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Auditor Report of Everest Organics Ltd.

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Everest Organics Limited ("the Company") which comprises the balance sheet as at 31 March, 2014, the statement of profit and loss and the cash flow statement for the year then ended and a summary of 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 sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the companies Act 2013 in terms of the General Circular 15/2013 dated 13-09-2013 of the Ministry of Corporate Affairs) and in accordance with the Accounting principles generally accepted in India. This responsibility includes the design implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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 Company''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.

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 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 31st March 2014;

(b) in the case of the statement of profit and loss, of the profit of the Company for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows of the Company for the year ended on that date.

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 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.

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 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, the statement of profit and loss and the cash flow statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the companies Act 2013 in terms of the General Circular 15/ 2013 dated 13-09-2013 of the Ministry of Corporate Affairs); and

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

STATEMENT REFERRED TO IN THE AUDIT REPORT

1. In respect of the company''s Fixed Assets

a) The records maintained by the company show broad particulars including quantitative details and situation in respect of the fixed assets and the fixed assets register requires to be updated. We are informed by the management that the company is in the process of compiling and reconstructing the Fixed Assets Register to show full particular including quantitative details and situation of fixed assets.

b) According to the information and explanations furnished to us, the fixed assets of the company have been broadly verified during the year by the management in accordance with a regular programme of verification, which provides for physical verification of the fixed assets at regular intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

C) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the company and such disposal has, in our opinion, not affected status as the going concern of the company.

2. In respect of the company''s Inventories :

a) As explained to us, Physical verification of inventory has been conducted at reasonable intervals by the management during the year in respect of majority of the high value items.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the Management appear to be generally reasonable and adequate in relation to the size of the company and the nature of its business.

a) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories in a broad manner and we are informed that no material discrepancies were noticed on physical verification.

3. a) As per the information and explanations furnished to us by the management the Company

has not granted any loans, secured or unsecured, to the parties coming under the provision of Sec.301 of the Companies Act, 1956. However, the remuneration drawn by the promoter directors in excess of the limits specified in the Schedule-XIII of the Companies Act, 1956 is to be regularized, amounting to Rs30.30 lakhs.

b) As per the information and explanations furnished to us by the management, out of the total unsecured loans amount, outstanding at Rs.884.20 lakhs as at 31-03-2014 (Previous Year Rs.781.28 lakhs-Rs.700 lakhs shown under Share Application Money and Rs.81.28 lakhs shown under unsecured loans), taken by the company an amount of Rs.247.21 lakhs (Previous Year Rs.134.17 lakhs) is from the Directors and their relatives and an amount of Rs.346.97 lakhs (Previous Year Rs.286.56 lakhs) is from an NBFC in which two of the directors of that company are the relatives of the Managing Director of the company, and accordingly are covered in the register maintained under section 301 of the Act. It is explained to us that there is no specific repayment programme has been fixed in this regard. As explained to us, out of the total unsecured loans of Rs.884.20 lakhs, an amount of Rs.33.86 lakhs carry interest @18% p.a. and the remaining amount of unsecured loans do not carry interest. The rate of interest and other terms and conditions of unsecured loans taken by the company do not, prima facie, appear to be prejudicial to the interest of the company.

4. In our opinion and according to the information and explanations given to us, the internal control procedures existing in the company with regard to purchase of Inventory, Fixed Assets and for the sale of goods, may be further strengthened commensurate with the size of the company and the nature of the business, more particularly in respect of procedures for requisitioning, placing orders, purchasing and making payment of items referred to above and for sale of goods.

5. As per the information and explanations given to us by the management, the transactions that need to be entered into a register in pursuance of the section 301 of the Act have been so entered (Refer to Note No.9 for the details of purchase and sale transactions with the Firm in which the Executive Director has become interested, his spouse being one of the Partners- Related Party Transactions). Each of these transactions appear to have been made at prices, which are reasonable having regard to the prevailing market prices at that relevant time.

6. As per the information and explanations furnished to us, the Company has not accepted any deposits from the Public during the year to which the directives issued by the Reserve Bank of India and the provisions of Sec.58A and Sec.58AA of the Companies Act, 1956 and Rules framed there under apply

However, the company has taken / accepted / held unsecured loans totally amounting to Rs.884.20 lakhs as at 31-03-2014 (Previous Year Rs.781.28 lakhs-Rs.700 lakhs shown under Share Application Money and Rs.81.28 lakhs shown under unsecured loans), out of which an amount of Rs.247.21 lakhs (Previous Year Rs.134.17 lakhs) is from the Directors and their relatives and an amount of Rs.346.97 lakhs (Previous Year Rs.286.56 lakhs) is from an NBFC and Rs.19.85 lakhs in the form of Security Deposits from Employees, all stated to be coming under the category of promoters, their friends, relatives, employees and sister concerns and it has explained to us that the unsecured loans (Previous year share application money) were earlier brought into the company to meet the then financial obligations of the company to the then Financial Institutions/Banks.

7. The Company does not have formal internal audit system during the year, however it''s internal control procedures involve reasonable internal checking of its financial records.

8. In our opinion and as per the information and explanations given to us, the stock records maintained by the company, prima facie, appear to meet the specifications given by the Central Government U/s.209(1)(d) of the Companies Act, 1956 in a broad manner. However, the contents of these accounts and records have not been examined by us in detail.

9. The undisputed dues including Provident fund, Employees State Insurance, Income-Tax, Sales- Tax, Excise-Duty, Cesses and other statutory dues have been deposited by the company during the year with the appropriate authorities with some delays. FBT to the tune of Rs.8.55 Lakhs, Service Tax of Rs.2.33 lakhs were outstanding as at 31st March, 2014 for a period of more than 6 months from the date they became payable.

10. The accumulated losses of the company as on 31.03.2014 amounts to Rs.511.81 lakhs (previous year Rs.598.56 lakhs). The accumulated losses at the end of the financial year are not less than fifty percent of its net worth. During the year 2013-14 and the immediately preceding financial year the company has not incurred cash losses.

11. The company has taken loans from a bank and the company, prima facie, does not appear to have defaulted in making the repayment of dues to the Bank. The company has not raised any loans from debenture holders.

12. As per the information and explanations furnished to us, during the year the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As per the information and explanations furnished to us, the company has not dealt with or traded in shares, securities, debentures or other investments during the year.

14. As per the information and explanations furnished to us by the management during the year, the company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

15. The terms loans raised, prima facie, appear to have been applied for the purpose for which the loans were obtained.

16. The examination of the Financial Statements, prima facie, indicates that some of the short term funds raised by the company appear to have been used for long term purposes. Due to this reason, the net working capital / Net Current Assets is negative to the tune of Rs.1025.99 lakhs as on 31-03-2014 (Previous year Rs.1502.20 lakhs).

17. As per the information and explanations furnished to us, during the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

18. The company has not raised any funds in the form of debentures and hence not created any securities.

19. The company has not raised any funds during the year in the form of public issue.

20. According to the information and explanations furnished to us, during the year, there was no fraud on or by the company that has been noticed or reported to us by the management.

21. The company is governed by the Companies Act, and no other special statute is applicable to the company.

22. The other particulars of this order are not applicable to the company.

For P.S.N.RAVISHANKER & ASSOCIATES

Chartered Accountants

Place : Hyderabad, Sd/-

Date : 31-05-2014. (P. RAVI SHANKER)

Partner


Mar 31, 2012

We have audited the attached Balance Sheet of M/s. Everest Organics Limited as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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.

i. 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 have enclosed in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the said order.

ii. Further to our statement referred to in paragraph I above, we report that:

a) We have obtained all the information and explanations, which to the best our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, the company as referred by law has kept proper books of accounts so far as it appears from our examination of those books.

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

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

e) On the basis of written representations received from the directors, as on 31.03.2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by 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

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

iii) In the case of the Cash flow statement, of the cash flows of the company for the year ended as on that date.

STATEMENT REFERRED TO IN THE AUDIT REPORT

1. a) The records maintained by the company show broad particulars including quantitative details and situation in respect of the fixed assets and the fixed assets register is to be updated.

b) According to the information and explanations furnished to us, the fixed assets of the company have been broadly verified during the year by the management at reasonable intervals and we are informed that no material discrepancies were noticed on such verification.

b) During the year the company has not disposed of substantial part of fixed assets.

2. a) As explained to us, Physical verification of inventory has been conducted at reasonable intervals by the management during the year in respect of majority of the high value items..

b) The procedures of physical verification of inventory followed by the Management appear to be generally 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 inventory in a broad manner and we are informed that no material discrepancies were noticed on physical verification.

3. a) As per the information and explanations furnished to us by the management the Company has not granted any loans, secured or unsecured, to the parties coming under the provision of Sec. 301 of the Companies Act, 1956.

b) During the year the company has taken unsecured loans of Rs. 77.42 lakhs from 7 parties (Previous year Rs. 149.60 Lakhs from 5 parties) covered in the register maintained under Sec.301 of the Companies Act, 1956. The total outstanding in these accounts at the end of the year stood at Rs. 40.37 lakhs (Previous year end 141.68 lakhs). Some of the unsecured loans carry interest @ 18% p.a. and some of the unsecured loans are interest free. It is explained to us that no specific repayment program has been fixed in this regard. Accordingly, the rate of interest and other terms and conditions of the unsecured loans taken by the company, prima facie, do not appear to be prejudicial to the interest of the company.

4. In our opinion and according to the information and explanations given to us, the internal control procedures existing in the company with regard to purchase of Inventory, Fixed Assets and for the sale of goods, needs to be further strengthened commensurate with the size of the company and the nature of the business.

5. As per the information and explanations given to us, during the year, there are no such contracts or arrangements that are required to be entered in to the register in pursuance of section 301 of the Act.

6. As per the information and explanations furnished to us, the Company has not accepted any deposits from the Public during the year to which the directives issued by the Reserve Bank of India and the provisions of Sec.58A and Sec.58AA of the Companies Act, 1956 and Rules framed there under apply. However, the Company has taken/accepted the unsecured loans, outstanding at 31.03.2012 at Rs. 49.12 lakhs (PY Rs. 401.96 lakhs) and share application money (pending allotment outstanding on 31.03.2012 and on 31.03.2011 at Rs. 700 lakhs and Rs. 388.81 lakhs) from various parties stated to be coming under the category of promoters, their friends, relatives, employees and sister concerns and it has been explained to us that unsecured loans/share application money have been brought into the company to meet the financial obligations of the company to the Financial Institutions/Banks. Out of the total unsecured loans received by the company during the earlier years an amount of Rs. 311.19 lakhs has been transferred to Share Application Money as on 31 -03-2012 (PY NIL).

7. The Company does not have formal internal audit system during the year. As per information & explanations furnished to us by the management the existing control procedures covers some of the internal audit aspects.

8. In our opinion and as per the information and explanations given to us, the stock records maintained by the company broadly meet the specifications given by the Central Government U/s.209(1 )(d) of the Companies Act, 1956. However, the contents of these accounts and records have not been examined by us in detail.

9. a) The undisputed dues including Provident fund, Employees State Insurance, Income- Tax, Sales-Tax, Excise-Duty, Cesses and other statutory dues have been deposited by the company during the year with the appropriate authorities with some delays. Provident Fund dues to the tune of Rs. 8.16 Lakhs, FBT to the tune of Rs. 8.55 Lakhs, Income-Tax to the tune of Rs. 19.49 lakhs, Tax Deducted at Source to the tune of Rs. 12.90 lakhs were outstanding as at 31st March, 2012 for a period of more than 6 months from the date they became payable.

b) We are informed that there are no dues in respect of Sales tax/Customs tax/Excise duty/ Cess which have not been deposited on accounts of any disputes.

10. The accumulated losses of the company as on 31.03.2012 amounts to Rs. 671.61 lacs (previous year Rs. 777.58 lakhs). The accumulated losses at the end of the financial year are not less than fifty percent of its net worth. During the year 2011-12 and the immediately preceding financial year the company has not incurred cash losses.

11. The company has taken loans from a bank, and the company, prima facie, does not appear to have defaulted in making the repayment of dues to the Bank. The company has not raised any loans from debenture holders.

12. As per the information and explanations furnished to us, during the year the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As per the information and explanations furnished to us, the company has not dealt with or traded in shares, securities, debentures or other investments during the year.

14. As per the information and explanations furnished to us by the management during the year, the company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

15. The terms loans raised, prima facie, appear to have been applied for the purpose for which the loans were obtained.

16. The examination of the Financial Statements, prima facie, indicates that some of the short term funds raised by the company appear to have been used for long term purposes.

17. As per the information and explanations furnished to us, during the year the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

18. The company has not raised any funds in the form of debentures and hence not created any securities.

19. The company has not raised any funds during the year in the form of public issue.

20. According to the information and explanations furnished to us, during the year, there was no fraud on or by the company that has been noticed or reported to us by the management.

21. The company is governed by the Companies Act, 1956 and no other special statute is applicable to the company.

22. The other particulars of this order are not applicable to the company.

For P.S.N. RAVI SHANKER & ASSOCIATES Chartered Accountants

Sd/- P. RAVI SHANKER Partner

Place: Hyderabad, Date : 31.05.2012.


Mar 31, 2011

We have audited the attached Balance Sheet of M/s. Everest Organics Limited as at 31st March, 2011, the Profit and Loss Account and the cash flow statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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.

I. 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 have enclosed in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the said order.

II. Further to our statement referred to in paragraph I above, we report that:

a) We have obtained all the information and explanations, which to the best our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, the company as referred by law has kept proper books of accounts so far as it appears from our examination of those books.

c) The Balance Sheet, Profit and Loss Account and the Cash Flow dealt with by this report are in agreement with the books of account.

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

e) On the basis of written representations received from the directors, as on 31.03.2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

(f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by 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, 2011

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

iii) In the case of the Cash flow statement, of the cash flows of the company for the year ended as on that date.

STATEMENT REFERRED TO IN THE AUDIT REPORT

1. a) The records maintained by the company show broad particulars including quantitative details and situation in respect of the assets and the fixed assets regis ter is to be updated.

According to the information and explanations furnished to us, the fixed assets of the company have been broadly verified during the year by the management and we are informed that no material discrepancies between the book records and the inventory have been noticed, which may be documented.

b) There was no disposal of a substantial part of fixed assets.

2. a) As explained to us, Physical verification of inventories has been conducted by the management during the year in respect of majority of the high value items at reasonable intervals.

b) The procedures of physical verification of inventory followed by the Management appear to be generally 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 inventory and we are informed that there were no material discrepancies noticed on physical verification and the discrepancies noticed on such verification have been properly dealt with.

3. a) During the year the company has taken unsecured loans from 3 parties at Rs.149.60 lakhs (Previous year Rs.59.24 Lakhs from 6 parties) covered in the register maintained under Sec.301 of the Companies Act, 1956. The total outstandings in these accounts at the end of the year stood at Rs.141.68 lakhs (Previous year end 144.73 lakhs). The Company has not granted any loans secured or unsecured or provided any guarantees to parties coming under the provision of Sec.301 of the Companies Act, 1956.

b) The unsecured loans taken are interest free and other terms and conditions of unsecured loans taken by the company are, prima facie, do not appear to be prejudicial to the interest of the company.

c) As per information and explanations furnished to us, no specific repayment program has been fixed for the unsecured loans.

4. In our opinion and according to the information and explanations given to us, the internal control procedures existing in the company with regard to purchase of Inventory and Fixed Assets and for the sale of goods, prima facie, appear to be commensurate with the size of the company and the nature of its business.

5. As per the information and explanations given to us, during the year, there are no such contracts or arrangements that are required to be entered in to the register in pursuance of section 301 of the Act.

6. As per the information and explanations furnished to us, the Company has not accepted any deposits from the Public during the year to which the directives issued by the Reserve Bank of India and the provisions of Sec.58A and Sec.58AA of the Companies Act, 1956 and Rules framed there under apply. However, the Company has taken/ accepted the unsecured loans (outstanding at 31.03.2011 to the tune of Rs.401.96 lakhs and outstanding as on 31.03.2010 at Rs.395.20 lakhs) and share application money (pending allotment outstanding on 31.03.2011 and on 31.03.2010 at Rs.388.81 lakhs) from various parties stated to be coming under the category of promoters, their friends, relatives, employees and sister concerns and it has been explained to us that unsecured loans/ share application money have been brought into the company to meet the financial obligations of the company to the Financial Institutions/Banks.

7. The Company does not have formal internal audit system from the external agency. As per the information and explanations furnished to us by the management the existing internal control procedures covers some of the internal audit aspects.

8. In our opinion and as per the information and explanations given to us, the stock records maintained by the company broadly meet the specifications given by the Central Government U/s.209(1)(d) of the Companies Act, 1956. However, the contents of these accounts and records have not been examined by us in detail.

9. a) The undisputed dues including Provident fund, Employees State Insurance, Income-Tax, Sales-Tax, Excise-Duty, Ceases and other statutory dues have been deposited by the company during the year with the appropriate authorities with delays. Provident Fund dues to the tune of Rs. NIL, FBT to the tune of Rs.8.55 Lakhs, Income-Tax to the tune of Rs.22.57 lacs, Tax Deducted at Source to the tune of Rs.6.77 lacs were outstanding as at 31st March, 2011 for a period of more than 6 months from the date they became payable.

b) We are informed that there are no dues in respect of Sales tax/Customs tax/Excise duty/Cess which have not been deposited on accounts of any disputes.

10. The accumulated losses of the company as on 31.03.2011 amounts to about Rs.777.58 lacs (previous year Rs.875.01 lakhs). The accumulated losses at the end of the financial year are not less than fifty percent of its net worth. During the year 2010-11 and the immediately preceding financial year the company has not incurred cash losses.

11. During the year the company, prima facie, appears to have not defaulted in repayment of dues to the Financial Institutions/Banks.

12. As per the information and explanations furnished to us, during the year the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As per the information and explanations furnished to us, the company has not dealt with or traded in shares, securities, debentures or other investments.

14. As per the information and explanations furnished to us, the company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

15. The terms loans were applied for the purpose for which the loans were obtained.However, during the year, the company has not availed any new term loans.

16. The examination of the Financial Statements, prima facie, indicates that some of the short term funds raised by the company appear to have been used for long term purposes.

17. As per the information and explanations furnished to us, during the year the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

18. The company has not raised any funds in the form of debentures.

19. The company has not raised any funds during the year in the form of public issue.

20. According to the information and explanations furnished to us, during the year, there was no fraud on or by the company that has been noticed or reported by the management.

21. The company is governed by the Companies Act, 1956 and no other special statute is applicable to the company.

22. The other particulars of this order are not applicable to the company.

For P.S.N. RAVI SHANKER & ASSOCIATES Chartered Accountants

Sd/- P. RAVI SHANKER Partner

Place : Hyderabad Date : 31.05.2011




Mar 31, 2010

We have audited the attached Balance Sheet of M/s. Everest Organies Limited as at 31st March, 2010, the Profit and Loss Account and the cash flow statement of the company for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements 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.

I. As required by the Companies (Auditors Report) Order, 2003, issued by Government of India in terms of sub-section(4A) of section 227 of the Companies Act, 1956, we have enclosed in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the said order.

II. Further to our statement referred to in paragraph I above, we report that:

a) We have obtained all the information and explanations, which to the best our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, the company as referred by law has kept proper books of accounts so far as it appears from our examination of those books.

c) The Balance Sheet, Profit and Loss Account and the Cash Flow dealt with by this report are in agreement with the books of account.

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

e) On the basis of written representations received from the directors, as on 31.03.2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by 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 Gase of the Balance Sheet, of the state of affairs of the company as at 31st March, 2010

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

iii) In the case of the Cash flow statement, of the cash flows of the company for the year ended as on that date.

STATEMENT REFERRED TO IN THE AUDIT REPORT

1. a) The records maintained by the company show broad particulars including quantitative details and situation in respect of the assets and the fixed assets register is to be updated.

According to the information and explanations furnished to us, the fixed assets of the company have been broadly verified during the year by the management and we are informed that no material discrepancies between the book records and the inventory have been noticed, which may be documented.

b) There was no dispersal of a substantial part of fixed assets.

2. a) As explained to us, Physical verification of inventories has been conducted by -the

management during the year in respect of majority of the high value items at reasonable intervals.

b) The procedures of physical verification of inventory followed by the Management appear to be generally 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 inventory and we are informed that there were no material discrepancies noticed on physical verification and the discrepancies noticed on such verification have been properly dealt with.

3. a) During the year the company has taken unsecured loans from 3 parties at Rs.59.24

lakhs (Previous year Rs.93.03 Lakhs from 5 parties) covered in the register maintained under Sec.301 of the Companies Act, 1956. The total outstandings in these accounts at the end of the year stood at Rs. 144.73 lakhs (Previous year end 85.48 lakhs). The Company has not granted any loans secured or unsecured or provided any guarantees to parties coming under the provision of Sec.301 of the Companies Act, 1956.

b) The unsecured loans taken are interest free and other terms and conditions of unsecured loans taken by the company are, prima facie, do not appear to be prejudicial to the interest of the company.

c) As per information and explanations furnished to us,*no specific repayment program has been fixed for the unsecured loans.

4. In our opinion and according to the information and explanations given to us, the internal control procedures existing in the company with regard to purchase of Inventory and Fixed Assets and for the sale of goods, prima facie, appear to be commensurate with the size of the company and the nature of its business.

5. As per the information and explanations given to us, during the year, there are no such contracts or arrangements that are required to be entered in to the register in pursuance of section 301 of the Act.

6. As per the information and explanations furnished to us, the Company has not accepted any deposits from the Public during the year to which the directives issued by the Reserve Bank of India and the provisions of Sec.58A and Sec.58AA of the Companies Act, 1956 and Rules framed there under apply. However, the Company has taken/accepted the unsecured loans (outstanding at 31.03.2010 to the tune of Rs.395.20 lakhs and outstanding as on 31.03.2009 at Rs.313.99 lakhs) and share application money(pending allotment outstanding on 31.03.2010 and on 31.03.2009 at Rs.388.81 lakhs) from various parties stated to be coming under the category of promoters, their friends, relatives, employees and sister concerns and it has been explained to us that unsecured loans/share application money have been brought into the company to meet the financial obligations of the company to the Financial Institutions/Banks.

7. The Company does not have formal internal audit system from the external agency. As per the information and explanations furnished to us by the management the existing internal control procedures covers some of the internal audit aspects.

8. In our opinion and as per the information and explanations given to us, the stock records maintained by the company broadly meet the specifications given by the Central Government U/s.209(1)(d) of the Companies Act, 1956. However, the contents of these accounts and records have not been examined by us in detail.

9. a) The undisputed dues including Provident fund, Employees State Insurance, Income- Tax, Sales-Tax, Excise-Duty, Ceases and other statutory dues have been deposited by the company during the year with the appropriate authorities with delays. Provident Fund dues to the tune of Rs.19.18 Lacs, FBT to the tune of Rs.8.55 Lakhs, Income- Tax to the tune of Rs.22.57 lacs, Tax Deducted at Source to the tune of Rs.7.65 lacs were outstanding as at 31 St March, 2010 for a period of more than 6 months from the date they became payable.

b) We are informed that there are no dues in respect of Sales tax/Customs tax/Excise duty/Cess which have not been deposited on accounts of any disputes.

10. The accumulated losses of the company as on 31.03.2010 amounts to about Rs.875.01 lacs (previous year Rs.990.61 lakhs). The accumulated losses at the end of the financial

year are not less than fifty percent of its net worth. During the year 2009-10 and the immediately preceding financial year the company has not incurred cash losses.

11. During the year the company, prima facie, appear to have not defaulted in repayment of dues to the Financial Institutions/Banks.

12. As per the information and explanations furnished to us, during the year the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As per the information and explanations furnished to us, the company has not dealt with or traded in shares, securities, debentures or other investments.

14. As per the information and explanations furnished to us, the company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

15. The terms loans were applied for the purpose for which the loans were obtained. However, during the year, the company has not availed any new term loans.

16. The examination of the Financial Statements, prima facie, indicates that some of the short term funds raised by the company appear to have been used for long term purposes.

17. As per the information and explanations furnished to us, during the year the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

18. The company has not raised any funds in the form of debentures.

19. The company has not raised any funds during the year in the form of public issue.

20. According to the information and explanations furnished to us, during the year, there was no fraud on or by the company that has been noticed or reported by the management

21. The company is governed by the Companies Act, 1956 and no other special statute is applicable to the company.

22. The other particulars of (his order are not applicable to the company.

For P.S.N. RAVI SHANKER & ASSOCIATES Chartered Accountants

Place : Hyderabad P. RAVI SHANKER

Date: 27.05.2010 Partner

 
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