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Auditor Report of Central Provinces Railways Company Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of The Central Provinces Railways Company Limited ("the Company"), which comprise the Balance Sheet as at 31/03/2015, the Statement of Profit and Loss, for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the 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 financial statements that give a true and fair view of the financial position and financial performance 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 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. 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 31/03/2015, and its Loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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 Act, we give in the annexure a statement on the matters specified in paragraph 3and 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 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 dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid 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) On the basis of the written representations received from the directors as on 31/03/2015 taken on record by the Board of Directors, none of the directors is disqualified as 31/03/2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) 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 did not have any pending litigations on its financial position in its financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. The Company does not required to be transferred fund to the Investor Education and Protection Fund.

Annexure to the Independent Auditors' Report

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

(1) In Respect of Fixed Assets

(a) No records are available for Fixed Capital Expenditure on Railway Construction account as shown in schedule No. 5 annexed to Balance Sheet which is in possession and control of the Central Railway.

(b) Physical verification could not be conducted by the management of fixed Assests under railway construction account since the assets are in possession and control of the Central Railway and hence discrepancies, if any are not presently ascertainable.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

(2) In Respect of Inventory

(a) As explained to us, shares are held as stock in trade which treated as inventories which have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

(3) Loans and advances to parties covered under section 189

In our opinion and according to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to/ from the companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013;

The company not granted or taken any loans from parties covered in the register maintained under Section 189 hence clause 3 (a) and 3 (b) is not applicable.

(4) Internal Control in reference to Purchase of Inventory and Fixed Assets and whether there is continue failure of Internal control

In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed

(5) Rules followed while accepting Deposits

No deposits within the meaning of Sections 73 to 76 or any other relevant provision of the Act and rules farmed thereunder have been accepted by the Company.

(6) Maintenance of cost records

The Company is not required to maintain cost records pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (l) of section 148 of the Companies Act.

(7) According to the information and explanations given to us in respect of statutory dues

(a) According to the records of the company, undisputed statutory dues including Income-tax & other material statutory dues to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amounts payable in respect of income tax & other material statutory dues which have not been deposited on account of any disputes.

(c) The Company does not required to transfer fund to the Investor Education and Protection Fund.

(8) Company which has been registered for a period less than five years and accumulated losses are more than 50% of Net worth, Reporting of cash Losses

The Company is a potentially Sick Company under clause (o) of Section 3 of Sick Industrial Companies (Special Provisions) Act, 1985 since the accumulated losses of the Company exceed 50% of the Net worth of the Company. Further the company has incurred cash losses in current year & immediately preceding year.

(9) Default in Repayment of Loans taken from Bank or Financial Institutions

The company has not taken any loans from Bank or Financial Institutions

(10) Terms for Loans and Advances from Banks or Financial Institutions prejudicial to the interest of the company

The company has not taken any loans from Bank or Financial Institutions, thus this clauses is not applicable.

(11) Application versus purpose of Term Loan.

During the year, the Company has not taken any term loans..

(12) Reporting of Fraud During the Year Nature and Amount

According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For S B Jajoo & Co. chartered accountants FRN: 125915W

Sd/-

Santosh B Jajoo Proprietor Membership No: 118622

Place: Mumbai Date: 28.05.2015


Mar 31, 2014

1. We have audited the accompanying financial statements of The Central Provinces Railway Company Limited , which comprise the Balance Sheet as at 31 March, 2014, the Statement of Profit and Loss and 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 Financial Statements

2. The Company''s Management is responsible for the preparation of these 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. 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 the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. Subject to our remark in para 7 below, in our opinion and to the best of our information and according to the explanations given to us, the 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014.

(b) In the case of the Statement of Profit and Loss, of the Loss of the Company for the year ended on that date, and

(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Other Matter

7. The Company has, as a matter of prudence not recognized income accrued from C e n t r a l Railways for the period 1st April 2013 to 31st March 2014 amounting to Rs 738,972 /- on the ground that the same has been adjusted by the Central Railways against capital expenditure claimed to have been incurred by them. No provision has been made for this liability nor has the assets been recognized in the f i n a n c i a l statements on the ground that the company has disowned the entire liability. (Refer Note 19 (ii) (c)).

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

9. As required by Section 227(3) of the Act, 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.

(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, 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 Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

(e) On the basis of the written representations received from the directors as on 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

The Annexure to Independent Auditor''s Report (Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" section of our report of even date)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. (a) No records are available for Fixed Capital Expenditure on Railway Construction account as shown in schedule No. 5 annexed to Balance Sheet which is in possession and control of the Central Railway.

(b) Physical verification could not be conducted by the management of fixed Assests under railway construction account since the assets are in possession and control of the Central Railway and hence discrepancies, if any are not presently ascertainable.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) As explained to us, shares are held as stock in trade which treated as inventories which have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the provisions of clauses 3 (b), 3(c) and 3 (d) of the order are not applicable to the Company.

(e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus clauses 3 (f) & 3 (g) are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, there were no contracts or arrangements referred to in section 301 of the Act, 1956. Hence Clause (b) of 5 of the said order is not applicable.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company did not have any internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, the company was not required to maintain cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act, 1956.

9. (a) According to the records of the company, undisputed statutory dues including Income-tax & other material statutory dues to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amounts payable in respect of income tax & other material statutory dues which have not been deposited on account of any disputes.

10. The Company is a potentially Sick Company under clause (o) of Section 3 of Sick Industrial Companies (Special Provisions) Act, 1985 since the accumulated losses of the Company exceed 50% of the Net worth of the Company. Further the company has incurred cash losses in current year & immediately preceding year.

11. Based on our audit procedures and on 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, bank or debenture holders.

12. According to the information and explanations given 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.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company is trading in Shares. Proper records & timely entries have been maintained.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

20. The Company has not raised any money by public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For S.B.JAJOO & CO, Chartered Accountants. (Reg.No.125915W)

Sd/- (Santosh .B. Jajoo) Proprietor Membership No.118622

Place: Mumbai Date: 29.05.2014


Mar 31, 2012

1 We have audited (he attached Balance Sheet of The Central Provinces Railways Company Limited as at 31st March, 2012 and also 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 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 generaly accepted in India. These 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 amount and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management as well as evaluating the overal financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Audit Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such check of books and records of the company, as we considered appropriate, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of (he said order to the extent applicable to the company.

4 The Company has, as a matter of prudence not recognised income accrued from Railways for the period 1st April 2011 to 31st March 2012 amounting to Rs.25,l7,886.04 ( Rs.20,76,071.25) on the ground that the same has been adjusted by the Central Railways against capital expenditure of Rs. 2,37,00,000 /- approx. daimecMo have been incurred by them. No provision has been made for this liability nor has the assets been recognised in the financial statements on the ground that the company has disowned the entire (ability (Refer Note 1 ).

5 Attention is invited to note 1A regarding non provision of interest in respect of interest bearing loan granted to a company. We are unable to express our opinion on the readability of Rs.20,00,000/- and interest thereon.

6 Further to our comments in the Annexure referred to above, we report that

a) We have obtained an the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose 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 these books;

- c) The Balance Sheet, Profit & Loss account and Cash Flow statement dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet and Profit & Loss account referred to in this report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act 1956 to the extent applicable to this Company;

e) On the basis of the written representations received from directors of the compa-ny, and taken on record by the Board Of Directors, we report that no director is disqualified as on March 31, 2012 from being appointed as a oTrector under clause (g) of sub-section (1) of Section 274 of the Companies Act 1956;

0 During the year the company has transferred the balance between many party accounts without any documentary evidence. This, coupled with non-availability of confirmation from the parties for their year-end balances, we are unable to vouch for the correctness of the entries made in these parties accounts accounts and consequently unable to express any opinion about the correctness of the year end balances of these parties.

g) We have not been able to verify the Register to be maintained u/s 301 of the Companies Act, 1956 as the same was not furnished to us. Hence we are unable to express any opinion on the same and the various clauses in the annexure to this report

h) We have not been able to verify some of the bank balances with the Sank statements, due to unavailability of the bank statements.

7 Subject to our remark in para 4, 5 & 6 above, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & toss account read together with the notes forming part thereof, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in confirmity with the accounting principles generally accepted m India;

i) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

ii) In so far as it relates to the Profit & Loss Account, of the loss of the Company for the year ended on that date;

AND

ii) In case of Cash Flow statement, of the cash flows of the company for the year ended on that date;

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN OUR REPORT OF EVEN DATE of The Central Provinces Railways Company Limited for the year ended on 31st March-2012

1 (a)No records are available for Fixed Capital expenditure on Railway construction account as shown in Schedule No.3 annexed to Balance Sheet which ae in possession and control of the Central Railway.

(b) Physical verification could not be conducted by the management of Fixed Assets under railway construction account since the assets are in possession and control of the Central Railway and hence discrepancies, if any are not presently ascertainable.

(c) During the year Company has not disposed of any part of fixed assets.

G) The Company did not have inventory at any point of time during the year. Hence Clouse 4(ii) of the said order pertaining to Inventory is not applicable.

m) The Company has not taken/granted any Loan from/to Companies, firms or other parties listed in the register maintained under section 301 of the companies Act, 1956 Hence clause (iii) of the said order pertaining to loans is not applicable.

iv) In our opinion and according to the information and explanations given to us there is adequate internal control procedures commensurate with the size cf the company and the nature of its business with regard to purchase of fixed assets and sale of services. During the course of our audit we have not observed any continuing failure to correct major weakness in internal control system. We are informed that the nature of Company's business does not involve purchase of inventory and sale of goods.

v) According to the information and explanations given to us, in our opinion, there were no contract or arrangements needing entry in the register to be maintained under section 301 of the Companies Act, 1956.Hence Clause 4(v) of the said order is not applicable.

vi) In our opinion , and according to the information and explanations given to us, the Company has not accepted any deposit from the public within the meaning of the provisions of section 58A, 58AA or any other relevant provisions of the Act and the Rules framed there under.

vii) The company did not have any internal audit system.

vii) According to the information and explanations given to us, the Company was not required to maintain cost records under section 209(1)(d) of the Companies Act, 1956.

ix) According to the information and explanations given to us, the company is regular in depositing undisputed statutory dues including provident fund, employee's state insurance, sales tax and any other statutory dues with the appropriate authorities.

x) In our opinion , the accumulated losses of the company were not more than fifty percent of its net worth as at 31st March 2012. The company incurred cash losses during the year ended 31st March 2012 and also in the immediately preceding financial year.

xi) The Company did not have outstanding debentures or outstanding loans from financial institution or bank during the year. Hence clause 4(xi) of the said Order is not applicable.

xii) The Company has not granted any loans and.advances on the basis of security by way of pledge of shares, debentures and other securities. Hence clause 4(xii) of the said Order is not applicable.

xiii) The Company is not a chit fund /nidhi/mutual benefit fund /society. Hence clause 4(xiii) of the said order is not applicable .

xiv) In our opinion, and according to the information and explanation given to us, the company did not deal or trade in share .securities, debentures & other investment. Hence Clause 4(>dv) of the said order is not applicable.

xv) According to the information and explanation given to us, the company has not given guarantee for loans taken by others from bank or financial institutions.

xvi) The Company had no term loans outstanding at any point of time during the year

xvii) According to the information & explanation given to us and on an overall examination of balance sheet of the company, we report that during the year the company has not utilized short term funds for long term investment.

xviii) During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act , 1956.Hence Clause 4(xviii) of the said Order is not applicable.

xix) The Company did not have outstanding debentures at any point of time during the year. Accordingly no securities or charge have been created.

xx) The company has not raised any money by public issues during the year.

xxi) According to the information and explanations given to us , no fraud on or by the Company has been noticed or reported during the year.



For BHANGARIA & Co.

Chartered Accountants

Nikunj G. Bhangaria

Proprietor M. No. 121369

Place: Mumbai

Date: 21/08/2012


Mar 31, 2010

1 We have audited the attached Balance Sheet of The Central Provinces Railways Company Limited as at 31st March, 2010 and also 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 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. These 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 amount and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 (Audit Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such check of books and records of the company, as we considered appropriate, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable to the company.

4 The Company has, as a matter of prudence not recognised income accrued from Railways for the period 1st April 2010 to 31st March 2010 amounting to Rs.20,76,071.25 on the ground that the same has been adjusted by the Central Railways against capital expenditure of Rs. 2.37 crores claimed to have been incurred by them. No provision has been made for this liability nor has the assets been recognised in the financial statements on the ground that the company has disowned the entire liability (Refer Note Sch 10 1 (c)).

5 Attention is invited to note Sch 10 B (13) regarding non provision of interest in respect of interest bearing loan granted to a company. We are unable to express our opinion on the realisability of Rs.20,00,000/- and interest thereon.

6 Further to our comments in the Annexure referred to 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 purpose 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 these books;

c) The Balance Sheet, Profit & Loss account and Cash Flow statement dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet and Profit & Loss account referred to in this report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable to this Company;

e) On the basis of the written representations received from directors of the company, and taken on record by the Board of Directors, we report that no director is disqualified as on March 31, 2010 from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) During the year the company has transferred the balance between many party accounts without any documentary evidence. This, coupled with non-availability of confirmation from the parties for their year-end balances, we are unable to vouch for the correctness of the entries made in these parties accounts accounts and consequently unable to express any opinion about the correctness of the year end balances of these parties.

g) We have not been able to verify the Register to be maintained u/s 301 of the Companies Act, 1956 as the same was not furnished to us. Hence we are unable to express any opinion on the same and the various clauses in the annexure to this report.

f) We have not been able to verify some of the bank balances with the bank statements, due to unavailability of the bank statements.

Subject to our remark in para 4, 5 & 6 above, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & Loss account read together with the notes forming part thereof, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in confirmity with the accounting principles generally accepted in India;

i) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

ii) In so far as it relates to the Profit & Loss Account, of the loss of the Company for the year ended on that date;

AND ii) In case of Cash Flow statement, of the cash flows of the company for the year ended on that date;

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN OUR REPORT OF EVEN DATE

The Central Provinces Railways Company Limited for the year ended on 31st March-2010

i) (a ) No records are available for Fixed Capital expenditure on Railway construction account as shown in Schedule No 3 annexed to Balance Sheet which ae in possession and control of the Central Railway.

(b) Physical verification could not be conducted by the management of Fixed Assets under railway construction account since the assets are in possession and control of the Central Railway and hence discrepancies, if any are not presently ascertainable.

(c) During the year Company has not disposed of any part of fixed assets.

ii) The Company did not have inventory at any point of time during the year. Hence Clouse 4(ii) of the said order pertaining to inventory is not applicable.

iii) The Company has not taken/granted any Loan from/to Companies, firms or other parties listed in the register maintained under section 301 of the companies Act, 1956 . Hence clause 4(iii) of the said order pertaining to loans is not applicable.

iv) In our opinion and according to the information and explanations given to us there is adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of fixed assets and sale of services. During the course of our audit we have not observed any continuing failure to correct major weakness in internal control system. We are informed that the nature of Companys business does not involve purchase of inventory and sale of goods.

v) According to the information and explanations given to us, in our opinion, there were no contract or arrangements needing entry in the register to be maintained under section 301 of the Companies Act, 1956.Hence Clause 4(v) of the said order is not applicable.

vi) In our opinion , and according to the information and explanations given to us, the Company has not accepted any deposit from the public within the meaning of the provisions of section 58A, 58AA or any other relevant provisions of the Act and the Rules framed there under.

vii) The company did not have any internal audit system.

viii) According to the information and explanations given to us, the Company was not required to maintain cost records under section 209(1)(d) of the Companies Act, 1956.

ix) According to the information and explanations given to us, the company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, sales tax and any other statutory dues with the appropriate authorities except the Fringe Benefit Tax amounting to Rs.22,364/ which is outstanding on the date of balance sheet for a period exceeding six months.

x) In our opinion , the accumulated losses of the company were not more than fifty percent of its net worth as at 31st March 2010. The company incurred cash losses during the year ended 31st March 2010 and also in the immediately preceding financial year.

xi) The Company did not have outstanding debentures or outstanding loans from financial institution or bank during the year. Hence clause 4(xi) of the said Order is not applicable.

xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence clause 4(xii) of the said Order is not applicable.

xiii) The Company is not a chit fund /nidhi/mutual benefit fund /society. Hence clause 4(xiii) of the said order is not applicable .

xiv) In our opinion, and according to the information and explanation given to us, the company did not deal or trade in share ,securities, debentures & other investment . Hence Clause 4(xiv) of the said order is not applicable.

xv) According to the information and explanation given to us, the company has not given guarantee for loans taken by others from bank or financial institutions.

xvi) The Company had no term loans outstanding at any point of time during the year

xvii) According to the information & explanation given to us and on an overall examination of balance sheet of the company , we report that during the year the company has not utilized short term funds for long term investment.

xviii) During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act , 1956.Hence Clause 4(xviii) of the said Order is not applicable.

xix) The Company did not have outstanding debentures at any point of time during the year. Accordingly no securities or charge have been created.

xx) The company has not raised any money by public issues during the year.

xxi) According to the information and explanations given to us , no fraud on or by the Company has been noticed or reported during the year.

For BHANGARIA & Co.

Chartered Accountants

Nikunj G. Bhangaria

Proprietor

M. No. 121369

Place : Mumbai Date : 23/Aug/10


Mar 31, 2009

1 We have audited the attached Balance Sheet of The Central Provinces Railways Company Limited as at 31st March, 2009 and also Profit and Loss Account and the Cash Row Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company 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. These 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 amount and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 (Audit Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such check of books and records of the company, as we considered appropriate, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable to the company.

4 The company has, as a matter of prudence not recognised income accrued from Railways for the period 1st April, 08 to 31st March, 09 amounting to Rs.20,29,341/- on the ground that the same has been adjusted by the Central Railways against capital expenditure of Rs. 2.58 crores claimed to have been incurred by them. No provision has been made for this liability nor has the assets been recognised in the financial statements on the ground that the company has disowned the entire liability (Refer Note Sch 10 1 (c)).

5 Attention is invited to note Sch 10 B (13) regarding non provision of interest in respect of interest bearing loan granted to a company. We are unable to express our opinion on the realisability of Rs.20,00,000/- and interest thereon.

6 Further to our comments in the Annexure referred to above, we report that:

1) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose 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 these books;

c) The Balance Sheet, Profit & Loss account and Cash Flow statement dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet and Profit & Loss account referred to in this report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable to this Company;

e) On the basis of the written representations received from directors of the company, and taken on record by the Board of Directors, we report that no director is disqualified as on March 31, 2009 from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

7 Subject to our remark in para 4 & 5 above, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & Loss account read together with the notes forming part thereof, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in confirmity with the accounting principles generally accepted in India;

i) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2009;

ii) In so far as it relates to the Profit & Loss Account, of the loss of the Company for the year ended on that date;

AND

ii) In case of Cash Flow statement, of the cash flows of the company for the year ended on that date;

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN OUR REPORT OF EVEN DATE of The Central Provinces Railways Company Limited for the year ended on 31st March-2009

i) (a ) No records are available for Fixed Capital expenditure on Railway construction account as shown in Schedule No 3 annexed to Balance Sheet which ae in possession and control of the Central Railway.

(b) Physical verification could not be conducted by the management of Fixed Assets under railway constuction account since the assets are in possession and control of the Central Railway and hence discrepancies, if any are not presently ascertainable.

(c) During the year Company has not disposed of any part of fixed assets.

ii) The Company did not have inventory at any point of time during the year. Hence Clouse 4(H) of the said order pertaining to inventory is not applicable.

iii) The Company has not taken/granted any Loan from/to Companies, firms or other parties listed in the register maintained under section 301 of the companies Act, 1956 . Hence clause 4(iii) of the said order pertaining to loans is not applicable.

iv) In our opinion and according to the information and explanations given to us there is adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of fixed assets and sale of services. During the course of our audit we have not observed any continuing failure to correct major weakness in internal control system. We are informed that the nature of Companys business does not involve purchase of inventory and sale of goods.

v) According to the information and explanations given to us, in our opinion, there were no contract or arrangements needing entry in the register to be maintained under section 301 of the Companies Act, 1956.Hence Clause 4(v) of the said order is not applicable.

vi) In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposit from the public within the meaning of the provisions of section 58A, 58AA or any other relevant provisions of the Act and the Rules framed there under.

vii) The company did not have any internal audit system.

viii) According to the information and explanations given to us, the Company was not required to maintain cost records under section 209(l)(d) of the Companies Act, 1956.

ix) According to the information and explanations given to us, the company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, sales tax and any other statutory, dues with the appropriate authorities except the Fringe Benefit Tax amounting to Rs.22364/ which is outstanding on the date of balance sheet for a period exceeding six months.

x) In our opinion , the accumulated losses of the company were not more than fifty percent of its net worth as at 31st March 2009. The company incurred cash losses during the year ended 31st March 2009 and also in the immediately preceding financial year.

xi) The Company did not have outstanding debentures or outstanding loans from financial institution or bank during the year. Hence clause 4(xi) of the said Order is not applicable.

xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence clause 4(xii) of the said Order is not applicable.

xiii) The Company is not a chit fund /nidhi/mutua! benefit fund /society. Hence clause 4(xiii) of the said order is not applicable.

xiv) In our opinion, and according to the information and explanation given to us, the company did not deal or trade in share ,securities, debentures & other investment. Hence Clause 4(xiv) of the said order is not applicable.

xv) According to the information and explanation given to us, the company has not given guarantee for loans taken by others from bank or financial institutions. xvi) The Company had no term loans outstanding at any point of time during the year

xvii) According to the information & explanation given to us and on an overall examination of balance sheet of the company, we report that during the year the company has not utilized short term funds for long term investment

xviii) During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.Hence Clause 4(xviii) of the said Order is not applicable.

xix) The Company did not have outstanding debentures at any point of time during the year. Accordingly no securities or charge have been created.

xx) The company has not raised any money by public issues during the year.

xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.



For V. S. Paranjape & Co.

Chartered Accountants

V. S. Paranjape

Sole Proprietor

M. No. 36273

Place Mumbai

Date 24/08/2009







 
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