AUDITORSTo the Members of
SHREE RENUKA SUGARS LTD
We have audited the Balance Sheet of SHREE RENUKA SUGARS LTD as at September 30,2010, the Profit and Loss Account and Cash Flow Statement for the year ended as on thatdate both annexed thereto. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on these financialstatements based on our audit.
1. We conducted our audit in accordance with auditing standards generally acceptedin India. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material mis-statement. Anaudit includes examining on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.
2. As required by The Companies (Auditor's Report) Order 2003, issued by theCentral Government of India in terms of sub-section (4A) of section 227 of the CompaniesAct, 1956, we enclose in the Annexure hereto a statement on the matters specified inparagraphs 4 and 5 of the said Order.
3. Further to our comments in the Annexure referred to in paragraph 2 above, wereport that:
a) We have obtained all the information and explanations which to the best of ourknowledge 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 theCompany, so far as it appears from our examination of those books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account;
d) In our opinion, the Balance Sheet and Profit and Loss Account and Cash FlowStatement dealt with by this report comply with the mandatory Accounting Standardsreferred in sub-section (3C) of section 211 of the Companies Act, 1956;
e) In our opinion, and based on information and explanations given to us, none ofthe directors are disqualified as on September 30, 2010 from being appointed as directorsin terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to theexplanations given to us, the said accounts read together with the Significant AccountingPolicies and other notes thereon give the information required by the Companies Act, 1956in the manner so required, and present a true and fair view in conformity with theaccounting principles generally accepted in India:
(i) in so far as it relates to the Balance Sheet of the state of affairs of the Companyas at September 30, 2010.
(ii) in so far as it relates to the Profit and Loss Account of the Profit of theCompany for the year ended on that date; and
(iii) in so far as it relates to the Cash Flow Statement, of the cash flows of theCompany for the year ended on that date.
For Ashok Kumar, Prabhashankar & Co.
Chartered Accountants
Firm Regn No. 004982S
K. N. Prabhashankar
Partner
Membership No. 19575
Place: Mumbai
Date: February 11, 2011
ANNEXURE TO AUDITORS’ REPORT
Referred to in Paragraph 2 of our report of even date
1. a. The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets on the basis of availableinformation.
b. As explained to us, all fixed assets have been physically verified by themanagement during the year in a phased periodical manner, which in our opinion isreasonable, having regard to the size of the Company and nature of its assets. No materialdiscrepancies were noticed on such physical verification. c. In our opinion, theCompany has not disposed of substantial part of fixed assets during the year and the goingconcern status of the Company is not affected.
2. a. As explained to us, inventories have been physically verified by themanagement at regular intervals.
b. In our opinion and according to the information and explanations given to us,the procedures of physical verification of inventories followed by the management isreasonable and is adequate in relation to the size of the Company and nature of itsbusiness.
c. The Company has maintained proper records of inventories. As explained to us,there were no material discrepancies noticed on physical verification of inventory ascompared to the book records.
3. In respect of the loans, secured or unsecured granted or taken by the company to/ from companies, firms or other parties covered in the Register maintained under section301 of the Companies Act, 1956:
a. The company has not taken any loans during the year.
b. The Company has given loans to four subsidiary companies. In respect of the saidloan, the maximum amount outstanding at any time during the year was Rs. 1,169.67 Millionand the year- end balance is Rs. 927.86 Million.
c. In our opinion and according to the information and explanations given to us,the rate of interest and other terms and conditions, are not prima facie prejudicial tothe interest of the company.
d. The principal amount is repayable on demand and there is no repayment schedule.The company is regular in payment and receipt of interest.
e. In respect of the said loan, the same is repayable on demand and therefore thequestion of overdue amount does not arise. In respect of interest there is no over dueamount.
4. In our opinion and according to the information and explanations given to us,there is an adequate internal control procedure commensurate with the size of the Companyand nature of its business for the purchase of inventory, fixed assets and also for thesale of goods and services. During the course of our audit, we have not observed anycontinuing failure to correct major weaknesses in internal control.
5. a. In our opinion and according to the information and explanations givento us, the transactions made in pursuance of contracts or arrangements, that needed to beentered in the register maintained under section 301 of the Companies Act, 1956 have beenso entered.
b. In our opinion and according to the information and explanations given to uswhere such transaction is in excess of Rs. 5 Lakhs, the transaction has been made atprices which is prima facie reasonable having regard to the prevailing market prices atthe relevant time and they are not prejudicial in the interest of the Company.
6. According to the information and explanations given to us, the company has notaccepted any deposits from the public within the meaning of provisions of Section 58A and58AA of the Companies Act, 1956 and the rules framed thereunder. Hence clause (vi) of theorder is not applicable.
7. In our opinion, the Company has an internal audit system commensurate with thesize and nature of its business.
8. The Central Government has prescribed maintenance of cost records under Section209(1) (d) of the Companies Act, 1956 for some products of the company. We have broadlyreviewed these records of the company and we are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However, we have notcarried out a detailed examination of such records.
9. a. According to the records of the Company and as per the information andexplanations given to us, the Company does not have any undisputed statutory duesincluding ESI, Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, CustomDuty, Excise Duty, Cess and any other statutory dues which are outstanding for a period inexcess of six months as on September 30, 2010.The Company is not having Investor Educationand Protection Fund.
b. According to the information and explanations given to us and as per the recordsexamined by us, there were no disputed amounts due in respect of Sales Tax, Income Tax,Customs Duty, Wealth Tax, Excise Duty and Cess as on September 30, 2010.
10. The Company has no accumulated losses and has not incurred any cash lossesduring the financial year covered by our audit or in the immediately preceding financialyear.
11. Based on our audit procedures and according to the information and explanationsgiven to us, we are of the opinion that the Company has not defaulted in repayment of duesto financial institutions or banks or debenture holders.
12. In our opinion and according to the explanations given to us and based on theinformation available, no loans and advances have been granted by the Company on the basisof security by way of pledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefitfund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’sReport) Order 2003 are not applicable to the Company.
14. The Company is trading in shares, securities and other investments. In ouropinion proper records have been maintained of the transactions and contracts entered bythe Company and timely entries have been made therein. These investments are held by theCompany in its own name.
15. The Company has given guarantees for loans taken by others from banks orfinancial institutions. According to the information and explanations given to us, we areof the opinion that the terms and conditions thereof are not prima facie prejudicial tothe interests of the company.
16. The term loans borrowed during the year have been utilised for the purposes forwhich they were raised.
17. According to the information and explanation given to us and on an overallexamination of the Balance Sheet of the Company, we are of the opinion that there are nofunds raised on short-term basis that have been used for long-term investment.
18. a. The Company has made preferential allotment of shares tocompanies/parties covered in the register maintained under section 301 of the CompaniesAct, 1956.
b. As per the information and explanations given to us the price at which suchpreferential allotment of shares made is not prejudicial to the interest of the Company.
19. During the year covered by our Audit Report, the Company has not issued anyDebentures.
20. The company has not raised any money by way of public issues during the year.
21. In our opinion and according to the Information and explanations given to us,no fraud on or by the company has been noticed or reported during the year that causes thefinancial statements to be materially mis-stated.
For Ashok Kumar, Prabhashankar & Co.
Chartered Accountants
Firm Regn No. 004982S
K. N. Prabhashankar
Partner
Membership No. 19575
Place: Mumbai
Date: February 11, 2011