immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to any financial
institution and bank. Further the Company did not have any outstanding
debentures during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, 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 benefi t fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from a bank, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
24,512 lacs raised on short term basis have been used for long-term
investment (without considering permanent capital) representing mainly
acquisition of fixed assets.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as
per the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S. R. BATLIBOI & CO.
Firm Registration Number: 301003E
CHARTERED ACCOUNTANTS
per SANJOY K. GUPTA
Place : 22, Camac Street, Partner
3rd Floor,
Kolkata - 700 016
Dated : 8th August, 2012 Membership No. 54968
Jun 30, 2010
1. We have audited the attached Balance Sheet of THE OUDH SUGAR MILLS
LIMITED as at 30th June, 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 the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the fi
nancial 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 signifi cant estimates
made by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specifi ed in paragraphs 4
and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note No. 7 on
Schedule 23, regarding accounting of Sugarcane purchases at Hargaon &
Rosa Sugar units in Uttar Pradesh @ Rs. 110 per quintal for sugar
season 2007-2008 as against the State Advised Price (SAP) of Rs. 125
per quintal in view of the interim order dated 8th September 2008 of
the Honble Supreme Court. The maximum liability on account of above
comes to Rs. 2422.74 Lakh. However, since the matter is subjudice, the
actual impact, if any, is presently undeterminable and hence, no
provision thereof has been made in the accounts.
5. Further to our comments in the Annexure referred to above, we
report that :Ã
(i) 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;
(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 as submitted to us;
(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, subject to our comments in para (vi) below.
(v) On the basis of written representations received from the directors
as on 30th June, 2010 and taken on record by the Board of Directors, we
report that none of the directors is disqualifi ed as on 30th June,
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) Attention is drawn to Note No. 8(a) on schedule 23 regarding
recognition of Deferred Tax Asset (DTA) (net) of Rs. 3,054.68 Lakh up
to 30th June 2010, based on the future profitability projections made
by the management. However, we are unable to express any opinion on the
above projections and their consequent impact, if any, on such
recognition of Deferred Tax Asset. Had the impact of above been
considered, there would be a loss of Rs. 11,282.58 Lakh as against the
reported loss of Rs. 8,227.90 Lakh for the year and the profit and
loss account debit balance would be Rs. 8,046.06 Lakh as against the
reported figure of Rs. 4,991.38 Lakh as on the balance sheet date.
In our opinion and to the best of our information and according to the
explanations given to us, the said Statements of Account, Subject to
the matters stated in para (vi) above, 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 Balance Sheet, of the state of affairs of the
Company as at 30th June, 2010;
(b) in the case of Profit and Loss Account, of the loss of the Company
for the year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash fl ows for the year
ended on that date.
Annexure To The Auditors Report (referred to in our report of even
date to the members of The Oudh Sugar Mills Limited as at and for the
year ended 30th June, 2010)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situations of fi xed
assets.
(b) Fixed Assets have been physically verifi ed by the management
during the year based on a phased programme of verifying all the assets
over a period of two years, which in our opinion, is reasonable having
regard to the size of the Company and the nature and value of its
assets. As informed, no material discrepancies were noticed on such
verifi cation.
(c) There was no substantial disposal of fi xed assets during the year.
(ii) (a) The management has conducted physical verifi cation of
inventory at reasonable intervals during the year.
(b) The procedures of physical verifi cation 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 such physical verifi cation.
(iii) (a) As informed, the Company has not granted any loans, secured
or unsecured to companies, fi rms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956 and
hence the requirements of clauses (iii) (b) to (d) of the order are not
applicable.
(b) The Company has taken loans of Rs. 500 Lakh from a company covered
in the register maintained under section 301 of the Companies Act,
1956. The maximum outstanding during the year as well as the year-end
balance of such loan was Rs. 500 Lakh.
(c) 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.
(d) There are no stipulations for repayment of the above loans but the
same are stated to be repayable on demand. As informed, the lenders
have not demanded repayment of the above loan during the year and thus,
there has been no default on the part of the company. Further,
interest on the above loans, as informed, was regularly paid by the
Company.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fi xed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of these areas and 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 the above section, have been
so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding the value of Rupees fi ve Lakh entered into
during the financial year, are at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, the directives issued by
the Reserve Bank of India and the provisions of Sections 58A, 58AA or
other relevant provisions of the Companies Act, 1956 and the rules
framed thereunder, to the extent applicable, have been complied with by
the Company. We are informed by the management that no order has been
passed by the Company law Board, National Company Law Tribunal or
Reserve Bank of India or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956 in respect of its products and are of the opinion that prima
facie, the prescribed accounts and records have been made and
maintained.
(ix) (a) The Company has generally been regular in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, employees state insurance, income-tax, sales-tax,
wealth-tax, service tax, custom duty, excise duty, cess and other
material statutory dues with appropriate authorities except for Cane
Purchase Ta x of Rs. 75.75 Lakh relating to the sugar unit in Bihar
which has remained unpaid as on the Balance sheet date.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(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, custom duty, excise duty, cess and
other material statutory dues were outstanding, at the year end for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding in
respect of income tax, sales tax, wealth tax, service tax, custom duty,
excise duty and cess on account of any dispute are as follows:
Name of the statute Nature of dues Amount
(Rs in Lakh)
Tax on sale of Alcohol to
country vendors& non
Bihar Finance Act,
1981 31.95
submission of declaration
forms
The Uttar Pradesh
Tax on On Sales of sugar 3.50
entry of goods Act,
2000
On Sales of Baggasse 19.05
Central Sales Tax
Act, Central Sales Tax demand on
9.29
1956 interstate sale
Various Sales Tax / Entry tax 4.15
demands on assessment
Interstate Baggasse sales 11.17
Demand for Sales Tax / non
à submission of Declaration 3.36
Forms
Disallowance of Cenvat
Central Excise
Act, 1944 Credit on certain inputs / 307.74
capital items
Excise Duty on burnt / waste
and loss on storage of 41.27
molasses etc.
Non-payment of Sugar Cess 86.18
Reversal of excise duty on 36.50
Baggasse sales
Excise duty on loss on 47.48
reprocessing of brown sugar
Name of the Period to which the Forum where dispute is
Statue amount relates pending
Joint Commissioner
Bihar Finance Act, 1981 1984-85 to 1989-90, (Appeals); Appellate
1995-96, 2002-03 Tribunal; High Court,
Patna
The Uttar Pradesh Tax on
entry of goods Act, 2000 2000-01 High Court, Allahabad
Additional Commissioner
2006-07 (Appeals)
Central Sales Tax Act,
1956 Joint Commissioner
1993-94 to 2004-05 Appeals
Appellate Tribunal,
1977-78 to 1981-82, Lucknow / High Court,
2000-01 Allahabad
2001-02, 2006-07 High Court, Lucknow
Joint Commissioner
2003-04 (Appeals) / High Court,
Allahabad
Central Excise Act, 1944 Commissioner (Appeals)
1998-99, 2001-02 to / CESTAT / High Court,
2008-09 Allahabad
Commissioner (Appeals)
1992-93, 2002-03 to / CESTAT / High Court,
2005-06 Allahabad
2007-08 Commissioner (Appeals)
2009-10 Commissioner (Appeals)
1988-89, 2003-04, Commissioner Appeals;
2006-07 to 2008-09 CESTAT, Delhi
(x) The Companys accumulated losses at the end of the financial year
(after considering the impact of deferred tax assets), are more than fi
fty per cent of its net worth and it has incurred cash losses in the
current year but it had not incurred cash loss in the immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to any bank and / or fi
nancial institution, read with the fact that the due date of 30th June,
2010 for loan repayment of Rs. 2,197 Lakh (including interest) has been
reseheduled by the bank and hence, there is no default as on the
balance sheet date. There were no debentures outstanding during the
year.
(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 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 and therefore, the provisions of clause
4(xiii) of the order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments and therefore, the
provisions of clause 4(xiv) of the order are not applicable.
(xv) According to the information and explanations given to us, the
Company has given guarantees for loans taken by others from a bank, the
terms and conditions whereof are stated to be not prima-facie
prejudicial to the interest of the Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which these
were obtained.
(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 Rs. 19,784 Lakh approx. raised on short-term basis have been used
for long-term investment (without considering permanent working
capital).
(xviii) The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as
per the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S. R. BATLIBOI & CO.
Firm Registration No. 301003E
Chartered Accountants
Per R. K. AGRAWAL
Place: Kolkata Partner
Dated: 27th August, 2010 Membership No. 16667