Mar 31, 2010
1. We have audited the attached Balance Sheet of Jhagadia Copper
Limited, as at 31st March, 2010, the Profit and Loss Account for the
year ended on that date and the Cash Flow Statement for the year ended
on that date, both annexed thereto. These financial statements are the
responsibility of the Company''s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We have 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 mis-statement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion,
3. As required by the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of subÂsection (4A)
of section 227 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.
4. (a) The financial statements of the Company is prepared on a going
concern basis, despite the following-
i. The Company has substantially eroded its net worth due to
incurrence of cash losses for several quarters, ii. The only
manufacturing plant of the Company is not in operation since September,
2009. in. The Company is facing severe financial crunch and is unable
to discharge its current liabilities in time. Further, it has defaulted
to its lenders and debenture holders
(b) Provision has not been made for likely impairment loss on fixed
assets.. We are unable to ascertain provision required for such
impairment loss due to non-availability of future cash flows, We are
informed that only after restructuring of the company the future cash
flaws can be worked out.
We are unable to ascertain the impact of the above on the financial
statements of the Company due to non- availability of the required
information.
5. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) Subject to Para 4 above, 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) Subject to Para 4 above, 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 & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts;
d) Subject to Para 4 above, in our opinion, the Balance Sheet, the
Profit and Loss Account and the Cash Flow Statement dealt with by this
report comply with the Accounting Standards referred to in sub-section
(3C) of section 211 of the Companies Act, 1956;
e) From one of the Directors, certificate confirming adherence to
section 274
f) In our opinion and to the best of our information and according to
the explanations given to us, subject to Para 4 above, the said
accounts give the information required by the Companies Act, 1956, in
the manner so required and subject to para 4 above, give a true and
fair view in conformity with the accounting principles generally
accepted in India :-
(i) In the case of Balance Sheet, of the state of affairs of the
Company as at 31s1 March 2010;
(ii) In the case of the Profit & Loss Account, of the Loss 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 Auditor''s report to the Members of Jkagudia Copper
Limited (Referred to in paragraph 3 of our report of even date)
(l) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and the situation of its fixed assets.
(b) According to information and explanations given to us, the fixed
assets were physically verified by the management in accordance with
the programme of verification which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
The discrepancies noticed on physical verification were not material.
(c) During the year, disposal of fixed assets is not substantial.
(ii) (a) The Company has conducted physical verification of inventory
at reasonable intervals during the year.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventory
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business. In our opinion,
the Company has maintained proper records of inventory. The
discrepancies between the physical stocks and the book stocks were not
material and have been properly dealt with in the books of account.
(iii) (a) During the year, Company has not granted any loans to
Companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956.
(b) During the year, Company has not taken any loans from companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
provided to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets, and for sale of goods and
services.
(v) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that there are no contracts that need to be entered in the
register maintained under Section 301 of the Act
(vi) The Company has not accepted any deposits from the public.
(vii) The Company has an internal audit system which, in our opinion,
is commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(l)(d) of the Companies
Act, 1956 and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. No cost audit was
carried out during the year,
(ix) (a) The Company was generally regular in depositing undisputed
statutory dues in respect of Provident Fund, Income tax, Sales tax
(VAT), Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any
other statutory dues with the appropriate authorities. According to the
information and explanation given to us, there is no arrears
outstanding of such items for more than six months as at the balance
sheet date
(b) As per the records of the Company, and information and explanation
provided.
(xi) As at the balance sheet date, following amounts due to the
financial institutions, banks and debenture holders have not been paid
by the Company:
a) Interest amounting to Rs, 17,206.99 Lacs for the period l" April,
2007 to 31" March. 2010 on loans.
b) Interest amounting to Rs 971.2Rs. Lacs and principal amounting to Rs
42140 Lacs towards term loan to one of the financial institution for
the period from 1" April, 2005 to 31" March, 2010.
c) Interest amounting to Rs.459,70 Lacs and principal amounting to
Rs.5036.16 Lacs for the period from April, 2007 to March,2010 in
respect of short term facdities provided by banks.
d) Interest amounting to Rs. 59.88 Lacs and principal amounting to Rs.
937.57 Lacs for the periodfrom December, 2009 to March, 2010 in respect
of devolved Bank Guarantee.
e) Interest amounting to Rs. 722.32 Lacs and principal amounting to Rs,
1681,97 Lacs for the periodfrom April, 2007 to March, 2010 in respect
of buyer''s credit,
f) Interest amounting to Rs. 5,664.96 Lacs on Optionally Fully
Convertible Debentures for the periodfrom April, 2007 to 31" March,
2010
g) Principal amounting to Rs. 723.08 Lacs in respect of Optionally
Fully Convertible Debentures due during the period I" April, 2009 to
31" March, 2010.
h) Interest amounting to Rs.508.42 Lacs for the period from Sh June,
1999 to 7th June, 2001 to the holders of 17.5% Fully Convertible
Debenture.
(xii) Based on our examination 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) The Company is not a chit/nidhi/mutual benefit fund/society;
hence clause (xiii) of the Order is not applicable.
(xiv) The Company has no dealing or trading in shares, securities,
debentures and other investment during the year.
(xv) On the basis of the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) In our opinion and according to the information and explanations
given to us, the term loan have been generally utilized for the purpose
for which it was obtained.
(xvii) On the basis of our examination of the books of accounts and the
information and explanation given to us, in our opinion, during the
year the short term loans have not been utilized for long term
investments.
(xviii) As explained to us, the preference shares issued during the
year are not in the nature of preferential allotment of shares.
(xix) In respect of outstanding debentures as on the Balance Sheet date
security has been created.
(xx) The company has not raised any money by public issues during the
year.
(xxi) Based on the audit procedures performed and information and
explanations given to us by the management, we report that no fraud on
or by the Company has been noticed or reported during the course of our
audit,
For N.M. RAIJI & CO.
Chartered Accountants
Firm Reg. No. :I08296W
J. M. GANDHI
Partner
Place: Mumbai Membership No: 37924
Date : 29th September 2010
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