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Auditor Report of Uttam Sugar Mills Ltd.

Jun 30, 2015

We have audited the accompanying financial statements of UTTAM SUGAR MILLS LIMITED which comprise the Balance Sheet as at 30 June, 2015, the Profit and Loss Statement and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management 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 the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fnancial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial Statements.

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

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 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 June 30, 2015;

b) In the case of the Proof and Loss Statement, of the Loss for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

Emphasis of Matter

We draw attention to:- - Note no 29, the State Governments of Uttar Pradesh and Uttarakhand has announced subsidy for Sugar Industry for season 2014-2015 which is linked to average selling price of Sugar and By Products during the period 01.10.2014 to 31.5.2015. Such subsidy as reduced from the cane cost by the Company is Rs. 6703.96 lacs up to 30.06.2015. - Note no 45, the company has recognized Deferred tax Assets (DTA) of Rs. 2469 lacs for the year ended 30.6.2015 and Rs. 14103.80 lacs up to 30.6.2015 on unabsorbed business losses and unabsorbed depreciation. Continuous losses in the last few years indicate the uncertainty as regards realization of such deferred tax assets. The Company's Management is of the view that it expects turnaround of sugar sector by view of expected assistance from Government and by way of Cane Development Activities carried out by the company as supported by report issued by Sugar Technical Expert, it has become reasonable that sufficient taxable income will be available against which such deferred tax assets can be realized.

- Note no 47, regarding preparation of account on going concern basis despite substantial erosion of net worth of the company and significant losses leading to material uncertainty about the company's ability to continue as going concern and based on mitigating factors as fully described therein.

Our opinion is not qualified in respect of above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order) issued by the Central Government in terms of section 143(11) of the Companies Act, 2013, 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. 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, Proof and Loss Statement and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards referred to in section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 ;

e. On the basis of written representations received from the directors as on June 30, 2015, and taken on record by the Board of Directors, none of the directors is disqualifed as on June 30, 2015, from being appointed as a director in terms of section 164(2) of the Act.

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed in note no. 17 impact of pending litigations on fnancial positions in its fnancial statement. 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.

Annexure To The Auditors Report

(Referred to in paragraph (1) of our Report on other legal and regulatory requirement of even date to the shareholders of UTTAM SUGAR MILLS LIMITED for the year ended 30th June 2015.)

1. The Company has maintained records showing particulars including quantitative details and situation of its principal fixed assets, accordingly the fixed assets are physically verified by the management according to a phased programmer designed to cover all the items over a period of three years which, in our opinion, is reasonable having regards to the size of the company and the nature of its assets. Pursuant to the programmer, a portion of the fxed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

2. (a) The physical verification of inventory has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) On the basis of our examination, in our opinion, the Company has maintained proper records of inventory. Discrepancies noticed on such physical verification of inventory as compared to the book records were not material.

3. According to information made available to us , the company has not granted any loan , secured or unsecured to companies , form or other parties covered in the register maintained under section 189 of the Act ,accordingly Para 3(iii)(a) & (b) of the Order are not applicable to the company.

4. In our opinion, and according to the information and explanations given to us, that some of items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparative quotations there is an adequate internal control system commensurate with the size of the Company and nature of its business, for purchase of inventory and fxed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. On the basis of information and explanations given to us and our scrutiny of company's records, in our opinion, the company has not accepted any public deposits within the meaning of section 73 to 76 or any other relevant provisions of the Act and the rules frames there under. The directives issued by the Reserve Bank of India are not applicable to the company.

6. We have broadly reviewed the books of account maintained by the Company in respect of products pursuant to the order made by the Central Government for the maintenance of the cost records under section 148(1) of the Act and are of the opinion that, prima-facie, the prescribed account and records have been maintained and are being made up. We however as not required have not made a detailed examination of such records with a view to determine whether these are accurate or complete.

7. (a) According to the information and explanations given to us the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. As explained to us, the provisions of Employees State Insurance are not applicable to the Company; no amount was due to be deposited under Investor Education and Protection Fund. Further, there was no arrears of undisputed statutory dues outstanding as at 30th June 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the disputed statutory dues of Income Tax , Sales Tax ,Excise duty and Service Tax aggregating to Rs. 487.54 lacs that have not been deposited are given below:-

Name of Statue Nature of Dues Amount Forum where dispute is (Rs. In lacs) pending

Sales Tax Laws Sales Tax/ Entry Tax 21.20 Commissioner/ Commissioner(Appeal)

17.23 Tribunal

9.22 High Court

Central Excise Act, 1944 Excise Duty 2.20 Commissioner/ Commissioner(Appeal)

406.81 CESTAT

5.83 High Court

25.05 Commissioner(Appeal)

Income Tax Act TDS

Total 487.54

Further, in respect of Custom Duty, Wealth Tax and Cess, it has been informed that there are no dues, which have not been deposited on account of any dispute.

8. The accumulated losses of Rs. 28289.93 lacs after reducing Deferred Tax assets of Rs. 7198.45 lacs of the company have exceeded fifty percent of its net worth as at 30th June 2015. The company has incurred cash losses amounting to Rs. 8815.46 lacs during the financial year covered by our audit, and Rs. 4932.05 lacs cash losses in the immediately preceding financial period.

9. In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of its dues to Banks. The particulars of delays which relates to interest/ installment during the year ended 30th June 2015 are as follows :-

Particulars Amount (including Period of Delay interest) (Days) (Rs. In lacs)

Banks 5297.03 1 - 30 days

2563.18 31 - 60 days

10304.83 61 - 90 days

Total 18165.04

Out of above dues from Banks of Rs. 14240.29 lacs were paid during the year and out of balance Rs. 3924.75 lacs outstanding as on 30.06.2015 a sum of Rs. 2143.75 lacs was paid up to 12.08.2015 The company has not issued any debentures.

10. According to the information and explanations given to us, the Company has given corporate guarantees for loans taken by others from Banks. The term and conditions of the said guarantee are not prejudicial to the interest of the company

11. In our opinion and on the basis of information and explanations given to us and on overall basis, term loans availed by the Company were, applied by the Company for the purposes for which the loans were raised apart from Rs. 291.98 lacs not utilized up to balance sheet date

12. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements materially misstated.

For B.K.KAPUR AND CO.,

Chartered Accountants,

Firm Registration No. 000852C

Place : Noida (B.K.KAPUR) F.C.A.

Dated : 19/08/2015 Partner

M.No.4578


Jun 30, 2014

We have audited the accompanying financial statements of UTTAM SUGAR MILLS LIMITED which comprise the Balance Sheet as at 30th June 2014 and the Statement of Profit and Loss and Cash Flow Statement for the period of fifteen months then ended and a summary of significant accounting policies and other explanatory information.

Management 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 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, 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.

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 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 2014;

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

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

Emphasis of Matter

We draw attention to:-

a) Note No 26 regarding change in cost formula for computation of cost of finished goods from Weighted Average Cost (WAC) method to First in First Out (FIFO) method. This has resulted in increase in value of closing stocks of finished goods by Rs1327.11 Lacs and Net loss for the period is lower by Rs 1327.11 Lacs and Debit balance of Profit and loss account is lower by same amount. Had the Company followed the WAC method of valuation of finished goods, value closing stock of finished goods would have been Rs. 46246.31 lacs, Net Loss for the Period would have been Rs 6856.92 Lacs and Debit Balance of Profit and loss account would have been 20797.55 Lacs.

b) Note No 41 of the financial statements regarding recognition of Deferred Tax Assets in respect of unabsorbed depreciation and unabsorbed brought forward business losses.

Our Opinion is not qualified in respect of above matters.

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 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) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in Sub Section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on 30th June 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 30th June 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 paragraph 1 under'' Report on Other Legal and Regulatory Requirements'' section of our report of even date to the shareholders of UTTAM SUGAR MILLS LIMITED for the period ended 30th June 2014.)

1. (a) The Company has maintained records showing particulars including quantitative details and situation of its principal fixed assets, accordingly the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regards to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

(b) Fixed Assets disposed off during the period were not substantial and, therefore, do not effect the going concern assumption.

2. (a) The physical verification of inventory has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) On the basis of our examination, in our opinion, the Company has maintained proper records of inventory. Discrepancies noticed on such physical verification of inventory as compared to the book records were not material.

3. (a) According to information made available 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 Act, accordingly clause 4(iii) (b) to (d) of the Order are not applicable to the Company.

(b) According to information made available to us, the Company has taken interest free unsecured loans from four parties covered in the register maintained under section 301 of the Act. There was Rs 137.34 Lacs outstanding of principal amount of such loan at the year end and maximum outstanding during the year amounts to Rs. 137.34 Lacs. Further, the Company has not taken any secured loan from the aforesaid referred parties.

(c) The other terms and conditions of the unsecured loans taken by the Company are prima-facie not prejudicial to the interest of the Company.

(d) As informed to us, at present there is no stipulation regarding the repayment of the principal amount of unsecured loans.

4. In our opinion, and according to the information and explanations given to us, that some of items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparative quotations there is an adequate internal control system commensurate with the size of the Company and nature of its business, for purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. (a) Based on our examination and 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 Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to prevailing market price at the relevant time.

6. On the basis of information and explanations given to us, the Company has not accepted any public deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Act, and rules framed there under.

7. The Company has an internal audit system which is commensurate with the size and nature of the Company''s business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the Central Government for the maintenance of the cost records under section 209(1)(d) of the Act and are of the opinion that, prima- facie, the prescribed account and records have been maintained and are being made up. We however as not required have not made a detailed examination of such records with a view to determine whether these are accurate or complete.

9. (a) According to the information and explanations given to us the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it, except few cases of delay in deposit of Tax Deducted at Source. As explained to us, the provisions of Employees State Insurance are not applicable to the Company; no amount was due to be deposited under Investor Education and Protection Fund. Further, there was no arrears of undisputed statutory dues outstanding as at 30th June 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the disputed statutory dues of Sales Tax & Excise duty aggregating to Rs. 503.84 Lacs that have not been deposited are given below:-

Name of Statue Nature of Dues Amount Forum where (Rs.in Lacs) dispute is pending

Sales Tax Laws Sales Tax/ Entry 35.21 Commissioner/ Tax Commissioner (Appeals)

44.57 Tribunal

9.22 High Court

Central Excise Excise Duty 2.20 Commissioner/ Act, 1944 Commissioner (Appeals)

406.81 CESTAT

5.83 High Court

Total 503.84

Further, in respect of Custom Duty, Wealth Tax, Service Tax and Cess, it has been informed that there are no dues, which have not been deposited on account of any dispute.

10. The accumulated losses of the Company have exceeded fifty percent of its net worth as at 3Cth June 2014. The company has incurred cash losses amounting to Rs 4932.05 Lacs during the financial period covered by our audit, however there was no cash loss in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of its dues to Banks. The particulars of delays which relates to interest/ installment during the period ended 30th June 2014 are as follows:-

Particulars Amount(including Interest) Period of Delay (Rs. in lacs) (Days)

Banks 3688.58 1 - 30 days

4948.71 31 - 60 days

4817.48 61 - 90 days

Total 13454.77

Out of above dues from Banks of Rs 13199.21 lacs were paid during the year and a sum of Rs.255.56 lacs was paid up to 28.08.2014.

The company has not issued any debentures.

12. According to the information and explanations given to 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.

13. The Company is not a chit fund or a Nidhi/ mutual benefit fund/ society, therefore provisions of clause 4(xiii) of the order are not applicable to the Company.

14. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provisions of clause 4(xiv) of the order are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any corporate guarantees for loans taken by other from Banks.

16. In our opinion and on the basis of information and explanations given to us and on overall basis, term loans availed by the Company were, applied by the Company for the purposes for which the loans were raised.

17. On the basis of overall examinations of the balance sheet of the Company, in our opinion and according to the informa- tion and explanations given to us funds raised on the short term basis to the extent of Rs. 15364 Lacs upto the date of the Balance Sheet have been used for long term basis primarily for repayment of Loans and financing of past losses.

18. During the year preferential allotment of 10% cumulative redeemable preference shares of Rs. 100/- each at a premium of Rs. 100/- per share have been made to parties and companies covered in the register maintained under section 301 of The Act.

In our opinion, price at which aforesaid shares have been issued is not prejudicial to the interest of the Company.

19. The Company has not issued any debentures, therefore, no comments is required under Para 4(xix) of CARO, 2003.

20. The Company has not raised any money by public issues during the period.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For B.K.Kapur and Co. Chartered Accountants, Firm Registration No.000852C

Place : Noida (B.K. KAPUR) F.C.A Dated : 28.08.2014 Partner M. No. 4578


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of UTTAM SUGAR MILLS LIMITED which comprise the Balance Sheet as at March 31, 2013 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 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 the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the de-sign, 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 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 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 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.

Emphasis of Matter

We draw attention to Note No.43 of the financial statements regarding recognisation of Deferred Tax Assets in respect of unabsorbed depreciation. Our opinion is not qualified in respect of this matter.

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 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 Statcrrent dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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 Auditors'' Report

(Referred to in paragraph (1) of our Report of even date to the shareholders of UTTAM SUGAR MILLS LIMITED for the year ended 31s1 March, 2013.)

1. (a) The Company has maintained records showing particulars including quantitative details and situation of its principal fixed assets, accordingly the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regards to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

(b) Fixed Assets disposed off during the year were not substantial and, therefore, do not effect the going concern assumption.

2. (a) The physical verification of inventory has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) On the basis of our examination, in our opinion, the Company has maintained proper records of inventory. Discrepancies noticed on such physical verification of inventory as compared to the book records were not material.

3. (a) According to information made available 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 Act, accordingly clause 4(iii) (b) to (d) of the Order are not applicable to the Company.

(b) According to information made available to us, the Company has taken interest free unsecured loans from four parties covered in the register maintained under section 301 of the Act. There was Rs. 137.34 Lacs outstanding of principal amount of such loan at the year end and maximum outstanding during the year amounts to Rs. 812.34 Lacs. Further, the Company has not taken any secured loan from the aforesaid referred parties.

(c) The other terms and conditions of the unsecured loans taken by the Company are prima-facie not prejudicial to the interest of the Company.

(d) As informed to us, the repayment of the principal amount of unsecured loans, wherever there is stipulation as regards the payments, are regular.

4. In our opinion, and according to the information and explanations given to us, that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and nature of its business, for purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. (a) Based on our examination and 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 Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations give to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to prevailing market price at the relevant time.

6. On the basis of information and explanations given to us, the Company has not accepted any public deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Act, and rules framed there under.

7. The Company has an internal audit system which is commensurate with the size and nature of the Company''s business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the Central Government for the maintenance of the cost records under section 209(1 )(d) of the Act and are of the opinion that, prima-facie, the prescribed account and records have been maintained and are being made up. We however as not required have not made a detailed examination of such records with a view to determine whether these are accurate or complete.

9. (a) According to the information and explanations given to us the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax. Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it, except few cases of delay in deposit of Tax Deducted at Source, and provident fund. As explained to us, the provisions of Employees State Insurance are not applicable to the Company; no amount was due to be deposited under Investor Education and Protection Fund. Further, there was no arrears of undisputed statutory dues outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the disputed statutory dues of Sales Tax & Excise duty aggregating to Rs. 513.77 Lacs that have not been deposited are given below:-

Name of Statue Nature of Dues Amount Forum where (Rs.in Lacs) dispute is pending

Sales Tax Laws Sales Tax/ Entry Tax 64.30 Commissioner/ Commissioner (Appeals)

11.65 Tribunal

9.33 High Court

Central Excise Excise Duty 54.23 Commissioner/ Act, 1944 Commissioner (Appeals)

368.43 CESTAT

5.83 High Court

Total 513.77

Further, in respect of Income Tax, Custom Duty, Wealth Tax, Service Tax and Cess, it has been informed that there are no dues, which have not been deposited on account of any dispute.

10. The accumulated losses of the company have not exceeded fifty percent of its net worth as at 31 st March, 2013. The company has not incurred any cash losses during the financial year covered by our audit, however there was a cash loss of Rs. 6423.81 Lacs in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of its dues to Banks. The particulars of delays which relates to interest/ installment during the year ended 31st March, 2013 are as follows :-

Particulars Amount (including Interest) Period of Delay (Rs. in lacs) (Days)

Banks 2740.24 1-30

2325.71 31-60

3213.72 61-90

41.29 90-more

Total 8320.96*

* Fully paid during the year

The company has not issued any debentures.

12. According to the information and explanations given to 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.

13. The Company is not a chit fund or a Nidhi/ mutual benefit fund/ society, therefore provisions of clause 4(xiii) of the order are not applicable to the Company.

14. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provisions of clause 4(xiv) of the order are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any corporate guarantees for loans taken by others from Banks.

16. In our opinion and on the basis of information and explanations given to us and on overall basis, term loans availed by the Company were, applied by the Company for the purposes for which the loans were raised apart from Rs. 362.50 lacs pending utilization.

17. On the basis of overall examinations of the balance sheet of the Company, in our opinion and according to the information and explanations given to us funds raised on the short term basis to the extent of Rs. 8,003 Lacs upto the date of the Balance Sheet have been primarily used for repayment of Loans and financing of past losses.

18. During the year preferential allotment of 10% cumulative redeemable preference shares of Rs. 100/- each at a pre- mium of Rs. 100/- per share have been made to parties and companies covered in the register maintained under section 301 of The Act.

In our opinion, price at which aforesaid shares have been issued is not prejudicial to the interest of the Company.

19. The Company has not issued any debentures, therefore, no comment is required under para 4(xix) of CARO, 2003.

20. The Company has raised monies by way of right issue of equity shares during the year. We have verified the end use of money raised by way of the right issue as declared by the management in the letter of offer filed with the Securities and Exchange Board of India and as appearing in Note No. 45 forming part of the financial statement.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For B.K.Kapur & Co.

Firm Registration No. 000852C

Chartered Accountants,

Place : Noida (M.S.Kapur) F.C.A.

Dated : May 18th 2013 Partner

M. No.74615


Mar 31, 2012

1. We have audited the attached Balance Sheet of UTTAM SUGAR MILLS LIMITED as at 31st March 2012, the Profit & Loss Statement and also the Cash Flow Statement 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 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 misstatements. An audit also 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 ("The Order"),as issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 ("The Act"), we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Without qualifying our opinion attention is invited to Note no 44 regarding recognisation of Deferred Tax Assets in respect of unabsorbed depreciation.

5. Further to our comments in Annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 such books;

c) The Balance Sheet, Profit & Loss Statement and Cash Flow Statement dealt with by this report are in agreement with books of account;

d) In our opinion, Balance Sheet, Profit & Loss Statement and Cash Flow Statement dealt with by this report comply with Accounting Standards referred to in Section 211 (3C) of the Act;

e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March,2012 from being appointed as a Director in terms of clause (g) of Sub Section (1) of Section of 274 of the Act;

f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and others notes thereon, and attached thereto, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: -

i) in the case of Balance Sheet, of the State of affairs of the Company as at 31st March, 2012;

ii) in the case of Profit & Loss Statement, of the Loss of the Company for the year ended on that date; and

iii) in the case of Cash Flow Statement, of the cash flows of the Company for year ended on that date.

Annexure to the Auditors' Report

(Referred to in paragraph (3) of our Report of even date to the shareholders of UTTAM SUGAR MILLS LIMITED for the year ended 31st March, 2012.)

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its principal fixed assets, accordingly the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period which, in our opinion, is reasonable having regards to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

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

2. (a) The physical verification of inventory has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) On the basis of our examination, in our opinion, the Company has maintained proper records of inventory. Discrepancies noticed on such physical verification of inventory as compared to the book records were not material.

3. (a) According to information made available 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 Act, accordingly clause 4(iii) (b) to (d) of the Order are not applicable to the Company.

(b) According to information made available to us, the Company has taken interest free unsecured loans from five parties covered in the register maintained under section 301 of the Act. There was Rs. 812.34 Lacs outstanding of principal amount of such loan at the year end and maximum outstanding during the year amounts to Rs 812.34 Lacs. Further, the Company has not taken any secured loan from the aforesaid referred parties.

(c) The other terms and conditions of the unsecured loans taken by the Company are prima- facie not prejudicial to the interest of the Company.

(d) As informed to us, the repayment of the principal amount of unsecured loans, wherever there is stipulation as regards the payments, are regular.

4. In our opinion, and according to the information and explanations given to us, that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparative quotations there is an adequate internal control system commensurate with the size of the Company and nature of its business, for purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. (a) Based on our examination and 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 Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are prima facie reasonable having regard to prevailing market price at the relevant time.

6. On the basis of information and explanations given to us, the Company has not accepted any public deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Act, and rules framed thereunder.

7. The Company has an internal audit system which needs to be strengthened to make it commensurate with the size and nature of the Company's business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the Central Government for the maintenance of the cost records under section 209(1) (d) of the Act and are of the opinion that, prima-facie, the prescribed account and records have been maintained and are being made up. We however as not required have not made a detailed examination of such records with a view to determine whether these are accurate or complete.

9. (a) According to the information and explanations given to us the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it, except few cases of delay in deposit of Income Tax, Tax Deducted at Source and Provident Fund. As explained to us, the provisions of Employees State Insurance are not applicable to the Company, no amount was due to be deposited under investor Education and Protection Fund. Further, there was no arrears of undisputed statutory dues outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the disputed statutory dues of Sales Tax, Entry Tax & Excise duty aggregating to Rs 1958.66 Lacs that have not been deposited are given below: -

Name of Statue Nature of Due Amount Forum where (Rs.in Lacs) dispute is pending

Sales Tax Laws Sales Tax 22.48 Additional Commissioner of Trade Tax (Appeal)

Central Excise Excise Duty 392.03 CESTAT/Commissioner Act, 1944 (Appeal) Asst Commissioner

Entry Tax Act Entry Tax 1544.15 Additional Commissioner of Trade Tax (Appeal)

Further, in respect of Income Tax .Custom Duty, Wealth Tax, Service Tax and Cess, it has been informed that there are no dues, which have not been deposited on account of any dispute.

10. The accumulated losses of the company have exceeded fifty percent of its net worth as at 31s1 March 2012. The company has incurred cash loss Rs.6423.81 Lacs during the year ended 31st March, 2012, however there was no cash loss in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has defaulted in the nature of delays in repayment of its dues to Banks. The particulars of delays after considering the effect of reschedulement of repayment terms of borrowing from Banks, approved by Corporate Debt Restructuring(CDR) Empowered Group which relates to interest/installment during the year ended 31st March 2012 are as follows: -

Particulars Amount (including Interest)* Period of Delay (Rs. in lacs) (Days)

Banks 5610.06 1-30

425.63 31-60

* Includes Rs. 5599.28 Lacs paid during the year.

There are no dues of debenture holders.

12. According to the information and explanations given to 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.

13. The Company is not a chit fund or a Nidhi / mutual benefit fund / society, therefore provisions of clause 4(xiii) of the order are not applicable to the Company.

14. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Ac- cordingly, provisions of clause 4(xiv) of the order are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any corporate guarantees for loans taken by others from Banks.

16. In our opinion and on the basis of information and explanations given to us and on overall basis, term loans availed by the Company were, applied by the Company for the purposes for which the loans were raised except Rs 63.50 Lacs pending utilization.

17. On the basis of overall examinations of the balance sheet of the Company, in our opinion and according to the information and explanations given to us funds raised on the short term basis to the extent of Rs. 11410 Lacs upto the date of the Balance Sheet have been , primarily used for repayment of Loans and financing of losses.

18. During the year the Company has not made preferential share allotment.

19. The Company has not issued any debenture, therefore, no comment is required under para 4(xix) of CARO, 2003.

20. The company has not raised any money by way of public issue during the period under report.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For B.K.Kapur & Co.

Firm Registration No. 000852C

Chartered Accountants,

Place : Noida (M.S.Kapur) F.C.A.

Dated : May 30th 2012 Partner

M. No.74615


Mar 31, 2011

1. We have audited the attached Balance Sheet of UTTAM SUGAR MILLS LIMITED as at 31st March 2011, the Profit & Loss Account and also the Cash Flow Statement 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 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 misstatements. An audit also 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 ("The Order"),as issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 ("The Act"), we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 such books; c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with books of account;

d) In our opinion, Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with Accounting Standards referred to in Section 211(3C) of the Act;

e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31s1 March,2011 from being appointed as a Director in terms of clause (g) of Sub Section (1) of Section 274 of the Act;

f) Without qualifying our opinion, we draw your attention to note no.8 (a) of schedule 19 relating to the accounting for sugar cane purchase liability in respect of units situated in the state of Uttar Pradesh for the sugar season 2007- 08 at an interim price of Rs.110/- per quintal which is as per the directions of Hon'ble Supreme Court instead of State Advisory Prices of Rs.125/- per quintal fixed by the State Government. Pending the final decision of the Hon'ble Supreme Court in this matter, the effect thereof presently is not ascertainable;

g) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and others notes thereon, and attached thereto, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: -

i) in the case of Balance Sheet, of the State of affairs of the Company as at 31st March, 2011;

ii) in the case of Profit & Loss Account, of the Loss of the Company for the year ended on that date; and

iii) in the case of Cash Flow Statement, of the cash flows of the Company for year ended on that date.

Annexure to the Auditors' Report

(Referred to in paragraph (3) of our Report of even date to the shareholders of UTTAM SUGAR MILLS LIMITED for the year ended 31st March,2011.)

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its principal fixed assets, accordingly the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regards to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

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

2. (a) The physical verification of inventory has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) On the basis of our examination, in our opinion, the Company has maintained proper records of inventory. Discrepancies noticed on such physical verification of inventory as compared to the book records were not material.

3. (a) According to information made available 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 Act, accordingly clause 4(iii) (b) to (d) of the Order are not applicable to the Company.

(b) According to information made available to us, the Company has fully repaid unsecured loans taken by way of conversion into preference shares from four parties covered in the register maintained under section 301 of the Act. There was no outstanding of principal amount of such loan at the year end and maximum outstanding during the year amounts to Rs 2938 Lacs. Further, the Company has not taken any secured loan from the aforesaid referred parties.

(c) The rate of interest and other terms and conditions of the unsecured loans taken by the Company are prima- facie not prejudicial to the interest of the Company.

(d) As informed to us, the repayment of the principal amount of unsecured loans and interest thereon, wherever there is stipulation as regards the payments, are regular.

4. 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 nature of its business, for purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. (a) Based on our examination and 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 Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to prevailing market price at the relevant time.

6. On the basis of information and explanations given to us, the Company has not accepted any public deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Act, and rules framed thereunder.

7. The Company has an internal audit system which needs to be strengthened to make it commensurate with the size and nature of the Company's business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the Central Government for the maintenance of the cost records under section 209(1) (d) of the Act and are of the opinion that, prima-facie, the prescribed account and records have been maintained and are being made up. We however as not required have not made a detailed examination of such records with a view to determine whether these are accurate or complete.

9. (a) According to the information and explanations given to us the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it, except few cases of delay in deposit of Income Tax, Tax Deducted at Source, Wealth Tax and Service Tax. As explained to us, the provisions of Employees State Insurance are not applicable to the Company, no amount was due to be deposited under investor Education and Protection Fund. Further, there was no arrears of undisputed statutory dues outstanding as at 31st March, 2011 for a period of more than six months from the date they became payable except the Income Tax dues of Rs 98.87 Lacs plus applicable interest thereon relating to the assessment year 2005-2006 and 2006-2007.

(b) According to the information and explanations given to us, the disputed statutory dues of Sales Tax & Excise duty aggregating to Rs 397.16 Lacs that have not been deposited are given below: -

Name of Statue Nature of Due Amount Forum where (Rs.in Lacs) dispute is pending

Sales Tax Laws Sales Tax 3.30 Commissioner of Trade Tax

Central Excise Excise Duty 340.72 CESTAT

Act, 1944 53.14 Commissioner(Appeal)

397.16

Further, in respect of Income Tax ,Custom Duty, Wealth Tax, Service Tax and Cess, it has been informed that there are no dues, which have not been deposited on account of any dispute.

10. The company's accumulated losses at the end of the year under report are less than fifty percent of its Net Worth. The company has not incurred any cash losses during the year ended 31th March, 2011, however there was cash losses in the immediately preceding period of fifteen months ended 31st March, 2010.

11. In our opinion and according to the information and explanations given to us, the Company has defaulted in the nature of delays in repayment of its dues to Banks. The particulars of delays after considering the effect of reschedulement of repayment terms of borrowing from Banks, approved by Corporate Debt Restructuring(CDR) Empowered Group which relates to interest/installment during the year ended 31s' March 2011 are as follows: -

Particulars Amount (including Interest)* Period of Delay (Rs. in lacs) (Days)

Banks 6462.77 1-30

2362.17 31-60

* Includes Rs. 8458 Lacs paid during the year. There are no dues of debenture holders.

12. According to the information and explanations given to 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.

13. The Company is not a chit fund or a Nidhi / mutual benefit fund / society, therefore provisions of clause 4(xiii) of the order are not applicable to the Company.

14. in our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provisions of clause 4(xiv) of the order are not applicable to the Company.

15. According to the information and explanations given to us, the Company has given corporate guarantees for loans taken by others from Banks. In our opinion, the term & conditions of these guarantees are not prejudicial to the interest of the company.

16. In our opinion and on the basis of information and explanations given to us and on overall basis, term loans availed by the Company were, prima-facie applied by the Company for the purposes for which the loans were raised.

17. On the basis of overall examinations of the balance sheet of the Company, in our opinion and according to the information and explanations given to us funds raised on the short term basis to the extent of Rs.4820 Lacs upto the date of the Balance Sheet have been used for long-term investment, primarily in the nature of capital expenditures and repayment of Loans.

18. During the year the Company has made preferential allotment of 840000, 6.5% Cumulative Redeemable Shares Series I @ Rs.100/- each, redeemable at par and 1675000, 10% Cumulative Redeemable Shares Series II @ Rs.100/- each, issued at premium of 100/- each, redeemable at premium of 100/- each to parties and companies covered in the register maintained under section 301 of the Act. In our opinion, prices at which shares have been issued is not prejudicial to the interest of the company.

19. The Company has not issued any debenture, therefore, no comment is required under para 4(xix) of CARO, 2003.

20. The company has not raised any money by way of public issue during the period under report.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For B.K.Kapur & Co.

Firm Registration Number 000852C

Chartered Accountants,

Place : Noida (M.S.Kapur) F.C.A.

Dated : May 27th 2011 Partner

M. No.74615






Mar 31, 2010

1. We have audited the attached Balance Sheet of UTTAM SUGAR MILLS LIMITED as at 31st March 2010, the Profit & Loss Account and also the Cash Flow Statement for the period of fifteen months ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 ("The Order"),as issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act. 1956 ("The Act"), we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of trie said Order.

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

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 such books;

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with books of account;

d) In our opinion, Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with accounting standards referred to in Section 211 (3C) of the Act.

e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March 2010 from being appointed as a Director in terms of clause (g) of Sub Section (1) of Section of 274 of the Act.

f) Without qualifying our opinion, we draw your attention to note no.9 (a) of schedule 19 relating to the accounting for sugar cane purchase liability in respect of units situated in the state of Uttar Pradesh for the sugar season 2007-08 at an interim price of Rs. 110/- per quintal which is as per the directions of Honble Supreme Court instead of State Advisory price of Rs. 125 per quintal fixed by the State Government. Pending the final decision of the Honble Supreme Court in this matter, the effect thereof presently is not ascertainable.

g) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts subject to note no.21(d) regarding managerial remuneration read together with the significant accounting policies and others notes thereon, remuneration read and attached thereto, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: -

i) in the case of Balance Sheet, of the State of affairs of the Company as at 31st March, 2010.

ii) in the case of Profit & Loss Account, of the Loss of the Company for the period of fifteen months ended on that date; and

iii) in the case of Cash Flow Statement, of the cash flows of the Company for the period of fifteen months ended on that datf* Annexure to the Auditors Report

(Referred to in paragraph (3) of our Report of even date to the shareholders of UTTAM SUGAR MILLS LIMITED for the period ended 31st March 2010.)

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its principal fixed assets, other than the situation of furniture and fixture and office equipments, which are under compilation, accordin -gly the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regards to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the period and no material discrepancies have been noticed on such verification.

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

2. (a) The physical verification of inventory has been conducted by the management at reasonable intervals.

(b) In our opinion and ad cording to the information and explanations given to us, 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) On the basis of our examination, in our opinion, the Company has maintained proper records of inventory. Discrepancies noticed on such physical verification of inventory as compared to the book records were not material.

3. (a) According to information made available 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 Act, accordingly clause 4(iii) (b) to (d) of the Order are not applicable to the Company.

(b) According to information made available to us, the Company has taken unsecured loans from seven parties covered in the register maintained under section 301 of the Act. Total outstanding for such loans at the period-end amounted to Rs.3253 lacs and maximum outstanding during the period amounts to Rs.5314.50 lacs. Further, the Company has not taken any secured loan from the aforesaid referred parties.

(c) The rate of interest and other terms and conditions of the unsecured loans taken by the Company are prima- facie not prejudicial to the interest of the Company.

(d) As informed to us, the repayment of the principal amount of unsecured loans and interest thereon, wherever there is stipulation as regards the payments, are regular.

4. 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 nature of its business, for purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. (a) Based on our examination and 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 Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to prevailing market price at the relevant time.

6. On the basis of information and explanations given to us, the Company has not accepted any public deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Act, and rules framed thereunder.

7. The Company has an internal audit system which needs to be strengthened to make it commensurate with the size and- nature of the Companys business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the Central Government for the maintenance of the cost records under section 209(1) (d) of the Act and are of the opinion that, prima-facie, the prescribed account and records have been maintained and are being made up. We however as not required have not made a detailed examination of such records with a view to determine whether these are accurate or complete.

9. (a) According to the information and explanations given to us the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it, except few cases of delay in deposit of Tax Deducted at Source . As explained to us, the provisions of Employees State Insurance are not applicable to the Company.no amount was due to be deposited under investor Education and Protection Fund. Further, there was no arrears of undisputed statutory dues outstanding as at 31st March,2010 for a period of more than six months from the date they became payable except the Income Tax dues of Rs. 98.87 lacs relating to the assessment year 2005-06 and 2006-07

(b) According to the information and explanations given to us, the disputed statutory dues of Income Tax, Sales Tax & Excise duty aggregating to Rs.233.99 Lacs that have not been deposited are given below: -

Name of Nature of Period to Amount Forum where dispute Statue Due which it (Rs. in lacs) is pending

Pertains

Sales Tax Laws Sales Tax 1999-2000 0.47 Joint Commissioner (Appeal)

Central Excise Act 1944 Excise Duty 2004-2005 233.52 CESTAT

233.99

Further, in respect of Custom Duty, Wealth Tax, Service Tax and Cess, it has been informed that there are no dues, which have not been deposited on account of any dispute.

10. The companys accumulated losses at the end of the period under report are less than fifty percent of its Net Worth. The company has incurred cash losses during the period of fifteen months ended 31sl March, 2010, and also in the immediately preceding financial period ended 31st December 2008.

* Includes Rs.7286.29 lacs paid during the period. There are no dues of debenture holders.

12. According to the information and explanations given to 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.

13. The Company is not a chit fund or a Nidhi / mutual benefit fund / society, therefore provisions of clause 4(xiii) of the order are not applicable to the Company.

14. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provisions of clause 4(xiv) of the order are not applicable to the Company.

15. According to the information and explanations given to us, the Company has given corporate guarantees for loans taken by others from Banks. In our opinion, the terms & conditions of these guarantees are not prejudicial to the interest of the company.

16. In our opinion and on the basis of information and explanations given to us and on overall basis, term loans availed by the Company were, prima-facie applied by the Company for the purposes for which the loans were raised.

17. On the basis of overall examinations of the balance sheet of the Company, in our opinion and according to the information and explanations given to us funds raised on the short term basis to the extent of Rs. 5311.76 Lacs upto the date of the Balance Sheet have been used for long-term investment, primarily in the nature of capital expenditures and repayment of Loans.

18. During the period Company has made preferential allotment of 41,60,000, 6.5% Cumulative Redeemable Preference Shares @ Rs.100/- each to parties and companies covered in the register maintained under section 301 of the Act. In our opinion, prices at which shares have been issued is not prejudicial to the interest of the company

19. The Company has not issued any debenture, therefore, no comment is required under para 4(xix) of CARO, 2003.

20. The company has not raised any money by way of public issue during the period under report.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For B.K.Kapur & Co.

Firm Registration Number 000852

Chartered Accountants

Place : Noida (M.S.Kapur) F.C.A.

Dated : 29th June, 2010 Partner

M. No.74615



 
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