| We have audited the accompanying standalone financial statements of J J
EXPORTERS 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 then ended, and a summary of the significant
accounting policies and other explanatory information.
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 but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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 matter in the Notes to the financial
statements:
a) Note 2 to the financial statements which indicates that the Company
has accumulated losses and its net worth has been substantially eroded,
the Company has incurred a Net loss during the current year and
incurred cash loss during the previous year and, the Company's current
liabilities exceeded its current assets as at the Balance Sheet date.
These conditions, along with other matters set forth in Clause 8 of
Note 23, indicate the existence of an uncertainty that may cast doubt
about the Company's ability to continue as a going concern. However,
the financial statements of the Company has been prepared on a going
concern basis since the financial and business restructuring has been
initiated by the company.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section(11) of section 143 of the Companies Act, 2013, we give in
the Annexure a statement on the matters specified in paragraphs 3 and 4
of the Order, to the extent applicable.
2. 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.
(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.
(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) The going concern matter described in sub-paragraph (a) under the
Emphasis of Matters paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company.
(f) 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.
(g) 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 has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Clause 1 of Note
23 to the financial statements.
(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.
(Referred to Paragraph 1 of Report on Other Legal and Regulatory
Requirements of our Report of even date) On the basis of such checks as
we considered appropriate and in terms of the information and
explanations given to us, we state that:
i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, fixed assets, according to the practice of the
Company, are physically verified by the management at reasonable
intervals, in a phased verification programmer, which, in our opinion,
is reasonable, looking to the size of the Company and the nature of its
business. According to the information and explanations given to us, no
material discrepancies were noticed on such verification.
ii. (a) As explained to us, inventories have been physically verified
during the year at reasonable intervals by the management.
(b) The procedures explained to us, which are followed by the
management for physical verification of inventories, are in our opinion
reasonable and adequate in relation to the size of the Company and the
nature of its business.
(c) On the basis of our examination of the inventory records of the
Company, we are of the opinion that, the Company is maintaining proper
records of its inventory. Discrepancies, which were noticed on physical
verification of inventory as compared to book records, have been
properly dealt with in the books of accounts. However, they are not
material in nature.
iii. According to the information and explanations given to us, the
Company has not granted any loan, secured or unsecured to the
Companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act, 2013. Hence, comment on Clause
No. iii (a) and iii (b) of the said order does not arise.
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 previous assessment, no continuing
failure to correct any major weakness in internal control system had
come to our notice.
v. According to the information and explanations given to us, there is
no such deposits, taken by the Company, for which 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, compliances are required.
vi. We have broadly reviewed the books of account and records
maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under sub-section (1) of
section 148 of the Companies Act, 2013 in respect of the Company's
product to which the said rules are made applicable, and are of the
opinion that, prima-facie, the prescribed accounts and records have
been made and maintained. We have, however not made a detailed
examination of the same.
vii. a) According to the records of the Company and as per the
information and explanations given to us , the Company is 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 during the year.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Statutory
Dues were in arrears as at 31st March,2015 for a period of more than
six months from the date they became payable.
b) On the basis of information and explanations given to us, these are
the disputed Statutory Dues, which have not been deposited with the
appropriate authorities :
The details regarding the Income Tax disputed dues pending before
Commissioner of Income Tax (Appeals) is shown below:
ASSESSMENT YEAR INCOME TAX ASSESSMENT YEAR INCOME TAX
AMOUNT(Rs.) AMOUNT(Rs.)
1998-1999 79,799 2008-2009 45,868,423
2003-2004 163,157 2009-2010 42,406,650
2004-2005 1,301,201 2010-2011 327,520
2005-2006 5,276,944 2011-2012 61,590
The details regarding the Sales tax disputed dues pending before
Appellate and Revisional Board are as follows:
ASSESSMENT YEAR SALES TAX AMOUNT (Rs.)
2008-09 1,15,154
2009-10 1,04,171
2010-11 25,76,331
2011-12 2,17,538
The details regarding the Excise Duty, Custom Duty and Service Tax
disputed dues are as follows:
PARTICULARS AMOUNT (Rs.) Forum where Dispute is Pending
Custom Duty (including
penalty of -
Rs.48,40,347) (2009-10
to 2012-13) 96,80,694 Commissioner of Central
Excise
Service Tax (2006-07) 2,56,065 Central Excise and Service
Tax Appellate Tribunal
(CESTAT)
Service Tax (2006-07) 3,36,842 Commissioner of Appeal
Service Tax (2007-08) 90,842 CESTAT
Service Tax on
Commission (2005-06) 3,48,536 Commissioner of Appeal
Service Tax (2007-08) 2,66,676 Commissioner of
Appeal
Service Tax (2007-08) 3,87,217 CESTAT
Service Tax (2008-09 &
2009-10) 2,83,482 Commissioner of Appeal
Service Tax (2009-10) 51,920 Commissioner of
Appeal
Service Tax (2006-07 &
2007-08) 6,95,479 Commissioner of Appeal
Service Tax (2007-08) 2,02,497 Honourable High Court of
Calcutta
c) There is no amount required to be transferred to Investors Education
and Protection Fund as on 31st March, 2015.
viii. The accumulated losses of the company at the end of the financial
year is more than fifty percent of its net worth and the company has
not incurred cash losses in the current financial year but the company
has incurred cash losses in the immediately preceding financial year.
ix. The term loan from Industrial Development Bank of India (IDBI) to
the extent of Rs.15 Crores, which was to be paid during the year 2014-15,
is not yet paid. However, the bank has approved one time settlement of
the outstanding loans, for which necessary compliances are in process.
Loans from Indian Overseas Bank (IOB) ofRs.23.18 Crores (including
interest), subject to confirmation was called back for repayment during
the year 2013-14 and is also not yet paid, for which the company has
approached for one time settlement to the bank in view of the current
financial position.
x. 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.
xi. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans were applied for
the purpose for which the loans were obtained.
xii. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
audit practices in India, and according to the information and
explanation given to us, we have neither come across instance of fraud
on or by the Company, noticed or reported during the year, nor we have
been informed of such case by the management.
For SALARPURIA JAJODIA & CO.
Chartered Accountants
ICAIReg:No. 302111E
Anand Prakash
Place : Kolkata Partner
Date: 29th day of May, 2015 Membership No. 056485 |