We have audited the attached Balance Sheet of M/S. JYOTI OVERSEAS
LIMITED., INDORE (M.P.) as at March 31st, 2011 and also Profit & Loss
Account and the Cash Flow Statement of the Company 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.
1) 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
2) As required by the Companies (Auditor''s Report) order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said
3) Further to our comments in the Annexure referred to above, we report
(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
(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
(c) The Balance Sheet and Profit and Loss Account and Cash flow
statement dealt with by this report are in agreement with the Books of
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement read with Notes dealt with by this report comply with
the accounting standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956;
(e) The Company is a Sick Industrial Company within the meaning of Sick
Industrial Companies (Special Provisions ) Act,1985. However, in view
of the facts indicated in note no. 3 in schedule 19, the accounts of
the Company have been prepared on going concern basis.
(f) Attention is drawn to the following notes in schedule 19 to
accounts whose impact on Company''s Loss/reserves is indicated in the
respective notes below:
i) Note no. 7 regarding non availability of balance confirmation
certificate from some of the Debtors, Creditors and Loans & Advances;
ii) Note No. 2 & 3 regarding non ascertainable effect, if Company is
not able to continue as a going concern, iii) Note No. 24 regarding
provision of gratuity on accrual basis and non ascertainment of
liability as per actuarial valuation as required by AS 15. iv) Note no.
4 for non provision of Interest on Term Loans taken by the Company from
Financial Institutions of Rs. 322.98 Lacs for the Year and total amount
not provided for till the date of Balance Sheet Rs. 4346.03 Lacs.
Without considering item no. (i) ,(ii) & (iii) above, whose impact on
Company''s loss/reserves is not presently ascertainable, had the impact
of item no. (iv) been considered, a) Loss for the year would have been
higher by Rs. 322.98 Lacs and consequently term Loans would have been
higher by same amount, b) If the Total amount would have been provided
for, the accumulated Losses would have been higher by Rs. 4346.03 Lacs
and Consequently Secured Loans would have been higher by Same amount.
(g) On the basis of information and explanations given to us, we report
that none of the directors is disqualified as on the date of Balance
Sheet date from being appointed as a director in terms of clause (g) of
sub- section (1) of section 274 of the Companies Act, 1956;
(h) Subject to the above and read together with other notes on
Accounts, in our opinion and to the best of our information and
according to the explanations given to us, the said accounts read with
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 the Balance Sheet, of the State of affairs of the
Company as at 31st March, 2011;and
(b) In the case of the Profit and Loss Account, of the Loss for the
year ended on that date; and
(c) In the case of Cash flow Statement of the Cash Flows of the Company
For the year ended on that date.
ANNEXURETOTHE AUDITOR''S REPORT
With reference to the Annexure referred to in paragraph 2 of our report
of even date to the members of M/S. JYOTI OVERSEAS LIMITED, for the
year ended on 31st March, 2011, We report that, in our opinion and to
the best of our information and explanations furnished to us and the
books and records examined by us in the normal course of Audit:
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b. As explained to us, the fixed assets have been physically verified
by the management during the year, which in our opinion is reasonable,
having regard to the size of the Company and nature of its asset We
were informed that no material discrepancies were noticed on such
c. There has been no disposal of substantial part of the Fixed Assets
during the year & the going concern status of the Company is not
2. a. Inventories have been physically verified by the management at
reasonable intervals during the year.
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. The Company has maintained proper records of inventories. The
discrepancies noticed on verification between physical stock and book
stock were not material having regard to the size of the operations of
the company and have been properly dealt with in Books of Accounts.
3. a. The Company has taken Loan from One party covered in the register
maintained under section 301 of the Act, At the year end Outstanding
balance of such loan taken aggregated to Rs. 67.26 Lacs and the maximum
Amount involved during the year was Rs. 74.76 Lacs, Further Company
has not granted Loans to Companies, firms or other parties covered in
the register maintained under Section301 of the Companies Act, 1956.
b. In our opinion and according to the information and explanations
given to us, the Loans are Interest free and other terms and conditions
of the aforesaid Unsecured loans taken by the Company are not prima
facie prejudicial to the interest of the Company.
c. In respect of Loans taken by the Company, the payment of Principal
amount is regular.
d. In respect of Loans taken by the Company, these were no overdue
amount. The Company has not given the Loan.
4. In our opinion and according to the information and explanation
given to us, there is adequate internal control procedure commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and also for the sale of goods.
During the course of our audit, we have not observed any major
weaknesses in internal controls.
5. Based on the Audit Procedures applied by us and according to the
information and explanations given to us, there were no transactions
that need to be entered into the register maintained in pursuance of
section 301 of the Companies Act, 1956.
6. The Company has not accepted any deposits from the public within the
meaning of Section 58 A and 58 AA of the Companies Act, 1956 and the
rules framed there under. Accordingly, there have been no proceedings
before the Company Law Board in this matter nor any order has been
7. In our opinion, the Internal Audit System is generally adequate and
commensurate with the size of the Company.
8. The Central Government has prescribed maintenance of cost records
under section 209(1) (d) of the Companies Act,1956 in respect of
manufacturing activity of the Company. We have broadly reviewed the
accounts and records of the Company in this connection and are of the
opinion, that prima facie, the prescribed accounts and records have
been made and maintained. We have not, however made a detailed
examination of the same with a view to determine whether these records
are complete and correct.
9. a. According to the records of the Company, undisputed Statutory
dues including Income Tax, Wealth Tax, Customs Duty, Excise Duty,
Provident fund and other statutory dues except for Sales Tax, Entry
Tax, Professional Tax and Cess duty have been generally regularly
deposited with the appropriate authorities. According to the
information and explanations given to us, no arrears of undisputed
amounts payable in respect of the aforesaid dues were outstanding as on
the date of Balance sheet for a period of more than six months from the
date they become payable except for MPCT/CST Rs. 43,48,239, Entry Tax
Rs. 1,20,17,890, Professional Tax Rs. 5,22,097 and Cess duty Rs.
b. According to the information and explanations given to us, the dues
in respect of Sales Tax that has not been deposited with the
appropriate authorities on account of disputes as on the date of the
Balance Sheet and the forum where the disputes are pending are as
Sr. Name of Nature of Forum where Amount for Amount
No. the Statue the Dues dispute is Which dispute Not
pending. is pending is pending Deposited
(Rs. in lacs) (Rs. in lacs)
1. M.P. Comm.
Tax Act MPCT High Court 158.40 158.40
2. M.P. Comm.
Tax Act Entry Tax High Court,
Indore 40.69 40.69
10. The accumulated losses of the Company at the end of the financial
year are more than fifty percent of its net worth. The Company has not
incurred any cash losses during this financial year, but the company
incurred cash loss in the immediately preceding financial year.
11. The Company has defaulted in repayment of dues to ARCIL and EXIM
Bank. The entire amount of outstanding Rs. 2678.11 Lacs and interest
not provided for of Rs. 4346.03 Lacs is in default.
12. According to the information and explanations given to us, the
Company during the year has not granted Loans and Advances on the basis
of security by way of pledge of shares, debentures and other
13. The Company is not a nidhi/mutual benefit fund/ society to which
the provisions of special statue relating to chit fund are applicable.
14. The Company is not dealing or trading in Share, Securities,
Debentures and other investments..
15. According to the information and explanation given to us, The
Company has not given any guarantees for Loans taken by others from
Banks or Financial Institutions.
16. The Company has not raised any term loans during the year & the
term loan outstanding at the beginning of the year, were applied for
the purpose for which they were raised.
17. According to the information and explanation given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that Prima facie the Company has not utilised the funds raised
from short term sources towards Long term investment and vice versa.
18. During the year, the Company has not made any preferential
allotment shares to parties and Companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19. The Company did not have issued debentures and therefore question
of creating of Securities does not arise.
20. The Company has not raised any money by way of Public issue during
21. In our opinion and according to the information and explanation
given to us, no fraud on or by the Company has been noticed or reported
during the year that causes the financial statements to be materially
For S. P. MOONDRA & CO.,
PLACE : INDORE M. NO. 073747
DATED THE : 25th August, 2011 FRN No.04879C