AUDITOR
To
The Members of
Kashipur Sugar Mills Limited
1. We have audited the attached Balance Sheet of Kashipur Sugar Mills Limited as
at 30th September 2011, 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 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 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 from any material misstatement.
An audit includes examining on a test basis, evidence supporting the amounts and the
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 presentation of the financial statements. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the
Central Government in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto
a statement on the matters specified in Paragraph 4 & 5 of the said order.
4. (a) Attention is invited to note no. 1(b) and 1(c) of Schedule No. 17
regarding non provision of excise duty aggregating to Rs. 3459.84 Lacs (including Rs.
294.37 Lacs for the current year) and interest thereon (amount indeterminate) and penalty
thereon amounting to Rs. 2932.25 Lacs. As the matter is subjudice and uncertain, it is not
possible to ascertain the probability of the liability and its impact on the accounts of
the company till the matter is finally decided by Hon’ble Court.
(b) Attention is invited to Note No. 12 of Schedule No. 17 regarding accounting of
Sugar Cane price for season 2007-08 at Rs.110.00 per quintal as per the interim order of
the Hon’ble Supreme Court as against the price of Rs.127.00 per qtl. fixed by
Uttarakhand Government. As the matter is subjudice and uncertain,hence it is not possible
to ascertain the probability of the liability and impact thereof on the accounts of the
company till the matter is finally decided by Hon’ble Court.
5. We further report that :
a. We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit
b. In our opinion, proper books of accounts as required by law have been kept by the
company so far as appears from our examination of the books.
c. The Balance Sheet and Profit & Loss Account & Cash Flow Statement dealt with
by this report are in agreement with the books of accounts.
d. In our opinion the profit & loss account and the Cash Flow Statement comply with
the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.
e. On the basis of the written representation from the directors, taken on record by
the Board of Directors, none of the directors are disqualified as on 30th
September, 2011, from being appointed as a director under section 274(1) (g) of the
Companies Act, 1956.
f. In our opinion and to the best of our information and according to the explanations
given to us, the said accounts read together with Principal Accounting Policies and Other
Notes thereon give the information required by the Companies Act, 1956 in the manner so
required and subject to our observations in Para 4 above, the effect whereof can not be
ascertained, 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 30th
September 2011 ; and
(b) In the case of the Profit & Loss Account, of the Loss for the year ended on
that date.
(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that
date.
|
For Mittal Gupta & Company |
|
Chartered Accountants |
|
(Alok Tandon) |
|
Partner |
| Place : New Delhi |
M.No. 74793 |
| Dated : 29.11.2011 |
FRN No. 001874C |
Annexure to the Auditor’s Report
(As referred to in Paragraph – (3) of our report of even date)
(i) (a) The fixed asset records maintained by the company needs to be updated to show
full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets were not physically verified by the management during the year and
discrepancies, if any, could not in the circumstances be known.
(c) In our opinion and as explained to us, substantial part of fixed assets has not
been disposed off by the Company during the year.
(ii) (a) The management has physically verified inventory at reasonable intervals
except stores.
(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) The Company is maintaining proper records of inventory. No material discrepancies
were noticed on physical verification of inventory as compared to book records and the
same have been properly dealt with in the books of account.
(iii) (a) The Company has not granted any loan secured or unsecured, to Companies,
firms or other parties covered in the register maintained under section 301 of the
Companies Act, 1956.
(b) As the company has not granted any such loans, hence provisions of clause (iii)
(a),(iii)(b), (iii)(c) and (iii) (d) are not applicable.
(c) The Company has taken loans secured and unsecured, from Companies, firms or other
parties covered in the register maintained under section 301 of the Companies Act, 1956.
The required details are as under :
| Particulars |
Loans and Advances taken |
| No. of Parties involved |
6 |
| Maximum balance at any time during the year |
Rs. 2651.70 Lacs |
| Closing Balance |
Rs. 2497.84 Lacs |
(d) The rate of interest and other terms and condition on which loans have been taken
by the Company, are not, prima facie, prejudicial to the interest of the Company.
(e) The payment of principal amount and interest are regular, whenever stipulated.
(iv) In our opinion and according to the information and explanations given to us there
are adequate internal control systems 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 we have not come across any continuing failure to correct
major weakness in the internal control system.
(v) (a) According to the information and explanations given to us the particulars of
contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been
entered in the register required to be maintained under that section.
(b) In our opinion and according to information & explanations given to us the
transactions made in pursuance of such contracts or arrangements and exceeding the value
of Rs. five lacs in respect of any party during the year have been made at prices which
are reasonable having regard to the prevailing market prices at the relevant time.
(vi) According to the information and explanations given to us, the Company has not
accepted any deposits from the public.
(vii) The company does not have an internal audit system.
(viii) We have been informed that the cost records as have been prescribed u/s 209 (1)
(d) of the Companies Act, 1956 have been made and maintained by the Company.
(ix) (a) According to the information and explanations given to us and the records of
the Company examined by us, the company is regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund, Employees’ State
Insurance, Income Tax, Trade Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess
and any other Statutory Dues applicable to it with the appropriate Authorities.
(b) The details of Income Tax / Trade Tax / Central Sales Tax / Excise Duty which have
not been deposited on account of disputes as on 30th September 2011 are as
follows :
| Sl. No. |
Name of Statue |
Nature of Dues |
Amount (Rs. in Lacs) |
Period to which the amount relates |
Forum where dispute is pending |
| 1. |
Trade Tax Laws |
Trade Tax |
5.82 |
2002–03 |
Hon’ble Trade Tax, Tribunal Haldwani |
| 2. |
Trade Tax Laws |
Trade Tax |
211.93 |
1997–1998 to 2000-01 |
Addl. Commissioner Appeals (Trade Tax) |
| 3. |
Trade Tax Laws |
Entry Tax |
18.00 |
2000–01 |
Addl. Commissioner Appeals (Trade Tax) |
| 4. |
Trade Tax Laws |
Trade Tax |
12.23 |
2001–02 to 2004–05 |
Joint Commissioner Appeals (Trade Tax) Haldwani |
| 5. |
Trade Tax Laws |
Trade Tax |
147.20 |
1999–2000 to 2000–2001 |
Deputy Commisioner Assessment |
| 6. |
Trade Tax Laws |
Trade Tax |
43.10 |
2005–06 |
Joint Commissioner (Appeals) |
| 7. |
Trade Tax Laws |
Trade Tax |
129.83 |
2009-10 to 2010-11 |
Joint Commissioner (Appeals) Haldwani |
| 8. |
Trade Tax Laws |
Entry Tax |
618.51 |
2002-03 to 2005-06 & 2009-10 to 2010-11 |
Joint Commissioner (Appeals) Haldwani |
| 9. |
Central Excise Laws |
Excise Duty |
1.30 |
1995–96 |
Central Excise and Service Tax Appellate Tribunal |
| 10. |
Central Excise Laws |
Excise Duty & Service Tax |
81.23 |
2005-06 to 2007-08 |
Central Excise and Service Tax Appellate Tribunal |
| 11. |
Central Excise Laws |
Excise Duty |
5864.54 |
2003 to 2009 |
Central Excise and Service Tax Appellate Tribunal |
| 12. |
Central Excise Laws |
Excise Duty |
3.46 |
1998–99 |
Commissioner Appeal |
(x) The accumulated losses at the end of the financial year are more than fifty percent
of its net worth. The Company has incurred cash losses in current financial year, however
the company has not incurred cash losses in the immediately preceding financial year. The
Company is a sick Industrial Company with in the meaning of clause O of subsection 1 of
Sec 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.
(xi) The Company is making payment to bank and the financial institutions in accordance
with the agreement/settlement entered w ith Bank & Financial Institutions, except that
the Company has not paid 6 installments aggregating to Rs. 211.25 lacs of term loan
(excise) from the Uttrakhand State Co-operative Bank Ltd. under Govt. of India scheme for
Extending Financial Assitance to Sugar Undertaking 2007. The Company has also not paid the
loan taken from State Governments on due dates.
(xii) The company has not granted any loans and advances on the basis of security by
way of pledge of shares, debentures and other securities, hence the provisions of
paragraph 4 (xii) of the Companies (Auditor’s Report) Order 2003 are not applicable
to the Company.
(xiii) The Company is not a nidhi / mutual benefit fund /society, hence the provisions
of paragraph 4 (xiii) of the Companies (Auditor’s Report) Order 2003 are not
applicable to the Company.
(xiv) The Company is not dealing or trading in shares, securities, debentures and other
investments, hence the provisions of paragraph 4 (xiv) of the Companies (Auditor’s
Report) Order 2003 are not applicable to the Company.
(xv) The Company has not given any guarantee for loans taken by others from bank or
financial institutions, hence the provisions of paragraph 4 (xv) of the Companies
(Auditor’s Report) Order 2003 are not applicable to the Company.
(xvi) The Term loans obtained by the Company have been applied for the purposes for
which they were obtained.
(xvii) The Company has not raised any specific short term loan funds during the year
except changes in working capital composition.
(xviii) The Company has not issued any equity share capital during the year; hence the
provisions of paragraph 4 (xviii) of the Companies (Auditor’s Report) Order 2003 are
not applicable to the Company.
(xix) The Company has not issued any debenture; hence the provisions of paragraph 4
(xix) of the Companies (Auditor’s Report) Order 2003 are not applicable to the
Company.
(xx) The company has not raised any money by public issues during the year, hence the
provisions of paragraph 4 (xx) of the Companies (Auditor’s Report) Order 2003 are not
applicable to the Company.
(xxi) According to the information and explanations no fraud on or by the Company has
been noticed or reported during the year.
|
For Mittal Gupta & Company |
|
Chartered Accountants |
|
(Alok Tandon) |
|
Partner |
| Place : New Delhi |
|
| Dated : 29.11.2011 |
|
+91-9892691696
