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Auditor Report of Elder Health Care Ltd.

Jun 30, 2014

We have audited the accompanying financial statements of Elder Health Care Limited ("the Company") which comprise the Balance Sheet as at 30th June, 2014, and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory notes.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation and presentation of financial statements that give a true and fair view of the financial position, financial performance and cash flow of the Company in accordance with applicable 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 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the designing, implementing and maintenance of internal control relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with 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 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 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 modified audit opinion.

Basis for Qualified Opinion

1. Fixed Assets

Some of the company''s Plant & Machineries acquired/installed have not been put to use and some have been operational for a small fraction of the installed capacity. On such assets, the company has not provided for impairment loss.

Non provision of impairment loss is a departure from AS-28 "Impairment of Assets" as prescribed under the Act. Management has neither provided a Technical Evaluation Report nor a Valuation Report in order to arrive at the fair value and, consequently, quantifying the possible impairment loss on these assets could not be arrived.

2. Legal suits

As informed, various legal suits have been filed against the Company under various Acts and Statutes applicable to the Company, the same are being contested by the Company at various foras. The outcome of such suites and their impact on the affairs of the Company were not made available/explained to us.

Emphasis of Matter

We draw attention to Note No. 33 of the Notes annexed to and forming part of the Financial Statements. The Company''s operations and operating results have been materially affected due to various factors. The appropriateness of the going concern assumption is dependent on the company''s ability to streamline its operations as well as infusing requisite finance to meet its short term and long term financial obligations and other statutory liabilities. Based on the mitigating factor discussed in the said note, management believes that the going concern assumption is appropriate and no adjustments have been made in the financial statements for the year ended June 30, 2014.

Our opinion is not qualified in respect of above matter.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph and Emphasis of Matter paragraph, 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:

I. In the case of Balance Sheet, of the state of affairs of the Company as at 30th June, 2014;

II. In the case of Statement of Profit and Loss, of the Loss of the Company for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

2) 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 appears from our examination of those books;

c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement referred to in this report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, the 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 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e) in absence of written representation from the Directors as on 30th June, 2014, we could not ascertain whether any of the Director is disqualified as on 30th June, 2014 from being appointed as director in terms of Clause (g) of sub- section (1) of section 274 of the Act.

Annexure to the Independent Auditor''s Report

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

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking in to consideration, the information and explanations given to us during the course of audit, we report that:

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

(b) As explained to us, some of the fixed assets of the Company have been physically verified by the management during the year in accordance with a phased program of verification designed to cover all the fixed assets over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on such physical verification were not material and have been properly dealt with in the books of account.

(c) The fixed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company.

(ii) (a) As explained to us, the inventories have been physically verified by the management at regular intervals during the year. The intervals at which the inventories have been verified are, in our opinion, reasonable in relation to the size of the Company and nature of its business.

(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 nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii- b), (iii-c) and (iii-d) of the paragraph 4 of the order are not applicable.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from the parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore requirements of clauses (iii-f) and (iii-g) of the paragraph 4 of the order are not applicable.

(iv) 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, fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in such internal control systems.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, transactions made in pursuance to such contracts or arrangements are specialized in nature and comparable prices are not always determinable and the price is charged are prima facie reasonable.

(vi) In our opinion and according to the information and explanations given to us, the Company, except cases of short term borrowings for Working Capital requirements, has not accepted any deposits as defined under sections 58A, of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975.

(vii) The Company has an internal audit system, the scope of which need to be strengthen commensurate with the size and the nature of its business.

(viii) The Central Government has prescribed maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) As per information and explanations given to us the Company has been irregular in depositing the undisputed statutory dues including Provident Fund, Income tax, sales tax, Profession Tax and Employees State Insurance and there has been serious delay in many cases.

The Company has been regular in respect of payments of statutory dues payable under Customs Duty, Excise Duty and Cess with the appropriate authorities and there were no undisputed amounts payable in respect of such dues which have remained outstanding as at 30th June, 2014 for a period exceeding six months from the date they become payable.

The following undisputed statutory dues were outstanding as on 30th June 2014 for a period of more than six months from the date they become payable:

Name of the Statute Nature of the Dues Period to which the amount Relates

Income Tax Act, 1961 Tax Deducted at April -2013 to Source Dec-2013

E.P.F.& M.P.F. Act, 1952 Provident Fund Aug-2012 to Nov-2012

Dec-2012 to Sep-2013

Oct-2013

Nov-2013

Dec-2013

Professional Tax Act, 1975 Profession Tax Jul-2013 to Dec-2013

Employees'' State Insurance Employees'' State Nov -2013 and Act, 1948 Insurance Fund Dec-2013

Name of the Statute Amount Payment made up to the date (Rs. ) of Auditor''s Report

Income Tax Act, 1961 7,531,378 Amount not paid till date E.P.F.& M.P.F. Act, 1952 Amount Paid Date of Payment

2,174,875 2,174,875 05/08/2014 4,521,189 4,521,189 12/08/2014

434,846 387,801 12/08/2014

426,175 380,018 12/08/2014

413,825 369,573 12/08/2014

Professional Tax Act, 1975 27,318 Amount not paid till date Employees'' State Insurance 701 Amount not paid till date Act, 1948

(b) According to the information and explanations given to us, there are no disputed dues payable in respect of Income tax, sales tax, service tax, custom duty, excise duty and cess are pending as on 30th June, 2014.

(x) The Company has accumulated losses of not less than 50% of its net worth and has incurred cash losses during the financial year covered by our audit. The company had not incurred cash losses in the immediately preceding financial year.

(xi) According to information and explanations given to us and based on the documents and records produced before us, the Company has defaulted in repayment of dues to banks amounting to Rs. 1,18,36,200/- upto 28th March, 2014, the date on which the account was assigned and transferred by the bank to a Assets Reconstruction Company for recovery of principal and interest thereon.

Since the amount was due and payable to the Assets Reconstruction Company, the company has not considered the amount payable after 28th March, 2014 as default in repayment to the bank.

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ society

(xiv) The Company has maintained proper records of the transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the Company in its own name.

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

(xvi) To the best of our knowledge and belief and according to the information and explanation given to us by the management the term loans availed by the Company were, prima facie, applied by the Company for the purpose for which the loans were obtained.

(xvii) According to the Cash Flow statement and other records examined by us and the information and explanations given to us, on all overall basis, funds raised on short term basis, have prima facie, not been used during the year for long term investments.

(xviii) The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the companies act, 1956.

(xix) As per information and explanation given to us and based on records examined by us the company has not issued any debentures during the year.

(xx) To the best of our knowledge and belief and according to the information and explanation given to us, the company has not raised any money through a public issue during the year.

(xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, which causes the financial statements to be materially misstated.

For S.S.KHANDELWAL & CO. Chartered Accountants (Firm Registration No.105064W)

S.S. Khandelwal Proprietor (Membership No. 031487)

Mumbai, 28th August, 2014


Jun 30, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Elder Health Care Limited ("the Company") which comprise the Balance Sheet as at 30th June, 2013, and 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 notes.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation and presentation of financial statements that give a true and fair view of the financial position , financial performance and cash flow of the Company in accordance with applicable Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act 1956 ("the Act"). This responsibility includes: designing, implementing and maintenance of internal control relevant to the preparation and presentation of 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 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 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 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.

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:-

i) In the case of Balance Sheet, of the state of affairs of the Company as at 30th June, 2013;

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

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

Emphasis of matter

Some lenders have filed legal cases against the Company and its Directors under section 138 of Negotiable Instruments Act 1981. Winding up petition under section 433 and 434 of the Companies Act1956 has also been filed.

As explained to us, the Company in some cases has made part payments and settlement negotiations are initiated in other cases.

Report on Other Legal and Regulatory Requirements

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

2) 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 appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement referred to in this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, the 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 Companies Act 1956.

e) On the basis of the written representation received from the Directors as on 30th June 2013 and taken on record by the Board of Directors, none of the Directors is disqualified as on 30th June, 2013 from being appointed as director in terms Clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

Annexure to the Independent Auditors'' Report

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

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking in to consideration, the information and explanations given to us during the course of audit, we report that:

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

b) As explained to us, some of the fixed assets of the Company have been physically verified by the management during the year in accordance with a phased program of verification designed to cover all the fixed assets over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on such physical verification were not material and have been properly dealt with in the books of account, c) The fixed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the Company

2) a) As explained to us, the inventories have been physically verified by the management at regular intervals during the year. The intervals at which the inventories have been verified are, in our opinion, reasonable in relation to the size of the Company and nature of its business.

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 nature of its business.

c) The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory.

3) a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii- b), (iii-c) and (iii-d) of the paragraph 4 of the order are not applicable.

b) According to the information and explanations given to us the Company has not taken any loans, secured or unsecured from the parties covered in the register maintained under section 301 of the Companies Act. 1956. Therefore requirements of clauses (iii-f) and (iii-g)) of the paragraph 4 of the order are not applicable.

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, fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in such internal control systems.

5) a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance to such contracts or arrangements are specialized in nature and comparable prices are not always determinable and the price is charged are prima facie reasonable.

6) In our opinion and according to the information and explanations given to us, the Company, except in cases of short term borrowings for Working Capital requirements, has not accepted any deposits as defined under sections 58A, of the Companies Act and Companies (Acceptance of Deposits) Rules, 1975.

7) The Company has an internal audit system, the scope of which need to be strengthen commensurate with the size and the nature of its business.

8) The Central Government has prescribed maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9) a) As per information and explanations given to us the Company has been irregular in depositing the undisputed statutory dues including Provident Fund, Income tax, sales tax and Employees State Insurance and there has been serious delay in many cases.

The Company has been regular in respect of payments of statutory dues payable under Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities and there were no undisputed amounts payable in respect of such dues which have remained outstanding as at 30th June 2013 for a period exceeding six months from the date they become payable.

Sum ofX 96.95 lacs in respect of Income Tax dues (Tax deducted at source), Rs. 48.01 lacs in respect of Provident Fund and X 2.76 lacs in respect of Employees State Insurance were outstanding as on 30th June 2013 for a period of more than six months from the date they become payable.

b) According to the information and explanations given to us, there are no disputed dues payable in respect of Income tax, sales tax, service tax, custom duty, excise duty and cess are pending as on 30th June, 2013.

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) According to information and explanations given to us and based on the documents and records produced before us, the Company has defaulted in repayment of dues to banks amounting to X 242.56 lacs as at the balance sheet date.

12) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion and according to the information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/society

14) The Company has maintained proper records of the transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the Company in its own name.

15) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank and other financial institutions.

16) To the best of our knowledge and belief and according to the information and explanation given to us by the management the term loans availed by the Company were, prima facie, applied by the Company during the year for the purpose for which the loans were obtained.

17) According to the Cash Flow statement and other records examined by us and the information and explanations given to us, on all overall basis, funds raised on short term basis, have prima facie, not been used during the year for long term investments.

18) The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the companies act, 1956.

19) As per information and explanation given to us and based on records examined by us the company has not issued any debentures during the year.

20) To the best of our knowledge and belief and according to the information and explanation given to us, the company has not raised any money through a public issue during the year.

21) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, which causes the financial statements to be materially misstated.

For S.S. KH ANDELWAL & CO.

Chartered Accountants

(Firm Registration No.105064W)

Mumbai, S.S.Khandelwal

29th August, 2013 Proprietor

Membership No. 031487


Mar 31, 2012

1) We have audited the attached Balance Sheet of ELDER HEALTH CARE LIMITED as at March 31,2012,the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors' Report) Order, issued by the Central Government of India under sub-section (4A) of the section 227 of the Companies Act, 1956,and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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 the books;

c) The Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement referred to in this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement, dealt by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) On the basis of the written representation received from the Directors and taken on record by the Board of Directors, we report that none of the said Directors is disqualified as on 31stMarch, 2012 from being appointed as director in terms of Clause (g) of sub-section (1) 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 with the notes there on 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,2012 and

ii) In the case of the Statement of Profit and Loss of the Profit of the Company for the year ended on that date.

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

Annexure to the Auditors' report.

(Referred to paragraph 3 of our report of even date)

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

b) As explained to us, the management during the year has physically verified the fixed assets in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) During the Year, the Company has not disposed of a substantial part of its fixed assets.

ii) a) As explained to us, the management at regular intervals during the year has physically verified inventories.

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 nature of its business.

c) The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory.

iii) a) The Company has not granted any loans, secured or unsecured to companies, firms and other parties listed in the register maintained under section 301 of the Companies Act,1956. Accordingly provisions of clause 4(iii)(a) to (d) of the order are not applicable to the company

b) The Company has taken unsecured loan from a company listed in the register maintained under section 301 of the Companies Act, 1956, of which loan of Rs 103.00 lakhs was outstanding at the year end. The maximum amount of loan taken from the said company during the year was Rs 149.00 lakhs.

c) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions of loan taken are prima facie not prejudicial to the interest of the Company.

d)The loan outstanding at the year end is at call have not been recalled during the year. The company has not made payment of interest.

e) There are no overdue amounts exceeding Rs one lakh.

iv) 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, fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in internal controls in respect of the above area.

v) a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) Based on the information and explanations given to us, we are of the opinion that the transactions made in pursuance of the contracts or agreements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs 5 lakhs in respect of any party during the year have been made at reasonable prices, having regard to the prevailing market price at the relevant time.

vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any Deposits as defined under sections 58A of the Companies Act and Companies (Acceptance of Deposits) Rules, 1975.

vii) The Company has an internal audit system, the scope of which need to be suitably strengthened.

viii) The Central Government has prescribed maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

ix) a) According to the records of the Company examined by us, the company was irregular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Value added Tax with the appropriate authorities and there were undisputed amounts payable in respect of Income Tax and Value Added Tax aggregating to Rs 51.68 lakhs and 38.18 lakhs respectively remaining outstanding as at 31st March 2012 for a period exceeding six months from the date they become payable, the above amount due has since been paid.

b) The Company has availed deferment of Sales Tax under the provisions of Sales Tax Laws applicable in Maharashtra, the liability in respect of which to be determined and quantified with the approval of the Authorities.

x) 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.

xi) According to information and explanations given to us and based on the documents and records produced before us, the Company has defaulted in repayment of two instalments of Rs 54.30 lakhs dues to banks as at the balance sheet date, the amount due has since been paid.

xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion and according to the information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi /mutual benefit fund/society.

xiv) The Company has maintained proper records of the transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the Company in its own name.

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

xvi) To the best of our knowledge and belief and according to the information and explanation given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purpose for which the loans were obtained.

xvii) According to the Cash Flow statement and other records examined by us and the information and explanations given to us, on all overall basis, funds raised on short term basis, have prima facie, not been used during the year for long term investments.

xviii)The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the companies act,1956.

xix) The Company has not issued any debentures during the year.

xx) The Company has not raised any money during the year through a public issue.

xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, which causes the financial statements to be materially misstated.

For S.S.KHANDELWAL & CO.

Chartered Accountants

(Firm Registration No. 105064W)

Place: Mumbai, S.S.Khandelwal

Date: 09th August, 2012 Proprietor

Membership No. 031487


Mar 31, 2011

1) We have audited the attached Balance Sheet of ELDER HEALTH CARE LIMITED as at March 31, 2011, the related Profit and Loss Account of the Company and the Cash Flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors' Report) Order, issued by the Central Government of India under sub-section (4A) of the section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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 the books;

c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement referred to in this report are in agreement with the books of account;

d) In our opinion, the Cash Flow Statement, Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956

e) On the basis of the written representation received from the Directors and taken on record by the Board of Directors, we report that none of the said Directors is disqualified as on 31 st March, 2011 from being appointed as director in terms of Clause (g) of sub-section (1) 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 with the notes there on 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 31 st March, 2011 and

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

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

Annexure to the Auditors' report (Referred to paragraph 3 of our report of even date)

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

b) As explained to us, the management during the year has physically verified the fixed assets in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

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

ii) a) As explained to us, the management at regular intervals during the year has physically verified inventories.

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 nature of its business.

c) The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory.

iii) a) The Company had granted unsecured loan to a company listed in the register maintained under section 301 of the Companies Act, 1956 and there was no outstanding at the year end. The maximum amount of loan granted to the said company during the year was Rs. 418.78 lacs.

b) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions of loan given are prima facie not prejudicial to the interest of the company.

c) The loan granted was recalled during the year. The company was generally regular in payment of interest.

d) There are no overdue amounts exceeding Rs. one lac.

e) The Company has taken unsecured loan from a company listed in the register maintained under section 301 of the Companies Act, 1956, of which loan of Rs.97.90 lacs was outstanding at the year end. The maximum amount of loan taken from the said company during the year was Rs. 100.00 lacs.

f) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions of loan taken are prima facie not prejudicial to the interest of the Company.

g) The loan outstanding at the year end is at call have not been recalled during the year. The company has not made payment of interest.

h) There are no overdue amount exceeding Rs. one lac.

iv) 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, fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in internal controls.

v) a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) Based on the information and explanations given to us, we are of the opinion that the transactions made in pursuance of the contracts or agreements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lacs in respect of any party during the year have been made at reasonable prices, having regard to the prevailing market price at the relevant time.

vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits as defined Under sections 58Aof the Companies Act, 1956 and the rules framed there under.

vii) The Company has an internal audit system, the scope of which need to be suitably strengthened commensurate with the size and the nature of its business.

viii) The Central Government has prescribed maintenance of Cost Records under Section 209(l)(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

ix) a) According to the records of the Company examined by us, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities.

According to the information and explanations given to us no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31 st March, 2011 for a period of more than six months from the date of becoming payable.

b) The Company has availed deferment of Sales Tax under the provisions of Sales Tax Laws applicable in Maharashtra, the liability in respect of which to be determined and quantified with the approval of the Authorities.

x) 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.

xi) According to information and explanations given to us and based on the documents and records produced before us, the Company has not defaulted in repayment of dues to banks as at the balance sheet date.

xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion and according to the information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ society

xiv) According to information and explanations given to us and based on the documents and records produced before us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

xvi) To the best of our knowledge and belief and according to the information and explanation given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purpose for which the loans were obtained.

xvii) According to the Cash Flow statement and other records examined by us and the information and explanations given to us, on all overall basis, funds raised on short term basis, have prima facie, not been used during the year for long term investments.

xviii)The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The Company did not issued any debentures during the year.

xx) The Company has not raised any money during the year through a public issue.

xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, which causes the financial statements to be materially misstated.

For S.S.KHANDELWAL & CO. Chartered Accountants (Registration No. 105064W)

S.S. Khandelwal Proprietor Membership No. 31487

Mumbai, 11th August, 2011

 
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