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Dalmia Bharat Sugar and Industries
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« Mar 10
Auditor's Report (Dalmia Bharat Sugar and Industries) Year End : Mar '11
1.  We have audited the attached Balance Sheet of Dalmia Bharat Sugar
 and Industries Limited (formerly known as Dalmia Cement (Bharat)
 Limited) (''the Company'') as at March 31, 2011 and also the Profit and
 Loss Account 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.
 
 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 of 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 financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 (as
 amended) (the Order) issued by the Central Government of India in terms
 of sub-section (4A) of Section 227 of the Companies Act, 1956 and on
 the basis of such checks as we considered appropriate and according to
 information and explanations given to us, we enclose in the Annexure 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 above, we
 report that:
 
 i. 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;
 
 ii. 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;
 
 iii. In our opinion, the Balance Sheet, Profit and 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;
 
 iv. The Balance Sheet, Profit and Loss account and Cash Flow statement
 dealt with by this report are in agreement with the books of account;
 
 v. On the basis of the written representations received from the
 directors, as on March 31, 2011, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956;
 
 vi. In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with the
 Accounting Policies and Notes thereon, 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 :
 
 a) in the case of Balance Sheet, of the state of affairs of the Company
 as at March 31, 2011;
 
 b) in the case of Profit and Loss account, of the profit for the year
 ended on that date; and
 
 c) in the case of Cash Flow statement, of the cash flows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date
 
 Re: Dalmia Bharat Sugar and Industries Limited
 (formerly known as Dalmia Cement (Bharat) Limited)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) All fixed assets have not been physically verified by the
 management during the year but there is a regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification as compared to book
 records.
 
 (c) Fixed assets (and other assets and liabilities) relating to
 demerged undertakings comprising of Cement business, Thermal Power
 business and Refractory business have been transferred to the resulting
 companies pursuant to the Scheme of Arrangement (refer note no. 19 of
 schedule 20). This has not affected the going concern assumption.
 
 (ii) (a) The management has conducted physical verification of
 inventory at reasonable intervals during the year, except stocks lying
 with third parties and in transit which have been verified with
 reference to correspondence of third parties or subsequent receipt of
 goods. In our opinion, the frequency of such verification is
 reasonable.
 
 (b) The procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material and have been properly dealt with in
 the books of account.
 
 (iii) (a) As informed, the company has not granted any loans, secured
 or 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), (c) & (d) of the
 order, are not applicable to the company.
 
 (b) According to the information and explanations given to us, the
 Company has taken unsecured loan from one company covered in the
 register maintained under section 301 of the Companies Act, 1956.  The
 maximum amount outstanding during the year was Rs 1017.50 million and
 the year end balance of such loan is Rs 250 million. Further, the
 company had, in earlier years, taken secured loans in the form of fixed
 deposits from four persons including directors and their relatives
 covered in the register maintained under section 301 of the companies
 Act, 1956. However, these loans have been transferred pursuant to the
 scheme of arrangement(refer note no. 19 of schedule 20). There are no
 such loans outstanding at the close of the year.
 
 (c) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not prima facie prejudicial to the interest of the
 Company.
 
 (d) In respect of loans taken, repayment of the principal amount is as
 stipulated and payments of interest have been regular. There are no
 overdue amounts at the year end as the loan is repayable on demand.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is 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. During the course of our audit carried out in accordance with
 the generally accepted auditing practices in India, we have not
 observed any major weakness or continuing failure to correct any major
 weakness in the internal control system of the company in respect of
 these areas.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Companies Act, 1956 that
 need to be entered into the register maintained under section 301 have
 been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakh in respect of each
 party have been entered into during the financial year at prices which
 are reasonable having regard to the prevailing market prices at the
 relevant time.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits from the public,
 within the meaning of Sections 58A and 58AA or any other relevant
 provisions of the Companies Act, 1956 and the Companies (Acceptance of
 Deposits) Rules, 1975. Regarding the deposits accepted in earlier
 years, the same have transferred pursuant to the Scheme of Arrangement
 (Refer note no. 19 of schedule 20).
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by 
 the Company pursuant to the Rules made by the Central Government 
 for the maintenance of cost records under section 209(1) (d) of the 
 Companies Act, 1956, and are of the opinion that prima facie, the 
 prescribed accounts and records have been made and maintained. 
 However, we are not required to make a detailed examination of such 
 books.
 
 (ix) (a) Undisputed statutory dues including provident fund, investor
 education and protection fund, employees'' state insurance, income-tax,
 sales- tax, wealth-tax, service tax, customs duty, excise duty, cess
 have generally been regularly deposited during the year with the
 appropriate authorities.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441 A of the Companies Act, 1956,
 we are not in a position to comment upon the regularity or otherwise 
 of the company in depositing the same.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees'' state insurance, income-tax,
 wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
 other undisputed statutory dues were outstanding, at the year end, for
 a period of more than six months from the date they became payable.
 
 (c) According to the records of the Company, the dues outstanding of
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty and cess on account of any dispute, are as follows:
 
 Name of the statute        Nature of ''the Dues         Amount (in
                                                         Millions)
 
 Central Excise Act, 1944   Disallowance of Cenvat             1.0 
                            Credit  
 
 Central Excise Act, 1944   Disallowance of Cenvat           13.81 
                            Credit 
 
 Central Excise Act, 1944   Demand on duty on                 27.8 
                            Bagass & electricity
                            sale 
 
 Central Excise Act,1944    Demand on duty on                121.8 
                            Bagass & electricity 
                            sale 
 
 Central Excise Act, 1944   Disallowance of Cenvat            28.5
                            Credit 
 
 Central Excise Act,1944    Disallowance of Cenvat             0.1 
                            Credit 
 
 Central Excise Act,1944    Cenvat Credit on                   0.2 
                            Cement 
 
 Finance Act, 1994          Demand of Service tax              0.1 
                            on installation 
 
 Central Excise Act,1944    Demand on duty of                  1.3
                            Distillery Products 
 
 Central Excise Act,1944    Cenvat Credit on                   1.6
                            Cement & Steel 
 
 Central Excise Act,1944    Cenvat Credit on                   0.3 
                            Cement & Steel 
 
 Central Sales Tax          Sales Tax                         19.9
 
 
 
 Name of the statute        Period to which the    Forum where disput 
                            amount relates         -e is pending
 
 Central Excise Act,1944    April 2006 to March    Dy. Commissioner,
                            2010                   Sitapur  
 
 Central Excise Act,1944    April 2006 to March    Dy. Commissioner,
                            2010                   LTU Delhi
 
 Central Excise Act,1944    Feb. 2007 to March     Add. Commissioner,
                            2010                   Lucknow
 
 Central Excise Act,1944    Feb. 2007 to March     Dy. Commissioner,
                            2010                   LTD Delhi
 
 Central Excise Act,1944    March 2006, to Nov     Commissioner,
                            2008                   Lucknow
 
 Central Excise Act,1944    March 2006, to Feb     Asst.Commissioner,
                            2007                   Sitapur   
 
 Central Excise Act,1944    April, 2006            Commissioner Appe
                                                   al,Delhi
 
 Finance Act, 1994          April 2006 to March    Asistant Commissi-
                            2007                   oner, Sitapur
 
 Central Excise Act,1944    April 2007 to March    Commissioner Appe-
                            2010                   al
 
 Central Excise Act,1944    April 2008 to Nov      Commissioner Appe-
                            2008                   al, LTU Delhi
 
 Central Excise Act,1944    March, 2006            Commissioner Appe-
                                                   al, Lucknow
 
 Central Sales Tax          -                      Dy. Commissioner, 
                                                   Sitapur
 
 
 
 (x) The Company has no accumulated losses as at the end of the
 financial year and has not incurred cash losses in the current year and
 in the immediately preceding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 institution, banks or debenture holders.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi /
 mutual benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Order are not applicable to the Company.
 
 (xiv) In respect of dealing/trading in shares, securities, debentures
 and other investments, in our opinion and according to the information
 and explanations given to us, proper records have been maintained of
 the transactions and contracts and timely entries have been made
 therein.  The shares, securities, debentures and other investments have
 been held by the Company in its own name.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (xvi) Based on information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained, where such end use has been stipulated by the lender(s).
 
 (xvii)According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report 
 that no funds raised on short-term basis have been used for long-term 
 investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 (xix) Based on the books and records produced to us by the management,
 securities have been created in respect of debentures issued, wherever
 required.
 
 (xx) During the period covered by our audit report, the company has not
 raised any money by way of public issue.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the year.
 
 
                                         For S.S. KOTHARI MEHTA & Co.
                                        Firm Registration No. 000756N
                                                Chartered Accountants
                                                    (ARUN K. TULSIAN)
                                                              Partner
                                                 Membership No. 89907
 
 Place ; New Delhi 
 Date  ; May 23, 2011
Source : Dion Global Solutions Limited
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