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Auditor Report of GRP Ltd.

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of GRP 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 Standards referred to in sub-section (3C) of section 211 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 misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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 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 fows 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") as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

The annexure referred to in our report of even date to the members of GRP Limited on the financial statements of the company for the year ended 31st March, 2014. We report that:

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

b) Fixed Assets have been physically verified by the management during the year as per regular programme of verification 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) The Fixed Assets disposed off during the year were not substantial so as to effect its going concern status.

2. a) As explained to us, the Inventory (excluding stocks with third parties) has been physical verified by the management during the year. In respect of inventory lying with the third parties, these have been confirmed by them. In our opinion, the frequency of verification is reasonable.

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 are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and on the basis of our examination of the inventory records, the Company is generally maintaining proper records of its inventories. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt within the books of account.

3. a) According to the information and explanation 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, the provisions of clause 4(ii)(a) to (d) of the Order are not applicable and hence not commented upon.

b) The Company has taken unsecured loans/deposits from fifteen (15) parties covered in the register maintained under Section 301 of the Companies Act 1956. The maximum amount involved during the year and the year end balance of such loans aggregates to Rs. 98.50 lakh and Rs. 92.50 lakh respectively.

c) In our opinion and according to the information and explanation given to us, the rate of interest 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) In respect of the aforesaid loans, the Company is regular in repaying the principal amounts and interest thereon as stipulated.

4. In our opinion and according to the information and explanation given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that 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) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5 lakh in respect of a party during the year have been made at prices which appear reasonable as per information available with the Company.

6. In our opinion and according to the information and explanation given to us, the directives issued by the Reserve Bank of India and the provisions of section 58A, section 58AA or any other relevant provisions of the Act and Rules framed there under, to the extent applicable, have been complied with. We are informed by the management 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 under section 58A and section 58AA of the Companies Act, 1956.

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

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to rules made by the Central Government under clause (d) of the sub section (1) of Section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We are, however not required to carry out a detailed examination of the same.

9. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess were outstanding at the year end for a period of more than six months from the date they became payable.

b) According to the books of accounts and records as produced and examined by us in accordance with the generally accepted auditing practice in India, there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute except details of the amounts not deposited on account of any disputes are as follows:

Name of The Statute Nature of Dues Financial Year Amount Forum Where dispute is pending ( Rs. in lakhs)

The Bombay Sales Act, 1959 Sales Tax. 1995-96 0.51 Tribunal - MST Mumbai

Income Tax Act, 1961 Income Tax 2010-11 69.00 Commissioner of Income Tax (A), Mumbai

The Central Excise Act, 1944 Central Excise June-2005 to 125.33 CESTAT – Ahemdabad June 2011

10. The Company does not have accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date.

12. According to the information and explanation given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund /nidhi / mutual benefit fund / societies are not applicable to Company.

14. In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures or other Investments and hence, the requirements of Para 4 (xiv) are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanation given to us, on overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to explanations given to us, there are no funds raised on short-term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act. 1956 during the year.

19. The Company has not issued any debentures during the year.

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

21. During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by management.

For A. B Modi & Associates

Chartered Accountants

Firm ''s Registration No: 106473W

(Rajesh S. Shah)

Partner

Membership No. 17844

Mumbai : 26th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of GRP 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 Standards referred to in sub-section (3C) of section 211 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 misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

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

Report on other Legal and Regulatory Requirements

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

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

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

Annexure to the Auditors'' Report

The annexure referred to in our report of even date to the members of GRP Limited on the financial statements of the company for the year ended 31st March, 2013.

We report that:

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

b) Fixed Assets have been physically verified by the management during the year as per regular programme of verification 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) The Fixed Assets disposed off during the year were not substantial so as to effect its going concern status.

2. a) As explained to us, the Inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with the third parties, these have been confirmed by them. In our opinion, the frequency of verification is reasonable.

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 are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and on the basis of our examination of the inventory records, the Company is generally maintaining proper records of its inventories. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt within the books of account.

3. a) The Company has granted interest free unsecured loan to an associate company covered in the register maintained under section 301 of the Companies Act, 1956. In respect of the said loan the maximum amount outstanding at any time during the year is Rs. 2.63 lakh and the year end balance is Rs. Nil.

b) In our opinion and according to the information and explanation given to us, the Nil rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the Company considering that the said loan is to an associate concern in which the company is holding 46% of share capital.

c) There is no stipulation as to interest or repayment of the said loan given. However there is no outstanding balance as at the end of the year.

d) There are no overdue amounts at the end of the year.

e) The Company has taken unsecured loans/deposits from sixeteen (16) parties covered in the register maintained under Section 301 of the Companies Act 1956. The maximum amount involved during the year and the year end balance of such loans aggregates to Rs. 101.00 lakh and Rs. 98.50 lakh respectively.

f) In our opinion and according to the information and explanation given to us, the rate of interest 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.

g) In respect of the aforesaid loans, the Company is regular in repaying the principal amounts and interest thereon as stipulated.

4. In our opinion and according to the information and explanation given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that 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) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakh in respect of a party during the year have been made at prices which appear reasonable as per information available with the Company.

6. In our opinion and according to the information and explanation given to us, the directives issued by the Reserve Bank of India and the provisions of section 58A, section 58AA or any other relevant provisions of the Act and Rules framed thereunder, to the extent applicable, have been complied with. We are informed by the management that, no order has been passed by the Comapny Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal under section 58A and section 58AA of the Companies Act, 1956.

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

8. According to the information and explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of the sub section (1) of Section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess were outstanding at the year end for a period of more than six months from the date they became payable.

b) According to the books of accounts and records as produced and examined by us in accordance with the generally accepted auditing practice in India, there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute except details of the amounts not deposited on account of any disputes are as follows:

Name of the Statute Nature of Financial dues Year

The Bombay Sales Act, 1959 Sales Tax 1995-96

Income Tax Act, 1961 Income Tax 2008-09

Income Tax Act, 1961 Income Tax 2009-10

The Central Excise Act, 1944 Central Excise Feb - 05 to August - 10

The Central Excise Act, 1944 Central Excise April - 05 to July - 11

The Central Excise Act, 1944 Central Excise Jan - 05 to Jan - 13

Name of the Statute Amount Forum where dispute (Rs. in lakhs) is pending

The Bombay Sales Act, 1959 0.51 Tribunal - MST Mumbai

Income Tax Act, 1961 29.72 ITAT

Income Tax Act, 1961 178.29 CIT(A)

The Central Excise Act, 1944 64.04 Tribunal - Central Excise

The Central Excise Act, 1944 06.23 Commissioner (A) - Central Excise

The Central Excise Act, 1944 35.81 The Excise Department

10. The Company does not have accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date.

12. According to the information and explanation given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund /nidhi / mutual benefit fund / societies are not applicable to Company.

14. In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures or other Investments and hence, the requirements of Para 4 (xiv) are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanation given to us, on overall basis, the term loans have been applied for the purposes for which they were obtained except surplus term loan funds which were lying pending utilisation had been kept in Fixed Deposit Account with Bank.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to explanations given to us, there are no funds raised on short-term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

19. The Company has not issued any debentures during the year.

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

21. During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud by the Company, noticed or reported during the year, nor have we been informed of such cases by management. A case of fraud on the company is reported. During transit of the sealed export container of reclaim rubber from company''s plant to port, contraband material was fradulently substituted by somebody. According to the information and explanation given to us by the management, the company does not forsee any financial and / or any other implication in the matter.

For A. B. Modi & Associates

Chartered Accountants

Firm ''s Registration No: 106473W

Rajesh S. Shah

Place : Mumbai Partner

Date : 28th May, 2013 Membership No.17844


Mar 31, 2012

1) We have audited the attached Balance Sheet of GRP Limited (Formerly known as Gujarat Reclaim and Rubber Products Ltd.), 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.

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

3) As required by the Companies (Auditor's Report) Order, 2003 and as amended by the Companies (Auditor's Report) (Amendement) Order, 2004 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 explanation, which to the best of our knowledge and belief were necessary for the purpose 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, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv) In our opinion, the Balance Sheet,Statement of Profit and Loss and 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;

v) On the basis of written representations received from the directors 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 financial statements together with the 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 Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Annexure referred to in paragraph [3] of our report of even date:

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

b) Fixed Assets have been physically verified by the management during the year as per regular programme of verification 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) The Company has not disposed of any substantial part of its fixed assets during the year so as to effect its going concern status.

2. a) The Inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with the third parties, these have been confirmed by them. In our opinion, the frequency of verification is reasonable.

b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

3. a) The Company has granted interest free unsecured loan to an associate company covered in the register maintained under section 301 of the Companies Act, 1956. In respect of the said loan the maximum amount outstanding at any time during the year is Rs. 41.65 Lakhs and the year end balance is Rs. Nil.

b) In our opinion and according to the information and explanation given to us, the Nil rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the Company considering that the said loan is to an assoicate concern in which the company is holding 46% of share capital.

c) There is no stipulation as to interest or repayment of the said loan given. However during the year loan to an associate company amounting to Rs. 32.50 Lakhs have been written off.

d) According to the company the amount is not recoverable considering the net worth and future business prospect of the said company. The Company has written off the amounts outstanding from the said associate concern.

e) The Company has taken unsecured loans/deposits from sixeteen (16) parties covered in the register maintained under Section 301 of the Companies Act 1956.The maximum amount involved during the year and the year end balance of such loans aggregates to Rs. 95.00 Lakhs and Rs. 95.00 Lakhs respectively.

f) In our opinion and according to the information and explanation given to us, the rate of interest 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.

g) In respect of the aforesaid loans, the Company is regular in repaying the principal amounts and interest thereon as stipulated.

4. In our opinion and according to the information and explanation given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that 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) In our opinion and according to the information and explanation given to us, the transaction made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

6. In our opinion and according to the information and explanation given to us, the directives issued by the Reserve Bank of India and the provisions of section 58A,section 58AA or any other relevant provisions of the Act and Rules framed thereunder, to the extent applicable, have been complied with. We are informed by the management that, no order has been passed by the Comapny Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal under section 58A and section 58AA of the Companies Act, 1956.

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

8. According to the information and explanation given to us and to the best of our knowledge, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

9. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess were outstanding at the year end for a period of more than six months from the date they became payable.

b) According to the books of accounts and records as produced and examined by us in accordance with the generally accepted auditing practice in India, there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute except details of the amounts not deposited on account of any disputes are as follows:

Name of The Statute Nature of Dues Financial Year Amount (Rs Lakhs.) Forum Where dispute is pending

The Bombay Sales Act, 1959 Sales Tax. 1995-96 0.51 Tribunal - MST Mumbai

Income Tax Act,1961 Income Tax 2003-04 10.18 Rectification Pending

Income Tax Act,1961 Income Tax 2006-07 25.11 I T Tribunal

Income Tax Act,1961 Income Tax 2008-09 138.86 CIT (Appeal)

The Central Excise Act, 1944 Central Excise Feb - 05 to August-10 27.15 Tribunal - Central Excise

The Central Excise Act, 1944 Central Excise April-05 to July-11 23.60 Commissioner (A) - Central Excise

The Central Excise Act, 1944 Central Excise Jan - 05 to Dec - 11 78.47 The Excise Department

10. The Company does not have accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date.

12. According to the information and explanation given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund /nidhi / mutual benefit fund/ societies are not applicable to Company.

14. In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures or other Investments and hence, the requirements of Para 4 (xiv) are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanation given to us, on overall basis, the term loans have been applied for the purposes for which they were obtained except surplus term loan funds which are lying pending utilisation have been kept in Fixed Deposit Account with Bank.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to explanations given to us, there are no funds raised on short-term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act. 1956 during the year.

19. The Company has not issued any debentures during the year.

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

21. During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by management.

For A. B Modi & Associates

Chartered Accountants

ICAI Firm Regd.No. 106473W

(Rajesh S. Shah)

Place : Mumbai Partner

Date : 28th June, 2012 Membership No. 17844


Mar 31, 2010

1) We have audited the attached Balance Sheet of GUJARAT RECLAIM & RUBBER PRODUCTS LIMITED, as at 31 st March, 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto, and the cash flow statement for the year ended on that date annexed thereto, and the cash flow statement 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.

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

3) As required by the Companies (Auditors Report) Order, 2003 and as amended by the Companies (Auditors Report) (Amendement) Order, 2004 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 explanation, which to the best of our knowledge and belief were necessary for the purpose 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 and Profit and Loss Account dealt with by this report are in agreement with the books of account;

iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the 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 with the 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, 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 flow for the year ended on that date.

Annexure referred to in paragraph [3] of our report of even date:

1. a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

b) Fixed Assets have been physically verified by the management during the year as per regular programme of verification 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) The Company has not disposed of any substantial part of its fixed assets during the year so as to effect its going concern status.

2. a) The Inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with the third parties, these have been confirmed by them. In our opinion, the frequency of verification is reasonable.

b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

3. a) The Company has granted interest free loan to an associate company covered in the register maintained under Section 301 of the Companies Act, 1956. In respect of the said loan the maximum amount outstanding at any time during the year is Rs.5,244,056/- and the year end balance is Rs.5,100,000/-.

b) In our opinion and according to the information and explanation given to us, the Nil rate of interest and other terms and conditions are not prima facie prejudicial to the interst of the Company considering the said loan to an assoicate concern and future expectation of the company.

c) The principal amounts are repayable on demand and there is no stipulation as to period in which loan is to be repaid.

d) In the absence of stipulation in respect of the terms of payment of principal amount and interest of the aforesaid loan, we are unable to comment whether reasonable steps have been taken by the Company for the recovery of the principal amount and interest where the overdue amount is more than rupees one lakh.

e) The Company has taken unsecured loans/deposits from twelve (12) parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year end balance of such loans aggregates to Rs. 8,550,000/- and Rs. 8,550,000/- respectively.

f) In our opinion and according to the information and explanation given to us, the rate of interest 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.

g) In respect of the aforesaid loans, the Company is regular in repaying the principal amounts and interest thereon as stipulated.

4. In our opinion and according to the information and explanation given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that 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) In our opinion and according to the information and explanation given to us, the transaction other than loan made in pursuance of contracts / arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs.5,00,000/- in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

6. In our opinion and according to the information and explanation given to us, the directives issued by the Reserve Bank of India and the provisions of Section 58A. Section 58AA or any other relevant provisions of the Act and Rules framed thereunder, to the extent applicable, have been complied with. We are informed by the management 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 under Section 58A and Section 58AAof the Companies Act, 1956.

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

8. According to the information and explanation given to us and to the best of our knowledge, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the products of the Company.

9. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess were outstanding at the year end for a period of more than six months from the date they became payable.

b) According to the books of accounts and records as produced and examined by us in accordance with the generally accepted auditing practice in India, there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute.The particulars of dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute are as follows:

Name of the Statute Nature of Financial Year dues

The Bombay Sales Tax Sales Tax 1995-96 Act, 1959

Income Tax Act,1961 Income Tax 2003-04

Income Tax Act, 1961 Income Tax 2005-06

Income Tax Act, 1961 Fringe 2005-06 Benefits Tax

Income Tax Act, 1961 Income Tax 2006-07

Income Tax Act, 1961 Fringe 2006-07 Benefits Tax

The Central Excise Act, Central April, 2006 to 1944 Excise October,2006

The Central Excise Act, Central Jan, 2005 to 1944 Excise March, 2007



Name of the Statue Amount Forum where dispute is (Rs.) pending

The Bombay Sales Tax Act, 1959 51,956/- Maharashtra Sales Tax Tribunal Mumbai

Income Tax Act,1961 653,103/- Commissioner (Appeals)

Income Tax Act, 1961 72,064/- Asst Commissioner of IT

Income Tax Act, 1961 7,385/- Asst Commissioner of I T

Income Tax Act, 1961 3,797,797/ Commissioner (Appeals)

Income Tax Act, 1961 261/- Asst Commissioner of I T

The Central Excise Act, 1944 183,771/- Commissioner-Central Excise, Surat

The Central Excise Act, 1944 3,424,840/- Commissioner -Central Excise

10. There are no accumulated losses of the Company as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date.

12. According to the information and explanation given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund /nidhi / mutual benefit fund / societies are not applicable to Company.

14. In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures or other Investments and hence, the requirements of Para 4 (xiv) are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanation given to us, on overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to explanations given to us, there are no funds raised on short-term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

19. The Company has not issued any debentures during the year.

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

21. During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by management.

For A.B.Modi & Associates Chartered Accountants (Rajesh S. Shah) Partner Place: Mumbai Membership No. 17844

Date : 20th May 2010 Firm Regd.No. 106473W

 
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