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Auditor Report of Sagar Soya Products Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of M/s Sagar Soya Products Limited which comprise the Balance Sheet as at March 31, 2014, and the statement of Profit & Loss and Cash Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statement

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. 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 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 management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fare 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 Profit & Loss Account, of the loss of the Company 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 required by the Companies (Auditor''s Report) Order,2003 ("the Order") issued by 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 paragraph 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 Account and Cash Flow Statement dealt with by this report are in agreement with the books of Accounts;

(d) In our opinion, Balance Sheet, Statement of Profit and Loss Account and Cash Flow Statement comply with the accounting standards referred to in Sub-Section 3(C) of sec-211 of Companies Act,1956; and

(e) On the basis of written representation received from the directors as on March 31, 2014 and taken on record by by the Board of Directors, none of the directors is disqualified as on March 31, 2014 from being appointed as the directors in terms of sec-274(1) (g) of the Companies Act, 1956;

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT

Referred to in Paragraph 1 under the heading of " Report on Other Legal and Regulatory Requirement" of our report of even date

1. Having regard to the nature of the Company''s business/activities/results during the year, clauses (xii), (xiii), (xiv) of paragraph 4 of the Order are not applicable to the Company.

2. (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management during the year. We are informed that no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable.

(c) No substantial part of fixed assets has been disposed off during the year.

3. a) The inventory has been physically verified by the management at reasonable intervals 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 nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

4. (a) The Company has taken loans from nine persons covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 539.38 lakhs and the year ended Balance Sheet of the loans taken from such persons was Rs. 507.38 lakhs. The Company has not granted any loans to the Companies firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956.

(b) In our opinion the other terms and conditions on which loan has been taken from the Companies listed in the register maintained u/s 301 of the Companies Act, 1956 are not prima facie, prejudicial to the Interest of the Company.

(c) The company is regular in repaying the principal amount as stipulated.

(d) There is no overdue amount in respect of loans taken from a company listed in the register maintained under section 301 of the Companies Act, 1956.

5. According to the information and explanations given to us, the company has not done any transaction with regard to the purchase of inventory, fixed assets and with regard to the sale of goods.

6. According to the information and explanation given to us, the company has not done any transaction which needs to be entered into a register in pursuance of section 301 of the companies Act, 1956.

7. In our opinion and according to information and explanation given to us the company has not accepted any deposit from the public within the meaning of section 58A and 58AA of the Companies Act, 1956 during the period.

8. In our opinion, the Company doesn''t have system of internal audit commensurate with its size and nature of its business;

9. According to the information and explanations given to us, we are of the opinion that no cost records maintenance has been prescribed by the Central Govt. under section 209 (1) (b) of the Companies Act, 1956.

10. a) According to the information and explanations given to us there is no undisputed amount payable in respect of income tax, wealth tax, custom duty, excise duty, and cess were in arrears, as at the last day of the financial year concerned for a period of more than six months from the date they become payable expect reported in forgoing Para.

(b) According to the information and explanations given to us, the disputed amount payable, which has not been deposited on account of any dispute are as under:

S. Name of the Year Nature of Dues Forum where dispute No. Statute is pending

1 Sales-tax Act 2000-01 Sales-tax / Supreme Court / Commercial Tax / Entry-tax

S. Name of the Amount (Rs. ) No. Statute

1 Sales-tax Act 5756471/- 11. The company has accumulated lossess at the end of the financial year which is more than fifty percent of its net worth and has incurred cash loss during the financial year covered by our audit & In the immediately preceding financial year also.

12. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to the financial institution and banks.

13. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from the banks and financial institutions.

14. In our opinion, the term loans have been applied for the purpose for which they were obtained.

15. According to the information and explanation given to us and on an overall examination of the Books of Accounts and Balance Sheet of the company, we report that funds raised on short-term basis have not been used for long term investment. No long-term funds have been used to finance short-term assets.

16. The company has not made any preferential allotment of shares to the parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

17. The company has not issued debentures to the raise the funds.

18. The company has not raised any funds by Public Issue during the year.

19. According to the information and explanations given to us, we report that there is no fraud on or by the company has been noticed or reported during the course of our audit.

For O.T.GANDHI & CO Chartered Accountants Firm Registration Number: 001120C Sd/- PLACE : INDORE SAMEEP GANDHI DATED : 30th May, 2014 Partner M.NO.411107


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s SAGAR SOYA PRODUCTS LTD., SAGAR (M.P.) as at 31st March 2012 and the Profit & Loss Account of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentations. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) order 2003 (the order) issued by the Central Government in terms of section 227 (4A) of the companies Act, 1956, we enclose in the annexure a statement on the matters specified in the said order.

4. Further to our comments in the Annexure referred in paragraph 3 above we report that:

(a) No manufacturing activity is carried out during this year and there is substantial doubt that it will be able to continue as a going concern. Consequently adjustments may be required to recorded assets amount and clarification of liabilities. The Financial Statement (and notes thereon) does not disclose this fact;

(b) We have obtained all the information & explanation, which to the best of our knowledge & belief were necessary for the purpose of our audit;

(c) In our opinion, proper books of accounts as required by law have been kept by the company so far as appears from our examinations of those books;

(d) In our opinion, accumulated losses of the company at the end of financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current financial year covered by our audit and in the immediately preceding financial year also

(e) The Company's the Balance Sheet and Profit & Loss Account dealt with by this Report are in agreement with the books of account;

(f) We draw reference to

1. Note No.1.12 regarding Overdue Debts considered good by the management in respect of which we are unable to form an opinion as to the extent of reliability at this stage.

2. In our opinion and to the best of our information and according to the explanation given to us the said accounts read together with the notes thereon regarding non provision of depreciation on the Fixed Assets as required by 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.

3. The accounts of the company have been prepared on Going Concern basis, However due to suspension of the Manufacturing and Other Activities of the Company we are unable to express our opinion on its ability to continue as a going concern in the event not being held to be a going concern and various Assets & Liabilities being consequently adjusted with respect their realizable value the impact thereof has not been ascertained and therefore, cannot be commented upon by us.

4. The Company has not complied with the Accounting Standard 15 in respect of Gratuity liability to the employees (Vide Note No. 1.7 of notes to accounts).

(g) Save our above observations, in our opinion, the Balance Sheet and Profit and Loss Account complies with the Accounting Standards referred to Section 211 of the Companies Act, 1956;

(h) On the basis of written representations received from the Directors and taken on records by Board of Directors, we report that none of the directors is disqualified as on March 31,2011, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;and

(i) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes there on, 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:

I. In the case of the Balance Sheet of the state of affairs of the company as at 31st March 2012.

II. In the case of the Profit & Loss Account of the Loss for the year ended on that date.

III. In the case of Cash Flow statement of the Cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT Annexure referred to in paragraph 3 of our report of even date

1. (a) According to information and explanations given to us the Company has lost its Fixed Assets Register and the company is in the process of preparing the new Fixed Assets Register to show full particulars including quantitative details and situation of its Fixed Assets.

(b) According to information given to us, the major portion of fixed assets has been physically verified by the management during the year. We are informed that no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable.

(c) No substantial part of fixed assets has been disposed off during the year.

2. (a) The inventory has been physically verified by the management at reasonable intervals 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 nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

3. a) The Company has taken loans from Nine persons covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 539.38 lakhs and the year ended Balance Sheet of the loans taken from such persons was Rs. 539.38 lakhs. The Company has not granted any loans to the Companies firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956.

(b) In our opinion the other terms and conditions on which loan has been taken from the Companies listed in the register maintained u/s 301 of the Companies Act, 1956 are not prima facie, prejudicial to the Interest of the Company.

(c) The company is regular in repaying the principal amount as stipulated.

(d) There is no overdue amount in respect of loans taken from a company listed in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business with regard to the purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit we have not observed any continuing failure to correct major weaknesses in internal controls.

5. (a) In our opinion and according to the information and explanations given to us, transactions that need to be

entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, these transactions have been made at prices, which are reasonable having regard to prevailing market price at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not complied with the provisions of Section 58 A and 58 AA of the Companies Act, 1956 and rules framed their under with regard to the deposits from the public.

7. In our opinion, the Company doesn't have system of internal audit commensurate with its size and nature of its business;

8. According to the information and explanations given to us, we are of the opinion that no cost records maintenance has been prescribed by the Central Govt. under section 209 (1) (b) of the Companies Act, 1956.

9. a) According to the information and explanations given to us the undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues which has not been deposited are as under :- (b) According to the information and explanations given to us and there is no undisputed amount payable in respect of income tax, sales tax, wealth tax, custom duty, excise duty, and cess were in arrears, as at the last day of the financial year concerned for a period of more than six months from the date they become payable expect reported in forgoing Para.

(c) According to the information and explanations given to us, the disputed amount payable in respect of income tax, sales tax, wealth tax, custom duty, excise duty, and cess, which has not been deposited on account of any dispute are as under:

S. Name of the Year Nature of Forum where dispute Amount(') No. Statute Dues is pending

1 Sales-tax Ac 2000-01 Sales-tax / Supreme Court / 5756471/- Commercial Tax / Entry-tax

10. In our opinion, accumulated losses of the company at the end of financial year are more than fifty percent of its net worth. The company has incurred cash losses in the current financial year covered by our audit and in the immediately preceding financial year also.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to the financial institution and banks.

12. According to the information and explanation given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

13. As the company is not a Nidhi/Mutual Benefit Fund/Society, the reporting requirements under this point are not applicable to the company.

14. The Company is not dealing or trading in shares, securities, debentures and other investments:

15. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from the banks and financial institutions.

16. In our opinion, the term loans have been applied for the purpose for which they were obtained.

17. According to the information and explanation given to us and on an overall examination of the Books of Accounts and Balance Sheet of the company, we report that funds raised on short-term basis have not been used for long term investment. No long-term funds have been used to finance short-term assets.

18. The company has not made any preferential allotment of shares to the parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The company has not issued debentures to the raise the funds.

20. The company has not raised any funds by Public Issue during the year.

21. According to the information and explanations given to us, we report that there is no fraud on or by the company has been noticed or reported during the course of our audit.

For O.T.GANDHI & CO

Chartered Accountants

Firm Registration Number: 001120C

Sd/- PLACE : INDORE SAMEEP GANDHI

DATED:30th May, 2012 Partner

M.NO.411107

 
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