The Members of Zuari Global Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Zuari Global Limited ("theCompany"), which comprise the Balance Sheet as at 31st March, 2013, and the Statementof Profit and Loss and Cash Flow Statement for the year then ended, and a summary ofsignificant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position, financial performance and cash flows of theCompany in accordance with accounting principles generally accepted in India, includingthe Accounting Standards referred to in sub-section (3C) of Section 211 of the CompaniesAct, 1956 ("the Act"). This responsibility includes the design, implementationand maintenance of internal control relevant to the preparation and presentation of thefinancial statements that give a true and fair view and are free from materialmisstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management, aswell as evaluating the overall presentation of the financial statements. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
Basis for Qualified Opinion
As referred in Note 9(a)(ii), the Company is carrying investments of Rs. 6944.09 lacsin the equity share capital of Nagarjuna Oil Refinery Limited (NORL), whereof the marketvalue at the year-end is Rs. 894.70 lacs. These shares were allotted to the Companyconsequent to demerger/merger scheme of Nagarjuna Fertiliser and Chemcals Limited (NFCL).The Company further holds 32267741 equity shares in NFCL which are yet to be listed on thestock exchange pending receipt of permission from Securities Exchange Board of India.These equity shares in NFCL are carried at value of Rs. 2115 lacs. The Company has notmade provision for diminution in the value of investment in NROL, in view of long termstrategic investments in the said company and upon which we are unable to comment onincluding consequential effects, if any, the accompanying financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us, except for the possible effects of the matter described in the Basis forQualified Opinion paragraph, the financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as atMarch 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for the year endedon that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended onthat 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 ofthe Companies Act, 1956, we give in the Annexure a statement on the matters specified inparagraphs 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 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 appears from our examination of those books ;
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the CashFlow Statement comply with the Accounting Standards referred to in subsection (3C) ofSection 211 of the Companies Act, 1956;
(e) On the basis of written representations received from the Directors as on 31stMarch, 2013, and taken on record by the Board of Directors, none of the Directors isdisqualified as on 31st March, 2013, from being appointed as a Director in terms of clause(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
For S.R. BATLIBOI & CO. LLP
Firm's Registration No.: 301003E
per Anil Gupta
Membership No.: 87921
Place : Gurgaon
Date : 9th May, 2013
Annexure referred to in paragraph  of our report of even date
Re: Zuari Global Limited
(i) (a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the management in a phased manner overa period of two years and accordingly, part of the fixed assets were physically verifiedduring the year and the discrepancies observed on such verification, as compared to thebook records, were not material. In our opinion, the frequency of physical verification isreasonable having regard to the size of the Company and the nature of the assets.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of inventory at reasonableintervals during the year.
(b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) The Company is maintaining proper records of inventory and no materialdiscrepancies were noticed on physical verification.
(iii) (a) The Company has granted loans to 5 companies covered in the registermaintained under Section 301 of the Companies Act, 1956. The maximum amount involvedduring the year was Rs. 18934.30 lacs and the year end balance or loans balance of loansgranted to such parties was Rs. 14759.30 lacs.
(b) In our opinion and according to the information and explanations given to us, therate of interest and other terms and conditions for such loans are not prima facieprejudicial to the interest of the Company.
(c) In respect of loans granted, repayment of the principal amount is as stipulated andpayment of interest has been regular.
(d) There is no overdue amount of loans granted to companies listed in the registermaintained under Section 301 of the Companies Act, 1956.
(e) As informed, the Company has not taken any loans, secured or unsecured fromcompanies, firms or other parties covered in the register maintained under Section 301 ofthe Companies Act, 1956, Therefore, the provisions of clause 4(f) and (g) of the Companies(Auditor's Report) Order 2003 (as amended) are not applicable to the Company and hence notcommented upon.
(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 andthe nature of its business, for the purchase of inventory and fixed assets and for thesale of goods. During the course of our audit, we have not observed any major weakness orcontinuing failure to correct any major weakness in the internal control system of thecompany in respect of these areas. During the course of our audit, we have not observedany continuing failure to correct major weakness in internal control system of thecompany.
(v) (a) According to the information and explanations provided by the management, weare of the opinion that particulars of contracts or arrangements referred to in Section301 of the Act that need to be entered into the register maintained under Section 301 havebeen so entered.
(b) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of such contracts or arrangements exceeding value of Rs.five lacs have been entered into during the financial year at prices which are reasonablehaving regard to the prevailing market prices at the relevant time.
(vi) In respect of deposits accepted in earlier years, in our opinion and according tothe information and explanations given to us, directives issued by the Reserve Bank ofIndia and the provisions of Sections 58A, 58AA or any other relevant provisions of theCompanies Act, 1956 and the rules framed thereunder, to the extent applicable, have beencomplied with. We are informed by the management that no order has been passed by theCompany Law Board, National Company Law Tribunal or Reserve Bank of India or any Court orany other Tribunal.
(vii) In our opinion, the Company has an internal audit system commensurate with thesize and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records underSection 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, theprescribed accounts and records have been made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor education andprotection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, servicetax, customs duty, excise duty, cess and other material statutory dues have generally beenregularly deposited with the appropriate authorities.
(b) According to the information and explanations given to us, no undisputed amountspayable in respect of provident fund, investor education and protection fund, employees'state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, exciseduty, cess and other material undisputed statutory dues were outstanding, at the year end,for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of income-tax,sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of anydispute, are as follows:
|Name of the statute ||Nature of dues ||Amount (Rs. In Lacs) ||Period to which amount relates (AY) ||Forum where dispute is pending |
|Income Tax Act ||Demand in respect of assessment proceedings ||4,995.82 ||1999-2000 ||Commissioner of Income Tax (Appeals) |
| || || ||2009-2010 || |
| || || ||2010-2011 || |
(x) The Company has no accumulated losses at the end of the financial year and it hasnot incurred cash losses in the current and immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and explanations given bythe management, we are of the opinion that the Company has not defaulted in repayment ofdues to banks. The Company did not have any outstanding debentures and loan from financialinstitution during the year.
(xii) According to the information and explanations given to us and based on thedocuments and records produced to us, the Company has not granted loans and advances onthe basis of security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report)Order, 2003 (as amended) 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 theCompanies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the Company has givenguarantee for loans taken by others from bank or financial institutions, the terms andconditions whereof in our opinion are not prima-facie prejudicial to the interest of theCompany.
(xvi) Based on information and explanations given to us by the management, term loanswere applied for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company, we report that no funds raised onshort-term basis have been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares to parties orcompanies covered in the register maintained under Section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money through a public issue during the year.
(xxi) Based upon the audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and as per the information and explanationsgiven by the management, we report that no fraud on or by the Company has been noticed orreported during the year.
For S.R. BATLIBOI & CO. LLP
Firm's Registration No.: 301003E
per Anil Gupta
Membership No.: 87921
Place : Gurgaon
Date : 9th May, 2013