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Auditor Report of Dhampur Sugar Mills Ltd.

Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Dhampur Sugar Mills Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 standalone Ind AS 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 standalone Ind AS financial statements based on our audit.

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

We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2018, and its profit/loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended March 2017 and the transition date opening balance sheet as at April 01, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended March 31, 2017 and March 31, 2016 dated May 25, 2017 and May 10, 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.

Our opinion is not modified in respect of these matters. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in”Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order ;

2. As required by Section143(3) of the Act, we report that

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such Controls, refer to our separate report in Annexure -’B’

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements.

ii. The Company does not have any long-term contracts including derivative contracts for which there are any material foreseeable losses.

iii. As explained, there has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

(i) In respect of its fixed assets:

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

(b) The Company has a phased program of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. The management has verified major fixed assets during the year and as explained there is no material discrepancy on such verification.

(c) The title deeds of the immovable properties, as disclosed in the financial statements, are held in the name of the company.

(ii) The inventories except goods in transit have been physically verified by the management at reasonable interval during the year. In our opinion and according to the information and explanations given to us, the frequency of such verification is reasonable. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to book records.

(iii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not granted any loan secured or unsecured to the companies, firms, limited liability partnership and other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly paragraph 3(iii) of the order is not applicable to the company.

(iv) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the company has not granted any loans, or provided any security or guarantee to the parties covered under Section 185 of the Companies Act, 2013. The Company has complied with the provisions of section 186 of the Companies Act, 2013 in respect of investment made or loans or guarantee or security provided to the parties covered under section 186 of the Companies Act, 2013.

(v) According to the information and explanations given to us, in our opinion, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and rules framed there under in respect of deposits accepted during the year. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in this connection.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost records and Audit) Rules, 2014 under section 148 of the Companies Act and are of the opinion that, prima facie, the prescribed cost record have been made and maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, investor education and protection fund, employees’ state insurance, income tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities except for demand raised by Income Tax Authorities at the time of processing of TDS return. There are no undisputed statutory dues as referred to above as at March 31, 2018 outstanding for a period of more than six months from the date they become payable except for demand raised by Income Tax Authorities at the time of processing of TDS return aggregating to ‘ 0.06 Crores. We have been informed by the Company that they are in process of getting these returns rectified and are hopeful that these demands will be substantially reduced after rectification.

(b) According to the information and explanations given to us, the particulars of Income tax, Service-tax, Sales-tax, Custom Duty, Excise Duty, Entry tax, Value Added Tax, which have not been deposited on account of any dispute, are as referred to Annexure -’A1’

(viii)According to the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of loans and borrowings to any financial institution, bank and government during the period. The Company has not borrowed any money by way of issue of debentures.

(ix) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the money raised by the Company by way of term loans have been applied for the purposes for which they were obtained.

(x) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company by its officers or employees was noticed or report during the year.

(xi) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company is not a Nidhi Company. Accordingly, the paragraph 3(xii) of the Order is not applicable to the Company.

(xiii)According to the information and explanations given to us and based on our examinations of the records, in our opinion, the transactions with related parties are in compliance with the provisions of sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (IndAS 24), Related Party Disclosures specified under Section 133 of the Act, read with Rule 15 of the Companies (Indian Accounting Standards) Rules, 2015.

(xiv)According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not raised funds by way of Private placement of Preferential Issues during the year.

xv) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not entered into any non-cash transactions as specified u/s 192 of the Act, with its directors or persons connected to him. Accordingly, the paragraph 3(xv) of the Order is not applicable to the Company.

(xvi)In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

(The Annexure - ‘A1’ referred to in our Independent Auditors’ Report to the members of the Company on the standalone financial statements for the year ended March 31, 2018)

(Rs.in crores)

S. No.

Name of the Statute

Nature of Dues

Amount in Rs.

Period to which the amount relates

Forum where the dispute is pending

1

Central Excise Act, 1944

Excise Duty

0.01

2003-04

Supreme Court

2

Central Excise Act, 1944

Excise Duty

0.02

2005-06

Supreme Court

3

Central Excise Act, 1944

Excise Duty

0.01

2012-13

Supreme Court

4

Central Excise Act, 1944

Excise Duty

#

2012-13

Supreme Court

Sub-total

0.04

1

Central Excise Act, 1944

Excise Duty

#

1998-99

High Court

2

Central Excise Act, 1944

Excise Duty

0.01

2001-02

High Court

3

Central Excise Act, 1944

Excise Duty

#

2004-05

High Court

4

Central Excise Act, 1944

Excise Duty

#

2004-05

High Court

5

Central Excise Act, 1944

Excise Duty

0.01

2004-05

High Court

6

Central Excise Act, 1944

Excise Duty

0.02

2005-06

High Court

7

Central Excise Act, 1944

Excise Duty

0.04

2010-11

High Court

8

Central Excise Act, 1944

Excise Duty

10.73

2011-12

High Court

Sub-total

10.81

1

Central Excise Act, 1944

Excise Duty

0.04

1995-96

CESTAT

2

Central Excise Act, 1944

Excise Duty

#

1996-97

CESTAT

3

Central Excise Act, 1944

Excise Duty

0.26

2005-06

CESTAT

4

Central Excise Act, 1944

Excise Duty

8.59

2006-07

CESTAT

5

Central Excise Act, 1944

Excise Duty

1.36

2007-08

CESTAT

6

Central Excise Act, 1944

Excise Duty

0.23

2007-08

CESTAT

7

Central Excise Act, 1944

Excise Duty

0.17

2007-08

CESTAT

8

Central Excise Act, 1944

Excise Duty

2.49

2008-09

CESTAT

9

Central Excise Act, 1944

Excise Duty

0.04

2009-10

CESTAT

10

Central Excise Act, 1944

Excise Duty

0.04

2009-10

CESTAT

11

Central Excise Act, 1944

Excise Duty

#

2009-10

CESTAT

12

Central Excise Act, 1944

Excise Duty

2.89

2010-11

CESTAT

13

Central Excise Act, 1944

Excise Duty

4.75

2010-11

CESTAT

14

Central Excise Act, 1944

Excise Duty

3.09

2010-11

CESTAT

15

Central Excise Act, 1944

Excise Duty

0.03

2010-11

CESTAT

16

Central Excise Act, 1944

Excise Duty

0.02

2010-11

CESTAT

17

Central Excise Act, 1944

Excise Duty

0.15

2011-12

CESTAT

18

Central Excise Act, 1944

Excise Duty

0.02

2011-12

CESTAT

19

Central Excise Act, 1944

Excise Duty

0.05

2011-12

CESTAT

20

Central Excise Act, 1944

Excise Duty

0.05

2011-12

CESTAT

21

Central Excise Act, 1944

Excise Duty

2.08

2014-15

CESTAT

22

Central Excise Act, 1944

Excise Duty

0.65

2014-15

CESTAT

23

Central Excise Act, 1944

Excise Duty

0.45

2015-16

CESTAT

11

Central Excise Act, 1944

Excise Duty

0.06

2017-18

CESTAT

12

Central Excise Act, 1944

Excise Duty

0.33

2017-18

CESTAT

3

Central Excise Act, 1944

Excise Duty

0.02

2017-18

CESTAT

4

Central Excise Act, 1944

Excise Duty

0.05

2017-18

CESTAT

5

Central Excise Act, 1944

Excise Duty

0.02

2017-18

CESTAT

6

Central Excise Act, 1944

Excise Duty

0.07

2017-18

CESTAT

Sub-total

28.00

1

Central Excise Act, 1944

Excise Duty

#

2001-02

Commissioner (Appeals)

2

Central Excise Act, 1944

Excise Duty

0.05

2001-02

Commissioner (Appeals)

3

Central Excise Act, 1944

Excise Duty

#

2004-05

Commissioner (Appeals)

4

Central Excise Act, 1944

Excise Duty

0.05

2009-10

Commissioner (Appeals)

5

Central Excise Act, 1944

Excise Duty

0.02

2011-12

Commissioner (Appeals)

6

Central Excise Act, 1944

Excise Duty

0.29

2011-12

Commissioner (Appeals)

7

Central Excise Act, 1944

Excise Duty

0.13

2015-16

Commissioner (Appeals)

8

Central Excise Act, 1944

Excise Duty

0.01

2015-16

Commissioner (Appeals)

9

Central Excise Act, 1944

Excise Duty

0.01

2015-16

Commissioner (Appeals)

10

Central Excise Act, 1944

Excise Duty

0.13

2016-17

Commissioner (Appeals)

Sub-total

0.69

1

Central Excise Act, 1944

Excise Duty

1.39

2017-18

Additional Commissioner (Appeals)

2

Central Excise Act, 1944

Excise Duty

0.45

2017-18

Additional Commissioner (Appeals)

1.84

Total Excise duty demands

41.38

1

Service Tax Law

Service Tax

0.56

2009-10

CESTAT

2

Service Tax Law

Service Tax

0.03

2010-11

CESTAT

Total Service tax demands

0.59

Total Excise duty & Service tax demands

41.97

1

U.P. Trade Tax Act, 1948

Trade Tax

0.01

1993-94

High Court

2

U.P. Trade Tax Act, 1948

Trade Tax

0.01

1994-95

High Court

3

U.P. Trade Tax Act, 1948

Trade Tax

0.04

1995-96

High Court

4

U.P. Trade Tax Act, 1948

Trade Tax

0.09

1996-97

High Court

5

U.P. Trade Tax Act, 1948

Trade Tax

0.10

1996-97

High Court

6

U.P. Trade Tax Act, 1948

Trade Tax

0.18

1997-98

High Court

7

U.P. Trade Tax Act, 1948

Trade Tax

0.35

1998-99

High Court

8

U.P. Trade Tax Act, 1948

Trade Tax

0.75

1999-00

High Court

9

U.P. Trade Tax Act, 1948

Trade Tax

0.04

1999-00

High Court

10

U.P. Trade Tax Act, 1948

Trade Tax

0.40

2000-01

High Court

11

U.P. Trade Tax Act, 1948

Trade Tax

0.02

2000-01

High Court

12

U.P. Trade Tax Act, 1948

Trade Tax

0.41

2001-02

High Court

13

U.P. Trade Tax Act, 1948

Trade Tax

0.16

2001-02

High Court

14

U.P. Trade Tax Act, 1948

Trade Tax

0.73

2002-03

High Court

15

U.P. Trade Tax Act, 1948

Trade Tax

0.15

2002-03

High Court

16

U.P. Trade Tax Act, 1948

Trade Tax

0.49

2003-04

High Court

17

U.P. Trade Tax Act, 1948

Trade Tax

0.07

2003-04

High Court

18

U.P. Trade Tax Act, 1948

Trade Tax

0.59

2004-05

High Court

19

U.P. Trade Tax Act, 1948

Trade Tax

0.26

2011-12

High Court

20

U.P. Trade Tax Act, 1948

Trade Tax

0.64

2011-12

High Court

Sub-total

5.49

1

U.P. Trade Tax Act, 1948

Trade Tax

0.72

1999-00

Commercial Tax Tribunal

2

U.P. Trade Tax Act, 1948

Trade Tax

1.12

1999-00

Commercial Tax Tribunal

3

U.P. Trade Tax Act, 1948

Trade Tax

0.43

2001-02

Commercial Tax Tribunal

4

U.P. Trade Tax Act, 1948

Trade Tax

2.65

2001-02

Commercial Tax Tribunal

5

U.P. Trade Tax Act, 1948

Trade Tax

5.49

2005-06

Commercial Tax Tribunal

6

U.P. Trade Tax Act, 1948

Trade Tax

0.05

2005-06

Commercial Tax Tribunal

7

U.P. Trade Tax Act, 1948

Trade Tax

2.75

2006-07

Commercial Tax Tribunal

8

U.P. Trade Tax Act, 1948

Trade Tax

0.04

2006-07

Commercial Tax Tribunal

5

U.P. Trade Tax Act, 1948

Trade Tax

0.63

2007-08

Commercial Tax Tribunal

6

U.P. Trade Tax Act, 1948

Trade Tax

0.60

2007-08

Commercial Tax Tribunal

7

U.P. Trade Tax Act, 1948

Trade Tax

1.18

2008-09

Commercial Tax Tribunal

8

U.P. Trade Tax Act, 1948

Trade Tax

1.77

2008-09

Commercial Tax Tribunal

9

U.P. Trade Tax Act, 1948

Trade Tax

0.66

2009-10

Commercial Tax Tribunal

10

U.P. Trade Tax Act, 1948

Trade Tax

1.08

2009-10

Commercial Tax Tribunal

Sub-total

19.17

1

U.P. Trade Tax Act, 1948

Trade Tax

0.01

2009-10

Additional Commissioner (Appeals)

2

U.P. Trade Tax Act, 1948

Trade Tax

0.07

2012-13

Additional Commissioner (Appeals)

3

U.P. Trade Tax Act, 1948

Trade Tax

0.73

2012-13

Additional Commissioner (Appeals)

4

U.P. Trade Tax Act, 1948

Trade Tax

0.10

2013-14

Additional Commissioner (Appeals)

5

U.P. Trade Tax Act, 1948

Trade Tax

1.77

2013-14

Additional Commissioner (Appeals)

6

U.P. Trade Tax Act, 1948

Trade Tax

0.35

2014-15

Additional Commissioner (Appeals)

7

U.P. Trade Tax Act, 1948

Trade Tax

0.65

2014-15

Additional Commissioner (Appeals)

Sub-total

3.68

Total Trade tax demands

28.34

1

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.82

1994-95

High court

2

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

1.06

1994-95

High court

3

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

1.25

1995-96

High court

4

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.37

1995-96

High court

5

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.88

2001-02

High court

4.38

1

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.02

2000-01

Commercial Tax Tribunal

2

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.51

2005-06

Commercial Tax Tribunal

3

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.43

2006-07

Commercial Tax Tribunal

4

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.02

2007-08

Commercial Tax Tribunal

5

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.21

2008-09

Commercial Tax Tribunal

6

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.89

2009-10

Commercial Tax Tribunal

Sub-total

2.08

1

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.02

2010-11

Additional Commissioner (Appeals)

2

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

2.85

2012-13

Additional Commissioner (Appeals)

3

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.43

2013-14

Additional Commissioner (Appeals)

4

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.05

2014-15

Additional Commissioner (Appeals)

Sub-total

3.35

Total Entry Tax demands

9.81

Total Trade Tax and Entry Tax demands

38.15

Report on the Internal Financial Control under clause (i) of subsection 3 of section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial control over financial reporting of Dhampur Sugar Mills Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the company for the year ended on that date.

Management’s Responsibility for internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s polices, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information , as required under the Companies Act, 2013 (“the Act”).

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial control over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Control Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence, we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial control system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that , in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the company; (2) provide reasonable assurance that transaction are recorded as necessary to permit preparation of financial statement in accordance with generally accepted accounting principles, and that receipt and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition , use ,or disposition of the company’s assets that could have a material effect on the financial statement.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial control over financial reporting were operating effectively as at March 31, 2018, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.

For Atul Garg & Associates For T R Chadha & Co LLP

Chartered Accountants Chartered Accountants

Firm Registration No.001544C Firm Registration No.006711N/N500028

Atul Garg Neena Goel

Partner Partner

Membership No. 070757 Membership No. 057986

Place: New Delhi Place: New Delhi

Date: May 09, 2018 Date: May 09, 2018


Mar 31, 2017

To

The Members of

Dhampur Sugar Mills Ltd.

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Dhampur Sugar Mills Limited (“the Company"), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss, the Cash Flow Statement, and a summary of the significant accounting policies and other explanatory information for the year then ended, in which are incorporated the financial statements for the year ended on that date of two units audited by the branch auditors of the Company.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

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

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

Opinion

In our opinion and to the best of our information and according the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true fair view in conformity with accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017 and its Profit and its Cash flows for the year ended on that date.

Other Matter

We did not audit the financial statements of two units which are included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs. 935.86 Crores as at 31st March, 2017 and total revenues of Rs. 601.62 Crores for the year ended on that date, as considered in the standalone financial statements. The financial statements of two units have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these units, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure - ''A'' a statement on the matters specified in paragraphs 3 and 4 of the Order;

2. As required by Section143(3) of the Act, we report that

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) The reports on the accounts of the two units of the Company audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

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

(e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(f) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such Controls, refer to our separate report in Annexure -''B''

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

ii. The Company does not have any long-term contracts including derivative contracts for which there are any material foreseeable losses.

iii. As explained, there has been no amount required to be transferred to the Investor Education and Protection Fund by the Company.

(h) the Company has provided requisite disclosures in Note 29 to these (standalone) financial statements, as to holdings of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on the audit procedures performed and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the company and produced to us by the Management.

Annexure - ''A'' to the Independent Auditors'' Report

The Annexure - ''A'' referred to in our Independent Auditors'' Report of even date to the members of the Company on the standalone financial statements for the year ended 31st March, 2017:

(i) In respect of its fixed assets:

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

(b) The Company has a phased program of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. The management has verified major fixed assets during the year and as explained there is no material discrepancy on such verification.

(c) The title deeds of the immovable properties, as disclosed in the financial statements, are held in the name of the company.

(ii) The inventories except goods in transit have been physically verified by the management at reasonable interval during the year. In our opinion and according to the information and explanations given to us, the frequency of such verification is reasonable. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to book records.

(iii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not granted any loan secured or unsecured to the companies, firms, limited liability partnership and other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly paragraph 3(iii) of the order is not applicable to the company.

(iv) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the company has not granted any loans, or provided any security or guarantee to the parties covered under Section 185 of the Companies Act, 2013. The Company has complied with the provisions of section 186 of the Companies Act, 2013 in respect of investment made or loans or guarantee or security provided to the parties covered under section 186 of the Companies Act, 2013.

(v) According to the information and explanations given to us, in our opinion, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and rules framed there under. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in this connection.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost records and Audit) Rules, 2014 under section 148 of the Companies Act and are of the opinion that, prima facie, the prescribed cost record have been made and maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given

to us and based on our examinations of the records, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities except for demand raised by Income Tax Authorities at the time of processing of TDS return. There are no undisputed statutory dues as referred to above as at 31st March, 2017 outstanding for a period of more than six months from the date they become payable except for demand raised by Income Tax Authorities at the time of processing of TDS return aggregating to Rs. 0.06 Crores. We have been informed by the Company that they are in process of getting these returns rectified and are hopeful that these demands will be substantially reduced after rectification.

(b) According to the information and explanations given to us, the particulars of Income tax, Service-tax, Sales-tax, Custom Duty, Excise Duty, Entry tax, Value Added Tax, which have not been deposited on account of any dispute, are as referred to Annexure -''A1.

(viii)According to the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of loans and borrowings to any financial institution, bank and government during the period. The Company has not borrowed any money by way of issue of debentures.

(ix) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the money raised by the Company by way of term loans and further public offer through qualified institutional placement have been applied for the purposes for which they were obtained.

(x) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company is not a Nidhi Company. Accordingly, the paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the transactions with related parties are in compliance with the provisions of sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(xiv)According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has complied with the requirements of Section 42 of the Companies Act in respect of preferential allotment of equity shares made during the year to qualified institutional investors and money raised on such allotment has been used for the purpose for which the funds were raised.

xv) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not entered into any non-cash transactions as specified u/s 192 of the Act, with its directors or persons connected to him. Accordingly, the paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Annexure - ''A1'' to the Independent Auditors'' Report

(The Annexure - ''A1'' referred to in our Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2017)

( Rs. in crores)

S. No.

Name of the Statute

Nature of Dues

Amount in Rs.

Period to which the amount relates

Forum where the dispute is pending

1

Central Excise Act, 1944

Excise Duty

1.08

2010-11

Supreme Court

2

Central Excise Act, 1944

Excise Duty

0.02

2015-16

Supreme Court

3

Central Excise Act, 1944

Excise Duty

0.01

2016-17

Supreme Court

4

Central Excise Act, 1944

Excise Duty

0.01

2016-17

Supreme Court

Sub-total

1.12

1

Central Excise Act, 1944

Excise Duty

0.04

2008-09

High Court

2

Central Excise Act, 1944

Excise Duty

10.73

2011-12

High Court

3

Central Excise Act, 1944

Excise Duty

0.06

2012-13

High Court

4

Central Excise Act, 1944

Excise Duty

0.01

2012-13

High Court

Sub-total

10.84

1

Central Excise Act, 1944

Excise Duty

0.04

1995-96

CESTAT

2

Central Excise Act, 1944

Excise Duty

0.01

1996-97

CESTAT

3

Central Excise Act, 1944

Excise Duty

0.00

2001-02

CESTAT

4

Central Excise Act, 1944

Excise Duty

0.07

2005-06

CESTAT

5

Central Excise Act, 1944

Excise Duty

0.26

2005-06

CESTAT

6

Central Excise Act, 1944

Excise Duty

1.63

2007-08

CESTAT

7

Central Excise Act, 1944

Excise Duty

0.23

2007-08

CESTAT

8

Central Excise Act, 1944

Excise Duty

0.17

2007-08

CESTAT

9

Central Excise Act, 1944

Excise Duty

0.07

2008-09

CESTAT

10

Central Excise Act, 1944

Excise Duty

0.71

2008-09

CESTAT

11

Central Excise Act, 1944

Excise Duty

2.49

2008-09

CESTAT

12

Central Excise Act, 1944

Excise Duty

0.03

2008-09

CESTAT

13

Central Excise Act, 1944

Excise Duty

0.01

2008-09

CESTAT

14

Central Excise Act, 1944

Excise Duty

0.53

2009-10

CESTAT

15

Central Excise Act, 1944

Excise Duty

0.56

2009-10

CESTAT

16

Central Excise Act, 1944

Excise Duty

0.04

2009-10

CESTAT

17

Central Excise Act, 1944

Excise Duty

0.04

2009-10

CESTAT

18

Central Excise Act, 1944

Excise Duty

8.07

2009-10

CESTAT

19

Central Excise Act, 1944

Excise Duty

0.20

2010-11

CESTAT

20

Central Excise Act, 1944

Excise Duty

2.89

2010-11

CESTAT

21

Central Excise Act, 1944

Excise Duty

4.75

2010-11

CESTAT

22

Central Excise Act, 1944

Excise Duty

3.09

2010-11

CESTAT

23

Central Excise Act, 1944

Excise Duty

0.23

2010-11

CESTAT

24

Central Excise Act, 1944

Excise Duty

0.31

2010-11

CESTAT

25

Central Excise Act, 1944

Excise Duty

0.18

2010-11

CESTAT

26

Central Excise Act, 1944

Excise Duty

0.40

2010-11

CESTAT

27

Central Excise Act, 1944

Excise Duty

0.28

2010-11

CESTAT

28

Central Excise Act, 1944

Excise Duty

0.17

2010-11

CESTAT

29

Central Excise Act, 1944

Excise Duty

0.25

2010-11

CESTAT

30

Central Excise Act, 1944

Excise Duty

0.19

2010-11

CESTAT

31

Central Excise Act, 1944

Excise Duty

0.14

2010-11

CESTAT

32

Central Excise Act, 1944

Excise Duty

0.03

2010-11

CESTAT

33

Central Excise Act, 1944

Excise Duty

0.15

2011-12

CESTAT

34

Central Excise Act, 1944

Excise Duty

0.02

2011-12

CESTAT

35

Central Excise Act, 1944

Excise Duty

0.15

2011-12

CESTAT

36

Central Excise Act, 1944

Excise Duty

0.01

2011-12

CESTAT

37

Central Excise Act, 1944

Excise Duty

0.02

2011-12

CESTAT

38

Central Excise Act, 1944

Excise Duty

0.00

2011-12

CESTAT

39

Central Excise Act, 1944

Excise Duty

0.18

2011-12

CESTAT

40

Central Excise Act, 1944

Excise Duty

0.04

2011-12

CESTAT

41

Central Excise Act, 1944

Excise Duty

0.07

2012-12

CESTAT

42

Central Excise Act, 1944

Excise Duty

2.08

2014-15

CESTAT

43

Central Excise Act, 1944

Excise Duty

0.14

2016-17

CESTAT

Sub-total

30.93

Total Excise duty demands

42.89

1

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.27

2004-2005

Commercial Tax Tribunal

2

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.02

2007-2008

Commercial Tax Tribunal

3

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.89

2009-2010

Commercial Tax Tribunal

Sub-total

1.18

1

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

1.32

2005-2006

Additional Commissioner (Appeals)

2

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

1.10

2006-2007

Additional Commissioner (Appeals)

3

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.47

2008-2009

Additional Commissioner (Appeals)

4

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.65

2010-2011

Additional Commissioner (Appeals)

5

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

1.94

2011-2012

Additional Commissioner (Appeals)

6

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

2.84

2012-2013

Additional Commissioner (Appeals)

7

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax

0.43

2013-2014

Additional Commissioner (Appeals)

Sub-total

8.75

1

U.P. Trade Tax Act, 1948

Trade Tax

0.19

1993-94

High Court

2

U.P. Trade Tax Act, 1948

Trade Tax

0.01

1994-95

High Court

3

U.P. Trade Tax Act, 1948

Trade Tax

0.04

1995-96

High Court

4

U.P. Trade Tax Act, 1948

Trade Tax

0.09

1996-97

High Court

5

U.P. Trade Tax Act, 1948

Trade Tax

0.10

1996-97

High Court

6

U.P. Trade Tax Act, 1948

Trade Tax

0.18

1997-98

High Court

7

U.P. Trade Tax Act, 1948

Trade Tax

0.35

1998-99

High Court

8

U.P. Trade Tax Act, 1948

Trade Tax

0.75

1999-00

High Court

9

U.P. Trade Tax Act, 1948

Trade Tax

0.04

1999-00

High Court

10

U.P. Trade Tax Act, 1948

Trade Tax

0.40

2000-01

High Court

11

U.P. Trade Tax Act, 1948

Trade Tax

0.02

2000-01

High Court

12

U.P. Trade Tax Act, 1948

Trade Tax

0.41

2001-02

High Court

13

U.P. Trade Tax Act, 1948

Trade Tax

0.16

2001-02

High Court

14

U.P. Trade Tax Act, 1948

Trade Tax

0.73

2002-03

High Court

15

U.P. Trade Tax Act, 1948

Trade Tax

0.15

2002-03

High Court

16

U.P. Trade Tax Act, 1948

Trade Tax

0.49

2003-04

High Court

17

U.P. Trade Tax Act, 1948

Trade Tax

0.07

2003-04

High Court

18

U.P. Trade Tax Act, 1948

Trade Tax

0.59

2004-05

High Court

19

U.P. Trade Tax Act, 1948

Trade Tax

0.26

2011-12

High Court

20

U.P. Trade Tax Act, 1948

Trade Tax

0.64

2011-12

High Court

Sub-total

5.67

1

U.P. Trade Tax Act, 1948

Trade Tax

0.94

Commercial Tax Tribunal

2

U.P. Trade Tax Act, 1948

Trade Tax

1.34

Commercial Tax Tribunal

3

U.P. Trade Tax Act, 1948

Trade Tax

0.72

Commercial Tax Tribunal

4

U.P. Trade Tax Act, 1948

Trade Tax

1.12

Commercial Tax Tribunal

5

U.P. Trade Tax Act, 1948

Trade Tax

0.43

Commercial Tax Tribunal

6

U.P. Trade Tax Act, 1948

Trade Tax

2.65

Commercial Tax Tribunal

7

U.P. Trade Tax Act, 1948

Trade Tax

2.29

Commercial Tax Tribunal

8

U.P. Trade Tax Act, 1948

Trade Tax

0.03

Commercial Tax Tribunal

5

U.P. Trade Tax Act, 1948

Trade Tax

0.63

Commercial Tax Tribunal

6

U.P. Trade Tax Act, 1948

Trade Tax

0.60

Commercial Tax Tribunal

9

U.P. Trade Tax Act, 1948

Trade Tax

0.66

Commercial Tax Tribunal

10

U.P. Trade Tax Act, 1948

Trade Tax

1.08

Commercial Tax Tribunal

Sub-total

12.49

1

U.P. Trade Tax Act, 1948

Trade Tax

5.51

Additional Commissioner (Appeals)

2

U.P. Trade Tax Act, 1948

Trade Tax

0.05

Additional Commissioner (Appeals)

3

U.P. Trade Tax Act, 1948

Trade Tax

2.75

Additional Commissioner (Appeals)

4

U.P. Trade Tax Act, 1948

Trade Tax

0.04

Additional Commissioner (Appeals)

5

U.P. Trade Tax Act, 1948

Trade Tax

1.26

Additional Commissioner (Appeals)

6

U.P. Trade Tax Act, 1948

Trade Tax

1.77

Additional Commissioner (Appeals)

7

U.P. Trade Tax Act, 1948

Trade Tax

0.84

Additional Commissioner (Appeals)

8

U.P. Trade Tax Act, 1948

Trade Tax

1.42

Additional Commissioner (Appeals)

9

U.P. Trade Tax Act, 1948

Trade Tax

0.14

Additional Commissioner (Appeals)

10

U.P. Trade Tax Act, 1948

Trade Tax

0.28

Additional Commissioner (Appeals)

11

U.P. Trade Tax Act, 1948

Trade Tax

0.07

Additional Commissioner (Appeals)

12

U.P. Trade Tax Act, 1948

Trade Tax

0.73

Additional Commissioner (Appeals)

13

U.P. Trade Tax Act, 1948

Trade Tax

0.10

Additional Commissioner (Appeals)

14

U.P. Trade Tax Act, 1948

Trade Tax

1.77

Additional Commissioner (Appeals)

16.73

Total Trade Tax and Entry Tax demands

44.82

Annexure - ''B'' to the Independent Auditor''s Report

(The Annexure - ''B'' referred to in our Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2017)

Report on the Internal Financial Control under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial control over financial reporting of Dhampur Sugar Mills Limited (“the Company") as of 31 March, 2017 in conjunction with our audit of the standalone financial statements of the company for the year ended on that date.

Management''s Responsibility for internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s polices, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information , as required under the Companies Act, 2013 (“the Act").

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial control over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Control Over Financial Reporting (the “Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence, we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial control system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles. A company''s internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that , in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the company; (2) provide reasonable assurance that transaction are recorded as necessary to permit preparation of financial statement in accordance with generally accepted accounting principles, and that receipt and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition , use ,or disposition of the company''s assets that could have a material effect on the financial statement.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial control over financial reporting were operating effectively as at 31 March 2017, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.

For MITTAL GUPTA & CO.,

Chartered Accountants

FRN01874C

(B. L. GUPTA)

Partner

Membership No. 073794

Place: New Delhi

Date: 25th May, 2017


Mar 31, 2016

To

The Members of Dhampur Sugar Mills Ltd.

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Dhampur Sugar Mills Limited (“the Company"), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement, and a summary of the significant accounting policies and other explanatory information for the year then ended, in which are incorporated the financial statements for the year ended on that date of two units audited by the branch auditors of the Company.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

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

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

Opinion

In our opinion and to the best of our information and according the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true fair view in conformity with accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016 and its Profit and its Cash flows for the year ended on that date.

Other Matter

We did not audit the financial statements of two units which are included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs, 846.98 Crores as at 31st March, 2016 and total revenues of Rs, 434.08 Crores for the year ended on that date, as considered in the standalone financial statements. The financial statements of two units have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these units, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Audit’s Report) Order, 2016 (“the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure - ''A'' a statement on the matters specified in paragraphs 3 and 4 of the Order;

2. As required by Section143(3) of the Act, we report that

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) The reports on the accounts of the two units of the Company audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

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

(e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(f) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such Controls, refer to our separate report in Annexure -''B''

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

ii. The Company does not have any long-term contracts including derivative contracts for which there are any material foreseeable losses.

iii. As explained, there has been no amount required to be transferred to the Investor Education and Protection Fund by the Company.

The Annexure - ''A'' referred to in our Independent Auditors'' Report of even date to the members of the Company on the standalone financial statements for the year ended 31st March, 2016:

(i) In respect of its fixed assets:

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

(b) The Company has a phased program of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. The management has verified major fixed assets during the year and as explained there is no material discrepancy on such verification.

(c) The title deeds of the immovable properties, as disclosed in the financial statements, are held in the name of the company.

(ii) The inventories except goods in transit have been physically verified by the management at reasonable interval during the year. In our opinion and according to the information and explanations given to us, the frequency of such verification is reasonable. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to book records.

(iii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not granted any loan secured or unsecured to the companies, firms, limited liability partnership and other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly paragraph 3(iii) of the order is not applicable to the company.

(iv) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the company has not granted any loans, or provided any security or guarantee to the parties covered under Section 185 of the Companies Act, 2013. The Company has complied with the provisions of section 186 of the Companies Act, 2013 in respect of investment made or loans or guarantee or security provided to the parties covered under section 186 of the Companies Act, 2013.

(v) According to the information and explanations given to us, in our opinion, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and rules framed there under. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in this connection.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost records and Audit) Rules, 2014 under section 148 of the Companies Act and are of the opinion that, prima facie, the prescribed cost record have been made and maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given

to us and based on our examinations of the records, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities except for demand raised by Income Tax Authorities at the time of processing of TDS return. There are no undisputed statutory dues as referred to above as at 31st March, 2016 outstanding for a period of more than six months from the date they become payable except for demand raised by Income Tax Authorities at the time of processing of TDS return aggregating to Rs, 0.25 Crores. We have been informed by the Company that they are in process of getting these returns rectified and are hopeful that these demands will be substantially reduced after rectification.

(b) According to the information and explanations given to us, the particulars of Income tax, Service-tax, Sales-tax, Custom Duty, Excise Duty, Entry tax, Value Added Tax, which have not been deposited on account of any dispute, are as referred to Annexure -''A1''

(viii)According to the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of loans and borrowings to any financial institution, bank and government during the period. The Company has not borrowed any money by way of issue of debentures.

(ix) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the money raised by the Company by way of term loans during the year have been applied for the purposes for which they were obtained. The Company has not raised any money by way of Initial Public Offer or further public offer (including debt instruments) during the year.

(x) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company is not a Nidhi Company. Accordingly the paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the transactions with related parties are in compliance with the provisions of sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(xiv)According to the information and explanations given to us and based on our examinations of the records, in our opinion, during the year, the Company has allotted equity shares on conversion of equity share warrants, which were issued on preferential basis in earlier years. The company has complied with the requirements of section 42 of the Companies Act in respect of such allotment and money raised on such allotment has been used for the purpose for which the funds were raised. The Company has not made any other preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examinations of the records, in our opinion, the Company has not entered into any non-cash transactions as specified u/s 192 of the Act, with its directors or persons connected to him. Accordingly, the paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

(The Annexure - ''B'' referred to in our Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2016)

Report on the Internal Financial Control under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial control over financial reporting of Dhampur Sugar Mills Limited (“the Company") as of 31 March, 2016 in conjunction with our audit of the standalone financial statements of the company for the year ended on that date.

Management''s Responsibility for internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s polices, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information , as required under the Companies Act, 2013 (“the Act").

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial control over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Control Over Financial Reporting (the “Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence, we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial control system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles. A company''s internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that , in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the company; (2) provide reasonable assurance that transaction are recorded as necessary to permit preparation of financial statement in accordance with generally accepted accounting principles, and that receipt and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition , use ,or disposition of the company''s assets that could have a material effect on the financial statement.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial control over financial reporting were operating effectively as at 31 March 2016, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.

For Mittal Gupta & Co., Chartered Accountants FRN01874C

(B. L. Gupta )

Partner

Membership No. 073794

Place : New Delhi

Dated : 10th May, 2016


Mar 31, 2015

We have audited the accompanying standalone financial statements of Dhampur Sugar Mills Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement, and a summary of the significant accounting policies and other explanatory information for the year then ended,in which are incorporated the Reports for the year ended on that date audited by the branch auditors of the Company''s Meerganj Unit.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors''Responsibility

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

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

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. ThoseStandards require that we comply withethical 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 financial statements. The procedures selected depend on the auditor''s judgment, includingthe 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 bytheCompany''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 ourqualifiedaudit opinionon the standalone financial statements.

Opinion

In our opinion and to the best of our information and according the explanations given to us and the standalone financial statements give the information required by the Act in the manner so required and give a true fair view in conformity with accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015 and its Loss and its Cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the Note No. -"26 (b)" of the annexed financial statements which explains the reasons for recognition of subsidy announced by the Government of Uttar Pradesh.

Our opinion is not modified in respect of this matter.

Other Matter

We did not audit the financial statements of Meerganj Unit included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs. 274.19 Crores as at 31st March, 2015 and total revenues of Rs. 114.84 Crores for the year ended on that date, as considered in the standalone financial statements. The financial statements of Meerganj Unit have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by Section143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) The reports on the accounts of the Meerganj Unit of the Company audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

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

(e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(f) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. (Refer Note No. -"38")

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditors'' Report

The Annexure referred to in our Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2015, we report that:

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. The management has verified major fixed assets during the year and as explained there is no any material discrepancy on such verification.

ii) (a) The inventories have been physically verified during

the period by the management. In our opinion, the frequency of verification of inventory is reasonable.

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

(c) The Company has maintained proper records of inventories. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to book records.

iii) (a) The Company had granted unsecured loans to Six companies covered in the register maintained under section 189 of the Companies Act,2013 ("the Act").

(b) In the case of the loans granted to companies listed in the register maintained under section 189 of the Act, the borrowers are regular in the payment of the interest, as stipulated. The terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 3(iii)(b) of the Order is not applicable to the Company in respect of repayment of the principal amount.

(c) There are no overdue amount of more than rupees one lakh in respect of the loans granted to company listed in the register maintained under section 189 of the Act.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchase of inventory and sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

v) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and rules framed there under. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in this connection.

vi) The company has made and maintained cost records pursuant to section 148 (1) of the Companies Act, 2013.

vii) (a) As explained to us, the statutory dues payable by the Company comprises mainly of Provident Fund, Investor Education Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax (VAT), Wealth-tax, Service-tax, Custom Duty, Excise Duty, Cess, Entry tax, Purchase tax and other material statutory dues applicable to it. According to the records of the Company and information and explanations given to us, the Company has been generally regularly depositing the aforesaid undisputed statutory dues with the appropriate authorities. There are no undisputed statutory dues as referred to above as at 31st March,2015 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, the particulars of Income tax, Service-tax, Sales- tax (VAT), Custom Duty, Excise Duty, Entry tax, Stamp duty and other statutory material dues, which have not been deposited on account of any dispute, are as referred to in the details of Contingent Liabilities in Note No."38"

(c) According to the information and explanations given to us the amounts which are required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act,1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

viii) The accumulated losses of the company at the end of the financial year are less than 50% of its net worth.The Company has not incurred cash losses during the financial year but has incurred cash losses in the immediately preceding financial year.

ix) In our opinion and according to the information and explanations given to us, there is no default in repayment of dues to any Financial Institution and Bank during the period under report, as per the terms of the respective loans.

x) In our opinion, the terms and conditions of guarantees given the company for loans taken by others from banks are not prima facie prejudicial to the interest of the Company.

xi) The term loans obtained by the Company have been applied for the purposes for which they were obtained.

xii) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the course of our audit.

For S. Vaish & Co., For Mittal Gupta & Co., Chartered Accountants Chartered Accountants FRN00001C FRN01874C

(S.P. Agrawal) (B. L. Gupta ) Partner Partner Membership No. 07269 Membership No. 073794

Place : Kanpur Dated : 27th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Dhampur Sugar Mills Limited (''the Company'') which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. Management''s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in section 211(3C) of the Companies Act, 1956 ("the Act") [which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs]. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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:

(i) in the case of the Balance Sheet, of the State of Affairs of the unit as at 31st March 2014;

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

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of section 227(4A) 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

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

e. On the basis of the written representations received from the directors as on March, 31, 2014, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of Section 274(1)(g) of the Act.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

Other Matter

We did not audit the financial statements of Meerganj Unit whose financial statements reflect total assets of Rs. 232.20 Crores as at 31st March, 2014 and total revenue of Rs. 197.97 Crores during the financial year. The financial statements of Meerganj unit are audited by the other auditors. In conduct of our audit, we have taken note of accounts audited by other auditors.

Annexure to the Independent Auditors'' Report

The Annexure referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Dhampur Sugar Mills Limited (the Company) for the year ended 31st March, 2014:

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management at the end of the period. In our opinion the frequency of verification is reasonable considering the size of the Company and nature of its business.

(c) The Company has not disposed off a substantial part of its fixed assets during the period and the going concern status of the Company is not affected.

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

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

(c) The Company has maintained proper records of inventories. As explained to us, no material discrepancies were noticed on physical verification of inventories as compared to book records.

iii) (a) The Company had granted interest free unsecured loans/advances to one company covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the period is Rs. 0.11 Crores.

- The year end balance due is Rs. 0.11 Crores.

(b) In our opinion, the other terms and conditions on which interest free unsecured loans/advances have been granted to a company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(c) The payments of principal amount are regular, wherever stipulated.

(d) There is no overdue amount of loans/advances, more than rupee one lac, granted to company listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company had taken interest free unsecured loans/advances from seven companies covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the period is Rs. 2.26 Crores.

- The year end balance due is Rs. 0.12 Crores.

(f) In our opinion, the other terms and conditions on which interest free loans/advances have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(g) The payments of principal amount are regular, wherever stipulated.

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

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

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

vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and section 58AA of the Companies Act, 1956 or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

viii) We have broadly reviewed the cost accounting records maintained by the company pursuant to Companies (Cost Accounting Records) Rules 2011 prescribed by Central Government under section 209 (1) (d) of Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained.

We have, however, not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

ix) (a) As explained to us, the statutory dues payable by the Company comprises mainly of Provident Fund, Investor Education Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax (VAT), Wealth-tax, Service-tax, Custom Duty, Excise Duty, Cess, Entry tax, Purchase tax and other material statutory dues applicable to it. According to the records of the Company and information and explanations given to us, the Company has been generally regularly depositing the aforesaid undisputed statutory dues with the appropriate authorities. There are no undisputed statutory dues as referred to above as at 31st March,2014 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, there were no dues on account of Income Tax and Wealth Tax which were not deposited on account any dispute. However, the particulars of Service-tax, Sales-tax (VAT), Custom Duty, Excise Duty, Entry tax, Stamp duty and other statutory material dues, which have not been deposited on account of any dispute, are as referred to in the details of Contingent Liabilities in Note No.

"36"

x) The accumulated losses of the company at the end of the financial year are less than 50% of its net worth. The Company has incurred cash losses during the financial year covered by the audit but not incurred any cash loss in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, there is no default in repayment of dues to any Financial Institution and Bank during the period under report, as per the terms of the respective loans.

xii) In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments, accordingly the provisions of paragraph 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions; as such the provisions of paragraph 4(xv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xvi) The term loans obtained by the Company have been applied for the purposes for which they were obtained.

xvii)According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that as at 31st March, 2014, short-term funds of Rs. 301.63 Crores have been used for long term uses.

xviii)In our opinion, the price at which preferential allotment of 30,00,000 Equity share warrants has been made to the parties covered in the register maintained under section 301 of the Companies Act, 1956 is not prejudicial to the interest of the company.

xix) The Company has not issued any debentures during the period.

xx) The Company has not raised any money during the period by public issue.

xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the course of our audit.

For S. Vaish & Co., For Mittal Gupta & Co.,

Chartered Accountants Chartered Accountants FRN 00001C FRN 01874C

(S.P. Agrawal) (B. L. Gupta )

Partner Partner

Membership No. 07269 Membership No. 073794

Place : Kanpur

Dated : 21st May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying revised financial statements of Dhampur Sugar Mills Limited (‘the Company'') which comprise the Balance Sheet as at 31st March, 2013, 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. The original financial statements of the Company for the year ended March 31, 2013 were audited by us and our audit report dated May 21, 2013 expressed an unqualified opinion in the same. The original financial statements were prepared without giving effect to the Scheme of Amalgamation of J.K. Sugar Limited with the company, since the order of the Hon''ble High Court of Judicature at Calcutta was not received till that date. In order to give effect to the Scheme of the aforesaid amalgamation, which has become effective on July 16, 2013 from the appointed date i.e. April 01,2012 as approved by the Hon''ble High Court of Judicature at Allahabad vide order dated 18.03.2013 and Hon''ble High Court of Judicature at Calcutta vide order dated 17.05.2013 as explained and referred to in Note No. 1.A, these financial accounts have now been revised by the Company.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in section 211(3C) 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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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:

(i) in the case of the Balance Sheet, of the State of Affairs of the unit as at 31st March 2013;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of section 227(4A) 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

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

e. On the basis of the written representations received from the directors as on March, 31, 2013, 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 Section 274(1)(g) of the Act.

Annexure to the Independent Auditors'' Report

The Annexure referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Dhampur Sugar Mills Limited (the Company) for the year ended 31st March, 2013 :

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management at the end of the period. In our opinion the frequency of verification is reasonable considering the size of the Company and nature of its business.

(c) The Company has not disposed off a substantial part of its fixed assets during the period and the going concern status of the Company is not affected.

ii) (a) The inventories, except stores, have been physically verified during the period by the management. In our opinion, the frequency of verification of inventory, except stores, is reasonable.

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

(c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to book records.

iii) (a) The Company had granted interest free unsecured loans/advances to two companies covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the period is Rs. 25.33 crore.

- The year end balance due is Rs. 0.11 crore.

(b) In our opinion, the other terms and conditions on which interest free unsecured loans/advances have been granted to a company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(c) The payments of principal amount are regular, wherever stipulated.

(d) There is no overdue amount of loans/advances, more than rupee one lac, granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company had taken interest free unsecured loans/advances from five companies covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the period is Rs. 17.81 crore.

- The year end balance due is Rs. 0.78 crore.

(f) In our opinion, the other terms and conditions on which loans/advances have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(g) The payments of principal amount are regular, wherever stipulated.

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

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

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

vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and section 58AA of the Companies Act, 1956 or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

viii) We have broadly reviewed the cost accounting records maintained by the company pursuant to Companies (Cost Accounting Records) Rules 2011 prescribed by Central Government under section 209 (1) (d) of Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

ix) (a) As explained to us, the statutory dues payable by the Company comprises mainly of Provident Fund, Investor Education Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax (VAT), Wealth- tax, Service-tax, Custom Duty, Excise Duty, Cess, Entry tax, Purchase tax and other material statutory dues applicable to it. According to the records of the Company and information and explanations given to us, the Company has been generally regularly depositing the aforesaid undisputed statutory dues with the appropriate authorities. There are no undisputed statutory dues as referred to above as at 31st March,2013 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, there were no dues on account of Income Tax and Wealth Tax which were not deposited on account any dispute. However, the particulars of Service-tax, Sales-tax (VAT), Custom Duty, Excise Duty, Entry tax, Stamp duty and other statutory material dues, which have not been deposited on account of any dispute, are as referred to in the details of Contingent Liabilities in Note No. "35".

x) The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the financial year covered by the audit and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, there is no default in repayment of dues to any Financial Institution and Bank during the period under report, as per the terms of the respective loans.

xii) In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments, accordingly the provisions of paragraph 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions; as such the provisions of paragraph 4(xv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xvi) The term loans obtained by the Company have been applied for the purposes for which they were obtained.

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

xviii) The Company has not made any preferential allotment of shares during the period to parties covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The Company has not issued any debentures during the period .

xx) The Company has not raised any money during the period by public issue.

xxi) 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 was noticed or reported during the course of our audit.

For S. Vaish & Co., For Mittal Gupta & Co.,

Chartered Accountants Chartered Accountants

FRN 00001C FRN 01874C

(S.P. Agrawal) (B. L. Gupta )

Partner Partner

Membership No. 07269 Membership No. 073794

Place : Kanpur Dated : 25th July, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of Dhampur Sugar Mills Limited (the Company), as at 31st March, 2012 the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto and signed by us, this day under reference to this report. 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.

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

1. As required by the Companies (Auditor''s Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in para 1 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 purposes 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, the Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

e) On the basis of written representation received from the directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as director under Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Balance Sheet, the Profit and Loss Account and the Cash Flow Statement together with notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with 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 Profit and Loss Account of the Profit for the year ended on that date; and

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

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management at the end of the period. In our opinion the frequency of verification is reasonable considering the size of the Company and nature of its business.

(c) The Company has not disposed off a substantial part of its fixed assets during the period and the going concern status of the Company is not affected.

ii) (a) The inventories, except stores, have been physically verified during the period by the management. In our opinion, the frequency of verification of inventory, except stores, is reasonable.

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

(c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to book records.

iii) (a) The Company had granted interest free unsecured loans/advances to two companies covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the period is Rs. 24.32 crore.

- The year end balance due is Rs. 22.53 crore.

(b) In our opinion, the other terms and conditions on which interest free unsecured loans/advances have been granted to a company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(c) The payments of principal amount are regular, wherever stipulated.

(d) There is no overdue amount of loans/advances, more than rupee one lac, granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company had taken interest free unsecured loans/advances from four companies covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the period is Rs. 3.17 crore.

- The year end balance due is Rs. 0.65 crore.

(f) In our opinion, the other terms and conditions on which loans/advances have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(g) The payments of principal amount are regular, wherever stipulated.

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

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

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

vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and section 58AA of the Companies Act, 1956 or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

viii) We have broadly reviewed the cost accounting records maintained by the company pursuant to Companies (Cost Accounting Records) Rules 2011 prescribed by Central Government under section 209 (1) (d) of Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

ix) (a) As explained to us, the statutory dues payable by the Company comprises mainly of Provident Fund, Investor Education Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax (VAT), Wealth- tax, Service-tax, Custom Duty, Excise Duty, Cess, Entry tax, Purchase tax and other material statutory dues applicable to it. According to the records of the Company and information and explanations given to us, the Company has been generally regularly depositing the aforesaid undisputed statutory dues with the appropriate authorities. There are no undisputed statutory dues as referred to above as at 31st March,2012 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, there were no dues on account of Income Tax and Wealth Tax which were not deposited on account any dispute. However, the particulars of Service-tax, Sales-tax (VAT), Custom Duty, Excise Duty, Entry tax, Stamp duty and other statutory material dues, which have not been deposited on account of any dispute, are as referred to in the details of Contingent Liabilities in Note No. "35".

x) The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the financial year covered by the audit and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, there is no default in repayment of dues to any Financial Institution and Bank during the period under report, as per the terms of the respective loans.

xii) In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments, accordingly the provisions of paragraph 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions; as such the provisions of paragraph 4(xv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xvi) The term loans obtained by the Company have been applied for the purposes for which they were obtained.

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

xviii)The Company has not made any preferential allotment of shares during the period to parties covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The Company has not issued any debentures during the period .

xx) The Company has not raised any money during the period by public issue.

xxi) 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 was noticed or reported during the course of our audit.

For S. Vaish & Co., For Mittal Gupta & Co.,

(S.P. Agrawal) (B. L. Gupta)

Partner Partner

Chartered Accountants Chartered Accountants

Membership No. 07269 Membership No. 073794

FRN 00001C FRN 01874C

Place : Kanpur

Dated : 15th May, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of Dhampur Sugar Mills Limited (the Company), as at 31 st March,2011, the Profit and Loss Account and also the Cash Flow Statement for the 18 months ended on that date annexed thereto and signed by us, this day under reference to this report. 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.

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

1. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in para 1 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 purposes 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, the Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

e) On the basis of written representation received from the directors as on 31st March,2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2011 from being appointed as director under Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) Attention is drawn to note III-2 of schedule 15 relating to accounting for cane purchase liability for the sugar season 2007-08 at Rs. 110 per quintal instead of State Advised Price of Rs. 125 per quintal fixed by the Uttar Pradesh State Government as the legal proceedings are pending in the matter.

g) In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Balance Sheet, the Profit and Loss Account and the Cash Flow Statement together with notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India:

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

ii) in the case of Profit and Loss Account of the Profit for the 18 months ended on that date; and

iii) in the case of Cash Flow Statement, of the cash flows for the 18 months ended on that date.

Annexure to the Auditors Report The Annexure referred to in the Auditors report to the members of Dhampur Sugar Mills Limited (the Company) for the 18 months ended 31st March, 2011:

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management at the end of the period. In our opinion the frequency of verification is reasonable considering the size of the Company and nature of its business.

(c) The Company has not disposed off a substantial part of its fixed assets during the period and the going concern status of the Company is not affected.

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

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

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

iii) (a) The Company had granted interest free unsecured loans/advances to three companies covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the period is Rs. 26.56 crore.

-The year end balance due is Rs. 24.37 crore.

(b) In our opinion, the other terms and conditions on which interest free unsecured loans/advances have been granted to a company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(c) The payments of principal amount are regular, wherever stipulated.

(d) There is no overdue amount of loans/advances, more than rupee one lac, granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company had taken interest free unsecured loans/advances from four companies covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the period is Rs. 7.60 crore.

-The year end balance due is Rs. 0.36 crore.

(f) In our opinion, the other terms and conditions on which loans/advances have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(g) The payments of principal amount are regular, wherever stipulated.

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

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

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

vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and section 58AA of the Companies Act, 1956 or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

viii) We have been informed that the cost records as have been prescribed under section 209 (1)(d) of the Companies Act, 1956 have been made and maintained.

ix) (a) As explained to us, the statutory dues payable by the Company comprises mainly of Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income-tax, Sales-tax (VAT), Wealth-tax, Service-tax, Custom Duty, Excise Duty, Cess, Entry tax, Purchase tax and other material statutory dues applicable to it. According to the records of the Company and information and explanations given to us, the Company has been generally regularly depositing the aforesaid undisputed statutory dues with the appropriate authorities. There are no undisputed statutory dues as referred to above as at 31st March,2011 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, there were no dues on account of Income Tax and Wealth Tax which were not deposited on account of any dispute. However, the particulars of Service-tax, Sales-tax, Custom Duty, Excise Duty, Entry tax. Stamp duty and other statutory material dues, which have not been deposited on account of any dispute, are as referred to in the Details of Contingent Liabilities in Schedule "15".

x) The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the financial year covered by the audit and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, there is no default in repayment of dues to any Financial Institution and Bank during the period under report, as per the terms of the respective loans.

xii) In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments, accordingly the provisions of paragraph 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions, as such the provisions of paragraph 4(xv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xvi) The term loans obtained by the Company have been applied for the purposes for which they were obtained.

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

xviii)The Company has not made any preferential allotment of shares during the period to parties covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The Company has not issued any debentures during the period.

xx) The Company has not raised any money during the period by public issue.

xxi) 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 was noticed or reported during the course of our audit.



For S. Vaish & Co., For Mittal Gupta & Co.,

(S.P. Agrawal) (B. L Gupta) Partner Partner Chartered Accountants Chartered Accountants Membership No. 07269 Membership No. 073794 FRN 00001C FRN01874C

Place : Kanpur Dated : 24th May, 2011


Sep 30, 2009

We have audited the attached Balance Sheet of Dhampur Sugar Mills Limited (the Company), as at 30th September, 2009, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto and signed by us, this day under reference to this report. 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.

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

1. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in para 1 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 purposes 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, the Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

e) On the basis of written representation received from the directors as on 30th September, 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30.09.2009 from being appointed as director under Clause (g) of sub- section (1) of Section 274 of the Companies Act, 1956.

f) Attention is drawn to note III-2 of schedule 16 relating to accounting for cane purchase liability for the sugar season 2007-08 at Rs. 110 per quintal instead of State Advised Price of Rs. 125 per quintal fixed by the Uttar Pradesh State Government as the legal proceedings are pending in the matter.

g) In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Balance Sheet, the Profit and Loss Account and the Cash Flow Statement together with notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India :

i) in the case of the Balance Sheet of the state of affairs of the Company as at 30th September, 2009;

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

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

Annexure to the Auditors’ Report

The Annexure referred to in the Auditors’ report to the members of Dhampur Sugar Mills Limited (the Company) for the year ended 30th September, 2009:

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management at the end of the year. In our opinion the frequency of verification is reasonable considering the size of the Company and nature of its business.

(c) The Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

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

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

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

iii) (a) The Company had granted interest free unsecured loans/advances to three companies covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the year is Rs. 19.47 crore.

- The year end balance due is Rs. 19.47 crore.

(b) In our opinion, the other terms and conditions on which interest free unsecured loans/advances have been granted to a company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(c) The payments of principal amount are regular, wherever stipulated.

(d) There is no overdue amount of loans/advances, more than rupee one lac, granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The Company had taken interest free unsecured loans/advances from five companies covered in the register maintained under section 301 of the Companies Act, 1956.

- The maximum amount involved during the year is Rs. 5.37 crore.

- The year end balance due is Rs. 4.09 crore.

(f) In our opinion, the other terms and conditions on which loans/advances have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(g) The payments of principal amount are regular, wherever stipulated.

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

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

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

vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and section 58AA of the Companies Act, 1956 or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

viii) We have been informed that the cost records as have been prescribed under section 209 (1)(d) of the Companies Act, 1956 have been made and maintained.

ix) (a) As explained to us, the statutory dues payable by the Company comprises mainly of Provident Fund, Investor Education Protection Fund, Employees’ State Insurance, Income-tax, Sales-tax (VAT), Wealth-tax, Service-tax, Custom Duty, Excise Duty, Cess, Entry tax, Purchase tax and other material statutory dues applicable to it. According to the records of the Company and information and explanations given to us, the Company has been generally regularly depositing the aforesaid undisputed statutory dues with the appropriate authorities. There are no undisputed statutory dues as referred to above as at 30th September, 2009 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, there were no dues on account of Income Tax and Wealth Tax which were not deposited on account any dispute. However, the particulars of Service-tax, Sales-tax, Custom Duty, Excise Duty, Entry tax, Stamp duty and other statutory material dues, which have not been deposited on account of any dispute, are as referred to in the Details of Contingent Liabilities in Schedule “16”.

x) The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the financial year covered by the audit and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the Company has repaid the dues to any financial institution and bank with some delays for a maximum period of 90 days however there is no default in repayment of dues at the end of the year as per the terms of the respective term loans.

xii) In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments, accordingly the provisions of paragraph 4 (xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions, as such the provisions of paragraph 4(xv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

xvi) The term loans obtained by the Company have been applied for the purposes for which they were obtained.

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

xviii) The Company has not made any preferential allotment of shares during the year to parties covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The Company has not issued any debentures during the year.

xx) The Company has not raised any money during the year by public issue.

xxi) 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 was noticed or reported during the course of our audit.

For S. Vaish & Co., For Mittal Gupta & Co.,

(S.P.Agrawal) (B. L. Gupta ) Partner Partner Chartered Accountants Chartered Accountants Membership No. 07269 Membership No. 073794

Place: Kanpur Dated: 9th November, 2009

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