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Jalpac India Ltd.

BSE: 523230 Sector: Industrials
NSE: N.A. ISIN Code: INE976B01011
BSE 05:30 | 01 Jan Jalpac India Ltd
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Jalpac India Ltd. (JALPACINDIA) - Auditors Report

Company auditors report

JALPAC INDIA LIMITED ANNUAL REPORT 2011-2012 AUDITORS' REPORT To The Members of Jalpac India Limited We have audited the attached Balance Sheet of Jalpac India Limited, as at 31st March 2012 and also the Profit and Loss Statement 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. We conducted our audit in accordance with the 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 of material misstatements. 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 1. As required by the Companies (Auditors' Report) Order, 2003 (The Order) (As Amended) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (The Act), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2. Further to our comments in the Annexure referred to in Paragraph 1 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 purposes of our audit read with our comments in para 2(f) below; (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, read with our comments in para 2(a) above ; (c) The Balance Sheet, Profit & Loss Statement and Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) In our opinion, the Balance Sheet, Profit & Loss Statement and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956. (e) On the basis of written representations received from the directors of the company and information and explanations given to us, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the companies act, 1956. (f) Attention is invited to the following Sub- Notes of Note No.2: i. As stated in Note no. 14 regarding preparation of accounts of the company on a going concern basis (impact unascertained) for the reason as stated in said note. Even, company's accumulated losses are in excess of net worth of the company. The company has become sick industrial company within the meaning of section 3(1)(O) of the Sick Industrial Companies (Special Provisions) Act, 1985 and by Hon'ble BIFR's Order dated 05.09.2006. And Vide order dt. 10.07.2012 regarding the recommendation of winding up of the Company BIFR to Hon'ble Uttrakhand High Court. ii. As stated in Note No. 4(a) and 4(b) regarding non provision against custom duty saved on raw material consumed under advance license and fiscal penalty imposed respectively as stated in the said notes and on account of non fulfillment of export obligation. (impact unascertainable) iii. As stated in Note No. 11 (a) & (b) regarding non-provision for shortfall in recovery against trade receivables and loans & advances for which recovery action has been initiated (amount unascertainable) as stated in the said note. iv. As stated in Note No. 12 in respect of non confirmation/ reconciliation of balances of trade receivables, trade payables, Other Current Liabilities (including Statutory Dues) & Provisions, Long Term Loans & Advances, Short Term Loans & Advances , Certain Secured loans, Unapplied Interest on Secured Loans, Unsecured Loans, certain Bank Balances, Fixed Deposits & Margin Money, Contingent liabilities considered as ascertained by the management, consequential impact whereof presently cannot be ascertained. v. As stated in Note No. 15(b) & (c) In respect of non payment of certain statutory dues and non-filing of certain statutory returns/forms w.r.t. Employee State Insurance, Provident Fund [read with note no. 1(vi) regarding Provident Fund demand not provided for and paid], Tax Deducted at source, Service Tax, Sales Tax [read with note no. 1(iii)], Excise Duty and other taxes (including accounting of Penalty, Interest, etc.) (amount unascertainable) and our inability to comment thereon. vi. As stated in Note No. 13 regarding nonprovision of losses (impact unascertainable) on account of impairment of assets in use for the reason stated in the said note and in the absence of supportive audit evidence our inability to comment thereon. vii. As stated in Note No. 15(a) regarding the non-provision of interest and penal interest etc. (amount unascertained). viii. As stated in Note No. 16(a) regarding pending appointment of Company Secretary, compilation/updation of secretarial records and other noncompliance as stated in the said note. ix. During the year full item wise detail of finished goods, raw material and stores & spares could not be made available to us and valuation of inventory have been considered as taken and valued by the management (impact presently could not be ascertained) [read with note no. 16(b)]. x. The internal control system needs to be further strengthened to be made the same {specifically read with note no. 12, 15 and 16(b) and 16 (c)} 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. We further report that the loss for the year, balance in profit & loss account, current liabilities and Provisions, current assets and secured loans are without considering the impact of items mentioned in Para ' (f)' above, the impact of which could not be determined and otherwise. Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together the note no. 2.3 and other Notes thereon, 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; i) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2012; ii) in the case of the Profit & Loss Statement, of the loss for the year ended on that date; and iii) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date. For LODHA & CO. Chartered Accountants Firm Registration No-301051E N.K. LODHA (Partner) Membership No.: - 85155 Place: New Delhi Date : 30.8.2012 ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph (1) of our Report of even date of Jalpac India Limited for the year ended 31st March 2012.) 1. (a) The Company has maintained proper records in respect of its fixed assets showing full particulars including quantitative details and situation of fixed assets except in respect of certain assets where these records are in the process of updation in respect of identification, quantitative details and location/situation. (b) As per information and explanations given to us, certain fixed assets have been physically verified by the Management [read with note no.2.16 (b)] according to the programme of physical verification once in every three years in phased manner, which in our opinion, is reasonable having regard to the size of the Company and the nature of its Fixed Assets. The discrepancies noticed on such physical verification were not material. (c) As per the records and information and explanations given to us, no Fixed Asset has been disposed off during the year. 2. (a) As per the records and information and explanations given to us, the inventory of the company (except stocks lying with the third parties) has been physically verified by the management [read with note no. 2.16 (b) and para 2(f) (ix) of our Audit Report above] during the year. (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 nature of its business [read with note no. 2.16 (b) and above para 2(f) (ix) of our Audit Report above]. (c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory excluding work in progress where stocks are updated as and when physical verification has been carried out [read with note no. 2.16 (b) and para (b) above]. The discrepancies noticed on such physical verification of inventory as compared to book records were not material. 3. (a) The Company has not granted any loans, secured/unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b) to (d) of the Order are not applicable to the Company. (b) As per the information and records made available, During the year Company has taken unsecured loan from two parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum balance involved during the year and the year-end balance of loan was Rs.28309 Thousands and 28309 Thousands respectively. (c) As per the information and explanations given to us, the terms and conditions on which loan has been taken to/by the company are not, prima facie prejudicial to the interest of the Company. (d) In accordance with the information and explanations given to us, in respect of the aforesaid loans, there were no as such stipulated terms (schedule) for repayment of principal and interest and the same are repayable on demand respectively. 4. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations or where user department has shown specific preference, the internal control system needs to be further strengthened to be made the same {read with note no. 2.12, 2.15 and 2.16(b) and 16 (c)} commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system. 5. According to the information and explanations given to us and based upon audit procedures performed, we are of the opinion that particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section; and transactions made in pursuance of such contracts or arrangements (exceeding the value of Rs. 5 lacs in respect of each party during the financial year), have been made at prices which are generally reasonable having regard to the prevailing market prices at the relevant time. 6. The Company has not accepted any deposits from public within the meaning of section 58A and 58AA and the rules framed there under and any other relevant provisions of the Act with regard to deposits accepted from the public. We have been informed that no 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 in this regard. 7. The Company has an internal audit system, which needs to be further strengthened to make it commensurate with the size of the Company and nature of its business. 8. As per the information and explanations provided by the management to us, the Central Government has prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of the products of the Company. However, the company is in process of compilation/updation of the required records. In absence of the same, we are unable to comment thereupon. 9. (a) According to the records and information and explanation given to us, undisputed statutory dues including Service Tax, Custom Duty, and Excise Duty, have generally been regularly deposited by the company except Provident Fund, Employee State Insurance, T.D.S, T.C.S, Sales Tax, Fringe Benefit Tax Service Tax and Excise Duty amounting to Rs. 4176 Thousands, 74 Thousand, 4855 Thousands, 43 Thousand, 1269 Thousands, 312 Thousands, 47 Thousands and 72 Thousands respectively, which as on 31st March, 2012 are outstanding for more then six months from the date they become payable [read with note no. 2.15 (b) & (c)]. (b) According to the records and information and explanation given to us, there are no dues in respect of Income Tax, Service Tax, Custom Duty, Cess and Wealth Tax that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Sales Tax, Entry Tax and Excise Duty that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below (read with note no. 2.1): Statue Nature of Dues Period Amount Forum where (Rs.in dispute Pending thou- sands Central Sales Interest on Tax 1999-00 to 77 Supreme Court Tax Act 2001-02 Disallowance of 2000-01 4199 Commercial Tax Exemptions 01-02 Tribunal, Noida 03-04 04-05 Disallowance of 2002-03 549 Commercial Tax Exemptions Tribunal, Noida Non-Submission of 2002-03 210 Deputy `C' Forums. Commissioner Trade Tax, Haldwani Non-Submission of 2003-04 358 Commercial Tax `C' Forums. Tribunal, Noida Non-Submission of 2003-04 & 980 Deputy `C' Forums. 2004-2005 Commissioner Tax, Haldwani Non-Submission of 2004-2005 183 Commercial Tax, `C' Forums. Tribunal Noida Central Sales Tax 2005-2006 1001 Addl. Commissioner (Appeals), Trade Tax Noida Central Sales Tax* 2005-06 170731 Deputy 2006-07 Commissioner 2007-08 Haldwani Penalty on account 2010-11 73 Joint of late & Commissioner deposition of CST 2011-12 (Appeals), Comm.Tax Haldwani Uttrakhand Trade Tax on Stock 1997-1998 8161 Trade Tax Sales Tax Transfer Tribunal Haldwani Act Local Sales Tax* 2005-06 2940 Deputy & Commissioner 2006-07 Haldwani U.P. Sales Sales Tax 2006-2007 43 Addl. Tax Act Commissioner (Appeals), Trade Tax Noida Uttrakhand Entry Tax 2003-2004 664 Joint Entry Tax Act Commissioner (Appeals), Haldwani Central Related to 1995 810 CESTAT, New Delhi Excise Act valuation Evaporation Boat 1998 717 High Court, Nainital Related to 1997-2000 10375 Commissioner, Valuation Excise * In these cases, appeals have been filed after financial year ended 31.3.2012. 10. The company's accumulated losses at the end of the year are more than fifty percent of its net worth and it has not incurred cash loss during the current financial year (read with our comments in para 2(f) above) but has incurred cash losses in the immediately preceding financial year. 11. On the basis of records made available and the information and explanation given to us the company has defaulted in repayment of dues to financial institution and banks. The amount overdue on account of principal is Rs. 336446 Thousands (Rs. 297023 Thousands up to 31-03-2011) consisting delays of 1 day to 2056 days and on account of interest Rs. 198908 Thousands (162884 Thousands up to 31-03-2011) consisting delays of 14 days to 2056 days. Further, this is to be read with Note no. 2.12, 2.14 and 2.15(a). 12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The Company is not a chit fund or a nidhi/mutual benefit fund/society, therefore, the provisions of clause 4(xiii) of the said Order are not applicable to the company. 14. According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. 15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. 16. During the year no term loans were received by company, accordingly the provisions of clause 4(xvi) of the Order are not applicable to the Company. 17. On the basis of information an explanations given to us and on an overall examination of financial statements of the company, no funds raised during the year in short term basis have been used for long term investment. 18. According to information and explanations given to us, the Company has not made any preferential allotment of shares to any parties or companies covered in the register maintained under section 301 of Companies Act 1956. 19. No debentures have been issued/outstanding during the year hence; the question of security/charges thereof does not arise. 20. The company has not raised any money through a public issue during the year. 21. Based on audit procedure performed and on the basis of information and explanations provided by the management and to the best of our Knowledge and belief, no fraud (read with our comments in para 2(f)(x) above) on or by the company has been noticed or reported during the course of our audit, nor we have been informed of any such case by the management. For LODHA & CO Chartered Accountants Firm Registration No-301051E N. K. LODHA Partner Membership No.: - 85155 Place: New Delhi Date : 30th August, 2012
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