| We have audited the accompanying standalone financial statements of
SUJANA UNIVERSAL INDUSTRIES LIMITED ("the Company"), which comprise the
Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year ended on 31st March, 2015, and a
summary of the significant accounting policies and other explanatory
information, in which are incorporated the audited returns of the
branches for the year ended on that date located at Chennai and Mumbai.
Management's Responsibility for the Standalone 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 standalone 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 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 of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were 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.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
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 the 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 the disclosures in the financial statements. The
procedures selected depend on the auditor's 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. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's 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 standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as
at 31st March, 2015, and its loss and its cash flows for the year ended
on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the
financial statements:
a) Note 2.14 and 2.16 forming part of the financial statements
regarding the Trade Receivables to the extent of Rs. 22,990.19 and
3,097.90 lakhs of advances are long overdue and the company considers
them as good and recoverable and estimates that provision for doubtful
debts is not necessary.
b) Note 2.36 to the financial statements which describes the
uncertainty related to the outcome of the lawsuit filed against the
Company by the Mauritius Commercial Bank which has financed to one of
its subsidiary - Hestia Holdings Ltd for which SUIL has given a
Corporate Guarantee.
c) Note 2.36 to the financial statements which describes the
uncertainty related to the outcome of the Bank Debt recalled by the
Standard Bank and Afrasia Bank which has financed to one of its
Sub-subsidiary - Selene Holdings Ltd for which SUIL has given a
Corporate Guarantee.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
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 it appears from our examination of
those books and proper returns adequate for the purposes of our audit
have been received from the branches not visited by us.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account and with the returns received from the branches not
visited by us.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best 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.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Auditors' Report
The Annexure referred to in our report to the members of Sujana
Universal Industries Limited for the year ended 31-03-2015. We report
that:
S Particulars
No.
(i) (a) Whether the company is maintaining proper
records showing full particulars, including
quantitative details and situation of fixed assets;
(b) Whether these fixed assets have been physically
verified by the management at reasonable
intervals; whether any material discrepancies were
noticed on such verification and if so, whether the
same have been properly dealt with in the books
of account;
(ii) (a) Whether physical verification of inventory has
been conducted at reasonable intervals by the
management;
(b) Are the procedures of physical verification
of inventory followed by the management
reasonable and adequate in relation to the size
of the company and the nature of its business. If
not, the inadequacies in such procedures should
be reported;
(c) Whether the company is maintaining proper
records of inventory and whether any material
discrepancies were noticed on physical verification
and if so, whether the same have been properly
dealt with in the books of account;
(iii) Whether the company has granted any loans, secured
or unsecured to companies, firms or other parties
covered in the register maintained under Section 189 of
the Companies Act. If so,
(a) whether receipt of the principal amount and
interest are also regular; and
(b) if overdue amount is more than rupees one lakh,
whether reasonable steps have been taken by the
company for recovery of the principal and interest;
(iv) Is there an adequate internal control system 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. Whether there is a continuing failure to
correct major weaknesses in internal control system.
(v) In case the company has accepted deposits, whether the
directives issued by the Reserve Bank of India and the
provisions of Sections 73 to 76 or any other relevant provisions
of the Companies Act and the rules framed there under, where
applicable, have been complied with? If not, the nature of
contraventions should be stated; If an 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,
whether the same has been complied with or not?
(vi) Where maintenance of cost records has been specified by the
Central Government under sub-section (1) of Section 148 of
the Companies Act, whether such accounts and records have
been made and maintained;
(vii) (a) Is the company regular in depositing undisputed
statutory dues including provident fund, employees'
state insurance, income-tax, sales-tax, wealth tax,
service tax, duty of customs, duty of excise, value
added tax, cess and any other statutory dues with the
appropriate authorities and if not, the extent of the
arrears of outstanding statutory dues as at the last day
of the financial year concerned for a period of more
than six months from the date they became payable,
shall be indicated by the auditor.
(b) In case dues of income tax or sales tax or wealth tax
or service tax or duty of customs or duty of excise or
value added tax or cess have not been deposited on
account of any dispute, then the amounts involved and
the forum where dispute is pending shall be mentioned.
(A mere representation to the concerned Department
shall not constitute a dispute).
(c) Whether the amount required to be transferred
to in accordance with the relevant provisions of
the Companies Act, 1956 (1 of 1956) and rules
made there under has been transferred to such
fund within time.
(viii) Whether in case of a company which has been registered
for a period not less than five years, its accumulated
losses at the end of the financial year are not less than
fifty per cent of its net worth and whether it has incurred
cash losses in such financial year and in the immediately
preceding financial year;
(ix) Whether the company has defaulted in repayment of
dues to a financial institution or bank or debenture
holders? If yes, the period and amount of default to be
reported;
(x) Whether the company has given any guarantee for
loans taken by others from bank or financial institutions,
the terms and conditions whereof are prejudicial to the
interest of the company;
(xi) Whether term loans were applied for the purpose for
which the loans were obtained;
(xii) Whether any fraud on or by the company has been noticed or
reported during the year; If yes, the nature and the amount
involved is
to be indicated.
S Auditors Remark
No.
(i) The Company is maintaining proper
records showing full particulars, including
quantitative details and situation of fixed
assets.
Yes, the fixed assets have been physically
verified by the management at reasonable
intervals. There was no material
discrepancies noticed during such physical
verification as per the management
(ii) Yes, the physical verification of inventories
has been conducted by the management
at reasonable intervals
Yes, the procedure of physical verification
followed by the management is reasonable
and adequate in relation to the size of the
company and the nature of its business.
Yes, the Company is maintaining proper
records of inventory and that no material
discrepancy was noticed on physical
verification.
(iii) According to the information and
explanations given to us, the Company
has not granted any loans, secured or
unsecured to the Companies, firms or other
parties listed in the register maintained
under Section 189 of the Companies Act,
2013.
Not Applicable
Not Applicable
(iv) Yes, the Company has adequate internal control
system commensurate with the size of the
company and nature of its business, for the
purchase of inventory and fixed assets and for
the sale of goods and services. We have not
observed any continuing failure or weaknesses
in the internal control system.
(v) The Company has not accepted any deposits
during the reporting period.
(vi) The Company maintains the cost records
pursuant to the Companies (Cost Accounting
Records) Rules, 2011 prescribed by the Central
Government under Section 148 (1) of the
Companies Act, 2013
(vii) Yes, the Company is regular in depositing the
undisputed statutory dues including provident
fund, employees state insurance, income tax,
sales tax, wealth tax, service tax, duty of
customs, duty of excise, value added tax, cess
and other statutory dues as on the last day of
the financial year for a period of more than six
months from the date it became payable except
the dividend distribution tax of Rs. 3.95 lakhs
for each financial year 2011-12, 2012-13 and
2013-14 and income tax for the financial year
2010-11 of Rs. 78.97 lakhs.
Yes, the disputed statutory dues that have not
been deposited on account of matters pending
before appropriate authorities are as follows:
Natureof financial Rs. In
Dues Year Lakhs Pending Before
Income tax 2005-06 542.35 ITAT
200940 596 29 itat
2010-11 1509.81 CIT-Appeals
TNGST Act, 2000-01 338.40 Special Committee,
1959 Sales Tax,
Tamilanadu
2001- 02 & 1697,05 Hon'ble High Court
of Tamilanadu
2002- 03
Customs & 1995-96 263.74 CESTAT, Chennai
Central Excise 2000-01 316.61 CESTAT, Bangalore
and Chennai
2007- 08 & 104.24 CESTAT, Bangalore
2008- 09
2008-09 37,15 Add. Commissioner
of CUS & CE,
Hyderabad.
(c) No amount required for transferring to
investor education and protection fund.
(viii) The Company does not have accumulated
losses at the end of the financial year. The
company has not incurred cash losses in
the current financial year and so also in the
financial year immediately preceding such
financial year.
(ix) The Company has not paid installments of
Rs. 715.20 Lakhs to IDBI Bank Ltd as at
the balance sheet date.
(x) The Company has given corporate
guarantees to Banks for the loans
extended to its subsidiary Companies
during the reporting period a) Hestia
Holdings Ltd and b) Selene Holdings Ltd,
where in the case of default in the former
the bank has moved legally against the
Holding Company and in the case of later
Sub-subsidiary the Bank has recalled the
loan.
(xi) The Company has applied the Term Loans
for the purpose for which the loans were
obtained.
(xii) No
For T Raghavendra & Associates
Chartered Accountants
FRN: 003329S
T. Raghavendra
Proprietor
(Membership No.023806)
Place: Hyderabad
Date: 27.05.2015
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