Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone Ind AS financial statements of SBEC Sugar Limited (âthe companyâ),which comprise the balance sheet as at 31st March, 2018, the statement of profit and loss, including the statement of other comprehensive income, the cash flow statement and the statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended.
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 the design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs 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, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of the 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 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.
Basis of qualified opinion
1) During the quarter the company has not made provision for interest, on late payment of cane dues amounting to Rs 931.31 lac for sugar season 2017-18 and Rs 3540.85 for sugar season 2016-17, had the company made provisions, the expense and loss for the quarter and year ended 31stMarch 2018 would have been higher by Rs 4472.16 lac and its consequential impact on EPS.
2) The company had executed a deed of assignment with a subsidiary company âSBEC Bioenergy Limitedâ to transfer its claim and all securities and charges created by Modi Industries Limited in its favour for a consideration of Rs12,500 lacs of which Rs. 8,300 lacs were to be received as per the mutually agreed instalments within a period of five years from the date of execution of the deed. The company has not received any amount out of balance amount of Rs 8300 lacs till the end of March 31st ''2018. Since the period of five years has already elapsed it may affect the ultimate recoverability of the carrying value of the said amount due from SBEC Bioenergy Limited. These financial statements do not include any adjustments that might result from the uncertainty mentioned above.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the affects of matter described in the Basis for Qualified Opinion paragraph, the aforesaid financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;
a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2018;
b) in the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the financial statements:
a) Note no (d)of the standalone Audited Financial Statement regarding interest payment on cane dues where the High Court vide its order dated 9th March, 2017 has set aside the decision of State Government for the waiver of Interest for the year 2012-13, 2013-14 and 2014-15 and asked the Cane Commissioner to take a final call in the matter, pending final order the Company has not made provision for interest, on the late payment of cane dues for years 2012-13, 2013-14 and 2014-15. The Hon''ble Supreme Court vide its order dated 23rd April, 2018 has upheld the Hon''ble High Court order dated 9th March, 2017.
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 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2) As required by section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The balance sheet, statement of profit and loss including the statement of 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended;
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 âAnnexure Câ.
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, as amended, 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 28 to the financial statements.
(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
Annexure "A" To The Independent Auditorsâ Report To The Member Of SBEC Sugar Ltd. Dated May 29, 2018
Report on the matters specified in paragraph 3 of the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 1 of âReport on Other Legal and Regulatory Requirementsâ section
i. (a) The Company has maintained proper records showing particulars, including quantitative details and situation of fixed assets.
(b) Though the Company has a programme of physical verification of its fixed assets in phased manner which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets, however the Fixed assets have not been physically verified by the management during the year therefore discrepancies, if any, could not be determined.
(c) According to information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties included in fixed assets are held in the name of the company.
ii. The inventory has not been physically verified by the management during the year.
iii. According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a) to (c) of the Order are not applicable to the company and hence not commented upon.
iv. In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable and hence not commented upon.
v. The Company has not accepted any fresh deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder are not applicable.
vi. We have broadly reviewed the records, including the books of account maintained by the company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013 in respect of company''s products and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.
vii. (a) According to the records of the Company, undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited during the year with the appropriate authorities.
(b) According to the information and explanations given to us and as per the books and records examined by us, the particulars of statutory dues of the specified statue as at the year, which have not been deposited on account of a dispute are referred to in Annexure âBâ.
viii. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of its dues to Governments, banks and financial institutions. The Company has not taken any loans from debenture holders.
ix. Based on our audit procedures and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer / further public offer. Further, based on our audit procedures and according to the information and explanations given to us and on an overall examination of the balance sheet, we report that monies raised by way of term loans were applied for the purposes for which those were raised.
x. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the year, nor have we been informed of such case by the management
xi. Based on our audit and according to the information and explanations given to us, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
xiii Based on our audit procedures and according to the information and explanations given to us, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.
xv. Based on our audit procedures and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.
xvi. According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
ANNEXURE âBâ TO AUDITORSâ REPORT
Referred in Paragraph VII(B) of Annexure âAâ a statement on the matters specified in the Companies (Auditors'' Report) Order, 2016 for the year ended 31st March 2018.
Name of The Statue |
Name of Dues |
Amount ( Rs. in Lacs) |
Period to which amount relates |
Forum where dispute is pending |
UP VAT Act, 2008 |
VAT imposed on bagasse given to M/s SBEC Bioenergy |
43.47 |
2008-09 |
Appeal filed before Honorable High Court by Commercial Tax department against order passed by Member Commercial Tax, Tribunal, Meerut |
Finance Act , 1994 |
Service Tax Credit Taken on Modinagar Site |
3.49 |
2014-15 |
Appeal filed before CESTAT Allahabad |
Finance Act , 1994 |
Service Tax on Commission |
150.88 |
2003-04 |
CESTAT has sent back the case to Commissioner Appeals, Meerut-1 for Remand |
Central Excise ,1944 |
Cenvat Credit taken on HR plates, Angles, Shape section |
13.88 |
2012-13 |
Appeal filed before Commissioner Appeal-1 Central Excise& Service Tax, Meerut. |
Central Excise ,1944 |
Excise duty on removal for Bagasse & Press Mud |
75.24 |
2015-16 |
Appeal filed before Commissioner Appeal-1 Central Excise& Service Tax, Meerut. |
Finance Act , 1994 |
Service tax Credit taken in invoice beyond 6 month |
8.59 |
Dec 2013 - Dec 2014 |
Application filed before Assistant Commissioner, Division-1 Meerut on 25.02.16 |
Finance Act , 1994 |
Service Tax on Lease Rent |
16.83 |
01.04.2008 -01.12.2010 |
Appeal Allowed by way of Remand by CESTAT, Delhi |
Finance Act , 1994 |
Service Tax on Lease Rent |
7.24 |
2012-13 |
Appeal Allowed by way of Remand by CESTAT, Delhi |
Central Excise ,1944 |
Cenvat Credit taken on HR plates, Angles, Shape section |
15.54 |
2015-17 |
SCN Reply Submitted before Deputy Commissioner, Division Shamli. Tax, Meerut. |
Finance Act , 1994 |
Service Tax Credit taken on Sugar Sales Commission |
11.08 |
2015-16 |
SCN Reply Submitted before Additional Commissioner Meerut. |
Finance Act , 1994 |
Service Tax Credit taken on Sugar Sales Commission |
2.45 |
2015-16 |
SCN Reply Submitted before Superintendent, Central Excise, RangeBaraut. |
Finance Act , 1994 |
Service Tax Credit taken on Sugar Sales Commission |
38.21 |
2016-17 & 2017-18 |
SCN Reply Submitted before Deputy Commissioner, Division Shamli. |
Annexure âCâ To The Independent Auditorâs Report Of Even Date on the Standalone (IND AS) Financial Statements Of SBEC Sugar Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 2(f) of âReport on Other Legal and Regulatory Requirementsâ section
We have audited the internal financial controls over financial reporting of SBEC Sugar Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 the Company''s policies, 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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.
An 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 judgement, 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 internal financial controls over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control 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 dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts 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 statements.
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 control 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 controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For K. K. Jain & Co.
Chartered Accountants
Firm Regn. No. 002465N
Sd/-
(Simmi Jain)
Place: New Delhi Partner
Dated: 29th May, 2018 Membership No.-086496
Mar 31, 2016
INDEPENDENT AUDITORS'' REPORT
To The Members of SBEC Sugar Limited
Report on the Standalone Financial Statements
We have audited the accompanying financial statements of SBEC Sugar Limited ("the company"),which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material 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 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 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 true and fair view 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 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 financial statements.
Basis of qualified opinion
i. During the year the company has not made provision for interest, on late payment of cane dues amounting to Rs. 3280.70lacs. Accordingly the expenses and profit for the year ended on 31st March 2016 would have been lower by Rs 3280.70 lacs and its consequential impact on EPS.
ii. The company had executed a deed of assignment with a subsidiary company "SBEC Bioenergy Limited" to transfer its claim and all securities and charges created by Modi Industries Limited in its favour for a consideration of Rs.12,500 lacs of which Rs. 8,300 lacs shall be received as per the mutually agreed installments within a period of five years from the date of execution of the deed. The company has not received any amount out of balance amount of Rs 8300 lacs till the end of March 31st ''2016. There seems to be uncertainty to recover the amount within the prescribed timeline and it may affect the ultimate recoverability of the carrying value of the said amount due from SBEC Bioenergy Limited. These financial statements do not include any adjustments that might result from the uncertainty mentioned above.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the affects of matter described in the Basis for Qualified Opinion paragraph, the aforesaid financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;
a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;
b) in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the financial statements:
a) Note no-41 of the statement regarding the company being registered with the Board for Industrial and Financial Reconstruction (BIFR) as per communication received from BIFR vide its letter No. 3/(S-22)/BC/2013 dated 21st August 2013 and consequent to it becoming a Sick Industrial u/s 3(1)(0) of SICA ,as the company''s net worth has been eroded and the company has incurred cash losses during the prior years. The statement have been prepared by the management of the company on a going concern basis as the company has continued its normal manufacturing during the current year and also generated profits.
b) Note No-47 to the statement regarding accounting of subsidy of Rs. 2167.70 lacs, as per PNCM Cabinet Decision dated 18th January 2016 issued by State Government of Uttar Pradesh subject to approval of appropriate authority and the Management is virtually certain regarding realization of subsidy. The company has netted off the subsidy from the cost of material consumed for the quarter ended 31st March''2016.
c) Note No-46 of the statement where the Company is carrying Rs 1208.12 lacs as assets held for disposal since March''2013. The management expects that the assets will be realized to the extent as stated & does not call for any provision as on the date of the Balance Sheet.
Our opinion is not modified in respect of these matters.
Report on other Legal and Regulatory Requirements
As required by section 143(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 appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) The going concern matter described in sub-paragraph (a) under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f) On the basis of written representations received from the directors as on 31 March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31 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 "C" to this report; and
h) With respect to the other matters included in the Auditor''s Report and to our 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 32 (iii) & (iv) to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
ANNEXURE TO AUDITORS'' REPORT
(Annexure referred to in our report of even date)
i.(a) The Company has maintained proper records showing particulars, including quantitative details and situation of fixed assets.
(b) Though the Company has a programme of physical verification of its fixed assets in phased manner which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets, however the Fixed assets have not been physically verified by the management during the year therefore discrepancies, if any, could not be determined.
(c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deed of immovable properties included in fixed assets is held in the name of the company. Some of these title deeds are given as security for securing various facilities sanctioned by banks and accordingly these original title deeds are kept with Banks, as security for the lenders.
ii. The inventory has not been physically verified by the management during the year.
iii. According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a) to (c) of the Order are not applicable to the company and hence not commented upon.
iv. In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Ac 2013 are applicable and hence not commented upon.
v. The Company has not accepted any fresh deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under are not applicable. The deposits outstanding as at the start of the financial year have been repaid during the financial year in full.
vi. We have broadly reviewed the records, including the books of account maintained by the company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013 in respect of company''s products and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.
vii.(a)According to the records of the Company, undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited during the year with the appropriate authorities.
(b) According to the information and explanations given to us, the company has not paid Water Cess of Rs. 5, 62,265 and interest of Rs. 1,59,674 to U.P. Pollution Control Board for the year 2012-13 for which a fresh demand order dated 16the Feb 2015 has been received by the company.
(c) According to the information and explanations given to us and as per the books and records examined by us, the particulars of statutory dues of the specified statue as at the year, which have not been deposited on account of a dispute are referred to in Annexure "B".
viii. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of its dues to Governments, banks and financial institutions. The Company has not taken any loans from debenture holders.
ix. Based on our audit procedures and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer / further public offer. Further, based on our audit procedures and according to the information and explanations given to us and on an overall examination of the balance sheet, we report that monies raised by way of term loans were applied for the purposes for which those were raised.
x. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the year, nor have we been informed of such case by the management
xi. Based on our audit and according to the information and explanations given to us, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
xiii Based on our audit procedures and according to the information and explanations given to us, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.
xv. Based on our audit procedures and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.
xvi. According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
ANNEXURE "B" TO AUDITORS'' REPORT
Referred in Paragraph VII(C) of Annexure "A" a statement on the matters specified in the Companies (Auditors'' Report) Order, 2016for the year ended 31st March 2016.
Name of the Statute |
Name of Dues |
Amount (Rs. in Lacs) |
Period to which amount relates |
Forum where dispute is pending |
UP VAT Act , 2008 |
Entry tax imposed on Sugar Purchase and sold |
790.53 |
2010-11 |
Application Filed for reopen the same u/s 32 |
UP VAT Act , 2008 |
VAT imposed on Molasses Bagasse and old scrap sold |
622.68 |
2010-11 |
Application Filed for reopen the same u/s 32 |
UP VAT Act , 2008 |
CST imposed on Molasses sold |
70.00 |
2010-11 |
Application Filed for reopen the same u/s 32 |
Central Excise ,1944 |
Cess on Sugar |
4.35 |
01.01.2009 30.09.2009 |
Appeal filed before CESTAT by the department against the Commissioner (Appeals) Meerut |
Finance Act , 1994 |
Service tax Credit taken in invoice beyond 6 month |
53.49 |
Dec 2013 â Dec 2014 |
Objection raised by central Excise Auditors. Appeal to be filed |
Finance Act , 1994 |
Service Tax on Commission |
16.83 |
01.04.2008 01.12.2010 |
Appeal filled before Commissioner (Appeals), Meerut |
Finance Act , 1994 |
Service Tax on Lease Rent |
7.24 |
2012-13 |
Appeal filed before Commissioner (Appeals) Meerut. |
Finance Act , 1994 |
Service tax on Lease rent |
1.21 |
April 2011 â March 2012 |
Appeal filed before Commissioner (Appeals), Meerut. |
Finance Act , 1994 |
Service Tax on Commission |
150.88 |
2003-04 |
CESTAT has sent back the case to Commissioner Appeals, Meerut-1 for Remand |
Annexure ''C'' to the independent auditor''s report of even date on the financial statements of SBEC Sugar Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SBEC Sugar Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the 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 control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 the Company''s policies, 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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.
An 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 internal financial controls over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control 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 dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts 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 statements.
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 control 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 controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Doogar & Associates
Chartered Accountants
Firm Regn. No. 000561N
Sd/-
Mukul Marwah
Place: New Delhi Partner
Dated: 30th May 2016 Membership No.-511239
Mar 31, 2015
Report on the Standalone Financial Statements
We have audited the accompanying financial statements of SBEC Sugar
Limited ("the company"),which comprise the Balance Sheet as at 31 March
2015, the Statement of Profit and Loss, the Cash Flow Statement for the
year then ended, and a summary of significant accounting policies and
other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters in
section 134(5) of the Companies Act, 2013 ("the Act") with respect to
the preparation of these financial statements that give a true and fair
view of the financial position, financial performance and cash flows of
the Company in accordance with the accounting principles generally
accepted in India, including the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes the maintenance of
adequate accounting records in accordance with the provision of the Act
for safeguarding of the assets of the Company and for preventing and
detecting the 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 internal financial control, that were operating
effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material 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 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. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give true and fair view 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 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 financial
statements.
Basis for Qualified Opinion
i) The Company has not made provision for interest, on late payment of
cane dues for the year of Rs.3541.64 lacs & for earlier years Rs.
2504.79 lacs aggregating to Rs. 6046.43 lacs. Accordingly manufacturing
expense and net losses for the year would have been higher by Rs.
3456.78lacs and its consequential impact on current liabilities and
EPS.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the affects of matter described in
the Basis for Qualified Opinion paragraph, the aforesaid financial
statements, give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India;
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
b) in the case of the Statement of Profit and Loss, of the loss for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the
financial statements:
a) The Companies financials have been prepared on "Going Concern" as
the company has continued its normal manufacturing operations during
the season 2014-15.
Note No.41 in the financial statements indicates that The company in
terms of Board of Director's resolution dated 6th July 2013 has fled a
reference with the Board for Industrial and Financial Reconstruction
(BIFR) U/S 15(1) of the Sick Industrial companies (Special Provisions)
Act 1985 (SICA) vide its letter dated 24th July 2013 and as per
communication received from BIFR vide its letter No. 3/(S-22)/ BC/2013
dated 21st August 2013, The said reference has been registered by BIFR
as case No. 58/2013. The BIFR has declared the company as Sick u/s
3(1)(0) of SICA and appointed IDBI as operating agency u/s 17(3) of the
Act. in its hearing held on dated 04.02.2014& the Draft Rehabilitation
Scheme is under compilation.
b) Note No. 45 in the financial statement regarding accounting of
subsidy of Rs. 2566.06 lacs, as per PNCM Cabinet Decision dated 12th
November 2014 issued by State Government of Uttar Pradesh subject to
approval of appropriate authority.
Our opinion is not modified in respect of these matters.
Report on other Legal and Regulatory Requirements
As required by section 143(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 appears from our examination of those
books.
c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the aforesaid financial
statements comply with the Accounting Standards specified under Section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014.
e) The going concern matter described in sub-paragraph (b) under the
Emphasis of Matters paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company.
f) On the basis of written representations received from the directors
as on 31 March, 2015, taken on record by the Board of Directors, none
of the directors is disqualified as on 31 March, 2015, from being
appointed as a director in terms of Section 164(2) of the Act.
g) With respect to the other matters included in the Auditor's Report
and to our 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 32 (iii) &
(iv) to the financial statements and except for the possible effects of
the matter described in paragraph of the "Basis of Qualified Opinion".
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses
iii. There were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company.
ANNEXURE TO AUDITORS' REPORT
(Annexure referred to in our report of even date)
i. (a) The Company has maintained proper records showing particulars,
including quantitative details and situation of fixed assets.
(b) The Fixed assets have not been physically verified by the
management during the year therefore discrepancies, if any, could not
be determined.
ii. (a) The inventory has not been physically verified by the
management during the year.
(b) Though the physical verification programme for inventory as
envisaged by the management is, in our opinion, reasonable and ad-
equate in relation to the size of the Company and nature of its
business. However no physical verification of inventories has been done
during the year.
(c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies, if any, compared to book records could
not be determined in absence of physical verification.
iii. The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the company in respect of these areas.
v. The company has deposits from public accepted during previous
years. As per compliance of Section 74 of Companies Act 2013 company
has to repay the deposits till 31st March 2015. The company has
obtained expert legal opinion that since company is in BIFR and it is
not required to repay the amount of deposit till the final order of
BIFR/AAIFR. As on the date of balance sheet the outstanding amount of
public deposits was Rs.6,58,25,000 and accrued interest thereon is
Rs.19,04,634.
vi. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company as
specified by the Central Government of India under section 148(1) of
the Companies Act, 2013 and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained. We have
not, however, made a detailed examination of the records with a view to
determine whether they are accurate and complete.
vii. (a) According to the records of the Company, undisputed statutory
dues including provident fund, employees' state insurance, income tax,
sales tax, wealth tax, service tax, duty of customs, duty of excise,
value added tax, cess and other material statutory dues have generally
been regularly deposited during the year with the appropriate
authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employee
employees' state insurance, income tax, sales tax, wealth tax, service
tax, duty of customs, duty of excise, value added tax and other
material statutory dues were outstanding, at the year end, for a period
of more than six months from the date they became payable, except the
company has not paid Water Cess of Rs. 5,62,265 and interest of Rs.
1,59,674 to U.P. Pollution Control Board for the year 2012-13 for which
a fresh demand order has been received by the company.
(c) According to the information and explanations given to us and as
per the books and records examined by us, the particulars of statutory
dues of the specified statue as at the year, which have not been
deposited on account of a dispute are referred to in Annexure "B".
(d) According to the records of the Company and as explained to us the
company did not have any dues on account of investor education and
protection fund.
viii. In Our Opinion, the accumulated losses of the company are more
than fifty percent of its net worth. During the year company had
incurred cash loss of Rs. 2580.31 Lacs. In the immediately preceding
financial year also, the company had incurred cash loss. The company is
a Sick Industrial Company within the meaning of Sick Industrial
Companies (Special Provision) Act, 1985& is registered with BIFR.
ix. According to the information and explanations given to us and as
per the books and records examined by us, the Company has not defaulted
in repayment of dues to any financial institution or bank.
x. The Company has provided guarantee to SREI Infrastructure Finance
Ltd. and the Government of Jharkhand is respect of loans taken by SBEC
Bio Energy Limited (a subsidiary company) and Bihar Sponge Iron Limited
respectively. The terms and conditions of the guarantees are prima
facie, not prejudicial to the interest of the Company.
xi. In our opinion, and according to the information and explanations
given to us, the term loans raised during the year by the company have
been applied for the purpose for which the said loans were obtained,
where such end use has been stipulated by the lender.
xii. During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company noticed or reported during the year, nor
have we been informed of such case by the management.
ANNEXURE "B" TO AUDITORS' REPORT
Referred in Paragraph 7(C) of Annexure "A" a statement on the matters
specified in the Companies (Auditors' Report) Order, 2015 for the Year
ended 31st March 2015.
Name of the Statute Name of Dues Amount Period to which
(Rs. in
Lacs) amount relates
UP VAT Act , 2008 Entry Tax imposed
on Sugar Purchased
and Sold 760.56 2010-11
UP VAT Act , 2008 VAT imposed on
Molasses, 622.68 2010-11
Bagasse and old
scrap sold
UP VAT Act , 2008 CST imposed on 70.00 2010-11
Molasses sold
Central Excise, 1944 Cess on Sugar 4.35 01.01.2009-
Scale 30.09.2009
Finance Act, 1994 Service Tax on
Commission 16.83 01.04.2008-
01.12.2010
Finance Act, 1994 Service Tax on
Lease Rent 1.81 2012-13
Finance Act, 1994 Service Tax on
Lease Rent 1.12 April 2011-
March 2012
Finance Act, 1994 Service Tax on
Commission 150.88 2003-04
Name of the Statute Forum where dispute is pending
UP VAT Act, 2008 Application Filed with Deputy
Commissioner for reopen the same u/s 32
UP VAT Act, 2008 Application Field with Deputy
Commissioner for reopen the same u/s 32
UP VAT Act, 2008 Application Field with Deputy
Commissioner for reopen the same u/s 32
Central Excise, 1944 Appeal submitted before CESTAT by the
department against the the Commissioner
(Appeals) Meerut
Finance Act, 1994 Appeal fled before Commissioner (Appeals),
Meerut
Finance Act, 1994 Appeal fled before Commissioner (Appeals),
Meerut
Finance Act, 1944 Appeal fled before Commissioner (Appeals),
Meerut
Finance Act, 1944 CESTAT has sent back the case to Commissioner
Appeals, Meerut-1 for Remand
For Doogar & Associates
Chartered Accountants
Firm Regn. No. 000561N
Mukesh Goyal
Place: New Delhi Partner
Dated: 30th May 2015 Membership No.-081810
Mar 31, 2014
Report on the financial statements
We have audited the accompanying financial statements of SBEC Sugar Ltd
("the Company"), which comprise the Balance Sheet as at March 31,2014,
and the Statement of Profit and Loss and Cash Flow Statement for the
year then ended, and a summary of significant accounting policies and
other explanatory information.
Management''s responsibility for the financial statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the company in accordance with
the accounting principles generally accepted in India, including
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by 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 qualified audit
opinion.
Basis for Qualified Opinion
i) The Companies financials have been prepared on "Going Concern" as
the company has continued its normal manufacturing operations during
the season 2013-14.
The company in terms of Board of Director''s resolution dated 6th July
2013 has filed a reference with the Board for Industrial and Financial
Reconstruction (BIFR) U/S 15(1) of the Sick Industrial companies
(Special Provisions) Act 1985 (SICA) vide its letter dated 24th July
2013 and as per communication received from BIFR vide its letter No.
3/(S-22)/BC/2013 dated 21st August 2013, The said reference has been
registered by BIFR as case No. 58/2013. The BIFR has declared the
company as Sick u/s 3(1)(0) of SICA and appointed IDBI as operating
agency u/s 17(3) of the Act. in its hearing held on dated 04.02.2014.
(ii) The company''s has not made provision for interest, on late payment
of cane dues amounting to Rs2241.12 Lacs. Accordingly manufacturing
expenses and net losses would have been higher by Rs2241.12 lacs
respectively & its consequential impact on EPS.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of matter
Without qualifying our opinion, we draw attention to:
Note no - 33 To these financial statements wherein company had executed
a deed of assignment with a subsidiary company "SBEC Bioenergy Limited"
to transfer its claim and all securities and charges created by Modi
Industries Limited in its favor for a consideration of Rs12,500 lacs of
which Rs 8,300 lacs shall be received as per the mutually agreed
installments within a period of five years from the date of execution
of the deed. The recoverability of the carrying value of the said
amount due from by SBEC Bioenergy Limited as at 31 March 2014 is
dependent on its ability to generate positive cash flow from
operations. The uncertainty mentioned above may affect the ultimate
recoverability of the carrying value of the said amount due from SBEC
Bioenergy Limited. These financial statements do not include any
adjustments that might result from the uncertainty mentioned above.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure ''A''
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow
statement dealt with by this report are in agreement with the books of
account;
d. Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet and
Statement of Profit & Loss Account and Cash Flow Statement dealt with
by this report comply with the Accounting Standards referred to in
sub-section (3c) of section 211 of Companies Act, 1956, to the extent
applicable.
e. On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2014,
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
ANNEXURE "A" TO AUDITORS'' REPORT
(Referred to in the Auditors'' Report of even date to the members of
SBEC Sugar Limited for the year ended 31st March, 2014)
1. (a) The Company has maintained proper records showing particulars,
including quantitative details and situation of fixed assets.
(b) Though the Company has a programme of physical verification of its
fixed assets in phased manner which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets,
however the Fixed assets have not been physically verified by the
management during the year therefore discrepancies, if any, could not
be determined.
(c) Fixed assets disposed off during the year were insignificant and
therefore do not affect the going concern assumption.
2. (a) The inventory has not been physically verified by the
management during the year.
(b) Though the physical verification programme for inventory as
envisaged by the management is, in our opinion, reasonable and adequate
in relation to the size of the Company and nature of its business.
However no physical verification of inventories has been done during
the year.
(c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies, if any, compared to book records could
not be determined in absence of physical verification.
3. (a) The Company has not granted any loan, secured or unsecured to
Companies, firms and other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, Paragraph 3
(b), 3 (c) & 3 (d) of the order are not applicable.
(b) The company has taken loans from three companies & another party,
covered under section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs435.45 lacs, Rs536.51 lacs, Rs
88.47lacs & Rs81.79 lacs and the yearend balance of loan taken from
such companies & another party were Rs435.45 lacs, Rs480.82 lacs, Rs85
lacs & NIL respectively.
(c) In our opinion and according to information and explanations given
to us , the rate of interest and other term & conditions for such loans
are not prima facie prejudicial to the interest of the Company.
(d) In respect of loan taken, as explained to us the same are
re-payable on demand.
4. In our opinion, and according to the information and explanations
given to us during the course of audit, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to purchase of inventory and fixed
assets and for the sale of goods. We did not observe any major weakness
in internal control during the course of our audit.
5. (a) Based upon the audit procedures applied by us and according to
the information and explanations given to us, we are of the opinion
that the transactions required to be entered into the register
maintained under section 301 of the Companies Act, 1956 have been
entered.
(b) In respect of certain transaction of the value of Rs 12,500.00 lacs
with subsidiary company, the management has informed us that the
transaction dealt is of a special nature and therefore comparable
prices are not available. In our opinion, and according to the
information and explanation given to us, the transactions made in
pursuance of contracts or arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 and aggregating
during the year to rupees five lacs or more in respect of each party
have been made at prices which are reasonable having regard to market
prices for such transactions, prevailing at the relevant time, where
such market prices are available.
6. The Company has accepted deposits from public and in our Opinion
Company has complied with the provisions of section 58A and 58AA of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975.
7. In our opinion, the Company has an internal audit system,
commensurate with the size and nature of its business.
8. We have broadly reviewed the Cost Accounting records, including the
books of account maintained by the company pursuant to the rules
prescribed by the Central Government for the maintenance of cost
records under section 209(1)(d) of the Companies Act 1956, and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. We, are however, not required to make a
detailed examination of such books and records.
9. (a) The company is regular in depositing with appropriate
authorities undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Income-Tax, Sales-Tax,
Wealth-Tax, Service-Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it.
(b) According to the information & explanations given to us, no
undisputed amount payable in respect of Provident Fund, Investor
Education and Protection Fund, Income Tax, Wealth Tax, Service Tax,
Sales Tax, Custom Duty, Excise Duty, Cess and other undisputed
Statutory dues were outstanding, at the year end, for a period more
than six months from the date they become payable.
(c) According to the information and explanations given to us and the
records of the company examined by us, the particulars of statutory
dues of the specified status as at the end of the year, which have not
been deposited on account of a dispute are referred to in "Annexure -
B".
10. In our opinion, the accumulated losses of the Company are more
than fifty percent of its net worth. During the year company has
incurred cash loss of Rs 4762.65 lacs. In the immediately preceding
financial year also, the company had incurred cash loss. Thus as per
the current financials the Company is a Sick Industrial Company within
the meaning of Sick Industrial Companies (Special Provision) Act, 1985.
11. According to the information and explanations given to us and as
per the books and records examined by us, the Company has not defaulted
in repayment of dues to any financial institution or bank.
12. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Company does not fall within the category of chit fund/ Nidhi/
Mutual Benefit/ Society and hence the related reporting requirements
are not applicable.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments and hence the related reporting requirements are not
applicable.
15. The Company has provided guarantee to SREI and the Government of
Jharkhand in respect of loans taken by SBEC Bioenergy Limited (a
subsidiary company) and Bihar Sponge Iron Limited respectively. The
terms and conditions of the guarantees are prima facie, not prejudicial
to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, the term loans raised during the year by the company have
been applied for the purpose for which the said loans were obtained,
where the lender has stipulated such end use.
17. According to the information and explanations given to us and as
per the books and records examined by us, no funds raised on short-term
basis have been used for long-term investment by the company.
18. The Company has not made any preferential allotment of shares to
parties and Companies covered in the registered maintained under
section 301 of the Companies Act, 1956.
19. The Company has not issued debentures of any type during the Year.
20. The Company has not raised any money by public issue during the
Year.
21. Based on our examination of the books and records of the Company
and according to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the Year.
ANNEXURE "B" TO AUDITORS'' REPORT
Referred in Paragraph 9(b) of Annexure "A" a statement on the matters
specified in the Companies (Auditors'' Report) Order, 2003 as amended by
the Companies Auditor''s Report (Amendment) Order, 2004 for the Year
ended 31st March 2014.
Name of the Statute Name of Dues Amount
(Rs. in Lacs)
UP VAT Act , 2008 VAT on Baggasse 50.05
UP VAT Act , 2008 Entry Tax on Sugar 169.56
Sold in Local Area
UP VAT Act , 2008 Entry Tax on Sugar
Purchased and Sold 400.00
in Local Area
UP VAT Act , 2008 VAT imposed on Molasses, 802.50
Bagasse and old scrap sold
during the year 2009-10
UP VAT Act , 2008 CST imposed on 40.00
Molasses sold during 2009-10
Central Excise, 1944 Cess on Sugar Cess 4.35
Molasses sold during 2009-10
Central Excise, 1944 Penalty on Scrap 2.61
Scale
Finance Act, 1994 Service Tax on Commission 16.83
Finance Act, 1994 Service Tax on Lease Rent 7.24
Finance Act, 1994 Service Tax on Commission 150.88
Name of the Statute Period to Forum where dispute
which mount is pending
relates
UP VAT Act , 2008 2008-09 Additional Commissioner,
Grade 1, Meerut, 1st Appeals
UP VAT Act , 2008 2010-11 Deputy Commissioner,
Assessment
UP VAT Act , 2008 2009-10 Application Filed for reopen the
the same u/s 32
UP VAT Act , 2008 2009-10 Application Filed for reopen
the same u/s 32
UP VAT Act , 2008 2009-10 Application Filed for reopen
CESTAT by the department
Central Excise, 1944 30.01.2009- Appeal filed before CESTAT by
30.09.2009 the department against the
Commissioner (Appeals) Meerut
Central Excise, 1944 30.11.2004- Appeal submitted before
31.03.2008 CESTAT
Finance Act, 1994 01.04.2008- Appeal filed before Commissioner
01.12.2010 Appeals), Meerut
Finance Act, 1994 2012-13 Appeal filed before Commissioner
(Appeals), Meerut
Finance Act, 1994 2003-04 CESTAT has sent back the case to
Commissioner Appeals, Meerut-1 for
Remand
For Doogar & Associates
Chartered Accountants
Firm Regn. No. 000561N
Mukesh Goyal
Place : New Delhi Partner
Dated : 6th July, 2013 M. No. 081810
Mar 31, 2013
Report on the financial statements
We have audited the accompanying financial statements of SBEC Sugar Ltd
("the Company"), which comprise the Balance Sheet as at March 31, 2013,
and the Statement of Profit and Loss and Cash Flow Statement for the
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 sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement. An audit involves performing procedures to
obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor''s
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal
control relevant to the Company''s preparation and fair presentation of
the financial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by 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 qualified audit opinion.
Basis for Qualified Opinion
(i) These financial statements have been prepared on a going concern
basis even though the Company has incurred operating losses during the
current year and also in the previous year and the company''s networth
is fully eroded. As explained to us by the management, reference will
be made to BIFR for measures to be adopted by the company. The
Management has also initiated certain steps to improve the operational
and financial position of the company failing which, provision would
then have to be made for any loss that might arise when the company''s
assets are realised.
(ii) The company''s has not made provision for interest, on late payment
of cane dues amounting to Rs. 346.52 Lacs. Accordingly manufacturing
expenses and net losses would have been higher by Rs. 346.52 lacs
respectively & its consequential impact on EPS.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of matter
Without qualifying our opinion, we draw attention to:
Note no  33 To these financial statements wherein company had executed
a deed of assignment with a subsidiary company "SBEC Bioenergy Limited"
to transfer its claim and all securities and charges created by Modi
Industries Limited in its favour for a consideration of Rs.12,500 lacs
of which Rs. 8,300 lacs shall be received as per the mutually agreed
installments within a period of five years from the date of execution
of the deed. The recoverability of the carrying value of the said
amount due from by SBEC Bioenergy limited as at 31 March 2013 is
dependent on its ability to generate positive cash flow from
operations. The uncertainty mentioned above may affect the ultimate
recoverability of the carrying value of the said amount due from SBEC
Bioenergy Limited. These financial statements do not include any
adjustments that might result from the uncertainty mentioned above.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure ''A''
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit; b . In our opinion proper books of account as required by law
have been kept by the Company so far as appears from our examination of
those books;
c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow
statement dealt with by this report are in agreement with the books of
account;
d. Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet and
Statement of Profit & Loss Account and Cash Flow Statement dealt with
by this report comply with the Accounting Standards referred to in
sub-section (3c) of section 211 of Companies Act, 1956, to the extent
applicable.
e. On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2013,
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
ANNEXURE "A" TO AUDITORS'' REPORT
(Referred to in the Auditors'' Report of even date to the members of
SBEC Sugar Limited for the year ended 31st March, 2013)
1. (a) The Company has maintained proper records showing particulars,
including quantitative details and situation of fixed assets.
(b) Though the Company has a programme of physical verification of its
fixed assets in phased manner which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets,
however the Fixed assets have not been physically verified by the
management during the year therefore discrepancies, if any, could not
be determined.
(c) Fixed assets disposed off during the year were insignificant and
therefore do not affect the going concern assumption.
2. (a) The inventory has not been physically verified by the
management during the year.
(b) Though the physical verification programme for inventory as
envisaged by the management is, in our opinion, reasonable and adequate
in relation to the size of the Company and nature of its business.
However no physical verification of inventories has been done during
the year.
(c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies, if any, compared to book records could
not be determined in absence of physical verification.
3. (a) The Company has not granted any loan, secured or unsecured to
Companies, firms and other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, Paragraph 3
(b), 3 (c) & 3 (d) of the order are not applicable.
(b) The company has taken loans from three companies & another party,
covered under section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs. 435.45 lacs, Rs. 543.78 lacs,
Rs. 87.89 lacs & Rs. 85.00 lacs and the year end balance of loans taken
from such companies & another party were Rs. 435.45 lacs, Rs. 480.82
lacs, Rs. 85.00 lacs & Rs. 74.70 lacs respectively.
(c) In our opinion and according to information and explanations given
to us, the rate of interest and other term & conditions for such loans
are not prima facie prejudicial to the interest of the Company.
(d) In respect of loans taken, as explained to us the same are
re-payable on demand.
4. In our opinion, and according to the information and explanations
given to us during the course of audit, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to purchase of inventory and fixed
assets and for the sale of goods. We did not observe any major weakness
in internal control during the course of our audit.
5. (a) Based upon the audit procedures applied by us and according to
the information and explanations given to us, we are of the opinion
that the transactions required to be entered into the register
maintained under section 301 of the Companies Act, 1956 have been
entered.
b) In respect of certain transaction of the value of Rs. 12,500 lacs
with subsidiary company, the management has informed us that the
transaction dealt is of a special nature and therefore comparable
prices are not available. In our opinion, and according to the
information and explanation given to us, the transactions made in
pursuance of contracts or arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 and aggregating
during the year to rupees five lacs or more in respect of each party
have been made at prices which are reasonable having regard to market
prices for such transactions, prevailing at the relevant time, where
such market prices are available.
6. The Company has accepted deposits from public and in our opinion
Company has complied with the provisions of section 58A and 58AA of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975.
7. In our opinion, the Company has an internal audit system,
commensurate with the size and nature of its business.
8. We have broadly reviewed the Cost Accounting records, including the
books of accounts maintained by the company pursuant to the rules
prescribed by the Central Government for the maintenance of cost
records under section 209(1)(d) of the Companies Act 1956, and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. We, are however, not required to make a
detailed examination of such books and records.
9. (a) The company is regular in depositing with appropriate
authorities undisputed statutory dues including Provident Fund,
Investor
Education and Protection Fund, Income-Tax, Sales-Tax, Wealth-Tax,
Service-Tax, Customs Duty, Excise Duty, Cess and other material
statutory dues applicable to it.
(b) According to the information & explanations given to us, no
undisputed amount payable in respect of Provident Fund, Investor
Education and Protection Fund, Income Tax, Wealth Tax, Service Tax,
Sales Tax, Custom Duty, Excise Duty, Cess and other undisputed
Statutory dues were outstanding, at the year end, for a period more
than six months from the date they become payable.
(c) According to the information and explanations given to us and the
records of the company examined by us, the particulars of statutory
dues of the specified status as at the end of the year, which have not
been deposited on account of a dispute are referred to in "Annexure Â
B".
10. In our opinion, the accumulated losses of the Company are more
than fifty percent of its net worth. During the year company has
incurred cash loss of Rs. 452.35 lacs. In the immediately preceding
financial year also, the company had incurred cash loss. Thus as per
the current financials the Company is a Sick Industrial Company within
the meaning of Sick Industrial Companies (Special Provision) Act, 1985.
11. According to the information and explanations given to us and as
per the books and records examined by us, the Company has not defaulted
in repayment of dues to any financial institution or bank.
12. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Company does not fall within the category of chit fund/ Nidhi/
Mutual Benefit/ Society and hence the related reporting requirements
are not applicable.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments and hence the related reporting requirements are not
applicable.
15. The Company has provided guarantee to SREI and the Government of
Jharkhand in respect of loans taken by SBEC Bioenergy Limited (a
subsidiary company) and Bihar Sponge Iron Limited respectively. The
terms and conditions of the guarantees are prima facie, not prejudicial
to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, the term loans raised during the year by the company have
been applied for the purpose for which the said loans were obtained,
where the lender has stipulated such end use.
17. According to the information and explanations given to us and as
per the books and records examined by us, no funds raised on short-term
basis have been used for long-term investment by the company.
18. The Company has not made any preferential allotment of shares to
parties and Companies covered in the register maintained under section
301 of the Companies Act, 1956.
19. The Company has not issued debentures of any type during the Year.
20. The Company has not raised any money by public issue during the
Year.
21. Based on our examination of the books and records of the Company
and according to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the Year.
ANNEXURE "B" TO AUDITORS'' REPORT
Referred in Paragraph 9(b) of Annexure "A" a statement on the matters
specified in the Companies (Auditors'' Report) Order, 2003 as amended by
the Companies Auditor''s Report (Amendment) Order, 2004 for the Year
ended 31st March 2013.
Name of the Statute Name of Dues Amount
(Rs. Lacs)
UP VAT Act , 2008 VAT on Baggasse 45.05
UP VAT Act , 2008 Entry Tax on Sugar
Sold in Local Area 139.59
Central Excise ,1944 Cess on Sugar Cess 4.35
Central Excise ,1944 Penalty on Scrap Scale 2.61
Finance Act , 1994 Service Tax on Commission 16.83
Finance Act , 1994 Service Tax on Lease Rent 1.81
Finance Act , 1994 Service Tax on Commission 150.88
Period to which Forum where dispute
amount relates is pending
2008-09 Additional Commissioner,
Grade 1, Meerut, 1st Appeals
2010-11 Deputy CommissionerAssessment
01.01.2009 to Commission Appeals
30.09.2009
30.11.2004 to CESTAT, New Delhi
31.03.2008
01.04.2008 to CESTAT, New Delhi
01.12.2010
2012-13 Commissioner Appeals
2003-04 Commission Central Excise
For & on behalf of
Doogar & Associates
Chartered Accountants
Firm Regn. No. 000561N
Mukesh Goyal
Place: New Delhi
Mg. Partner
Dated: 6th July, 2013
Membership No. 081810
Mar 31, 2012
We have audited the attached Balance Sheet of SBEC Sugar Ltd. as at
31st March 2012,the statement of Profit & Loss and the Cash Flow
Statement of the Company for the year ended on that date, annexed
thereto.
These financial statements are the responsibility of the Company''s
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We have conducted our audit in accordance with auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on 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 reasonable
basis for our opinion.
As required by the Companies (Auditors Report) Order, 2003 as amended
by the Companies Auditor''s Report (Amendment) Order, 2004 issued by
the Central Government of India, in terms of Section 227(4A) of the
Companies Act, 1956 and on the basis of such checks as we considered
appropriate and according to the information and explanation given to
us, we enclose in the Annexure "A" a statement on the matters
specified in paragraph 4 and 5 of the said order.
Attention of the members is invited to note no-45 regarding the
financial statements of the Company having been prepared on a going
concern basis, notwithstanding the fact that its net worth is eroded as
at 31st March''2012 (considering the qualifications as mentioned
below). The appropriateness of the said basis is interalia dependent on
the management plans for further actions in improving the networth.
Further to our comments in the Annexure referred to 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, Statement of Profit & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts;
d) In our opinion, the Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement, dealt with by this report, comply with the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956, to the extent applicable.
e) On the basis of written representations 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 from being
appointed as a director in terms of 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, subject to
i) Levy stock liability is to be accounted for as defined in Govt. of
India notification no F.No. 5-5(Legal-21)/2009-SCII dated 30th
November, 2010. The Company has decided to account for levy orders at
the time of actual dispatches, which was hitherto being valued as per
the orders pending for execution. The above treatment is not in line
with the fundamental accounting assumptions of "Consistency" and
"Accrual" as defined in AS-1""Disclosure of Accounting Policies".
Levy stock if determined for the pending and/or expected levy orders,
the company would be required to make provision of Rs. 1867.15 Lacs
being the differential between the lower of ''current cost or market
price'' and levy price,
ii) Inventory has been stated at its cost, which is in excess of its
net realisable value. Management''s computation, which we have reviewed,
shows that inventory, if valued at the lower of cost and net realisable
value as required by Accounting Standard (AS) 2, "Valuation of
Inventories" notified by the Central Government under the Companies
(Accounting Standards) Rules, 2006, would have been lower by Rs. 774.89
Lacs .
iii) Non provision of liability for Rs 321.15 Lacs regarding
differential amount of custom duty under EPCG Scheme as per the final
order of Supreme court of India dated 07th February, 2011.
Had the impact as per (i),(ii) and (iii) above being taken in the
financial results, the loss for the year would have increased by an
even amount & its consequential effect on other accounts & EPS, the
said accounts, read with the Accounting policies and 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 the
accounting principles generally accepted in India;
i) In the case of Balance Sheet, of the state of affairs of the Company
as at 31st March, 2012
ii) In the case of statement of Profit & Loss , of the loss for the
year ended on that date;
iii) In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE "A" TO AUDITORS'' REPORT
(Referred to in the Auditors'' Report of even date to the members of
SBEC Sugar Limited for the year ended 31st March, 2012)
1 (a) The Company has maintained proper records showing particulars,
including quantitative details and situation of fixed assets.
(b) The Company has a programme of physical verification of its fixed
assets in phased manner which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Management has physically verified fixed assets during the year. The
discrepancies notice on physical verification of fixed assets as
compared to book records were not material and have been properly dealt
with in the books of accounts.
(c) Fixed assets disposed off during the year were insignificant and
therefore do not affect the going concern assumption.
2. (a) The inventory, except material lying with third parties, has
been physically verified by the management during the year. In our
opinion, the frequency of such verification is reasonable.
(b) The procedures for the physical verification of inventory followed
by the management are, in our opinion, reasonable and adequate in
relation to the size of the Company and nature of its business.
(c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies, if any, noticed on physical verification
of inventory as compared to books records were not material and have
been properly dealt with in the books of accounts.
3. (a) The Company has not granted any loan, secured or unsecured to
Companies, firms and other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, Paragraph 3
(b), 3 (c) & 3 (d) of the order are not applicable.
(b) The company has taken loan from three companies, covered under
section 301 of the Companies Act, 1956. The maximum amount involved
during the year was Rs. 435.45 lacs, Rs. 500.00 lacs, & Rs. 103.36 lacs
and the year end balance of loan taken from such companies were
Rs.435.45 lacs, Rs. 399.91 lacs & Rs. 85.00 lacs respectively.
(c) In our opinion and according to information and explanations given
to us , the rate of interest and other term & conditions for such loans
are not prima facie prejudicial to the interest of the Company.
(d) In respect of loan taken, as explained to us the same is re-payable
on demand.
4. In our opinion, and according to the information and explanations
given to us during the course of audit, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to purchase of inventory and fixed
assets and for the sale of goods. We did not observe any major weakness
in internal control during the course of our audit.
5. (a) Based upon the audit procedures applied by us and according to
the information and explanations given to us, we are of the opinion
that the transactions required to be entered into the register
maintained under section 301 of the Companies Act, 1956 have been
entered.
(b) In our opinion, and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and aggregating during the year to rupees five
lacs or more in respect of each party have been made at prices which
are reasonable having regard to market prices for such transactions,
prevailing at the relevant time, where such market prices are
available.
6. The Company has accepted deposits from public and in our opinion
Company has complied with the provisions of section 58A and 58AA of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975.
7. In our opinion, the Company has an internal audit system,
commensurate with the size and nature of its business.
8. We have broadly reviewed the Cost Accounting records, including the
books of account maintained by the company pursuant to the rules
prescribed by the Central Government for the maintenance of cost
records under clause (d) of sub- section 209 of the Act, and are of the
opinion that prima facie the prescribed accounts and records have been
made and maintained. We, are however, not required to make a detailed
examination of such books and records.
9. (a) According to the information & explanations given to us, no
undisputed amount payable in respect of Provident Fund, Income Tax,
Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Cess and
other undisputed Statutory dues were outstanding, at the year end, for
a period more than six months from the date they become payable.
(b) According to the information and explanations given to us and the
records of the company examined by us, the particulars of statutory
dues of the specified status as at the end of the year, which have not
been deposited on account of a dispute are referred to in "Annexure -
B".
10. In our opinion, the accumulated losses of the Company are more
than fifty percent of its net worth. During the year company has
incurred cash loss of Rs. 2768.06 lacs and there were no cash losses in
the immediately preceding financial year.
11. According to the information and explanations given to us and as
per the books and records examined by us, the Company has not defaulted
in repayment of dues to any financial institution or bank.
12. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Company does not fall within the category of chit fund/ Nidhi/
Mutual Benefit/ Society and hence the related reporting requirements
are not applicable.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments and hence the related reporting requirements are not
applicable.
15. The Company has provided guarantee to SREI and the Government of
Jharkhand in respect of loans taken by SBEC Bioenergy Limited (a
subsidiary company) and Bihar Sponge Iron Limited respectively. The
terms and conditions of the guarantees are prima facie, not prejudicial
to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, the term loans raised during the year by the company have
been applied for the purpose for which the said loans were obtained,
where the lender has stipulated such end use.
17. According to the information and explanations given to us and as
per the books and records examined by us, no funds raised on short-term
basis have been used for long-term investment by the company.
18. The Company has not made any preferential allotment of shares to
parties and Companies covered in the registered maintained under
section 301 of the Companies Act, 1956.
19. The Company has not issued debentures of any type during the Year.
20. The Company has not raised any money by public issue, during the
Year.
21. Based on our examination of the books and records of the Company
and according to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the Year.
Name of the Statute Name of Dues Amount
Rs. Lacs
Service Tax Act Service Tax 150.88
Service Tax Act Service Tax 16.83
Central Excise and Demand of Custom 321.15
Custom Act duty on import of
capital goods against
EPCG License
Central Excise and Penalty on Scrap Sale 2.61
Custom Act
Central Excise and Cess on Sugar Cess 4.35
Custom Act
U P Tax on Entry Entry Tax on Sugar Sold 137.41
of Goods Act in Local Area
U P VAT Act VAT on Baggase 12.27
Name of the Statute Period to which Forum where dispute
amount relates is pending
Service Tax Act 01.10.1999 to Commissioner (Appeals) of
Central
31.03.2003 Excise Meerut 1,U.P
Service Tax Act 01.04.2008 to Commissioner (Appeals) of
Central
31.12.2010 Excise Meerut 1,U.P
Central Excise and
Custom Act 01.04.1997 to Deputy Commissioner of
Customs
30.06.1998 (Bond Section), Mumbai
Central Excise and
Custom Act 30.11.2004 to CESTAT, New Delhi
31.03.2008
Central Excise and
Custom Act 01.01.2009 to CESTAT, New Delhi
30.09.2009
UP Tax on Entry of
Goods Act A Y 2010-11 Commercial Tax Tribunal,
Meerut, U.P
U P VAT Act A Y 2007-08 Additional Comm Appeals,
Commercial Tax Meerut
For and on behalf of
DOOGAR & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Regn.No-000561N
Place : New Delhi (MUKESH GOYAL)
Date : 12th November, 2012 Mg. Partner
Membership No. : 081810
Mar 31, 2011
We have audited the attached Balance Sheet of SBEC Sugar Ltd. as at
31st March 2011 and also the Profit & Loss Account and the Cash Flow
Statement of the Company for the year ended on that date, annexed
thereto.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We have conducted our audit in accordance with auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on 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 reasonable
basis for our opinion.
As required by the Companies (Auditors Report) Order, 2003 as amended
by the Companies Auditor's Report (Amendment) Order, 2004 issued by the
Central Government of India, in terms of Section 227(4A) of the
Companies Act, 1956 and on the basis of such checks as we considered
appropriate and according to the information and explanation given to
us, we enclose in the Annexure "A" a statement on the matters specified
in paragraph 4 and 5 of the said order.
Further to our comments in the Annexure referred to 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, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement, dealt with by this report, comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956, to the extent applicable.
e) On the basis of written representations 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 from being appointed
as a director in terms of 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, subject to note no 6 of schedule 14(B)
regarding valuation of closing stock (free Sugar) at market price
instead of "lower of cost or net realizable value" resulting in
overstatement of Inventories(Finished Goods-free sugar) by Rs.752.19
lacs & profit for the year by Rs.752.19 lacs (before tax), the said
accounts, read with the Accounting policies and 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 the
accounting principles generally accepted in India;
i) In the case of Balance Sheet, of the state of affairs of the Company
as at 31st March, 2011
ii) In the case of Profit & Loss Account, of the Profit for the year
ended on that date;
iii) In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE "A" TO AUDITORS' REPORT
(Referred to in the Auditors' Report of even date to the members of
SBEC Sugar Limited for the year ended 31st March, 2011)
1 (a) The Company has maintained proper records showing particulars,
including quantitative details and situation of fixed assets.
(b) The Company has a programme of physical verification of its fixed
assets in phased manner which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Management has physically verified fixed assets during the year. The
discrepancies notice on physical verification of fixed assets as
compared to book records were not material and have been properly dealt
with in the books of accounts.
(c) Fixed assets disposed off during the year were insignificant and
therefore do not affect the going concern assumption.
2. (a) The inventory, except material lying with third parties, has
been physically verified by the management during the year. In our
opinion, the frequency of such verification is reasonable.
(b) The procedures for the physical verification of inventory followed
by the management are, in our opinion, reasonable and adequate in
relation to the size of the Company and nature of its business.
(c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies, if any, noticed on physical verification
of inventory as compared to books records were not material and have
been properly dealt with in the books of accounts.
3. (a) The Company has not granted any loan, secured or unsecured to
Companies, firms and other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, Paragraph 3
(b), 3 (c) & 3 (d) of the order are not applicable.
(b) The company has taken loan from three companies, covered under
section 301 of the Companies Act, 1956. The maximum amount involved
during the year was Rs. 435.45 lacs, Rs. 400.00 lacs, & Rs. 103.40 lacs
and the year end balance of loan taken from such companies were Rs.
435.45 lacs, Rs. 400.00 lacs & Rs.100 lacs respectively.
(c) In our opinion and according to information and explanations given
to us , the rate of interest and other term & conditions for such loans
are not prima facie prejudicial to the interest of the Company.
(d) In respect of loan taken, as explained to us the same is re-payable
on demand.
4. In our opinion, and according to the information and explanations
given to us during the course of audit, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to purchase of inventory and fixed
assets and for the sale of goods. We did not observe any major weakness
in internal control during the course of our audit.
5. (a) Based upon the audit procedures applied by us and according to
the information and explanations given to us, we are of the opinion
that the transactions required to be entered into the register
maintained under section 301 of the Companies Act, 1956 have been
entered.
(b) In our opinion, and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and aggregating during the year to rupees five
lacs or more in respect of each party have been made at prices which
are reasonable having regard to market prices for such transactions,
prevailing at the relevant time, where such market prices are
available.
6. The Company has accepted deposits from public and in our opinion
Company has complied with the provisions of section 58A and 58AA of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975.
7. In our opinion, the Company has an internal audit system,
commensurate with the size and nature of its business.
8. We have broadly reviewed the Cost Accounting records, including the
books of account maintained by the company pursuant to the rules
prescribed by the Central Government for the maintenance of cost
records under clause (d) of sub-section 209 of the Act, and are of the
opinion that prima facie the prescribed accounts and records have been
made and maintained. We, are however, not required to make a detailed
examination of such books and records.
9. (a) According to the information & explanations given to us, no
undisputed amount payable in respect of Provident Fund, Income Tax,
Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Cess and
other undisputed Statutory dues were outstanding, at the year end, for
a period more than six months from the date they become payable. (b)
According to the information and explanations given to us and the
records of the company examined by us, the particulars of statutory
dues of the specified status as at the end of the year, which have not
been deposited on account of a dispute are referred to in "Annexure Ã
"B".
10. There are accumulated losses in the Company. The Company has not
incurred any cash loss during the current financial year and in the
immediately preceding period (9 months).
11. According to the information and explanations given to us and as
per the books and records examined by us, the Company has not defaulted
in repayment of dues to any financial institution or bank.
12. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Company does not fall within the category of chit fund/ Nidhi/
Mutual Benefit/ Society and hence the related reporting requirements
are not applicable.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments and hence the related reporting requirements are not
applicable.
15. The Company has provided guarantee to SREI and the Government of
Jharkhand in respect of loans taken by SBEC Bioenergy Limited (a
subsidiary company) and Bihar Sponge Iron Limited respectively. The
terms and conditions of the guarantees are prima facie, not prejudicial
to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, the term loans raised during the year by the company have
been applied for the purpose for which the said loans were obtained,
where the lender has stipulated such end use.
17. According to the information and explanations given to us and as
per the books and records examined by us, no funds raised on short-
term basis have been used for long-term investment by the company.
18. The Company has not made any preferential allotment of shares to
parties and Companies covered in the registered maintained under
section 301 of the Companies Act, 1956.
19. The Company has not issued debentures of any type during the Year.
20. The Company has not raised any money by public issue, during the
Year.
21. Based on our examination of the books and records of the Company
and according to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the Year.
Referred in Paragraph 9(b) of Annexure "A" a statement on the matters
specified in the Companies (Auditors' Report) Order, 2003 as amended by
the Companies Auditor's Report (Amendment) Order, 2004 for the Year
ended 31st March 2011.
Name of the Name of Dues Amount Period to Forum where
Statute Rs. Lacs which dispute
amount is pending
relates
Service Tax Service Tax 151.67 01.10.1999 to Commissio
Act 31.03.2003 ner of Centr
al Excise
Meerut 1,U.P
Central Excise Demand of 627.06 01.04.1997 to The Supre
and Custom Act Custom 30.06.1998 me Court of
duty on impo India
rt of capital
goods against
EPCG License
U P Tax on Entry Tax on 4.50 A Y 2000-01 Commercial
Entry Machinery Tax Tribunal,
of Goods Act Meerut, U.P
U P Tax on Entry Tax on 50.62 A Y 2010-11 Commercial
Entry of Sugar Sale Tax Tribunal
Goods Act , Meerut, U.P
For and on behalf of
DOOGAR & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Regn.No-000561N
(MUKESH GOYAL)
Mg. Partner
Membership No. : 081810
Place: New Delhi
Date : 11th August, 2011
Mar 31, 2010
We have audited the attached Balance Sheet of SBEC Sugar Ltd. as at
31st March 2010 and also the Profit & Loss Account and the Cash Flow
Statement of the Company for the period ended on that date, annexed
thereto.
These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We have conducted our audit in accordance with auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on 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 reasonable basis for our opinion.
As required by the Companies (Auditors Report) Order, 2003 as amended
by the Companies Auditors Report (Amendment) Order, 2004 issued by the
Central Government of India, in terms of Section 227(4A) of the
Companies Act, 1956 and on the basis of such checks as we considered
appropriate and according to the information and explanation given to
us, we enclose in the Annexure "A" a statement on the matters specified
in paragraph 4 and 5 of the said order.
Further to our comments in the Annexure referred to 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, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement, dealt with by this report, comply with the Accounting
Standards referred to in the Companies (Accounting Standard) Rules,
2006 issued by the Central Government in exercise of the power
conferred under sub-section (1)(a) of section 642 of the Companies Act,
1956 to the extent applicable.
e) On the basis of written representations received from the directors
as on 31s" March 2010 and taken on record by the Board of Directors, we
report that none of the directors is disqualified from being appointed
as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956.
f) Without qualifying our opinion, we draw your attention to note no.4
of schedule 14(B) relating to the accounting for sugar cane purchase
liability for the sugar season 2007-08 at an interim price of Rs.110/-
per quintal which is as per the directions of Honble Supreme Court
instead of State Advisory prices of Rs. 125/130 per quintal fixed by
the State Government.
g) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read with the
Accounting policies and 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 the accounting principles generally
accepted in India;
i) In the case of Balance Sheet, of the state of affairs of the Company
as at 31st March, 2010
ii) In the case of Profit & Loss Account, of the Profit for the period
ended on that date;
iii) In the case of Cash Flow Statement, of the cash flows for the
period ended on that date.
ANNEXURE "A" TO AUDITORS REPORT (Referred to in the Auditors Report
of even date to the members of SBEC Sugar Limited for the period ended
31st March, 2010)
1 (a) The Company has maintained proper records showing particulars,
including quantitative details and situation of fixed assets.
(b) The Company has a programme of physical verification of its fixed
assets in phased manner which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Management has physically verified fixed assets during the period. The
discrepancies notice on physical verification of fixed assets as
compared to book records were not material and have been properly dealt
with in the books of accounts.
(c) Fixed assets disposed off during the period were insignificant and
therefore do not affect the going concern assumption.
2. (a) The inventory, except material lying with third parties, has
been physically verified by the management during the period. In our
opinion, the frequency of such verification is reasonable.
(b) The procedures for the physical verification of inventory followed
by the management are, in our opinion, reasonable and adequate in
relation to the size of the Company and nature of its business.
(c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies, if any, noticed on physical verification
of inventory as compared to books records were not material and have
been properly dealt with in the books of accounts.
3. (a) The Company has not granted any loan, secured or unsecured to
Companies, firms and other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, Paragraph 3
(b), 3 (c) & 3 (d) of the order are not applicable.
(b) The company has taken loan from three companies, covered under
section 301 of the Companies Act, 1956. The maximum amount involved
during the period was Rs. 345.45 lacs, Rs. 64.47 lacs, & Rs. 18.71 lacs
and the period end balance of loan taken from such companies were Rs.
345.45 lacs, Rs. 34.47 lacs & Rs. Nil respectively.
(c) In our opinion and according to information and explanations given
to us , the rate of interest and other term & conditions for such loans
are not prima facie prejudicial to the interest of the Company.
(d) In respect of loan taken, as explained to us the same is re-payable
on demand.
4. In our opinion, and according to the information and explanations
given to us during the course ot audit, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to purchase of inventory and fixed
assets and for the sate of goods. We did not observe any major weakness
in internal control during the course of our audit.
5. (a) Based upon the audit procedures applied by us and according to
the information and explanations given to us, we are of the opinion
that the transactions required to be entered into the register
maintained under section 301 of the Companies Act, 1956 have been
entered. (b) ki our opinion, and according to the information and
explanation given to us, the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
section 301 of the Companies Act, 1956 and aggregating during the
period to rupees five lacs or more in respect of each party have been
made at prices which are reasonable having regard to market prices for
such transactions, prevailing at the relevant time, where such market
prices are available.
6. The Company has accepted deposits from public and in our opinion
Company has complied with the provisions of section 58A and 58AA of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975.
7. In our opinion, the Company has an internal audit system,
commensurate with the size and nature of its business.
8. We have broadly reviewed the Cost Accounting records, including the
books of account maintained by the company pursuant to the rules
prescribed by the Central Government for the maintenance of cost
records under clause (d) of sub-section 209 of the Act, and are of the
opinion that prima facie the prescribed accounts and records have been
made and maintained. We, are however, not required to make a detailed
examination of such books and records.
9. (a) According to the information & explanations given to us, no
undisputed amount payable in respect of Provident Fund, Income Tax,
Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Cess and
other undisputed Statutory dues were outstanding, at the period end,
for a period more than six months from the date they become payable.
(b) According to the information and explanations given to us and the
records of the company examined by us, the particulars of statutory
dues of the specified status as at the end of ihe period,,which have
not been deposited on account of a dispute are referred to in "Armexure
- B".
10. There are accumulated losses in the Company. The Company has not
incurred any cash loss during the current period (9 months), and in the
immediately preceding period (15 months).
11. According to the information and explanations given to us and as
per the books and records examined by us, the Company has not defaulted
in repayment of dues to any financial institution or bank.
12. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Company does not fall within the category of chit fund/ Nidhi/
Mutual Benefit/ Society and hence the related reporting requirements
are not applicable.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments and hence the related reporting requirements are not
applicable.
15. The Company has provided guarantee to SREI and the Government of
Jharkhand in respect of loans taken by SBEC Bioenergy Limited (a
subsidiary company) and Bihar Sponge Iron Limited respectively. The
terms and conditions of the guarantees are prima facie, not prejudicial
to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, the term loans raised during the period by the company
have been applied for the purpose for which the said loans were
obtained, where the lender has stipulated such end use.
17. According to the information arid explanations given to us and as
per the books and records examined by us, no funds raised on short-term
basis have been used for long-term investment by the company,
18. The Company has not made any preferential allotment of shares to
parties and Companies covered in the registered maintained under
section 301 of the Companies Act, 1956.
19. The Company has not issued debentures of any type during the
period.
20. The Company has not raised any money by public issue, during the
period.
21. Based on our examination of the books and records of the Company
and according to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the period.
Name of the Statute Name of Dues Amount
Rs. Lacs
Service Tax Act Service Tax 151.67
Central Excise and Demand of Custom 627.06
Custom Act duty on import of
capital goods against
EPCG License
U P Tax on Entry Entry Tax on Machinery 4.50
of Goods Act
Name of the Statue Period to which Forum where dispute
amount relates is pending
Service Tax Act 01.10.1999 to Commissioner of Central
31.03.2003 Excise, Meerut-1, U.P.
Central Excise and
Custom Act 01.04.1997 to The Supreme Court of India
30.06.1998
U P Tax on Entry
of Goods Act A.Y. 2000-01 Trade Tax Tribunal,
Meerut, U.P.
For and on behalf of
DOOGAR & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Regn.No-000561N
Place: New Delhi (MUKESH GOYAL)
Date : 25th August, 2010 Mg. Partner
Membership No. : 081810
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