Independent Auditors
to the members of Jalpac India Limited –
Report on the financial statements
A) Report on Financial Statements
We have audited the accompanying financial statements of Jalpac India Limited,
which comprise the Balance Sheet as at 31st March 2013, the Statement of the Profit and
Loss and the Cash Flow Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
B) Management’s responsibility for the financial statements
Management is responsible for the preparation of these financial statements that give a
true and fair view of the financial position, financial performance and cash flows of the
company in accordance with the accounting principles generally accepted in India including
Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act,
1956("the Act"). This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
C) 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
the 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 assessment of risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the company’s preparation and fair
presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting estimates made by 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.
D) Basis for Qualified Opinion:-
Attention is invited to the following Sub-Notes of Note No.2:
i. Note no. 14 regarding preparation of accounts of the company on a going concern
basis (impact unascertained) for the reason as stated in said note. Even, company’s
accumulated losses are in excess of net worth of the company and the company is a sick
industrial company, which has been declared by Hon’ble BIFR’s Order dated
05.09.2006 and Vide order dt. 10.07.2012 recommendation for winding up of the Company BIFR
to Hon’ble Uttrakhand High Court.
ii. Note No. 4(a) and 4(b)[read with note no. 4(c)] regarding non provision against
custom duty saved on raw material consumed under advance license and fiscal penalty
imposed respectively as stated in the said notes and on account of non fulfillment of
export obligation.(impact unascertainable)
iii. Note No. 11 (a) & (b) regarding non-provision for shortfall in recovery
against trade receivables and loans & advances for which recovery action has been
initiated (amount unascertainable) as stated in the said note.
iv. Note No. 12 in respect of non confirmation/ reconciliation of balances of trade
receivables, trade payables, Other Current Liabilities (including Statutory Dues) &
Provisions , certain Long Term Loans & Advances, certain Short Term Loans &
Advances , certain Secured loans, Unapplied Interest on Secured Loans, Unsecured Loans,
certain Bank Balances, Fixed Deposits & Margin Money, Contingent liabilities
considered as ascertained by the management, consequential impact whereof presently cannot
be ascertained.
v. Note No. 15(b) & (c) In respect of non payment of certain statutory dues and
non-filing of certain statutory returns/forms w.r.t. Employee State Insurance, Provident
Fund, Tax Deducted at source, Service Tax, Sales Tax [read with note no. 1(iii)], Excise
Duty and other taxes (including accounting of Penalty, Interest, etc.) (amount
unascertainable) and our inability to comment thereon.
vi. Note No. 13 regarding non-provision of losses (impact unascertainable) on account
of impairment of assets in use for the reason stated in the said note and in the absence
of supportive audit evidence our inability to comment thereon.
vii. Note No. 15(a) regarding the non-provision of interest and penal interest etc.
(amount unascertained).
viii.Note No. 16(a) regarding pending appointment of Company Secretary,
compilation/updation of secretarial records and other non-compliance as stated in the said
note.
ix. Note No. 16(b) regarding non- availability of full item wise detail of finished
goods, raw material and stores & spares and valuation of inventory have been
considered as taken and valued by the management (impact presently could not be
ascertained).
x. Note No. 2.19 regarding managerial remuneration amounting to Rs.739 Thousands paid
to an executive director is subject to requisite approval of Central Government.
xi. In view of our comment under para (i) to (x) above and on our comments in terms of
Sec.227(4A)(CARO) the internal control system needs to be further strengthened to be made
the same { read with note no. 12, 15 and 16(b) and 16 (c)} 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.
We further report that the loss for the year, balance in profit & loss statement,
current liabilities and Provisions, current assets and secured loans are without
considering the impact of items mentioned above, the impact of which could not be
determined and otherwise.
E) Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described under the head "Basis for
Qualified Opinion" paragraph, the financial statements read together the note no. 2.3
and other Notes thereon, 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 31st
March 2013,
b. In case of the Statement of the Profit and Loss, of the loss for the year ended on
that date, and
c. In case of the Cash Flow Statement, of the cash flows for the year ended on that
date.
F) Report on other legal and the regulatory requirements:
1. As required by the Companies (Auditors’ Report) Order, 2003 (The Order) (As
Amended) issued by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956 (The Act), we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in Paragraph 1 above, we report
that:
(a)We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit, read with our comments
in para D above;
(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, read with our comments in
para 2(a) above :
(c)The Balance Sheet, Profit & Loss Statement and Cash Flow Statement dealt with by
this report are in agreement with the books of account;
(d)In our opinion, the Balance Sheet, Profit & Loss Statement and Cash Flow
Statement dealt with by this report comply with the Accounting Standards referred to in
Section 211 (3C) of the Companies Act, 1956.
(e)On the basis of written representations received from the directors of the company
and information and explanations given to us, we report that none of the directors is
disqualified 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 LODHA & CO. |
| Firm Registration No-301051E |
Chartered Accountants |
|
N. K. LODHA |
| Place : New Delhi |
(Partner) |
| Date : 24.7.2013 |
Membership No.: - 85155 |
ANNEXURE
(Referred to in paragraph (1) of under the heading "Report on other legal and
regulatory requirements" of our report of even date of JALPAC INDIA LIMITED for the
year ended 31st March 2013
1. (a) The Company has maintained proper records in respect of its fixed assets showing
full particulars including quantitative details and situation of fixed assets except in
respect of certain assets where these records are in the process of updation in respect of
identification, quantitative details and location/ situation.
(b) As per information and explanations given to us, certain fixed assets have been
physically verified by the Management [read with note no.2.16 (b)] according to the
programme of physical verification once in every three years in phased manner, which in
our opinion, is reasonable having regard to the size of the Company and the nature of its
Fixed Assets. The discrepancies noticed on such physical verification were not material.
(c) As per the records and information and explanations given to us, fixed assets
disposed off during the year were not substantial.
2. (a) As per the records and information and explanations given to us, the inventory
of the company (except stocks lying with the third parties) has been physically verified
by the management [read with note no.2.16 (b) and para D (ix) above] during the year.
(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 [read with
note no. 2.16 (b) and para D (ix) above].
(c) In our opinion and according to the information and explanations given to us, the
company has maintained proper records of inventory excluding work in progress where stocks
are updated as and when physical verification has been carried out [read with note no.
2.16 (b) and para (b) above]. The discrepancies noticed on such physical verification of
inventory as compared to book records were not material.
3. (a) The Company has not granted any loans, secured/ unsecured to companies, firms or
other parties covered in the register maintained under section 301 of the Companies Act,
1956. Accordingly, the provisions of clause 4 (iii) (b) to (d) of the Order are not
applicable to the Company. (e) As per the information and records made available, during
the year Company has taken unsecured loan from two parties covered in the register
maintained under section 301 of the Companies Act, 1956.
The maximum balance involved during the year and the year-end balance of loan was Rs
29559 Thousands and Rs. 29559 Thousands respectively.
(f) As per the information and explanations given to us, the terms and conditions on
which loan has been taken to/by the company are not, prima facie prejudicial to the
interest of the Company.
(g) In accordance with the information and explanations given to us, in respect of the
aforesaid loans, there were no as such stipulated terms (schedule) for repayment of
principal and interest and the same are repayable on demand respectively.
4. In our opinion and according to the information and explanations given to us, having
regard to the explanations that some of the items purchased are of special nature and
suitable alternative sources do not exist for obtaining comparable quotations or where
user department has shown specific preference, the internal control system needs to be
further strengthened to be made the same {read with note no. 2.12, 2.15 and 2.16(b) and 16
(c)} commensurate with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and services. During the
course of our audit, we have not observed any continuing failure to correct major
weaknesses in internal control system.
5. According to the information and explanations given to us and based upon audit
procedures performed, we are of the opinion that particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register required to be
maintained under that section; and transactions made in pursuance of such contracts or
arrangements (exceeding the value of Rs. 5 lacs in respect of each party during the
financial year), have been made at prices which are generally reasonable having regard to
the prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations given to us,the
Company has not accepted any deposits from public within the meaning of section 58A and
58AA and the rules framed there under and any other relevant provisions of the Act with
regard to deposits accepted from the public. We have been informed that no order has been
passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or
any Court or any other Tribunal in this regard.
7. The Company has an internal audit system, which needs to be further strengthened to
make it commensurate with the size of the Company and nature of its business.
8. As per the information and explanations provided by the management to us, the
Central Government has prescribed maintenance of cost records under Section 209(1)(d) of
the Companies Act, 1956 in respect of the products of the Company. However, the company is
in process of compilation/updation of the required records. In absence of the same, we are
unable to comment thereupon.
9. (a) According to the records and informations and explanations given to us,
undisputed statutory dues including Service Tax, Custom Duty, and Excise Duty, have
generally been regularly deposited by the company except Provident Fund, Employee State
Insurance, T.D.S, T.C.S, Sales Tax, Fringe Benefit Tax, Service Tax and Excise Duty
amounting to Rs. 3591 Thousands, 74 Thousand, 5672 Thousands, 52 Thousand, 1371 Thousands,
312 Thousands, 46 Thousands and 72 Thousands respectively, which as on 31st March, 2013
are outstanding for more then six months from the date they become payable [read with note
no. 2.15 (b) & (c)].
(b) According to the records and informations and explanations given to us, there are
no dues in respect of Income Tax, Service Tax, Custom Duty, Cess and Wealth Tax that have
not been deposited with the appropriate authorities on account of any dispute and the dues
in respect of Sales Tax, Entry Tax and Excise Duty that have not been deposited with the
appropriate authorities on account of dispute and the forum where the dispute is pending
are given below (read with note no. 2.1): -
| Statue |
Nature of Dues |
Period |
Amount (Rs.in thou- sands) |
Forum where dispute Pending |
| Central Sales |
Central Sales Tax |
2000-2001 |
|
Commercial Tax |
| Tax Act |
(Disallowance of Exemptions) |
2001-2001 |
4197 |
Tribunal, Noida |
|
|
2003-2004 |
|
|
|
|
2004-2005 |
|
|
|
Central Sales Tax |
2002-2003 |
517 |
Commercial Tax |
|
(Disallowance of Exemptions) |
|
|
Tribunal, Noida |
|
Central Sales Tax |
2002-2003 |
210 |
Deputy Commissioner |
|
(Non-Submission of ‘C’ Fomrs) |
|
|
Trade Tax, Haldwani |
|
Central Sales Tax |
2003-2004 |
358 |
Commercial Tax |
|
(Non-Submission of ‘C’ Forms) |
|
|
Tribunal, Noida |
|
Central Sales Tax |
2003-2004 & |
980 |
Deputy Commissioner |
|
(Non-Submission of ‘C’ Forms) |
2004-2005 |
|
Trade Tax, Haldwani |
|
Central Sales Tax |
2004-2005 |
183 |
Commercial Tax, |
|
(Non-Submission of ‘C’ Forms) |
|
|
Tribunal, Noida |
|
Central Sales Tax |
2005-2006 |
1001 |
Addl. Commissioner (Appeals), Trade Tax Noida |
|
Central Sales Tax* |
2006-2007 2007-2008 & 2008-2009 |
71478 |
Deputy Commissioner Trade, Haldwani |
| Uttrakhand Sales Tax Act |
Sales Tax (Trade Tax on Stock Transfer) |
1997-1998 |
8161 |
Trade Tax Tribunal Haldwani |
|
Local Sales Tax* |
2006-2007 |
708 |
Deputy Commissioner Haldwani |
| U.P. Sales Tax Act |
Sales Tax |
2006-2007 |
43 |
Addl. Commissioner (Appeals), Trade Tax Noida |
| Uttrakhand EntryTax Act |
Entry Tax |
2003-2004 |
690 |
Joint Commissioner (Appeals), Haldwani |
| Central Excise Act |
Excise Duty (Related to Valuation) |
1995 |
1810 |
CESTAT, New Delhi |
|
Excise Duty (Evaporation Boat) |
1998 |
717 |
High Court, Nanital |
|
Excise Duty (Related to Valuation) |
1997-2000 |
10375 |
Commissioner Excise |
10.The company’s accumulated losses at the end of the year are more than fifty
percent of its net worth and it has incurred cash loss during the current financial year
(read with our comments in Para D above) but has not incurred cash losses in the
immediately preceding financial year.
11.On the basis of records made available and the information and explanation given to
us the company has defaulted in repayment of dues to financial institution and banks. The
amount overdue on account of principal is Rs. 366269 Thousands (Rs. 336446 Thousands up to
31-03-2012) consisting delays of 1 day to 2421 days and on account of interest Rs. 235112
Thousands (198908 Thousands up to 31-03-2012) consisting delays of 14 days to 2421 days.
Further, this is to be read with Note no. 2.12, 2.14 and 2.15(a).
12. According to the information and explanations given to us, the company has not
granted any loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. The Company is not a chit fund or a nidhi / mutual benefit fund /society,
therefore, the provisions of clause 4(xiii) of the said Order are not applicable to the
company.
14. According to the information and explanations given to us, the Company is not
dealing in or trading in shares, securities, debentures and other investments.
15. According to the information and explanations given to us, the company has not
given any guarantee for loans taken by others from banks or financial institutions.
16. During the year no term loans were received by company, accordingly the provisions
of clause 4(xvi) of the Order are not applicable to the Company.
17. On the basis of information and explanations given to us and on an overall
examination of financial statements of the company, no funds raised during the year in
short term basis have been used for long term investment.
18. According to information and explanations given to us, the Company has not made any
preferential allotment of shares to any parties or companies covered in the register
maintained under section 301 of Companies Act 1956.
19. No debentures have been issued/ outstanding during the year hence; the question of
security/ charges thereof does not arise.
20.The company has not raised any money through a public issue during the year.
21. Based on audit procedure performed and on the basis of information and explanations
provided by the management and to the best of our Knowledge and belief, no fraud (read
with our comments in clause (xi) of para D above) on or by the company has been noticed or
reported during the course of our audit, nor we have been informed of any such case by the
management.
|
For LODHA & CO |
|
Chartered Accountants |
|
Firm Registration No-301051E |
| Place : New Delhi |
N. K. LODHA |
| Date : 24.7.2013 |
Partner |
|
Membership No.: - 85155 |
+91-9892691696
