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Auditor Report of Coromandel Agro Products and Oils Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s Coromandel Agro Products and Oils Limited which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss for the year ended on that date annexed thereto and Cash Flow Statement for the year then ended, and a summary of 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 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, 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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 thereunder.

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 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 true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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.

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;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

1. As required by the Companies (Auditor's Report) Order, 2015 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 paragraphs 3 and 4 of the Order.

Report on other Legal and Regulatory Requirements

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 appears from our examination of those books

c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement 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 written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us :

i. The Company does not have any pending litigations which would impact its financial position;

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

iii. The amounts which were required to be transferred to the Investor Education and Protection Fund by the Company have been so transferred;

ANNEXURE TO THE AUDITORS' REPORT

(Ref. Coromondel Agro Products and Oils Limited) (Of even date referred to in Para 1 of our Report)

(i) a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) All the Fixed Assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets and, to the best of our knowledge, no material discrepancies were noticed on such verification;.

(ii) a) As explained given to us, physical verification of inventories has been conducted by the Management at reasonable intervals.

b) In our opinion, the procedures of physical verification of stocks 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. As explained to us, no material discrepancies were noticed on physical verification of inventory.

(iii) Based on the information and explanations provided to us, the company has not granted any loans, whether secured or unsecured, to the companies, firms or other parties covered in the Register maintained u/s Sec. 189 of the Companies Act, 2013 during the year. Hence sub clauses (a) and (b) of clause 3(iii) of the order are not applicable to the company for the year.

(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 also for the sale of goods and services to the extent applicable. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) Based on the information provided to us, the Company has not accepted any deposits during the year and hence, in our opinion, the Clause 3(v) is not applicable to the company for the year

(vi) Based on the explanations given to us, the Company has made and maintained cost records and accounts as specified by the Central Government under Section 148 of the Companies Act, 2013.

(vii) (a) According to the records of the company, the company is regular in depositing the undisputed statutory dues including employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess with the appropriate authorities;

(b) According to the information and explanations given to us, there are no dues of VAT, income tax, customs duty, excise duty, wealth tax, service tax, cess to be deposited on account of any dispute

Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

(c) According to the information provided and explanations offered to us, the company is regular in transferring amounts to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(viii) The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our Audit or in the immediately preceding financial year.

(ix) Based on the information provided and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to Banks.

(x) Based on the information provided and explanations offered to us, the Company has not given guarantee for loans taken by others from Banks or Financial Institutions the terms and conditions whereof are prejudicial to the interest of the company.

(xi) According to the information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

(xii) In our opinion and according to the information provided and explanations offered to us, no fraud on or by the Company has been noticed or reported during the year.

For M/s A.RAMACHANDRA RAO & Co. Chartered Accountants ICAI FRN:002857S

Sd/- (A.Ramachandra Rao) Place : Hyderabad Partner Date : 30th May 2015 Membership No. :009750


Mar 31, 2014

We have audited the accompanying financial statements of M/s Coromandel Agro Products and Oils Limited which comprise the Balance Sheet as at 31st March, 2014 and the Statement of Profit and Loss for the year ended and Cash Flow Statement as on that date annexed thereto and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements :

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 notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13 th 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.

Auditor''s Responsibility :

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 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 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 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 entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Opinion :

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 March 31, 2014;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. 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 Order.

2. As required under provisions of section 227(3) of the Companies Act, 1956, we report that:

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;

a) 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;

b) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

c) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under Companies Act, 1956 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;

d) On the basis of written representations received from the Directors as on March 31, 2014 and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2014 from being appointed as a Director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT (Of even date referred to in Para 1 thereof) Ref: M/s. Coromandel Agro Products And Oils Ltd

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the Fixed Assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets and to the best of our knowledge no material discrepancies were noticed on such verification;.

(c) In our opinion, the Company has not disposed off substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. (a) As explained to us, inventories have been physically verified by the Management at regular intervals during the year.

(b) The procedure of physical verification of stocks 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. As explained to us, no material discrepancies were noticed on physical verification of inventory as compared to the book records.

3. (a) Based on the information and explanations provided to us, the company has not granted any loans, whether secured or unsecured, to the companies, firms or other parties covered in the Register maintai -ned u/s Sec. 301 of the Companies Act, 1956 during the year. Hence sub clauses (b), (c) and (d) of clause 4(iii) of the order are not applicable to the company for the year.

(b) Based on the information and explanations provided to us, the company has taken loans, secured or unsecured, from companies, firms or other parties covered in the register maintained u/s 301 of the Act. The numbers of parties are four (previous year four) in number and the maximum amount involved in the year is Rs.4,75,89,694/- (Previous year Rs. 5,42,88,184/-)

(c) In our opinion, the rate of interest and other terms and conditions of loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interests of the company.

(d) Based on the information provided and explanations offered to us, the payment of principal amount and interest, if any, are also regular as per terms agreed upon.

4. 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 also for the sale of goods and services to the extent applicable. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. (a) In our opinion, and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301of the Companies Act,1956 have been entered in the register required to be maintained under that Section;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in point (a) above and exceeding the value of Rs.5,00,000/- with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time

6. Based on the information provided to us, the Company has not accepted any Deposits from the public during the year and hence, in our opinion, the Clause 4(vi) is not applicable to the company for the year;

7. In our opinion, the company has an internal audit system commensurate with its size and nature of its business.

8. We are of the opinion, based on the information provided to us, that the accounts and records, as prescribed by the Central Government under section 209(1)(d) of the Act in respect of maintenance of cost records, have been made and maintained.

9. (a) According to the records of the company, the company is regular in depositing the undisputed statutory dues including Sales tax, Income- tax, Customs duty, Excise duty and Employees State Insurance and Provident Fund and Cess, Investor Education Fund with the appropriate authorities. We have been informed that the company is not liable to pay Wealth Tax. We have been informed that the provisions of Wealth Tax, Cess is not applicable to the company.

(b) According to the information and explanations given to us, there are no dues of Sales Tax/Income Tax/ Customs duty/Excise duty to be deposited on account of any dispute;

10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our Audit or in the immediately preceding financial year.

11. Based on the information provided and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to Banks or Financial Institutions or Debenture holders.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a Chit fund or Nidhi / Mutual Benefit Fund / Society and hence clause 4(xiii) of the Companies (Auditor''s Report) order 2003 is not applicable to the Company.

14. Based on the information given to us, the Company has not dealt or traded in shares, securities, debentures or other investments during the year.

15. Based on the information provided to us, the Company has not given guarantee for loans taken by others from Banks or Financial Institutions.

16. According to the information and explanations given to us, the term loans availed during the year by the Company were applied for the purposes for which the loans were obtained.

17. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term investment;

18. Based on the information provided and explanations offered, during the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956 and hence sub clause (xvii) of the order is not applicable to the company for the year.

19. The Company has not issued debentures and not created any securities or charges.

20. The Company has not raised any money by way of Public Issue during the year.

21. In our opinion and according to the information provided and explanations offered to us, no fraud on or by the Company has been noticed or reported during the year.

For A.RAMACHANDRA RAO & CO Chartered Accountants ICAI FRN:002857S

Sd/- Place: GUNTUR (Camp) (A.RAMACHANDRA RAO) Date : 30th MAY, 2014 Partner M. No. : 9750


Mar 31, 2013

We have audited the accompanying financial statements of M/S. COROMANDEL AGRO PRODUCTS AND OILS LIMITED which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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. 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.

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 ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are tree from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

01. 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 March 31, 2013;

b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

02. 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 Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

03. 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 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 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 Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

(Of even date referred to in Para 1 thereof)

Re: M/s. Coromandel Agro Products And Oils Ltd

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the Fixed Assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets and to the best of our knowledge no material discrepancies were noticed on such verification;.

(c) In our opinion, the Company has not disposed off substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. (a) As explained to us, inventories have been physically verified by the Management at regular intervals during the year.

(b) The procedure of physical verification of stocks 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. As explained to us, no material discrepancies were noticed on physical verification of inventory as compared to the book records.

3. (a) Based on the information and explanations provided to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained u/s301of the Act during the year. Accordingly the sub-clauses (b),(c),(d),(e) and (f) of clause 4(iii) are not applicable for the year.

(b) Based on the information and explanations provided to us, the company has taken unsecured loans from companies, firms or other parties covered in the register maintained under section 301 of the act. The number of parties are four and the amount involved in the transactions is Rs. 5,42,88,184/-.

(c) In our opinion, the rate of interest and other terms and conditions of loans taken by the company, secured or unsecured ,are not prima facie prejudicial to the interest of the company

(d) Based on information provided and explanations given to us, the payment of principal amount and interest if any ,are also regular as per terms agreed upon.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In our opinion, and according to the information and explanations given to us, the company has not entered into any transactions referred to in section 301 of the Act and hence clause 4(v) is not applicable to the company for the year;

6. Based on the information provided to us, in our opinion, the Company has not accepted any deposits from the public during the year and hence, in our opinion, the Clause 4(vi) is not applicable to the company for the year;

7. In our opinion, the company has an internal audit system to commensurate with its size and nature of its business.

8. In our opinion, based on the information provided to us, that the accounts and records, as prescribed by the Central Government under section 209(1 )(d) of the act in respect of maintenance of cost records, have been made and maintained.

9. (a) According to the records of the company, the company is regular in depositing the undisputed statutory dues including Sales tax, Income-tax, Customs duty, Excise duty and Employees State Insurance and Provident Fund and cess, investor education fund with the appropriate authorities. We have been informed that the company is not liable to pay Wealth Tax. We have been informed that the provisions of wealth tax, cess are not applicable to the company;

(b) According to the information and explanations given to us, there are no dues of sales tax / income tax / customs duty / Wealth tax / excise duty/ cess to be deposited on account of any dispute;

10. The company has no accumulated losses and has not incurred any cash losses during the year covered by our audit.

11. Based on the information provided and explanations given to us. we are of the opinion that the Company has not defaulted in repayment of dues m banks.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a Chit fund or Nidhi / Mutual Benefit Fund / Society and hence clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

14. Based on the information given to us, the Company has not dealt or traded in shares, securities, debentures or other investments during the year.

15. Based on the information provided to us, the Company has not given guarantees for loans taken by others from Banks or Financial Institutions.

16. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term investment;

18. Based on the information provided and explanations offered, during the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained u/s 301 of the Companies Act 1956 and hence sub clause (xvii) of the order is not applicable to the company for the year.

19. The Company has not issued any debentures and not created any securities or charges.

20. The Company has not raised any money by way of Public Issue during the year.

In our opinion and according to the information provided and explanations offered to us, no fraud on or by the Company has been noticed or reported during the year.

For A. RAMACHANDRA RAO & CO.,

Chartered Accountants

FRN:002857S

Sd/-

Place : GUNTUR. (A. RAMACHANDRA RAO)

Date : 31st May, 2013. Partner

M.No.9750


Mar 31, 2010

We have audited the attached Balance Sheet of M/S. COROMANDEL AGRO PRODUCTS AND OILS LIMITED as at 31st March 2010, the Profit and Loss Account and also Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial stater .its based on our audit.

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.

1. As required by the Companies (Auditors Report) Order, 2003, and amendments thereto made from time to time, 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 Anncxure a Statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to 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 accounts as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and 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, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in Sub-section 3C of Section 211 of the Companies Act, 1956;

e) On the basis of the written representations received from the Directors, as on 31st March. 2010, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (I) of section 274 of the Companies Act. 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the significant Accounting Policies and other 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:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

iii) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

(Of even date referred to in Para 1 of our Report)

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) All the fixed assets have not been physically verified by the Management during the year but there is a regular program of verification which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets and to the best of our knowledge no material discrepancies were noticed on such verifications.

c) In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. a) As explained to us, inventories have been physically verified by the Management at regular intervals during the year.

b) In our opinion, the procedure 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 inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. a) Based on the information and explanations provided to us, the company has not granted any loans, secured or unsecured, to companies, firms, or other parties covered in the register maintained u/s.30l of the Act and hence sub-clauses (b), (c) and (d) of clause 4(iii) of the order arc not applicable for the year;

b) Based on the information and explanations provided to us, the company has taken loans, secured or unsecured from companies, firms or other parties covered in the register maintained u/s. 301 of the Act. The no. of parties arc three and the amount involved in the transactions is Rs. 8,89,22,522/-;

c) In our opinion, the rate of interest and other terms and conditions of loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company; and

d) Based on the information provided and explanations given to us, the payment of principal amount and interest, if any, are also regular as per terms agreed upon.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and also for the sale of goods and services to the extent applicable. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5. In our opinion, and according to the information and explanations given to us, the company has not entered into any transactions referred to in section 301 of the Act and hence clause 4(v) is not applicable to the company for the year;

6. Based on the information provided to us, the Company has not accepted any Deposits from the public during the year and hence, in our opinion, the Clause 4(vi) is not applicable to the company for the year;

7. In our opinion, the company has an adequate internal audit system commensurate with its size and nature of its business,

8. We are of the opinion, based on the information provided to us, that the accounts and records, as prescribed by the Central Government under section 209( 1 )(d) of the Act in respect of maintenance of cost records, is not applicable to the Company;

9. (a) According to the records of the company, the company is regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales Tax, Service Tax, Income-tax, Customs Duty and Excise Duty with the appropriate authorities. We have been informed that the provisions of Wealth Tax, Cess are not applicable to the company;

(b) According to the information and explanations given to us, there are no dues of Sales Tax / Income Tax / Service Tax / Customs Duty / Excise Duty to be deposited on account of any dispute;

10. The Company has no accumulated losses and has not incurred any cash losses during the year covered by our Audit or in the immediately preceding financial year.

11. Based on the information provided and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to Banks.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a Chit Fund or Nidhi / Mutual Benefit Fund / Society and hence clause 4(xiii) is not applicable to the Company.

14. In our opinion, based on the information given to us, the Company has not dealt or traded in shares, securities, debentures or other investments during the year.

15. Based on the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions;

16. In our opinion and based on the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained;

17. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds raised on short term basis have not been specifically used for long term investment;

18. Based on the information provided and explanations offered, during the year, the Company has not made any preferential allotment of shares;

19. The Company has not issued debentures and not created any securities or charges.

20. The Company has not raised any money by way of Public Issue during the year.

21. In our opinion and according to the information provided and explanations offered to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For A. RAMACHANDRA RAO & CO.,

Chartered Accountants

FRN:002857S

Sd/-

Place: GUNTUR (A. RAMACHANDRA RAO)

Date: May 24, 2010. Partner

M.No. 9750

 
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