Venus Sugar Ltd Auditor Reports

VENUS SUGAR LIMITED ANNUAL REPORT 2009-2010 AUDITORS REPORT TO THE MEMBERS OF VENUS SUGAR LIMITED 1. We have audited the attached Balance Sheet of M/s VENUS SUGAR LIMITED as at 30th June, 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 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 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 financier statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order 2003, issued by the Central Government in terms of sub section (4A) of section 227 of the Companies Act, 1956, we annex hereto 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: 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, as far as appears from our examination of such books, and the above mentioned accounts are in agreement therewith; c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the Books of Accounts of the company; d) 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; e) On the basis of written representations received from the Directors, as on June 30th, 2010 and taken on record by the Board of Directors, we report that none of the directors of the company are disqualified as on 30th June, 2010 from being appointed as Director, in terms of clause (g) of sub- section (1) to section 274 of the act; f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: I) In the case of the Balance Sheet, of the State of Affairs of the company as at 30th June 2010 and, II) In the case of the Profit & Loss Account, of the Loss for the year ended on that date and, III) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date. For G. K. Nigam & Associates Chartered Accountants (Regn. No. 04972N) Sd/- (Hari Om) Place: New Delhi Partner Date : 30/08/2010 M.No 87129 ANNEXURE TO AUDITORS REPORT: (Referred to in paragraph 3 of our report of even date) 1. a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. b) The fixed assets have been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. c) During the year there has been no major disposal of fixed assets. 2. a. The Inventories have been physically verified by the Management. In our opinion, the frequency of verification is reasonable, b. The procedure of physical verification of Inventories followed by the Management is reasonable and adequate in relation to the size of the company and nature of its business, c. In our opinion and according to the information and explanations given to us, the company is maintaining proper records of Inventories. No material discrepancies were noticed during verification between the physical stocks and book records. 3. In our opinion and according to the information and explanations given to us, the company has not granted but taken interest free unsecured loans, during the year from companies, firms and other parties covered in the register maintained under section 301 of The Companies Act, 1956, as explained in the notes to Accounts (Schedule-S). 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 company and the nature of its business for the purchase of Inventory, fixed assets and also for the Sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control. 5. To the best of our knowledge and belief and according to the information and explanations given to us, there were few transactions which are required to be entered and are entered into the register maintained under section 301 of The Companies Act, 1956. 6. In our opinion and according to the information and explanations given to us, the company has not accepted deposits from public within the meaning of section 58A & 58AA of the Companies Act 1956, at the end of the period covered by our audit report. 7. In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business. 8. The Central Government has prescribed maintenance of Cost Records under section 209(1)(d) of The Companies Act, 1956 in respect of White Crystal Sugar and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We are however, not required, and have therefore not made a detailed examination of such records. 9. a) According to the records, the company is Generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues to the extent applicable to it. However all the pending dues had been deposited. b) According to the information and explanations given to us, no undisputed amount payable in respect of the Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues were in arrears as at 30th June 2010 for a period of more than six months from the date of becoming payable. c) According to the information and explanations given to us, details of dues of Sales Tax, Income Tax, Excise Duty, Custom Duty, Entry Tax and Cess etc. which have not been deposited on account of any dispute before appropriate authorities are given below: Name of the Statute Nature of Dues Year to Amount Forum in which in Lacs which the related dispute is pending 1. U.P. Trade Tax Tax imposed on 1998-99 1.67 2nd Appeal in Act, 1948 Ex - U.P. HSD Tribunal, Purchased and Meerut issued to transporters 2. Tax on Entry Entry Tax 2001-02 2.00 2nd Appeal in of Goods claimed by dept. Tribunal, Act, 1999 Meerut 3. U.P. Trade UPTT imposed due 2001-02 4.55 2nd Appeal in Tax Act, 1948 to enhancement Tribunal, of sales of Meerut molasses & on the basis of Misc. Income 4. U.P. Trade UPTT imposed due 2002-03 6.00 2nd Appeal in Tax Act, 1948 to enhancement Tribunal, of sales of Meerut molasses & on the basis of Misc. Income 5. Tax on Entry Entry Tax 2002-03 0.60 2nd Appeal in of Goods Act, 1999 imposed by the Tribunal, Department Meerut 6. Tax on Entry Entry Tax 2003-04 42.94 1st Appeal of Goods Act, 1999 imposed by the pending in Department Tribunal, Meerut 7. U.P. Trade Tax UPTT imposed 2003-04 3.64 1st Appeal Act, 1948 due to pending in enhancement Tribunal, of sales of Meerut molasses & on the basis of Misc. Income 8. U.P. Trade Tax UPTT imposed 2004-05 4.12 Ist Appeal in Act, 1948 due to Tribunal, enhancement Meerut of sales of molasses & on the basis of Misc. Income 9. Tax on Entry Entry Tax 2004-05 85.08 1st Appeal in of Goods Act, 1999 imposed by Tribunal, department on Meerut interstate Sale of Sugar 10. Factory Act, 2 Cases 1999 0.50 CJM, Moradabad 1948 11. Factory Act, 2 Cases 2003 0.20 ACJM, Chandausi 1948 12. U.P. Sugar 17 Cases 2002-03 0.34 CJM, Moradabad Cane (Regulation of supply & purchase) Act, 1953 13. U.P. Sugar 3 Cases 2006-07 0.34 High Court, Cane Act Allahabad 14. Central Demand of 1995-96 7.73 Dy. Excise Act, Excise Duty on Commissioner 1944 Molasses Moradabad 15. Central Demand on 1996-97 1.71 Tribunal Excise Act, Difference of New Delhi 1944 Rate on molasses 16. Central Demand on 1997-98 83.89 Tribunal Excise Act, removal & wrong New Delhi 1944 accounting of molasses & sugar bags 17. Central Excise Demand on 1997-98 11.35 Tribunal Act, 1944 shortage of New Delhi molasses & excess of sugar bags 18. Central Excise Demand on 2004-05 1.68 Tribunal Act, 1944 shortage of New Delhi molasses 19. Central Excise Demand on 2005-06 1.41 Tribunal Act, 1944 removal of New Delhi molasses with- out duty 20. Central Excise Demand on 2005-06 0.33 Tribunal Act, 1944 excess molasses New Delhi Total 260.08 Lacs 10. The accumulated losses at the end of the financial year are more than hundred percent of its net worth. The company has incurred cash loss during the financial year covered by our report, however there were cash losses in the immediately preceding financial year. Thus as per the current financials the Company is a Sick Industrial Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985. 11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has partially defaulted in repayment of dues to Financial Institutions. 12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities. 13. The provisions of any special statue applicable to Chit Fund, Nidhi or Mutual Benefit Society are not applicable to this company. 14. The company is not dealing or trading in shares, securities, debentures or other investments. However the investments made by the company in securities have been held by the company in its own name. 15. In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loan taken by others from banks and financial institutions. 16. In our opinion and according to the information and explanations given to us, the company has not raised any new term loan during the year under audit. 17. According to the information and explanations given to us and on the overall examination of the Balance Sheet of the company, we report that no short term funds were raised by the company which were used for long term investment during the year under review. 18. According to the information and explanations given to us, 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. 19. During the period covered by our audit report, the company has not issued any Debentures during the year. 20. During the period covered by our audit report, the company has not raised any money by way of public issue. 21. On examination of the Books & explanations afforded to us, No fraud on or by the company has been noticed or reported in respect of the year under audit. For G. K. Nigam & Associates Chartered Accountants (Regn. No. 04972N) Sd/- (Hari Om) Place: New Delhi Partner Date : 30/08/2010 M.No. 87129