The Members of Raj Agro Mills Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Raj Agro Mill Limited("the Company") which comprise the Balance Sheet as at March 31 2015 theStatement of Profit and Loss the Cash flow statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made hereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statement that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2015 and its losses and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to Note No.3 6 and 7 regarding disclosure pursuant to Part I ofSchedule III to the Companies Act 2013 pertaining to Long-Term Borrowings Short-TermBorrowings and Other Current Liabilities respectively the company has reached a settlementwith its banker as such figures of short term borrowings working capital and othercurrent liabilities have been classified in accordance with One Time Settlement dated26.09.2012.
To repay the outstanding liabilities of its banker as per One Time Settlement thecompany has liquidated its assets and has not so far replaced those assets thus it is notmaintaining its status of going concern.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order 2015 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2015 we give in the Annexure a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
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 bestof 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 theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the Accountingstandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
(e) The going concern matter described in sub-paragraph (b) under the Emphasis ofMatters paragraph above in our opinion may have an effect on the functioning of Company.
(f) On the basis of the written representations received from the directors as on 31stMarch 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2015 from being appointed as a director in terms of Section164 (2) of the Act.
(g) The company has adequate internal financial controls in place and the same isoperating effectively having regard to company size and operations.
(h) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition.
ii The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
| ||For & on behalf of |
| ||P. C. Goyal & Co. |
| ||Chartered Accountants |
| ||FRN: 002368N |
|Place: Ludhiana ||CA. P.C. Goyal |
|Date: 28.08.2015 ||Partner |
| ||M.NO.080377 |
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT OF M/S RAJ AGRO MILLS LTD.
(Referred to in Paragraph under Report on Other Legal and RegulatoryRequirements section of our report of even date.)
(i) In Respect of Fixed Assets:
(a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the management in a phasedperiodical manner which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets. No material discrepancies were noticed on suchverification.
(c) In order to discharge its liabilities of its banker in terms of One Time Settlementreached with the bank the company has sold a substantial part of its Fixed Assetsincluding land & building during the past years. According to information andexplanation given to us the company has so far not made any plan to replace such parts offixed assets that has been sold. In view of said sale of substantial part of fixed assetsbeing taking place in order to discharge bankers liabilities the company has noplans to maintain going concern status in near future till the liabilities of the companyare fully paid off.
(ii) In Respect of Inventories:
(a) Since there is no business operation in the company as such it is not having anystock inventory in view of which nothing requires to be given under this para.
(iii) (a) The Company has not granted any loans secured or unsecured to companiesfirms or other parties covered in the register maintained under section 189 of theCompanies Act 2013.
(iv) In our opinion and according to the information and explanations given to usthere are adequate internal control procedures commensurate with the size of the companyand the nature of its business with regard to purchases of inventory fixed assets and forthe sale of goods and services. During the course of our audit we have not observed anycontinuing failure to correct major weaknesses in internal control system.
(v) According to the information and explanation given to us the company has notaccepted any deposits from the public as such the provisions of section 73 to 76 or anyother relevant provisions of the Companies Act 2013 and rules framed thereunder withregard to the deposits accepted from the public are not applicable. Therefore theprovisions of the clause 3(v) of the Order are not applicable to the company. However thecompany has taken interest free unsecured loan from one person (managing director) coveredin the register maintained under section 189 of the Companies Act 2013. The maximumamount involved during the year is Rs.398.59 Lacs. In our opinion the terms and conditionsof such unsecured loan are not prejudicial to the interest of the company.
(vi) In our opinion and according to information and explanations given to usand as opined by previous cost auditor of the company the Companies (Cost Records andAudit) Rules 2014 are not applicable to the Company. Hence the maintenance of costaccounts and records are not required. (vii) In respect of Statutory dues:
(a) According to the information and explanations given to us and on the basis of ourexamination of the books of accounts the company has been regular in depositing withappropriate authorities undisputed statutory dues including Provident FundEmployees State Insurance Income tax Sales tax Wealth tax Service tax Customduty Excise duty Value Added Tax Cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were outstanding as at 31.03.2015 for a periodof more than six months from the date of becoming payable.
(c) As at 31st March 2015 according to the records of the company and theinformation and explanation given to us the following are the particulars of dues onaccount of sales tax penalty matters that have not been deposited on account of anydispute:
|Name of the statute ||Nature of the dues ||Amount (in Rs.) ||Period to which the amount relates ||Forum where dispute pending |
|The Punjab VAT ACT 2005 ||Penalty u/s 51(7)(b) ||35500/- ||Fin Year 2006- 2007 ||Appeal before Deputy Excise & Taxation Commissioner Cum Joint Director (Enforcement) Bathinda |
However according to information and explanation given to us a sum of Rs.8875/- wasdeposited on 22.07.2006 against the above demand.
(d) In our opinion there is no amount required to be transferred to Investor educationand protection fund in accordance with the relevant provisions of the Companies Act 1956and Rules made there-under.
(viii) The Company have accumulated losses more than 50% of its net worth at the end ofthe financial year. The Company has incurred cash losses during the financial year coveredby our audit and in the previous financial years to the immediately preceding financialyear.
(ix) Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the company has not defaulted in repayment of duesto Banks financial institutions or debenture holders during the year under review.However its account with the State Bank of India has been classified as NPA on 30.09.2010and the company has reached an One Time Settlement with bank vide banks letterreference no.SAMB/SK/1142 dated 26.09.2012 and in terms of said Compromise Offer thecompany was to deposit aggregate amount of Rs.28.00 cr up to 25.03.2015 as per specifiedpayments on different dates with amount specified there against. The company is regular inpaying the installments of OTS and it has paid entire Principal Amount of Rs.33.20 crunder OTS up to 27th June 2015 well before due date of 25thSeptember 2015. However Interest amount of Rs.28524915/- is still outstanding aspayable which is to be paid on or before 25.03.2016.
(x) According to the information and explanations given to us the company has notgiven any guarantee in respect of loans taken by others from banks or financialinstitutions.
(xi) In our opinion and according to information and explanations given to us no termloan was obtained by the company during the year under review.
(xii) In our opinion and according to the information and explanations given to us nofraud on or by the company has been noticed or reported during the course of our audit.
| ||For & on behalf of |
| ||P. C. Goyal & Co. |
| ||Chartered Accountants |
| ||FRN: 002368N |
| ||CA.P.C. Goyal |
| ||(Partner) |
| ||M. No. 080377 |
|Place: Ludhiana || |
|Date: 28.08.2015 || |