Mar 31, 2015
We have audited the accompanying financial statements of GEI Industrial
Systems Limited ("the Company"), which comprise the Balance Sheet as &t
March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with accounting principles generally
accepted in India, including the Accounting Standards specified under
section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2015.
This responsibility includes maintenance of adequate accounting records
in accordance with the provisions of the Act for safeguarding of the
assets of the Company and for preventing and detecting frauds and other
irregularities; selection And application of appropriate accounting
policies making judgments and its and estimates that are reasonable and
prudent; and the design, implementation and maintenance of adequate
internal financial control that were operating effectively for ensuring
the accuracy and completeness of the accounting records, relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
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, as specified under Section 143(10) of the Act. We
have taken into account the provisions of the Act, the accounting and
auditing standards and matters which are required to be included in the
audit report under the provisions of the Act and the Rules made
there under. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the effectiveness of such
controls. 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 on the standalone financial statements.
Opinion
We report that:
1. Balances of Trade Receivables, Trade Payables, Advance to Suppliers
and Bank accounts have been un-reconciled and unconfirmed.
2. Liability on account of interest on borrowings from financial
institutions/ ICDs where suits were filed by the lenders or the account
is classified as NPA by them, has not been provided in the accounts. It
has been estimated by the management and disclosed as contingent
liability of Rs. 11,06,96,963/- in Note No.26 of the financial
statements.
3. Reconciliation of Intra-head and intra-group accounts and resultant
adjustments are pending which may have impact on intra-head balances
and financial position disclosed in the financial statements.
Subject to our remarks 1 to 3 above and subject to other qualifications
in the report mentioned in Para (1) under "Report on Other Legal and
Regulatory Requirements" below, in our opinion and to the best of our
information and according to the explanations given to us, the
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2015, its loss and its cash
flows for the year ended on that date.
Emphasis of Matters
We draw attention to Note No. 8.1 to the financial statements regarding
the financial effect of any diminution in value of non-moving
inventories. In the opinion of the company, the realization will be
materialized with the revival of the projects, hence no provision for
any loss thereof is made in the accounts.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's report) Order, 2015 Order")
issued by the Central Government of India in terms of sub- section (11)
of section 143 of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
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
those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164 (2) of the Act;
(d) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2015, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has not disclosed the additional financial impact, if
any, of pending litigations in its financial statements-Refer Notes 4.2
and 4.4 to the financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. As per the information and explanations given to us there were Rs.
4,15,294/- which were required to be transferred to the Investor
Education and Protection Fund by the Company.
Annexure as referred to in paragraph 1 under the heading "Report on
other Regulatory requirements" of our report of even date of GEI
Industrial Systems Limited on the Accounts for the year ended on 31st
March,2015
(i) (a) The company has not maintained up to date records showing full
particulars including quantitative details and situation of fixed
assets.
(b) We have not been provided with evidence of physical verification of
assets by the management as per a program of verification in a
periodical manner, hence unable to comment whether any discrepancies
were noticed on such verification.
(c) In our opinion, the company has not disposed off substantial part
of fixed assets during the year and the going concern status of the
company is not affected.
(ii) (a) We have not been provided with evidence of physical
verification of inventories by the management, hence unable to comment
whether any discrepancies were noticed on such verification.
(b) In view of our remark in sub-para (a) above, we are unable to
comment whether the procedures of physical verification of inventories,
if any, followed by the management during the year, are reasonable and
adequate in relation to the size of the company and the nature of its
business.
(c) The company has maintained records of inventories on computerized
environment. Inventory of work in progress, obsolete material and
project have been determiner certified- by the management arraingment
incorporated the accounts accordingly and not verified by us for want
of proper records.
(iii) The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Hence provisions of
Clause (iii) of Paragraph 3 are not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there is no adequate internal control system commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and with regard to the sale of
goods and services. During the course of our audit, we have come
across major weakness in internal controls.
(v) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits within the
purview of sections 73 to 76 of the Companies Act, 2013 and the rules
framed there under.
(vi) We have not been provided with the cost records as specified by
the Central te Government under sub-section 148 of the Companies Act,
hence we are A unable to comment whether such records are maintained.
(vii) (a) According to the records of the company udisputed statutory
dues including provident fund, employeesstate insurance income tax
sales tax wealth tax, service tax, duty of customs duty mentioned below
have cess and other material stautory dues except those mentioned below
haveauthority. According to the information and explanations given to
us undisputed amounts payable in respect of aforesaid payable as
under:-
Amount (Rs,)
Nature of Liability
ESI 5510997/-
Provident Fund 31217597/-
TDS (Deducted) 43354713/-
on various heads)
1243002/-
Professional Tax
(Employees)
Export Tax 2034991/-
VAT* 13075151/-
SERVICE TAX* 17288058/-
EXCISE DUTY* 46021291/-
CST 10028104/-
* Subject to adjustment for input credit
(b) According to the information and explanations given to us, the
following are the particulars of statutory dues as at 31st 2015 not
deposited on account of a dispute pending.
Name of Nature of Amount Period to Forum Where the
the Dues (Rs.) which amount dispute is pending
Statute relates FY
Sales Tax Central Rs,1747280 2006-2007 Board of Revenue
Law Sales Tax Bhopal
Sales Tax Central Rs, 839541 2007-2008 Board of Revenue
Law Sales Tax Bhopal
Sales Tax Central Rs,4135024 2006-2007 Board of Revenue
Law Sales Tax Bhopal
Sales Tax Central Rs, 166859 2006-2007 Board of Revenue
Law Sales Tax Bhopal
Income Income Tax Rs, 3576166 2006-07 Commissioner of
Tax Act Demand Income Tax
(c) According to the information and the explanations given to us an
amount of Rs.4,15,294/- is required to be transferred to Investor
Education and Protection Fund, for which necessary instruction was
given to the banker. However, no confirmation of such transfer is
available with the company.
(viii) The accumulated losses at the end of the financial year are less
than fifty percent of its net worth and the company has incurred cash
losses during the financial year and in the immediately preceding
financial year.
(ix) In our opinion and according to the information and explanations
given to us, the company has defaulted in repayment of dues to
financial institution or bank as unden-
S/N Name of the Fl/Bank Period of Defult Amount of
0 Default Rs,
1 The HSBC LTD >365 days Rs,37165626/-
2. Citi Bank LTD >365 days Rs.276460387/-
3. Madhya Pradesh
Finance >365 days Rs.2546389/-
Corp.LTD
(x) In terms of the information and explanations given to us, the
company has given corporate guarantee for loans taken by subsidiary
company from banks or financial institutions. In our opinion, the terms
and conditions on which the company has given such guarantees are not
prejudicial to the interest of the company.
(xi) The company has not raised any fresh term lons during the year.
(xii) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and
according to the information and explanations given to us by the
management, we report that no fraud on or by the company has been
noticed or reported during the course of our audit.
For A.K. Khabya & Co.
Chartered Accountants
Firm Reg. No. 001994C
Place : Bhopal CA. M.N.G. PILLAI
Date : 14th June, 2015 Partner
M.No.74051
Mar 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of GEI Industrial
Systems Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2014, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
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 principles generally accepted in India including
Accounting Standards referred to in Section 211(3C) of the Companies
Act, 1956 ("the Act"). 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 misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
We report that:
1. Balances of Trade Receivables, Trade Payables and Advance to
Suppliers have not been confirmed.
2. Liability on account of interest on borrowings from financial
institutions/ ICDs where suit were filed by the lenders or the account
is classified as NPA by them, has not been provided in the accounts. It
has been estimated by the management and disclosed as contingent
liability of Rs. 10,53,83,183/- in the Balance Sheet.
Subject to our remarks above and subject to other qualifications in the
report mentioned in Para (1) under "Report on Other Legal and
Regulatory Requirements''" below, in our opinion and to the best of our
information and according to the explanations given to us, the
aforesaid financial statements give the information required by the Act
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) In the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of Section
227(4A) 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
referred to in section 211(3C) of the Act;
(e) On the basis of the written representations received from the
directors as on March 31, 2014, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2014,
from being appointed as a director in terms of Section 274(l)(g) of the
Act;
Annexure as referred to in paragraph 3 of our report of even date of
GEI Industrial Systems Limited on the Accounts for the year ended on
31st March, 2014
(i) (a) On the basis of available information the company has
maintained records showing full particulars including quantitative
details and situation of fixed assets, however the records are not
updated as at the year end.
(b) We have not been provided with evidence of physical verification of
assets by the management as per a program of verification in a
periodical manner, hence unable to comment whether any discrepancies
were noticed on such verification.
(c) In our opinion, the company has not disposed off substantial part
of fixed assets during the year and the going concern status of the
company is not affected.
(ii) (a) We have not been provided with evidence of physical
verification of inventories by the management, hence unable to comment
whether any discrepancies were noticed on such verification.
(b) In view of our remark in sub-para (a) above, we are unable to
comment whether the procedures of physical verification of inventories,
if any, followed by the management during the year, are reasonable and
adequate in relation to the size of the company and the nature of its
business.
(c) The company has maintained records of inventories on computerized
environment. Inventory of work in progress, obsolete material and
project have been determined, certified by the management and
incorporated in the accounts accordingly and relied upon by us without
verification.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Hence provisions of
Clause (iii) (b), (c) and (d) of Paragraph 4 are not applicable to the
Company.
(b) The company has taken unsecured loan from two parties covered in
the register maintained under section 301 of the Companies Act, 1956.
In respect of the said loans, the maximum amount outstanding at any
time during the year and the year end balance was RS. 8,39,66,288/-.
(c) According to the information and explanations given to us, there
was no stipulation of interest and period of repayment hence no
irregularity thereon is reported.
(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 with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not come across any major weakness in internal controls.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts and arrangements
referred to in Section 301 of the Act, have been entered in the
register required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of RS. 500000/- in
respect of each party during the year have been made at prices which
appear reasonable having regard to the prevailing market prices 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 within the
purview of sections 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975, during the year.
(vii) In our opinion, there was no internal audit system during the
year.
(viii) We have not been provided the accounts and records maintained by
the company pursuant to the Companies (Cost Accounting Records) Rules,
2011 prescribed by the Central Government under section 209 (1)(d) of
the Companies Act, 1956, hence unable to comment whether, the
prescribed cost records have been maintained.
(ix) (a) According to the records of the company, undisputed statutory
dues including provident fund, investor education protection fund,
employees state insurance, income tax, sales tax, wealth tax, service
tax, custom duty, excise duty cess and other material statutory dues
applicable to it have been generally deposited with the appropriate
authority. According to the information and explanations given to us,
undisputed amounts payable in respect of aforesaid dues were in
arrears, as at 31st March, 2014 for a period of more than six months
from the date they became payable as under: -
Nature of Liability Period Amount
ESI September,2013 2790041.00
Provident Fund September,2013 18956921.00
TDS (Deducted) Upto September, 2013 13667210.00
on various heads)
Professional Tax Upto September 2013 901988.00
(Employees)
EXPORT Tax Upto September 2013 2034991
(b) According to the information and explanations given to us, the
following are the particulars of statutory dues as at 31st March, 2014
not deposited on account of a dispute pending:
Name of the Nature of Dues Amount Period to which
Statute (Rs.) amount relates
F.Y.
Sales Tax Law Central Sales 1747280 2006-2007
Tax
Sales Tax Law Central Sales 839541 2007-2008
Tax
Sales Tax Law Central Sales 4135024 2008-09
Tax
Sales Tax Law Central Sales 166859 2009-10
Tax
Income Tax Income Tax 3576166 2006-07
Act Demand
Name of the Nature of Dues Forum where the dispute
Statute is pending
Sales Tax Law Central Sales Board of Revenue, Bhopal
Tax
Sales Tax Law Central Sales Board of Revenue, Bhopal
Tax
Sales Tax Law Central Sales Board of Revenue, Bhopal
Tax
Sales Tax Law Central Sales Board of Revenue, Bhopal
Tax
Income Tax Income Tax Commissioner of Income
Act Demand Tax
(x) The accumulated losses at the end of the financial year are less
than fifty percent of its net worth and the company has incurred cash
losses during the financial year and in the immediately preceding
financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has defaulted in repayment of dues to
financial institution or bank as under:-
S/No Name of the FI/ Bank Period of Default Amount of Default
The HSBC LTD >365 37165626
Citi Bank Ltd >365 276460387
Madhya Pradesh
Financial Corp.Ltd >365 2230545
(xii) 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 and
therefore Paragraph 4(xii) of the Order is not applicable.
(xiii) In our opinion, the company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the
provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other * investments. Accordingly,
the provisions of clause 4(xiv) of the Companies (Auditor''s Report)
Order, 2003 are not applicable to the company.
(xv) In terms of the information and explanations given to us, the
company has given corporate guarantee for loans taken by subsidiary
company from banks or financial institutions. In our opinion, the terms
and conditions on which the company has given such guarantees are not
prejudicial to the interest of the company.
(xvi) The Company has not raised any new term loans during the year and
accordingly paragraph 4(xvi) of the Order is not applicable.
(xvii) According to the cash flow statement and other records examined
by us and information and explanations given to us, on an overall
basis, the funds raised on short-term basis have, prima facie, not been
used during the year for long-term investment.
(xviii)The company has not made preferential allotment of shares during
the year to parties and companies covered in the register maintained
under section 301 of the Act.
(xix) The company has not issued any debentures and therefore paragraph
4(xix) of the Order is not applicable.
(xx) The company has not raised any money by way of public issues
during the year and therefore paragraph 4(xx) of the Order is not
applicable.
(xxi) According to the information and explanations given to us and in
our opinion, no fraud on or by the company has been noticed or reported
during the year.
For A.K. Khabya &Co.
Chartered Accountants
Firm Reg. No. 001994C
Place : Bhopal CA. M.N.G. PILLAI
Date : 29th May, 2014 Partner
M.No.74051
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of GEI Industrial
Systems Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
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 principles generally accepted in India including
Accounting Standards referred to in Section 211(3C) of the Companies
Act, 1956 ("the Act"). 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 misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion. ¦
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 March 31, 2013;
(b) In the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date. Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of Section
227(4A) 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
referred to in section 211 (3C) of the Act;
(e) On the basis of the written representations received from the
directors as on March 31, 2013, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2013,
from being appointed as a director in terms of Section 274(1 )(g) of
the Act;
(f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
[Annexure as referred to in paragraph 3 of our report of even date of
GEI Industrial Systems Limited on] |the Accounts for the year ended on
31s'' March, 2oT3|
(i) (a) On the basis of available information the company has
maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
(b) As explained to us all the assets have been physically verified by
the management as per a program of verification in a periodical manner,
which in our opinion is reasonable having regard to the size of the
company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) In our opinion, the company has not disposed off substantial part
of fixed assets during the year and the going concern status of the
company is not affected.
(ii) (a) As explained to us the inventories have been physically
verified during the year by the management. In our opinion, the
frequency of verification is reasonable.
(b) According to the information and explanations given to us, the
procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business.
(c) The company has maintained proper records of inventories. As
explained to us, no material discrepancies were noticed or> physical
verification as compared to the book records. Inventory of work in
progress, obsolete material and project have been determined certified
by the management and incorporated in the accounts as such.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Hence provisions of
Clause (iii) (b), (c) and (d) of Paragraph 4 are not applicable to the
Company.
(b) The company has taken unsecured loan from two parties covered in
the register maintained under section 301 of the Companies Act, 1956.
In respect of the said loans, the maximum amount outstanding at any
time during the year and the year end balance was 71752027/-.
(c) According to the information and explanations given to us, the rate
of interest wherever applicable and other terms and conditions on which
loans have been taken by the company are not, prima facie, prejudicial
to the interest of the company.
(d) Wherever stipulated the company has been regular in the payment of
principal amount and interest.
(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 with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not come across any major weakness in internal controls.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts ands
arrangements referred to in Section 301 of the Act, have been entered
in the register required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of 500000/- in respect
of each party during the year have been made at prices which appear
reasonable having regard to the prevailing market prices 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 within the
purview of sections 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975, during the year.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the accounts and records maintained by
the company pursuant to the Companies (Cost Accounting Records) Rules,
2011 prescribed by the Central Government under section 209 (1)(d) of
the Companies Act, 1956, and are of the opinion that prima facie, the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the records with a view to determine
whether they are accurate and complete.
(x) The company has accumulated losses at the end of the financial
year. The company has incurred cash losses during the financial year
covered by our audit but not in the immediately preceding financial
year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to any
financial institution or bank except Rs.280489892.39 of CITI Bank
(Unsecured Loan) and Rs.37165626/- of HSBC Ltd(Unsecured Loan
Rs.22400000/- and Rs. 14765626/- Current Liabilities).
(xii) 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 and
therefore Paragraph 4(xii) of the Order is not applicable.
(xiii) In our opinion, the company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the company.
(xv) In terms of the information and explanations given to us, the
company has given corporate guarantee for loans taken by subsidiary
company from banks or financial institutions. In our opinion, the terms
and conditions on which the company has given such guarantees are not
prejudicial to the interest of the company.
(xvi) The Company has not raised any new term loans during the year and
accordingly paragraph 4(xvi) of the Order is not applicable.
(xvii) According to the cash flow statement and other records examined
by us and information and explanations given to us, on an overall
basis, the funds raised on short-term basis have, prima facie, not been
used during the year for long-term investment.
(xviii) The company has made preferential allotment of shares on
conversion of warrants during the year to parties and companies covered
in the register maintained under section 301 of the Act and in our
opinion the price at which shares have been issued is not prejudicial
to the interest of the company.
(xix) The company has not issued any debentures and therefore paragraph
4(xix) of the Order is not applicable. ,
(xx) The company has not raised any money by way of public issues
during the year and therefore paragraph 4(xx) of the Order is not
applicable.
(xxi) According to the information and explanations given to us and in
our opinion, no fraud on or by the company has been noticed or reported
during the year,
For A.K. Khabya & Co.
Chartered Accountants
Firm Reg. No. 001994C
Place : Bhopal CA. M.N.G. PILLAI
Date : 30th May, 2013 Partner
M.No.74051
Mar 31, 2012
1. We have audited the attached Balance Sheet of GEI Industrial
Systems Ltd as at 31st March 2012, the Profit and Loss Account and also
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 the 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 (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specifed in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) 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;
(ii) 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;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the mandatory
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ;
(v) On the basis of written representations received from the
Directors, as on 31st March 2012 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2012 from being appointed as a Director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and Notes thereon, give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(b) in the case of the Profit and Loss Account, of the Profit for the
year ended on that date ; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure as referred to in paragraph 3 of our report of even date of
GEI Industrial Systems Ltd on the accounts for the year ended on 31st
March, 2012
(i) (a) On the basis of available information the Company has properly
maintained records showing full particulars including quantitative
details and situation of fixed assets.
(b) As explained to us the fixed assets have been physically verifed by
the management as per a program of verification in a periodical manner,
which in our opinion is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) In our opinion, the Company has not disposed off a substantial part
of fixed assets during the year and the going concern status of the
Company is not affected.
(ii) (a) As explained to us the inventories have been physically
verifed during the year by the management. In our opinion, the
frequency of verification is reasonable.
(b) According to the information and explanations given to us, the
procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company has maintained proper records of inventories. As
explained to us, no material discrepancies were noticed on physical
verification as compared to the book records.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, clauses
4(iii)(b), (c) and (d) 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 companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, clauses 4(iii)(f) and (g)
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 systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
service. During the course of our audit, we have neither observed nor
have been informed of any continuing failure to correct major
weaknesses in the internal control systems.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act, have been entered in the
register required to be maintained under that section.
(b) According to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements
entered in the Register maintained under section 301 of the Companies
Act, 1956 and exceeding the value of Rs. 500000 in respect of each party
during the year have been made at prices which appear reasonable as per
information available with the Company having regard to the prevailing
market prices 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 within the
purview of sections 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975, during the year. We are
informed that no order has been passed by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) According to the information and explanations given to us the
Central Government has not prescribed maintenance of cost records under
section 209(1)(d) of the Companies Act, 1956, for the products
manufactured by the Company.
(ix) (a) According to the information and explanations given to us and
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, service tax, custom duty, excise
duty, cess and other material statutory dues as applicable, with the
appropriate authorities. According to the information and explanations
given to us, no undisputed amounts payable in respect of the aforesaid
dues were outstanding as at 31st March, 2012 for a period more than six
months from the date they become payable.
(b) According to the information and explanations given to us, the
following are the particulars of statutory dues as at 31st March, 2012
not deposited on account of a dispute pending:
Name of the Nature of Dues Amount (Rs.) Period to
Statute which amount
relates F. Y.
Sales Tax Law Central Sales Tax 1747280 2006-2007
Sales Tax Law Central Sales Tax 839541 2007-2008
Sales Tax Law Central Sales Tax 4135024 2008-09
Income Tax Act Income Tax Demand 1085865 2005-2006
Income Tax Act Income Tax Demand 2287677 2006-2007
Income Tax Act Income Tax Demand 21723813 2007-08
Income Tax Act Income Tax Demand 118147090 2009-10
Name of the Statue Forum where the dispute is
pending
Sales Tax Law Board of Revenue, Bhopal
Sales Tax Law Board of Revenue, Bhopal
Sales Tax Law Board of Revenue, Bhopal
Income Tax Act ITAT
Income Tax Act ITAT
Income Tax Act Commissioner of Income Tax
Income Tax Act Commissioner of Income Tax
(x) The Company has no accumulated losses as at 31st March, 2012 and it
has not incurred cash losses in the financial year ended on that date
and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank.
(xii) 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, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company.
(xv) The Company has given corporate guarantee for loans taken by it's
subsidiary Company from banks and financial institutions. According to
the information and explanations given to us, we are of the opinion
that the terms and conditions thereof are not prima facie prejudicial
to the interest of the Company.
(xvi) According to the information and explanations given to us, the
term loans raised by the Company have been applied for the purposes for
which they were obtained.
(xvii) According to the cash flow statement and on overall examination
of the Balance Sheet, we are of the opinion that no funds raised on
short-term basis have, prima facie, been used for long-term investment.
(xviii) According to the information and explanations given to us the
Company has made preferential allotment of shares/warrants to parties
covered in the register maintained under section 301 of the Act. In our
opinion, the price at which shares/warrants have been offered is
according to SEBI guidelines and not prejudicial to the interest of the
Company.
(xix) The Company has not issued any debentures.
(xx) The Company has not raised any money by way of public issues
during the year.
(xxi) According to the information and explanations given to us and in
our opinion, no instances of fraud on or by the Company have been
noticed or reported during the year nor have we been informed of such
case by the Company.
For A. K. Khabya & Co.
Chartered Accountants
Place : Bhopal CA. M.N.G. PILLAI
Date : 03.09.2012 Partner
Membership No.74051
FRN 001994C
Mar 31, 2011
1. We have audited the attached Balance Sheet of GEI Industrial
Systems Ltd as at 31st March 2011, the Profit and Loss Account and also
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 the 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 (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) 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;
(ii) 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;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the mandatory
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ;
(v) On the basis of written representations received from the
directors, as on 31st March 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and Notes thereon, give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2011;
(b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date ; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditor's Report
Annexure as referred to in paragraph 3 of our report of even date of
GEI Industrial Systems Ltd on the accounts for the year ended on 31st
March, 2011
(i) (a) On the basis of available information the Company has properly
maintained records showing full particulars including quantitative
details and situation of fixed assets.
(b) As explained to us the assets have been physically verified by the
management as per a program of verification in a periodical manner,
which in our opinion is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) In our opinion, the Company has not disposed off substantial part
of fixed assets during the year and the going concern status of the
Company is not affected.
(ii) (a) As explained to us the inventories have been physically
verified during the year by the management. In our opinion, the
frequency of verification is reasonable.
(b) According to the information and explanations given to us, the
procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company has maintained proper records of inventories. As
explained to us, no material discrepancies were noticed on physical
verification as compared to the book records.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, clauses
4(iii)(b), (c) and (d) 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 companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, clauses 4(iii)(f) and (g)
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 systems commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fxed assets and for the sale of goods and
service. During the course of our audit, we have neither observed nor
have been informed of any continuing failure to correct major
weaknesses in the internal control systems.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act, have been entered in the
register required to be maintained under that section.
(b) According to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements have
been made at prices which are reasonable having regard to the
prevailing market prices 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 within the
purview of sections 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975, during the year. We are
informed that no order has been passed by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) According to the information and explanations given to us the
Central Government has not prescribed maintenance of cost records under
section 209(1)(d) of the Companies Act, 1956, for the products
manufactured by the Company.
(ix) (a) According to the information and explanations given to us and
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, service tax, custom duty, excise
duty, cess and other material statutory dues as applicable, with the
appropriate authorities.
(b) According to the information and explanations given to us, the
following are the particulars of statutory dues as at 31st March, 2011
not deposited on account of a dispute pending:
Name of the Nature of Dues Amount Period to Forum where the
Statute (Rs.) which dispute is
amount pending
relates
F. Y.
Sales Tax Central Sales 3144803 2006-2007 Board of Revenue,
Law Tax Bhopal
Sales Tax Central Sales 1089541 2007-2008 Commissioner
Law Tax of Sales Tax
Income Tax Income Tax 3171740 2005-2006 Commissioner
Act Demand of Income Tax
Income Tax Act Income 3360566 2006-2007 Commissioner
Tax Demand of Income Tax
(x) The Company have no accumulated losses as at 31st March, 2011 and
it has not incurred cash losses in the financial year ended on that
date and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank.
(xii) 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, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company.
(xv) In terms of the information and explanations given to us, the
Company has given corporate guarantee for loan taken by subsidiary
Company from banks or financial institutions.
(xvi) According to the information and explanations given to us, the
term loans have been applied by the Company for the purposes for which
they were obtained.
(xvii) According to the Cash Flow Statement and other records examined
by us and information and explanations given to us, on an overall
basis, the funds raised on short-term basis have, prima facie, not been
used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has made preferential allotment of shares/ warrants to parties
covered in the register maintained under section 301 of the Act. In our
opinion, the price at which shares/warrants have been offered is
according to SEBI guidelines and not prejudicial to the interest of the
Company.
(xix) The Company has not issued any debentures.
(xx) The Company has not raised any money by way of public issues
during the year.
(xxi) According to the information and explanations given to us and in
our opinion, no instances of fraud on or by the Company have been
noticed or reported during the year nor have we been informed of such
case by the Company.
For A. K. Khabya & Co.
Chartered Accountants
CA. M.N.G. PILLAI
Partner
Membership No.74051
FRN 001994C
Place : Bhopal
Date : 20th August, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of GEI Industrial
Systems Ltd as at 31st March 2010, the Profit and Loss Account and also
the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the 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, 2003 issued
by the Central Government of India in terms of sub- section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) 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;
ii) 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;
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv) In our opinion, the Balance Sheet, Profit and Loss
Account and Cash Flow Statement dealt with by this report comply with
the mandatory Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956 ;
v) On the basis of written representations received from the directors,
as on 31st March 2010 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and Notes thereon, specifically Note
No. 6 regarding excess managerial remuneration of Rs. 79.99 lakhs
pending approval of Central Government, 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:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2010;
b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date ; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors Report
Annexure as referred to in paragraph 3 of our report of even date of
GEI Industrial Systems Ltd on the Accounts for the year ended on 31st
March 2010
i) a) On the basis of available information the Company has properly
maintained records showing full particulars including quantitative
details and situation of fixed assets.
b) As explained to us the assets have been physically verified by the
management as per a program of verification in a periodical manner,
which in our opinion is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
c) In our opinion, the Company has not disposed off substantial part of
fixed assets during the year and the going concern status of the
Company is not affected.
ii) a) As explained to us the inventories have been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
b) According to the information and explanations given to us, the
procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us, no material discrepancies were noticed on physical
verification as compared to the book records.
iii) a) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to Companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, clauses 4(iii)(b), (c) and
(d) 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 Companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, clauses 4(iii)(f) and (g)
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
systems commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and service. During the course of our audit, we have
neither observed nor have been informed of any continuing failure to
correct major weaknesses in the internal control systems.
v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act, have been entered in the register required
to be maintained under that section.
b) According to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements have
been made at prices which are reasonable having regard to the
prevailing market prices 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 within the
purview of sections 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975, during the year. We are
informed that no order has been passed by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal.
vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii) According to the information and explanations given to us the
Central Government has not prescribed maintenance of cost records under
section 209(1)(d) of the Companies Act, 1956, for the products
manufactured by the Company.
ix) a) According to the information and explanations given to us and
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, service tax, customs duty, excise
duty, cess and other material statutory dues as applicable, with the
appropriate authorities.
b) According to the information and explanations given to us, the
following are the particulars of statutory dues as
at 31st March 2010 not deposited on account of a dispute pending:
Name of the Statute Nature of Dues Amount (Rs.)
Sales Tax Law Central Sales Tax 569830
Sales Tax Law Central Sales Tax 3144803
Income Tax Act Income Tax Demand 3171740
Income Tax Act Income Tax Demand 3360566
(Amount in Rs.)
Name of the Statute Period to which Forum where the
amount relates F.Y. dispute is pending
Sales Tax Law 2005-2006 Board of Revenue, Bhopal
Sales Tax Law 2006-2007 Board of Revenue, Bhopal
Income Tax Act 2005-2006 Commissioner of Income Tax
Income Tax Act 2006-2007 Commissioner of Income Tax
x) The Company has no accumulated losses as at 31st March 2010 and it
has not incurred cash losses in the financial year ended on that date
and in the immediately preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank.
xii) 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, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.
xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company.
xv) In terms of the information and explanations given to us, the
Company has given corporate guarantee for loan taken by Subsidiary
Company from banks or financial institutions.
xvi) According to the information and explanations given to us, the
term loans have been applied by the Company for the purposes for which
they were obtained.
xvii) According to the Cash Flow Statement and other records examined
by us and information and explanations given to us, on an overall
basis, the funds raised on short-term basis have, prima facie, not been
used for long-term investment.
xviii) According to the information and explanations given to us the
Company has made preferential allotment of shares/warrants to parties
covered in the register maintained under section 301 of the Act. In our
opinion, the price at which shares/warrants have been offered is
according to SEBI guidelines and not prejudicial to the interest of the
Company.
xix) The Company has not issued any debentures.
xx) The Company has not raised any money by way of public issues during
the year.
xxi) According to the information and explanations given to us and in
our opinion, no instances of fraud on or by the Company have been
noticed or reported during the year nor have we been informed of such
case by the Company.
For A.K. Khabya & Co.
Chartered Accountants
CA. M.N.G. Pillai
Partner
Place: Bhopal Membership No.74051
Date: 23rd August 2010 FRN 001994C
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