| We have audited the accompanying financial statements of THE JEYPORE
SUGAR COMPANY LIMITED ('the Company') which comprise the Balance Sheet
as at March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management's responsibility for the financial statements
The Company's board of directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013 ('the Act') with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash fows
of the Company in accordance with the accounting principles generally
accepted in India, including the Accounting standards specified under
section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for
safeguarding the assets of the company and for prevention and detection
of frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; design, implementation and maintenance of
adequate internal financial controls, that are operating effectively for
ensuring the accuracy and completeness of the accounting records,
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.
Auditors' responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and Rules made there under. We conducted our
audit in accordance with the standards on auditing specified under
section 143(10) of the Act. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors' judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the company has in place an adequate internal financial controls
system over financial reporting and the operating effectiveness of such
controls. An audit also includes evaluating the appropriateness of the
accounting policies used and the reasonableness of the accounting
estimates made by the Company's board of directors, 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 on the financial
statements.
Opinion
Basis for Disclaimer of Opinion
We are informed that the company has proposed for restructuring by
demerging its Pothavaram sugar unit and same is under process. In view
of this, the company is in the process of reviewing the carrying amount
of its assets in Pothavaram Unit. Pending information about its
recoverable amount, we are at present unable to ascertain the
adjustment, if any, required to be made to the value of the assets
between the carrying amount and its recoverable amount as required to
be made as per AS-28 "Impairment of Assets" and its impact, if any, on
the Loss for the year, fixed assets and reserves of the company.
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 in the basis for Disclaimer of opinion paragraph, the
financial statements 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 Balance Sheet, of the state of affairs of the Company
as at March 31, 2015;
b) In the case of Statement of Profit and Loss, of the Loss of the
Company for the year ended on that date; and
c) In the case of Cash Flow Statement, of the cash fows of the Company
for the year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ('the
Order'), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a) We have sought and 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 account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the accounting standards specified under
section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014 subject to points noted in para of basis for disclaimer of
opinion;
e) On the basis of written representations received from the directors
as on March 31, 2015 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015 from being
appointed as a director in terms of sub-section (2) of section 164 of
the Act;
f) With respect to the other matters to be included in the Auditor's
Report in accordance with the Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and to the basis of our
information and according to the explanations given to us:
i. The company does not have any pending litigations which would impact
its financial position except those which are disclosed in the notes to
the financial statements and para no.7 in Annexure to our Audit report.
ii. The company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to the
Investor Education Protection Fund by the company except an amount of
Rs.4,94,760/- which are held in abeyance due to pending legal cases.
The Annexure referred to in our report to the members of THE JEYPORE
SUGAR COMPANY LIMITED ("Company") for the year ended March 31, 2015.
We report that:
1. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) According to the information and explanations furnished to us, the
Company has not physically verified its fixed assets during the year.
However, the Company has adopted a phased programme of verification
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets.
2. In respect of its inventories:
a) According to the information and explanations furnished to us, the
Company has physically verified its inventories. In our opinion, the
frequency of such verification to the extent carried out is reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) According to the information furnished to us, the Company is
maintaining proper records of inventory. The discrepancies noticed on
verification between the physical stocks and the book records, which
were not material, have been properly dealt with in the books of
account.
3. The Company has not granted any loans, secured or unsecured to
companies, forms or other parties covered in the register maintained
under section 189 of the Act. Consequently, clauses (iii)(a) and(b) of
paragraph 3 of the Order are not applicable.
4. 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 with regard
to purchase of inventory, fixed assets and for the sale of goods and
services. Further during the course of our audit, we have not come
across any instances of major weaknesses in internal control that in
our opinion, require correction.
5. The Company has not accepted any deposits from the public and
members during the financial year 2014-15. However, in respect of
deposits accepted from public and members prior to 1.4.2014, being the
date of commencement of Companies Act, 2013, an amount of Rs.352.24
lakhs (Public Rs.58.24 lakhs and members Rs.294 lakhs) is outstanding
as on 31.3.2015 which are not due for repayment as per the terms of
deposit. The company has not fled statement of deposits with the
Registrar in Form DPT-4 as required to be fled as per the provisions of
section 74(1)(a) of the Act.
The company has received advances against sale of goods amounting to
Rs.19.47 lakhs which are pending for supply for more than a year and
outstanding as on 31.3.2015. We are informed that all these advances
has arisen in respect of sale of goods for which goods were already
sold and some balances were outstanding against the supplies.
Subject to the above, the company has complied with the directives
issued by Reserve Bank of India and the provisions of sections 73 to 76
or any other relevant provisions of the Act and the rules framed there
under. According to the information furnished to us, no order has been
passed on the Company by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal
for non-compliance with the provisions of sections 73 to 76 of the Act.
6. We have broadly reviewed the books of account and records
maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under section 148(1) of
the Act and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not carried out a detailed audit of the same.
7. a) According to the information furnished to us, the Company made
substantial delays in remitting of its dues such as Provident Fund,
Value added tax, Income-tax, Service tax, Excise duty, Cess and other
statutory dues applicable to it. There were no undisputed statutory
dues in arrears as at the date of the Balance Sheet under report, for a
period of more than six months from the date they became payable except
the following.
Name of the statue Nature of dues Amount (Rs.) Period
AP Non-agricultural Non- Agricultural 2,72,115 1978-79 to
1987-88
land asst. tax land tax
Income-tax Act,
1961 Income-tax 3,72,86,980 Asst. year
2013-14
AP Vat Act VAT TDS 6,20,669 2011-2012
Due date Date of
payment
30th June of -
every year
Various dates -
Various dates -
b) According to the information furnished to us, the following amounts
of Income tax, Value added tax, wealth tax, Entry tax, Excise duty and
Service tax have been disputed by the Company, and hence were not
remitted to the authorities concerned at the date of the Balance Sheet
under report.
S. Nature of the
dues and Name of Statute Disputed
Amount Pending before
No period to
which dispute (amount paid
relates under protest)
1 Sales Tax
1995-96 Orissa Sales
Tax Act. 1947 2,00,21,670 High Court,
Orissa
(80,00,000
paid under
protest)
2 Income Tax
Asst Yr-
2009-10 Income Tax
Act, 1961 7,43,163
(3,32,404 CIT(Appeals),
paid under
protest) Vizag
3 CENVAT
credit for
the period Central
from Dec, Excise
2009 to Act, 1944 7,20,51,702
(Stay CESTAT,
March,2009 granted Bangalore
by CESTAT
for demand)
4 CENVAT
credit
for the
period Central
from july Excise Act,
2007 to 1944 40,48,90 Commissioner
of
March, 2009 Central
Excise,
Guntur
5 Service tax
for the
period
from Finance Act,
Aprial2005 1994 16,10,484 Commissioner
of
to Feb, 2008 Central
Excise,
Guntur
c) Further, an amount of Rs.4,94,761/- related to the years 2004-05 to
2006-07 is pending for remittance into Investor Education Protection
Fund which is kept in abeyance due to pending legal cases.
8) The Company had accumulated losses at the end of the financial year.
The Company has incurred cash losses during the financial year covered
by the audit and also in the immediately preceding financial year.
9) According to the information and explanations given to us and as per
the books and records examined by us, the company made considerable
delays and continuing defaults in repayment of its dues to banks. The
company has not borrowed any amounts from financial institutions and by
way of issue of debentures.
Amounts due in respect of Term loans from banks on account of Principal
and interest aggregating to Rs.9642.57 lakhs during the year ended
31.3.2015 (IDBI Rs.4600.86 lakhs : BOB Rs.1146.90 lakhs: Andhra Bank
Rs.848.53 lakhs: BOI Rs.2230.64 lakhs and ICICI Rs.815.63 lakhs) where
payments were delayed from 1-365 days up to 31.3.2015 and these dues
were cleared up to the close of financial year 31.3.2015, except an
amount of Rs.1966.94 lakhs which is pending for remittance as on
31.3.2015. Of the said amount, an amount of Rs.19.48 Lakhs was remitted
till the date of our report.
10)The Company has given corporate guarantee and also offered its
properties as security for loans taken by its cane growers from banks.
According to the information and explanations given to us, we are of
the opinion that the terms and conditions thereof are not prima facie
prejudicial to the interests of the company.
11)According to the information and explanations given to us, the term
loans obtained by the Company during the year have been applied for the
purpose for which they were obtained.
12)During the course of our examination of the books and records of the
Company, carried out in accordance with the Generally Accepted Auditing
Practices in India, and according to the information and explanations
given to us, we have not come across any instance of fraud on or by the
Company, noticed or reported during the year, nor have we been informed
of such case by the management.
for BRAHMAYYA & CO
Chartered Accountants
Firm Regd. No.000513S
Place :Camp : Chennai (Sd.) P.LAKSHMANA RAO
Date : 07-06-2015 Partner
(ICAI Memb No.13254) | 