Mar 31, 2016
INDEPENDENT AUDITORSâ REPORT
To,
The Members of
Sir Shadi Lal Enterprises Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Sir Shadi Lal Enterprises Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit
& Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statement
The Companyâs 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 and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs 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 misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditorâs 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 Companyâs preparation of the financial statements that give a true & fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operative effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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.
Emphasis of matter
1. âOther Operating Revenue include reimbursement of Society Commission Rs.1,60,30,339/- relating to erstwhile âUNN Sugar Unitâ of the company, for the season 2012-13, which is being persued for recovery/adjustment, as stated in Note No. 3.8 of the aforesaid Financial Statement.
2. Attention is invited to note no. 3.9 to Financial Statement regarding potential sickness of the Company. The Company, over the last few years, has been incurring losses, due to which its net worth has been completely eroded. At the close of financial year ended on 31.03. 2014, the Company has become Sick Industrial Company under provision of Sick Industrial Company (Special Provisions) Act, 1985. This fact was reported to BIFR, consequently the Company has been registered under BIFR on 03.02.2016 as Case no. 23/2016.
3. The Company has not maintained accounts on âAccrual Basisâ to the extent:
i) of Rs.17,25,35,188/- as stated in Note No. 3.5 of the aforesaid Financial Statement in respect of interest on late payment of cane price, and
ii) as stated in Note No. 3.7 of the aforesaid Financial Statement in respect of liability (not determined by the company) towards bonus relating to financial year 2014-15 in accordance with revised Bonus Notification dated 1st January, 2016.
Basis for Qualified Opinion
1. As stated in Note No. 3.1 provision for bad & doubtful debts has been short provided by Rs. 1,50,37,693/-. Had this provision been made the profit for the year would have been lower to that extent.
2. As stated in Note No. 3.3 of the aforesaid financial statement, the method for arriving cost of sugar production has been changed this year, resulting in increase in value of closing stock of sugar by Rs. 2,45,03,240/-. Had there been no deviation in method of arriving cost of production of sugar, the profit for the year would have been lower by Rs. 2,45,03,240/- and deficit appearing under the head âReserves & Surplusâ would have been higher to that extent.
3. As stated in Note No. 3.6 of the aforesaid Financial Statement, the Company has decided that in deviation of past practice, to book the value of the closing stock of Bagasse at the close of the year by Rs. 1,06,61,786/-. Had there been no deviation the profit for the year would have been lower to that extent and deficit appearing under the head âReserves & Surplusâ would have been higher to that extent in the Balance Sheet.
4. In view of carry forward losses and also that the company has become a sick company, the Deferred Tax Asset Rs. 68,81,11,332/-, which was provided in earlier years, in absence of virtual certainty about future profitability, the recovery of which is uncertain, in our opinion, the decision of management in continuing the carry forward of the aforesaid Deferred Tax Asset, in terms of Accounting Standard-22, is not desirable. Had the impact of aforesaid Deferred Tax Asset been reversed, the deficit appearing under âReserves & Surplusâ would have been Rs. 1,25,02,67,430/- as against the reported figure of Rs. 56,21,56,098/- in the balance sheet.
As stated in Note No.3.10 to the Financial Statements, the management has however decided, not to account for the effect of Deferred Taxation for the current year.
5. The aggregate impact of aforesaid para 1-4 results in increase in profit for the year by Rs.5,02,02,719/-. Had the aforesaid adjustments not been made by the company the figure of profit for the year Rs.2,01,20,944/- would have been converted into a loss for the year to Rs. 3,00,81,775/ and the deficit appearing under the head âReserves & Surplusâ would have been higher by Rs. 73,83,13,051/- in the Balance Sheet.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, except for the effect of matters stated in the Basis for Qualified Opinion paragraph above, 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, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) as amended, issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies 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, the Profit and Loss Statement, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, except as stated herein above.
e) on the basis of the written representations received from the directors as on March 31, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, 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 Bâ; and
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :
i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements, (Refer Note No. 2.30 of the Financial Statements);
ii) The Company did not have any long-term contracts including derivative contracts for which there were any foreseeable losses; and
iii) There has been no delay in transferring amounts, required to be transferred, to investor Education and Protection fund by the company.
i. a) The Company has maintained proper records showing
Report of even date on the financial statements of Sir Shadi Lal Enterprises Limited for the year ended on 31st March, 2016:
full particulars, including quantitative details and situation of fixed assets on the basis of available information.
b) The Companyâs programme of physical verification of all its fixed assets once in three years, is in our opinion, reasonable having regard to the size of the Company and the nature of its fixed assets. We are informed that in accordance with the programme, no physical verification of fixed assets was carried out during the year under report.
c) According to the 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 are stated to be held in the name of the Company. The original Title Deeds were not produced to us for our verification and we were told that same are deposited as security with IFCI.
ii. a) During the year, the inventories have been physically verified by the management except material sent for job work and lying with third party. In our opinion, the frequency of verification is reasonable.
b) The discrepancies noticed on physical verification between the physical stocks and the book records were not material, however, the discrepancies noticed have been properly accounted for in the books of account.
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 Act. 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, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 with respect to loans, investments, guarantees, and security.
v. According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year, therefore, the provisions of clause (v) of paragraph 3 of the CARO 2016, are not applicable to the Company.
vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014 prescribed by the Central Government under Section 148 (1) (d) of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed accounts and cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii. a) According to the information & explanations given to us and on the basis of our examination of the records of the Company, there is no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, value added tax, wealth-tax, service-tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date of becoming payable.
b) According to the records of the Company and the information and explanations given to us, there are no amounts in respect of income-tax, value added tax, sales tax,wealth-tax, service-tax, customs duty, excise duty and cess, which have not been deposited with the appropriate authorities on account of any dispute, other than mentioned in âAnnexure-1â to this report.
viii. In our opinion and according to the information and explanations furnished to us by the management of the company, the Company has defaulted in repayment of dues payable to State Bank of India. Balance due to State Bank of India since the beginning of the year Rs.60,35,45,834/- was not paid during the year, however the Company is regular in payment of interest on said loan.
ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.
x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
We have audited the internal financial controls over financial reporting of Sir Shadi Lal Enterprises Limited (âthe Companyâ) as of 31 March, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
âAnnexure Bâ to Independent Auditorsâ Report of even date on the financial statements of Sir Shadi Lal Enterprises Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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 (âICAIâ). 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 companyâs 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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, issued by ICAI and deemed to be prescribed 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.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 companyâs 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 companyâs 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 31 March, 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 BASANT RAM & SONS
Chartered Accountants
(Firm Regn. No. 000569N)
H. K. Chadha
Place : New Delhi Partner
Dated : 28th May, 2016 Membership No. 6470
Mar 31, 2015
We have audited the accompanying financial statements of Sir ShadiLal
Enterprises Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2015, the Profit & Loss Statement and Cash Flow
Statement for the year then ended, and a summary of signifcant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statement
The Company's Board of Directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013("the Act") with respect to
the preparation of these financial statements that give a true and fair
view of the financial position, financial performance and cash flows of
the Company in accordance with the Accounting principles generally
accepted in India, including the accounting standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for
safeguarding the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance
of adequate internal financial controls, that were operating effectively
for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial statements
that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
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
specifed 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 misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend upon the auditor's judgment, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal financial
control relevant to the Company's preparation of the financial
statements that give a true & fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on whether the Company has in place an
adequate internal financial controls system over financial reporting and
the operative effectiveness of such controls. 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
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Emphasis of matter
1. Attention is invited to note no. 3.8 of Financial Statement
regarding potential sickness of the Company. The Company, over the last
few years, has been incurring loses, due to which its net worth has
been completely eroded. Last year the Company has become Sick
Industrial Company under provision of Sick Industrial Company (Special
Provisions) Act, 1985, and this fact was reported to BIFR. This year
further losses have been suffered.
2. In view of the aforesaid facts "deferred tax" assets Rs. 68.81
crore, the recovery of which is uncertain, in absence of future
projections for profitability. In our opinion recognition in accounts
of deferred tax assets is not desirable.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements subject to
Note No. 3.1, in respect of bad and doubtful debts short provided by
Rs.150.38 lacs 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, of the state of
affairs of the Company as at March 31, 2015 and its loss and its cash
fows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
subÂsection(11) of section 143 of the Companies Act, we give in the
Annexure a statement on the matters specified in paragraphs 3 and 4 of
the Order to the extent applicable.
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, the Profit and Loss Statement, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) in our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e) on the basis of the written representations received from the
directors as on March 31, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015,
from being appointed as a director in terms of Section 164 (2) of the
Act.
f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us :
1. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements, (Refer Note No. 2.30 of
the Financial Statements);
2. The Company did not have any long term contracts including
derivative contracts for which there were any foreseeable losses; and
3. There has been no delay in transferring amounts, required to be
transferred, to investor Education and Protection fund by the company.
ANNEXURE 'A' TO THE INDEPENDENT AUDITORS' REPORT
Referred to in Paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements" of our report of even date to the members
of Sir Shadi Lal Enterprises Limited on financial statements for the
year ended 31st March, 2015.
i. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets on the basis of available information.
b) The Company's programme of physical verification of all its fixed
assets once in three years, is in our opinion, reasonable having regard
to the size of the Company and the nature of its fixed assets. We are
informed that in accordance with the programme, no physical verification
of fixed assets was carried out during the year under report.
ii. a) During the year, the inventories have been physically verified by
the management except Material sent for job work and lying with third
party. In our opinion, the frequency of verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory,
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c) On the basis of our examination of records of inventory, in our opinion,
the Company has maintained proper records of inventory. The discrepancies noticed
on physical verification between the physical stocks and the book records were
not material, however, the discrepancies noticed have been properly accounted
for in the books of account.
iii. a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties listed in the Register maintained
under Section 189 of the Companies Act, 2013.
b) The Company has taken demand loans/fixed deposits, from companies,
firms or other parties listed in the Register maintained under Section
189 of the Companies Act, 2013, which were taken from eight parties and
the maximum amount involved during the year was Rs.17.57 crores and the
year end balance was Rs.11.93 crores. As no other demand loans were
taken by the company, therefore the rate of interest and other terms
and conditions of such demand loans are not comparable.
c) The Company is regular in repayment of principal amount of demand
loans/fixed deposits and interest thereon.
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. Further, on the basis of our examination of the books and
information and as per the explanations given to us, we have neither
come across nor have been informed of any instance of continuing
failure to correct major weaknesses in the aforesaid internal control
system.
v. According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year,
therefore, the provisions of clause (v) of paragraph 3 of the CARO
2015, are not applicable to the Company. .
vi. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Records and Audit) Rules 2014
prescribed by the Central Government under Section 148 (1) (d) of the
Companies Act, 2013 and are of the opinion that, prima facie, the
prescribed accounts and cost records have been maintained. We have,
however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
vii. a) According to the records of the Company and information and
explanations given to us, there is no undisputed amounts payable in
respect of provident fund, employees' state insurance, incomeÂtax,
sales tax, wealthÂtax, serviceÂtax, customs duty, excise duty, cess
and other material statutory dues were outstanding, at the year end for
a period of more than six months from the date of becoming payable.
b) According to the records of the Company and the information and
explanations given to us, there are no amounts in respect of
incomeÂtax, salesÂtax, wealth tax, serviceÂtax, customs duty, excise
duty and cess, which have not been deposited with the appropriate
authorities on account of any dispute, other than mentioned in
'Annexure 1' to this report.
c) According to the records of the company and information and
explanations given to us, there are no amounts that are due to be
transferred to the investor education and protection fund in accordance
with the relevant provisions of the Companies Act, 1956 (1 of 1956) and
rules there under.
viii. The Company has accumulated losses of Rs. 58,22,77,042/Â as at
the end of the financial year 31st March, 2015, after reducing there
from Deferred Tax Assets of Rs. 68,81,11,332/. The Company has incurred
cash losses amounting to Rs. 48,43,71,440/Â during the financial year
ended 31st March, 2015, the Company has also incurred cash losses
amounting to Rs. 57,49,85,408/Â during the immediately preceding
financial year.
ix. In our opinion and according to the information and explanations
furnished to us by the management of the company, the Company has
defaulted in repayment of dues payable to its bankers. The loans (cash
credit account) due to Zila Sahkari Bank, Gaziabad Rs. 20,33,85,431/Â,
was not paid on due dates during the period from November, 2014 till
30th March, 2015 and another unpaid balance due to State Bank of India
since the beginning of the year Rs. 64,65,76,381/Â was not paid during
the year.
x. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantees for loans taken
by others from Banks or Financial Institutions.
xi. The Company has not raised fresh term loans during the year. The
term loans outstanding at the beginning of the year have been applied
for the purposes for which they were raised.
xii In our opinion and according to the information & explanations
given to us, no fraud by the company and no material fraud on the
company has been noticed or reported during the year.
For BASANT RAM & SONS
Chartered Accountants
(Firm Regn. No. 000569N)
H. K. Chadha
Place : New Delhi Partner
Dated : 29th May, 2015 Membership No. 6470
Mar 31, 2014
We have audited the accompanying financial statements of Sir Shadi Lal
Enterprises Limited ("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 Statement
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under the Companies
Act, 1956 ("the Act") (which continue to be applicable in respect
of Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs)
and in accordance with the accounting principles generally accepted in
India. This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances
but not for the purpose of expressing an opinion on the effectiveness
of the Company''s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by the management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence, we have obtained, is sufficient and
appropriate to provide a basis for our audit opinion. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, subject to Note No. 3.1, in respect of bad
and doubtful debts short provided by Rs. 150.38 Lacs 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, 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 of the
Company for the year ended on that date.
Emphasis of matter
Attention is invited to note No. 3.6 of Financial Statement regarding
potential sickness of the Company. The accumulated losses of the
Company as on 31.03.2014 have resulted in 100% erosion of the peak Net
Worth during the immediately preceding four financial years. Therefore,
the Company has become Sick Industrial Company under the provisions of
the Sick Industrial Companies (Special Provisions) Act, 1985 and which
will be reported by the Company to the BIFR as required under the
provisions of Section 15 (1) of the Sick Industrial Companies (Special
Provisions) Act, 1985.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' 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
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 the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
the Cash Flow Statement complied with the Accounting Standards referred
to in sub section (3C) of section 211 of the Companies Act, 1956 read
with General Circular 15/2013 dated 13 September 2013 of the Ministry
of Corporate Affairs) in respect of Section 133 of the Companies Act,
2013;and
e) on the basis of written representations received from the directors
as on March 31, 2014, taken on record by the Board of Directors, none
of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE ''A'' TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 of Auditors'' Report of even date to the
members of Sir Shadi Lal Enterprises Limited on the accounts for the
year ended 31st March, 2014)
i. a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets except that cost and to date depreciation written off for
certain assets, was available for group of assets.
b) The Company''s programme of physical verification of all its fixed
assets once in three years, is in our opinion, reasonable having regard
to the size of the Company and the nature of its fixed assets. Pursuant
to such programme, a physical verification of fixed assets was carried
out during the year and the discrepancies noticed between the book
record and physical inventory have been properly accounted for in the
books of account.
c) In our opinion, there was no substantial disposal of fixed assets
during the year.
ii. a) During the year, the inventories have been physically
verified by the management except Material sent for job work and lying
with third party. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory,
followed by the management are reasonable and adequate in relation to
the size of the Company.
c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and the book records were not material, however, the
discrepancies noticed have been properly accounted for in the books of
account.
iii. a) The Company has not granted any loans, secured or
unsecured, to companies, firms or other parties listed in the Register
maintained under Section 301 of the Companies Act, 1956.
b) The Company has taken demand loans/fixed deposits, from companies,
firms or other parties listed in the Register maintained under Section
301 of the Companies Act, 1956.
c) The demand loans/fixed deposits were taken from eight parties listed
in the Register maintained under Section 301 of the Companies Act, 1956
and the maximum amount involved in the transactions during the year was
Rs.20.30 Crores and the year end balance of such loans/deposits was
Rs.17.57 Crores.
d) In our opinion, the rate of interest and other terms
and conditions of fixed deposits taken from Directors/ Managing
Director and other parties covered in the Register maintained under
Section 301 of the Companies Act, 1956 are not, prima facie,
prejudicial to the interest of the Company. No demand loans were taken
by the company except from Directors/ Managing Director. Therefore, the
rate of interest and other terms and conditions of such demand loans
are not comparable.
e) The Company is regular in repayment of principal amount of demand
loans/fixed deposits and interest thereon.
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. Further, on the basis of our examination of the books and
information and as per the explanations given to us, we have neither
come across nor have been informed of any instance of continuing
failure to correct major weaknesses in the aforesaid internal control
system.
v. a) In our opinion and according to the information
and explanations given to us, the contracts and arrangements that need
to be entered into the Register maintained under Section 301 of the
Companies Act, 1956, have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts /
arrangements entered in the Register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of '' Rs. 5,00,000 in
respect of each party during the year have been made at prices which
appear reasonable as per information available with the Company.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of Sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. Last year we had reported that during the
financial year 2012-13 Company has accepted/ renewed deposits in excess
of limits laid down in rule 3 (2)(I) by Rs. 42.34 lacs and in rule
3(2)(II) by Rs. 190.93 lacs of section 58 A and other relevant
provision of the Companies Act, 1956 and Companies (Acceptance of
Deposits) Rules 1975. However, during the financial year
2013-14, Company has refunded out of the said excess amount accepted,
Rs. 42.34 lacs and Rs.175.82 under rule 3 (2)(I) and rule 3 (2)(II)
respectively.
As per the information and explanations given to us, no order has been
passed on the Company by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal,
relevant to Section 58A, 58AA or the other relevant provisions of the
Act.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii. We have broadly reviewed the Books of Account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for maintenance of
cost records under Section 209(1)(d) of the Companies Act, 1956 and we
are of the opinion, 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 or complete.
ix. a) According to the information and explanations given
to us except service tax Rs. 601/- no undisputed amounts payable in
respect of provident fund, investor education and protection fund,
employees'' state insurance, income-tax, sales-tax, wealth-tax,
service- tax, customs duty, excise duty, cess and other material
statutory dues were outstanding, at the year end for more than six
months from the date they became payable.
b) According to the records of the Company and the information and
explanations given to us, there are no amounts in respect of
income-tax, sales-tax, wealth- tax, service-tax, customs duty, excise
duty and cess that have not been deposited with the appropriate
authorities on account of any dispute, other than mentioned in
''Annexure-1'' to this report.
x. The Company has accumulated losses amounting to Rs.2203.69 Lacs as
at the end of the Financial Year 31st March, 2014 after reducing
therefrom Deferred Tax Assets of Rs.4985.56 Lacs. The Company has
incurred cash losses amounting to Rs.5749.86 Lacs during the financial
year ended 31st March, 2014, the Company has also incurred cash losses
amounting to Rs.147.99 Lacs during the immediately preceding financial
year.
xi. In our opinion and according to the information and explanations
given to us by the Management, the Company has not defaulted in
repayment of dues to any financial institution or bank or debenture
holders.
xii. According to the information and explanations given to us by the
Management, the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
xiii. In our opinion, considering the nature of activities carried on
by the Company during the year, the provisions of any special statute
applicable to chit fund/nidhi/ mutual benefit fund/societies are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures, and other investments. Accordingly,
the provisions of clause 4(xiv) of the Order are not applicable to the
Company.
xv. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantees for loans taken
by others from Banks or F inancial Institutions. Accordingly, the
provisions of clause 4(xv) of the Order, are not applicable to the
Company.
xvi. The Company has not raised fresh term loans during the year. The
term loans outstanding at the beginning of the year have been applied
for the purposes for which they were raised.
xvii. According to the information and explanations given to us and
based on an overall examination of the Balance Sheet of the Company, we
are of the opinion that no funds raised on short-term basis (excluding
Working Capital) have been used for long term investment.
xviii. 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, during the year. Accordingly, the
provisions of clause 4(xviii) of the Order are not applicable to the
Company.
xix. According to the information and explanations given to us, the
Company has not issued any debentures during the year and did not have
any outstanding debentures during the year. Accordingly, the provisions
of clause 4(xix) of the Order are not applicable to the Company.
xx. The Company has not raised any money by public issue during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable to the Company.
xxi. 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, and according to the information and
explanations given to us, 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.
Following are the particulars of disputed dues (provided/considered
contingent liability, as appropriate) as on 31.03.2014 on account of
Income-Tax, Sales-Tax, and Excise matters that have not been deposited
on account of dispute:-
Name of the Nature of the Amount Period to which
Statute Dues (Rs.in lacs) the Amount
relates
Sales Tax Act Entry Tax 3.02 2004-2005
3.20 2005-2006
2.54 2006-2007
11.17 2010-2011
Central Excise Modvat Credit 0.41 2003-2004
Tax
2004-2005
Central Excise Duty/Penalty 30.35 2008-2009
Act
4.01 2007-2008
10.92 2008-2009
3.94 2008-2009
0.20 2011-2012
Central Excise Penalty/Reversal 2.09 1999-2000
Act of Modvat Credit/ to
Service Tax 2005-2006
U.P.Excise Act Penalty for Low 1.85 1991-1992
Recovery
Duty/Penalty 55.42 1988-1989
Income Tax Act Pending Demand 11.25 2001-2002
23.59 2005-2006
Name of the Statute Forum where dispute is pending
Sales Tax Act Addl. Commissioner Appeal, M.nagar
Addl. Commissioner Appeal, M.nagar
Addl. Commissioner Appeal, M.nagar
Addl. Commissioner Appeal, M.nagar
Central Excise Tax High Court at Allahabad/ Lucknow
Central Excise Act CESTAT
CESTAT
CESTAT
CESTAT
Central Excise Act Commissioner (Appeal), Meerut.Commissioner
/(Asst. Commissioner)
U.P.Excise Act Excise Commissioner, Allahabad
Weight & Measurement Department
Saharanpur, High Court, Allahabad
Income Tax Act High Court, Delhi ITAT, Delhi
We have been informed that apart from above, there are no dues in
respect of Wealth-tax, Service-tax , Custom Duty which have not been
deposited on account of any dispute.
For BASANT RAM & SONS
Chartered Accountants
(Firm Regn. No. 000569N)
H. K. Chadha
Place : New Delhi Partner
Dated : 27th May, 2014 Membership No. 6470
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying fnancial statements of Sir Shadilal
Enterprises Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow
Statement for the year then ended, and a summary of signifcant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statement
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub- section (3C) of section
211 of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the fnancial 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 fnancial
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 fnancial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid fnancial 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 Proft 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 fows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") 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
statement on the matters specifed in paragraphs 4 and 5 of the Order.
2. The accumulated losses of the Company as on 31.03.2012 resulted in
more than 50% erosion of the peak Net Worth during the immediately
preceding four fnancial years which in compliance of provisions of
Section 23 (1) (a) (i) of the Sick Industrial Companies (Special
Provisions) Act, 1985 was reported by the Company to BIFR on 3.10.2012.
The Net Worth of the Company as on 31.3.2013 has been further reduced
by Rs.9.25 Crores on account of loss during the year, however Net Worth
of the Company as on 31.03.2013, is still positive.
3. 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 Proft and Loss, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) in our opinion, the Balance Sheet, Statement of Proft and Loss, and
the Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors
as on March 31, 2013, taken on record by the Board of Directors, none
of the directors is disqualifed 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.
i. a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fxed
assets except that cost and to date depreciation written off for
certain assets, was available for group of assets.
b) The Company''s programme of physical verifcation of all its fxed
assets once in three years, is in our opinion, reasonable having regard
to the size of the Company and the nature of its fxed assets. We are
informed that in accordance with the programme, no physical verifcation
of fxed assets was carried out during the year under report.
c) In our opinion, there was no substantial disposal of fxed assets
during the year.
ii. a) During the year, the inventories have been physically verifed by
the management except Material sent for job work and lying with third
party. In our opinion, the frequency of verifcation is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verifcation of inventory,
followed by the management are reasonable and adequate in relation to
the size of the Company.
c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and the book records were not material.
iii. a) The Company has not granted any loans, secured or unsecured, to
companies, frms or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956.
b) The Company has taken demand loans/fixed deposits, from companies,
frms or other parties listed in the Register maintained under Section
301 of the Companies Act, 1956.
c) The demand loans/fxed deposits were taken from eleven parties listed
in the Register maintained under Section 301 of the Companies Act, 1956
and the maximum amount involved in the transactions during the year was
Rs. 21.56 Crores and the year end balance of such loans/deposits was
Rs. 20.00 Crores.
d) In our opinion, the rate of interest and other terms and conditions
of fxed deposits taken from Directors/ Managing Director and other
parties covered in the Register maintained under Section 301 of the
Companies Act, 1956 are not, prima facie, prejudicial to the interest
of the Company. No demand loans were taken by the company except from
Directors/Managing Director, therefore the rate of interest and other
terms and conditions of such demand loans are not comparable.
e) The Company is regular in repayment of principal amount of demand
loans/fxed deposits and interest thereon.
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 fxed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
information and as per the explanations given to us, we have neither
come across nor have been informed of any instance of continuing
failure to correct major weaknesses in the aforesaid internal control
system.
v. a) In our opinion and according to the information and explanations
given to us, the contracts and arrangements that need to be entered
into the Register maintained under Section 301 of the Companies Act,
1956, have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts /
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in
respect of each party during the year have been made at prices which
appear reasonable as per information available with the Company.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of Sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public, except that the Company has not complied with
the aforesaid provisions of the Act and Acceptance of Deposit Rules
because the Company has accepted/renewed deposit in excess of
prescribed limits amounting to Rs.42.34 Lacs of deposit under rule 3
(2) (i), and amounting to Rs.190.93 Lacs covered under rule 3 (2) (ii).
As per the information and explanations given to us, no order has been
passed on the Company by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal,
relevant to Sections 58A, 58AA or the other relevant provisions of the
Act.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii. We have broadly reviewed the Books of Account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for maintenance of
cost records under Section 209(1)(d) of the Companies Act, 1956 and we
are of the opinion, 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 or complete.
ix. a) According to the information and explanations given to us and
according to the books and records examined by us, in our opinion, the
Company is regular in depositing undisputed statutory dues in respect
of provident fund, investor education and protection fund, employees''
state insurance, income-tax, sales-tax, wealth-tax, service-tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with appropriate authorities.
b) According to the records of the Company and the information and
explanations given to us, there are no amounts in respect of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess that have not been deposited with the appropriate
authorities on account of any dispute, other than mentioned in
ÂAnnexure-1'' to this report.
x. The Company does not have accumulated losses as at the end of the
Financial Year 31st March, 2013. The Company has incurred cash losses
amounting to Rs.147.99 Lacs during the financial year ended 31st March,
2013, the Company has also incurred cash losses amounting to Rs.4453.11
Lacs during the immediately preceding fnancial year.
xi. In our opinion and according to the information and explanations
given to us by the Management, the Company has not defaulted in
repayment of dues to any fnancial institution or bank or debenture
holders.
xii. According to the information and explanations given to us by the
Management, the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
xiii. In our opinion, considering the nature of activities carried on
by the Company during the year, the provisions of any special statute
applicable to chit fund/nidhi/ mutual beneft fund/societies are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures, and other investments. Accordingly,
the provisions of clause 4(xiv) of the Order are not applicable to the
Company.
xv. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantees for loans taken
by others from Banks or Financial Institutions. Accordingly, the
provisions of clause 4(xv) of the Order, are not applicable to the
Company.
xvi. The Company has not raised fresh term loans during the year. The
term loans outstanding at the beginning of the year have been applied
for the purposes for which they were raised.
xvii. According to the information and explanations given to us and
based on an overall examination of the Balance Sheet of the Company, we
are of the opinion that no funds raised on short-term basis (excluding
Working Capital) have been used for long term investment.
xviii.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, during the year. Accordingly, the
provisions of clause 4(xviii) of the Order are not applicable to the
Company.
xix. According to the information and explanations given to us, the
Company has not issued any debentures during the year and did not have
any outstanding debentures during the year. Accordingly, the provisions
of clause 4(xix) of the Order are not applicable to the Company.
xx. The Company has not raised any money by public issue during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable to the Company.
xxi. 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, and according to the information and
explanations given to us, 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.
For BASANT RAM & SONS
Chartered Accountants
(Firm Regn. No. 000569N)
H. K. Chadha
Place : New Delhi Partner
Dated : 30th May, 2013 Membership No. 6470
Mar 31, 2012
1. We have audited the Balance Sheet of Sir Shadi Lal Enterprises
Limited as at 31st March, 2012, the Statement of Profit and Loss and
also the Cash Flow Statement for the year ended on that date annexed
thereto. These Financial Statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these Financial Statements based on our audit.
2. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956, and on the basis of such
checks of books and records of the Company as we considered appropriate
and according to the information and explanations given to us, we give
in the Annexure 'A' statement on the matters specified in
paragraphs 4 and 5 of the said order.
4. In our opinion more than 50% of the peak Net Worth, during the
immediately preceding four financial years of the company, has been
eroded, which need to be reported by the company to the BIFR as
required under the provisions of Section 23(1)(a)(i) of the Sick
Industrial Companies (Special Provisions) Act, 1985.
5. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) 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;
ii) 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;
iii) 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;
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3 C) of Section 211 of
the Companies Act, 1956;
v) On the basis of written representations received from the directors,
taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2012 from being appointed as a director
in terms of clause (g) of sub-section (1) of Section 274 of the
Companies Act, 1956;
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant Accounting Policies and notes thereon and attached thereto,
give in the prescribed manner, the information required by the
Companies Act, 1956, 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 31st March, 2012;
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.
i. a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets except that cost and to date depreciation written off for
certain assets, was available for group of assets.
b) The Company's programme of physical verification of all its fixed
assets once in three years, is in our opinion, reasonable having regard
to the size of the Company and the nature of its fixed assets. We are
informed that in accordance with the programme, no physical
verification of fixed assets was carried out during the year under
report.
c) In our opinion, there was no substantial disposal of fixed assets
during the year.
ii. a) During the year, the inventories have been physically verified
by the managment except for process stores at Shamli Sugar unit and
stores and spares at Unn Sugar Unit. In our opinion, the frequency of
verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory,
where conducted, followed by the management are reasonable and adequate
in relation to the size of the Company.
c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and the book records were not material.
iii. a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956.
b) The Company has taken demand loans/fixed deposits, from companies,
firms or other parties listed in the Register maintained under Section
301 of the Companies Act, 1956.
c) The demand loans/fixed deposits were taken from seventeen parties
listed in the Register maintained under Section 301 of the Companies
Act, 1956 and the maximum amount involved in the transactions during
the year was Rs. 30.53 Crores and the year end balance of such
loans/deposits was Rs. 21.31 Crores.
d) In our opinion, the rate of interest and other terms and conditions
of fixed deposits taken from Directors / Managing Director and other
parties covered in the Register maintained under Section 301 of the
Companies Act, 1956 are not, prima facie, prejudicial to the interest
of the Company. No demand loans were taken by the company except from
Directors/Managing Director, therefore the rate of interest and other
terms and conditions of such demand loans are not comparable.
e) The Company is regular in repayment of principal amount of demand
loans/fixed deposits and interest thereon.
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. Further, on the basis of our examination of the books and
information and as per the explanations given to us, we have neither
come across nor have been informed of any instance of continuing
failure to correct major weaknesses in the aforesaid internal control
system.
v. a) In our opinion and according to the information and explanations
given to us, the contracts and arrangements that need to be entered
into the Register maintained under Section 301 of the Companies Act,
1956, have been so entered.
b) In our opinion and according to the information and explanations
given to us, that during the year there were no transactions exceeding
value of Rupees five lacs that need to be entered into the Register in
pursuance of contracts or arrangements referred to in Section 301 of
the Companies Act, 1956.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of Sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. As per the information and explanations given
to us, no order has been passed on the Company by the Company Law Board
or National Company Law Tribunal or Reserve Bank of India or any Court
or any other Tribunal, relevant to Sections 58A, 58AA or the other
relevant provisions of the Act.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii. We have broadly reviewed the Books of Account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for maintenance of
cost records under Section 209(1)(d) of the Companies Act, 1956 and we
are of the opinion, 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 or complete.
ix. a) According to the information and explanations given to us and
according to the books and records examined by us, in our opinion, the
Company is regular in depositing undisputed statutory dues in respect
of provident fund, investor education and protection fund, employees'
state insurance, income-tax, sales-tax, wealth-tax, service-tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with appropriate authorities.
b) According to the records of the Company and the information and
explanations given to us, there are no amounts in respect of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess that have not been deposited with the appropriate
authorities on account of any dispute, other than mentioned in '
Annexure-1' to this report.
x. The Company does not have accumulated losses as at the end of the
Financial Year 31st March, 2012. The Company has incurred cash losses
amounting to Rs.4453.11 Lacs during the financial year ended 31st
March, 2012, the Company has also incurred cash losses amounting to
Rs.439.20 Lacs during the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us by the Management, the Company has not defaulted in
repayment of dues to any financial institution or bank or debenture
holders.
xii. According to the information and explanations given to us by the
Management, the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
xiii. In our opinion, considering the nature of activities carried on
by the Company during the year, the provisions of any special statute
applicable to chit fund/nidhi/ mutual benefit fund/societies are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures, and other investments. Accordingly,
the provisions of clause 4(xiv) of the Order are not applicable to the
Company.
xv. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantees for loans taken
by others from Banks or Financial Institutions. Accordingly, the
provisions of clause 4(xv) of the Order, are not applicable to the
Company.
xvi. According to the information and explanations given to us, in our
opinion, the term loans have been applied for the purpose for which
they were raised.
xvii. According to the information and explanations given to us and
based on an overall examination of the Balance Sheet of the Company, we
are of the opinion that no funds raised on short-term basis (excluding
Working Capital) have been used for long term investment.
xviii.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, during the year. Accordingly, the
provisions of clause 4(xviii) of the Order are not applicable to the
Company.
xix. According to the information and explanations given to us, the
Company has not issued any debentures during the year and did not have
any outstanding debentures during the year. Accordingly, the provisions
of clause 4(xix) of the Order are not applicable to the Company.
xx. The Company has not raised any money by public issue during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable to the Company.
xxi. 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, and according to the information and
explanations given to us, 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-1 as referred to in para ix. (b) of Annexure 'A' to the
Auditors' Report of even date to the members of Sir Shadi Lal
Enterprises Limited on the accounts for the year ended 31st March,
2012).
Following are the particulars of disputed dues (provided/considered
contingent liability, as appropriate) as on 31.03.2012 on account of
Income-Tax, Sales-Tax, and Excise matters that have not been deposited
on account of dispute:-
Name of the Nature of the Amount Period to
which Forum where dispute
is
Statute Dues (Rs.in
lacs) the Amount pending
relates
Sales Tax
Act Entry Tax 93.83 2004-2005 High Court at
Allahabad
1.71 2008-2009 Jt. Commissioner
(Appeals)
19.22 2009-2010 Jt. Commissioner
(Appeals)
Central
Excise Tax Modvat Credit 0.41 2003-2004 High Court at
Allahabad/ Lucknow
2004-2005
Central
Excise Act Duty/Penalty 12.64 2007-2008 Commissioner Appeal
30.35 2008-2009 Commissioner Appeal
0.66 2007-2008 Commissioner Appeal
5.01 2007-2008 Commissioner Appeal
10.92 2008-2009 Commissioner Appeal
21.40 2008-2009 Commissioner Appeal
3.94 2008-2009 Commissioner Appeal
Central
Excise Act Penalty/Reversal 2.09 1999-2000 Commissioner/
(Asstt.
of Modvat to Commissioner)
Credit/ Service 2005-2006
Tax
U.P. Excise
Act Penalty for Low 1.85 1991-1992 Excise Commissioner,
Allahabad
Recovery 55.42 1988-1989 Weight & Measurement
Department
Duty/Penalty Saharanpur.
Income Tax
Act Pending Demand 11.25 2002-2003 DCIT, CC-19, Delhi
44.40 2003-2004 DCIT, CC-19, Delhi
23.59 2005-2006 DCIT, CC-19, Delhi
We have been informed that apart from above, there are no dues in
respect of Wealth-tax, Service-tax , Custom Duty which have not been
deposited on account of any dispute.
For BASANT RAM & SONS
Chartered Accountants
(Firm Regn. No. 000569N)
H.K. Chadha
Place : New Delhi Partner
Dated : 14th July, 2012 Membership No. 6470
Mar 31, 2011
1. We have audited the attached Balance Sheet of Sir Shadi Lal
Enterprises Limited as at 31st March, 2011, the Profit and Loss Account
and also the Cash Flow Statement for the year ended on that date
annexed thereto. These Financial Statements are the responsibility of
the CompanyÃs Management. Our responsibility is to express an opinion
on these Financial Statements based on our audit.
2. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003 as
amended by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956, and on the basis of such
checks of books and records of the Company as we considered appropriate
and according to the information and explanations given to us, we give
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) 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;
ii) 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;
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv) In our opinion, the Balance Sheet, Profit and 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;
v) On the basis of written representations received from the directors,
and taken on record by the Board of Directors, we report that none of
the directors is disqualified as on 31st March, 2011 from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956;
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with the
significant Accounting Policies and notes thereon and attached thereto,
give in the prescribed manner, the information required by the
Companies Act, 1956, 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 31st March, 2011;
b) In the case of the Profit and Loss Account, 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.
ANNEXURE TO THE AUDITORSÃ REPORT
(Referred to in paragraph 3 of Auditorsà Report of even date to the
Members of Sir Shadi Lal Enterprises Limited on the accounts for the
year ended 31st March, 2011)
i. a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets except that cost and to date depreciation written off for
certain assets, was available for group of assets.
b) The CompanyÃs programme of physical verification of all its fixed
assets once in three years, is in our opinion, reasonable having regard
to the size of the Company and the nature of its fixed assets. Pursuant
to such programme, a physical verification of fixed assets was carried
out during the year and we are informed that no material discrepancies
between the book record and physical inventory have been noticed on
such verification.
c) The Company has disposed off its distillery unit namely ÃPilkhani
Distillery & Chemical WorksÃ, apart from which, in our opinion, the
Company has not disposed off any other substantial part of fixed assets
during the year, and the going concern status of the Company is not
affected.
ii. a) During the year, the inventories have been physically verified
by the management except Material sent for job work and lying with
third party. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and the book records were not material.
iii. a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956.
b) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956, except demand loans/
fixed deposits.
c) The demand loans/fixed deposits were taken from eighteen parties
listed in the Register maintained under Section 301 of the Companies
Act, 1956, and the maximum amount involved in the transactions during
the year was Rs. 31.78 Crores and the year end balance of such
loans/deposits was Rs. 30.51 Crores.
d) In our opinion, the rate of interest and other terms and conditions
of demand loans/fixed deposits taken from Directors / Managing Director
and other parties covered in the Register maintained under Section 301
of the Companies Act, 1956, are not, prima facie, prejudicial to the
interest of the Company.
e) The Company is regular in repayment of principal amount of demand
loans/fixed deposits and interest thereon.
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. Further, on the basis of our examination of the books and
information and as per the explanations given to us, we have neither
come across nor have been informed of any instance of continuing
failure to correct major weaknesses in the aforesaid internal control
system.
v. a) In our opinion and according to the information and explanations
given to us, the contracts and arrangements that need to be entered
into the Register maintained under Section 301 of the Companies Act,
1956, have been so entered.
b) In our opinion and according to the information and explanations
given to us, that during the year there were no transactions exceeding
value of Rupees five lacs that need to be entered into the Register in
pursuance of contracts or arrangements referred to in Section 301 of
the Companies Act, 1956.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of Sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956, and the Companies
(Acceptance of Deposits) Rules, 1975
with regard to the deposits accepted from the public. As per the
information and explanations given to us, no order has been passed on
the Company by the Company Law Board or National Company Law Tribunal
or Reserve Bank of India or any Court or any other Tribunal, relevant
to Sections 58A, 58AA or the other relevant provisions of the Act.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii. We have broadly reviewed the Books of Account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for maintenance of
cost records under Section 209(1)(d) of the Companies Act, 1956, and we
are of the opinion, 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 or complete.
ix. a) According to the information and explanations given to us and
according to the books and records examined by us, in our opinion, the
Company is regular in depositing undisputed statutory dues in respect
of provident fund, investor education and protection fund, employeesÃ
state insurance, income-tax, sales-tax, wealth-tax, service-tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with appropriate authorities.
b) According to the records of the Company and the information and
explanations given to us, there are no amounts in respect of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess that have not been deposited with the appropriate
authorities on account of any dispute, other than mentioned in
ÃAnnexure-1Ã to this report.
x. The Company does not have accumulated losses as at the end of the
Financial Year 31st March, 2011. The Company has incurred cash losses
amounting to Rs. 436.68 Lacs during the financial year ended 31st
March, 2011 but the Company has not incurred any cash losses during the
immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us by the Management, the Company has not defaulted in
repayment of dues to any financial institution or bank or debenture
holders.
xii. According to the information and explanations given to us by the
Management, the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
xiii. I n our opinion, considering the nature of activities carried on
by the Company during the year, the provisions of any special statute
applicable to chit fund/nidhi/ mutual benefit fund/societies are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures, and other investments. Accordingly,
the provisions of clause 4(xiv) of the Order are not applicable to the
Company.
xv. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantees for loans taken
by others from Banks or Financial Institutions. Accordingly, the
provisions of clause 4(xv) of the Order, are not applicable to the
Company.
xvi. According to the information and explanations given to us, in our
opinion, the term loans have been applied for the purpose for which
they were raised.
xvii. According to the information and explanations given to us and
based on an overall examination of the Balance Sheet of the Company, we
are of the opinion that no funds raised on short-term basis (excluding
Working Capital) have been used for long term investment.
xviii.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, during the year. Accordingly, the
provisions of clause 4(xviii) of the Order are not applicable to the
Company.
xix. According to the information and explanations given to us, the
Company has not issued any debentures during the year and did not have
any outstanding debentures during the year. Accordingly, the provisions
of clause 4(xix) of the Order are not applicable to the Company.
xx. The Company has not raised any money by public issue during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable to the Company.
xxi. 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, and according to the information and
explanations given to us, 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.
For BASANT RAM & SONS
Chartered Accountants
(Firm Regn. No. 000569N)
H. K. Chadha
Partner
Membership No. 6470
Place : New Delhi
Dated : 16th July, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Sir Shadi Lal
Enterprises Limited as at 31st March, 2010 and also the Profit & Loss
Account and the Cash Flow Statement for the year ended on that date
annexed thereto. These Financial Statements are the responsibility of
the Companys Management. Our responsibility is to express an opinion
on these Financial Statements based on our audit.
2. We have conducted our audit in accordance with Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
Financial Statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Financial Statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall Financial Statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 as
amended by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956, and on the basis of such
checks as we considered appropriate and according to the information
and explanations given to us, we set out in the Annexure ÃA statement
on the matters specified in paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) 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;
ii) 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;
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the Books of Account;
iv) 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;
v) On the basis of written representations received from the Directors,
and taken on record by the Board of Directors, we report that none of
the Directors is disqualified as on 31st March, 2010 from being
appointed as a Director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956;
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
other notes thereon and attached thereto, give in the prescribed manner
the information required by the Companies Act, 1956, 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 31st March, 2010;
b) In the case of the Profit & Loss Account, of the Profit for the year
ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
ANNEXURE A TO THE AUDITORS REPORT
(Referred to in paragraph 3 of Auditors Report of even date to the
Shareholders of Sir Shadi Lal Enterprises Limited on the accounts for
the year ended 31st March, 2010)
i. a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets except that cost and todate depreciation written off for certain
assets, was available for group of assets.
b) The Companys programme of physical verification of all its fixed
assets once in three years, is in our opinion, reasonable having regard
to the size of the Company and the nature of its fixed assets. We are
informed that in accordance with the programme, no physical
verification of fixed assets was carried out during the year under
report.
c) In our opinion, there was no substantial disposal of fixed assets
during the year.
ii. a) During the year, the inventories have been physically verified
by the management except material sent for job work and lying with
third party. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and the book records were not material.
iii. a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956.
b) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956 except demand loans/ fixed
deposits.
c) The demand loans/fixed deposits were taken from eighteen parties
listed in the Register maintained under Section 301 of the Companies
Act, 1956 and the maximum amount involved in the transactions during
the year was Rs. 33.64 crores and the year end balance of such loans/
deposits was Rs. 30.73 crores.
d) In our opinion, the rate of interest and other terms and conditions
of demand loans/fixed deposits taken from Directors / Managing Director
and other parties covered in the Register maintained under Section 301
of the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the Company.
e) The Company is regular in repayment of principal amount of demand
loans/fixed deposits and interest thereon.
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. Further, on the basis of our examination of the books and
information and as per the explanations given to us, we have neither
come across nor have been informed of any instance of continuing
failure to correct major weaknesses in the aforesaid internal control
system.
v. a) In our opinion and according to the information and explanations
given to us, the contracts and arrangements that need to be entered
into the Register maintained under Section 301 of the Companies Act,
1956, have been so entered.
b) In our opinion and according to the information and explanations
given to us, that during the year there were no transactions exceeding
value of Rupees five lacs that need to be entered into the Register in
pursuance of contracts or arrangements referred to in Section 301 of
the Companies Act, 1956.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of Sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. As per the information and explanations given
to us, no order has been passed on the Company by the Company Law Board
or National Company Law Tribunal or Reserve Bank of India or any Court
or any other
Tribunal, relevant to Sections 58A, 58AA or the other relevant
provisions of the Act.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii. We have broadly reviewed the Books of Account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for maintenance of
cost records under Section 209(1)(d) of the Companies Act, 1956, and we
are of the opinion, 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 or complete.
ix. a) According to the information and explanations given to us and
according to the books and records examined by us, in our opinion, the
Company is regular in depositing undisputed statutory dues in respect
of provident fund, investor education and protection fund, employees
state insurance, income-tax, sales-tax, wealth-tax, service-tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with appropriate authorities.
b) According to the records of the Company and the information and
explanations given to us, there are no amounts in respect of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess that have not been deposited with the appropriate
authorities on account of any dispute, other than mentioned in
Annexure-1 to this report.
x. The Company does not have accumulated losses as at the end of the
Financial Year 31st March, 2010. The Company has not incurred cash
losses during the financial year ended on that date or in the
immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us by the Management, the Company has not defaulted in
repayment of dues to any Financial Institution or Bank or
Debentureholders.
xii. According to the information and explanations given to us by the
Management, the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
xiii. In our opinion, considering the nature of activities carried on
by the Company during the year, the provisions of any special statute
applicable to chit fund/ nidhi/ mutual benefit fund/societies are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures, and other investments. Accordingly,
the provisions of clause 4(xiv) of the Order are not applicable to the
Company.
xv. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantees for loans taken
by others from Banks or Financial Institutions. Accordingly, the
provisions of clause 4(xv) of the Order, are not applicable to the
Company.
xvi. According to the information and explanations given to us, in our
opinion, the term loans have been applied for the purpose for which
they were raised.
xvii. According to the information and explanations given to us and
based on an overall examination of the Balance Sheet of the Company, we
are of the opinion that no funds raised on short-term basis (excluding
Working Capital) have been used for long term investment.
xviii.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, during the year. Accordingly, the
provisions of clause 4(xviii) of the Order are not applicable to the
Company.
xix. According to the information and explanations given to us, the
Company has not issued any debentures during the year and did not have
any outstanding debentures during the year. Accordingly, the provisions
of clause 4(xix) of the Order are not applicable to the Company.
xx. The Company has not raised any money by public issue during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable to the Company.
xxi. 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, and according to the information and
explanations given to us, 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.
For BASANT RAM & SONS
Chartered Accountants
(Registration No. 000569N)
H. K. Chadha
Partner
Membership No. 6470
Place : New Delhi
Dated : 17th July, 2010