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Auditor Report of J D Orgochem Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of JD ORGOCHEM LIMITED ('the Company'), which comprise the Balance Sheet as at March 31,2015, the Statement of profit and loss and the cash flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matter stated in Section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation and presentation of the financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and from preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and 'matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirement 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 the 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 operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

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, of the state of affairs of the Company as at March 31,2015 and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements without qualifying our opinion;

* Note 2 in the financial statements which indicates that the financial statements of the Company have been prepared on a going concern basis. However, the Company has accumulated losses and its net worth has been fully eroded, the Company has incurred a net loss / net cash loss during the current and previous year(s) and, the Company's liabilities exceeded its assets as at the balance sheet date. These conditions, along with other matters set forth in notes, indicate the existence of material uncertainty that may cast significant doubt about the Comapny's ability to continue as a going concern.

Report on the other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the 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 the paragraph 3 and 4 of the Order, to the extent applicable.

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, 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 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 the written representations received from the directors as on March 31, 2015 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; and

f) with the respect to the other matters to be included in the Auditor's Report in accordance with the Rule 11 of the Companies (Audit and Auditors) Rule, 2014, in our opinion and to the best of our information and according to the information given to us:

i. The impact of the pending litigation with regards to employee liabilities on its financial position is not ascertainable. However, in the opinion of management of the Company the provision made in the accounts in this regards in earlier year is adequate as referred to in note 7 & 8 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. There are no amount which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to Independent Auditor’s Report

The Annexure referred to in paragraph of the Our Report of even date to the members of JD ORGOCHEM LIMITED on the accounts of the company for the year ended 31st March, 2015.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

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

(b) As informed to us, the company had verified part of its fixed assets in regular programme of periodical verification during the year. According to the information and explanations given to us, no material discrepancies have been noticed on such verificaton.

2 (a) As explained to us, inventories have been physically verified during the year by the management.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3 The company has granted interest-free unsecured loan of Rs 178 lakhs in earlier years to a party listed in the register maintained under Section 189 of the Companies Act, 2013, for which, as informed to us, no terms of repayment has been stipulated and hence overdue amount cannot be ascertained. The said amount due is considered doubtful of recovery for which provision has been made in the accounts in earlier year as referred to in Note No.14.1 of the Notes to Financial Statement.

4 In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets & for sale of goods and services. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5 In our opinion and according to the information and explanations given to us, the company has not accepted deposits from the public except from an agent. Therefore, the provisions of Section 73 to 76 of the Companies Act, 2013 and Rules there under are not applicable to the company

6 The Central Government of India has not specified the maintenance of cost record under sub-section (1) of Section 148 of the Act for any of the products of the Company.

7 (a) According to the information and explanation given to us and as per the records of the Company examined by us, undisputed statutory dues of Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Cess and other statutory dues other than mentioned in (b) below have generally been regularly deposited with the appropriate authorities.

(b) As per records of the Company, the following undisputed statutory dues were outstanding as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

Nature of Dues Period to which the amount relates (Rs in lacs)

Power (Electricity) 01.05.2001 to 28.02.2002 111.69

Sales Tax 01.06.2001 to 31.03.2004 86.59

Gram Panchayat Tax 01.04.2000 to 31.03.2011 105.76

(c) As per records of the company, the following disputed dues have not been deposited.

Nature of Dues Forum where dispute is Pending (Rs in lacs)

Custom Duty (Shown as Commissioner of Customs - Mumbai 510.99 contingent liability)

Custom Duty Central Excise & Gold Appellate 53.99 Tribunal (CEGAT) - Mumbai

Gram Panchayat Tax Gram Panchayat , Vadgaon, 25.82 (Shown as contingent Taluka Khalapur, Dist. Raigad Liability)

(d) No amount was required to be transferred to Investor Education and Protection Fund (IEPF) in accordance with the Provision of Companies Act 1956 and the rules made thereunder.

8 As per the accounts of the company, the company has accumulated losses of Rs 8909.26 lakhs at the end of the financial year and the accumulated losses of the company are not less than fifty percent of its net worth.

As per the accounts of the company, the company has incurred cash loss of Rs 37.39 lakhs during the financial year under reference and cash loss of Rs 30.03 lakhs was incurred in the immediately preceding financial year.

9 Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, or bank or debenture holders.

10 According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

11 In our opinion, the term loans have been applied for the purpose for which they were raised.

12 Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For MAGANLAL & AJAY MEHTA Chartered Accountants Firm Registration No. 105730W

(MAGANLAL THACKER) Place : Mumbai Partner Date : May 25, 2015 Membership No. 4549


Mar 31, 2014

We have audited the accompanying financial statements of JD ORGOCHEM LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 of India (the "Act") read with the General Circular No. 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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 Statement of Profit and Loss, 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 the 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 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, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under the Act read with the General Circular No. 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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 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 paragraph 1 of the Our Report of even date to the members of JD ORGOCHEM LIMITED on the accounts of the Company for the year ended March 31, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

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

(b) As informed to us, the Company had verified part of its fixed assets in regular programme of periodical verification during the year. According to the information and explanations given to us, the extent of discrepancies noticed on physical verification and the extent of un-reconciled differences for years prior to March 31, 1992, which are not material, are not yet been finally determined, since the same continue to be under scrutiny by the Company. As explained to us, adjustments necessary on these counts will be made only after the said scrutiny is completed and reconciled with the book records.

(c) The accounts of the Company have been prepared on the basis that the Company is a going concern. The Company has fixed assets at its unit at Patalganga. The Hon''ble High Court of Bombay on June 20, 2008 has approved the Scheme of Compromise/ Arrangement between Secured Creditors and equity shareholders and the scheme has been effective from July 4, 2008. The Company''s plant at Patalganga was partially restarted in earlier year. During the year the Company has sold some part of plant & machinery which is not substantial. Also no manufacturing activity is carried out during the year under reference and hence we are still unable to express any opinion about the Company''s ability to continue as a going concern in the foreseeable future.

2 (a) As explained to us, inventories have been physically verified during the year by the management.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3 (a) The Company has granted interest-free unsecured loan of Rs. 178 lakhs in earlier years to a party listed in the register maintained under Section 301 of the Companies Act, 1956, for which, as informed to us, no terms of repayment has been stipulated and hence overdue amount cannot be ascertained. The said amount due is considered doubtful of recovery for which provision has been made during the year in the accounts as referred to in Note No.14.1 of the Notes to Financial Statement. b) The interest-free unsecured loan of Rs. 18.54 lakhs taken by the Company in earlier years from a party listed in the register maintained under Section 301 of the Companies Act, 1956, has been repaid during the year.

4 In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods and services. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5 a) On the basis of the Audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the transactions in which directors were interested and which were required to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been entered. (b) In our opinion and according to the information and explanation given to us and excluding certain transactions of purchase and sale of goods and material of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, where each of such transactions is in excess of rupees five lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time and other relevant circumstances.

6 In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public except from an agent. Therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules there under are not applicable to the Company.

7 As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8 We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the central government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the Company''s products to which the said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and / or complete.

9 (a) As per the records of the Company, undisputed statutory dues of Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues other than mentioned in (b) below have generally been regularly deposited with the appropriate authorities.

(b) As per records of the Company, the following undisputed statutory dues were outstanding as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

Nature of Dues Period to which the amount relates Amount (Rs.in lacs)

Power (Electricity) 01.05.2001 to 28.02.2002 111.69

Sales Tax 01.06.2001 to 31.03.2004 88.43

Gram Panchayat Tax 01.04.2000 to 31.03.2011 105.76

(c) As per records of the Company, the following disputed dues have not been deposited.

Nature of Dues Forum where dispute is Pending Amount (Rs.in lacs)

Custom Duty (Shown as Commissioner of Customs – Mumbai 510.99 contingent liability)

Custom Duty Central Excise & Gold Appellate Tribunal (CEGAT) - Mumbai 53.99

Gram Panchayat Tax Gram Panchayat , Vadgaon, Taluka (Shown as contingent Khalapur, Dist. Raigad 12.91 Liability)

10 As per the accounts of the Company, the Company has accumulated losses of Rs. 8801.13 lacs at the end of the financial year and the accumulated losses of the Company are not less than fifty percent of its net worth.

As per the accounts of the Company, the Company has incurred cash loss of 30.03 lacs during the financial year under reference and cash loss of 47.93 lacs was incurred in the immediately preceding financial year.

11 Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12 According to the information and explanations given 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 Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14 According to information and explanations given to us, the Company has made investments in shares and securities in earlier years. These investments are held by the Company in its own name.

15 According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16 In our opinion, the term loans have been applied for the purpose for which they were raised.

17 Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at March 31, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18 Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19 In respect of Zero coupon Non-convertible debentures of Rs.1604 lacs which are outstanding at the year- end charge has been created.

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

21 Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For MAGANLAL & AJAY MEHTA Chartered Accountants Firm Registration No. 105730W

(MAGANLAL THACKER) Place : Mumbai Partner Date : May 28, 2014 Membership No. 4549


Mar 31, 2013

Report of Financial Statements

We have audited the accompanying financial statements of JD ORGOCHEM LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and 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 tor the preparation ot 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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. Basis of Qualified Opinion

i) Adequacy of the provision made for meeting workers liability cannot be ascertained as referred to in note no.7.1 & 8.1 of Notes to Financial Statement.

ii) No provision has been made in the accounts for advances of Rs. 178 lacs given to Jaysynth Polychem Private Limited in earlier years as referred to in note no. 14.1 of Notes to Financial Statement resulting into the understatement of accumulated losses by 7 178 lacs.

Qualified Opinion

Subject to above, 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 ioss 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 the 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 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, and information about the company''s failure to redeem its debentures on due date in earlier years and failure continued for more than one year, we report that all the directors are disqualified as on March 31, 2013 from being appointed as a director of any other public company in terms of clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956.

Annexure to the Auditors'' Report

Annexure referred to in paragraph 1 of our report of even date to the members of JD Orgochem Limited on the accounts of the Company for the year ended 31st March, 2013.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. (a) The company has maintained proper records to show fui! particulars Including quantitative details and situation of its fixed assets.

(b) As informed to us, the company had verified part of its fixed assets in regular programme of periodical verification during the year. According to the information and explanations given to us, the extent of discrepancies noticed on physical verification and the extent of un-reconciled differences for years prior to 31st March 1992, which are not material, are not yet been finally determined, since the same continue to be under scrutiny by the company. As explained to us, adjustments necessary on these counts will be made only after the said scrutiny is completed and reconciled with the book records.

(c) The accounts of the company have been prepared on the basis that the company is a going concern. The company has fixed assets at its unit at Patalganga.The Hon''ble High Court of Bombay on 20/06/2008 has approved the Scheme of Compromise/ Arrangement between Secured Creditors and equity shareholders and the scheme has been effective from 04/07/2008.The company''s plant at Patalganga was partially restarted in earlier year. During the year the company has sold some part of plant & machinery which is not substantial. Also no manufacturing activity is carried out during the year under reference and hence we are still unable to express any opinion about the company''s ability to continue as a going concern in the foreseeable future.

2 (a) As explained to us, inventories have been physically verified during the year by the management.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3 (a) The company has granted interest-free unsecured loan in earlier years to two parties listed in the register maintained under Section 301 of the Companies Act, 1956, the amount aggregates to Rs. 228.91 lacs for which, as informed to us, no terms of repayment has been stipulated and hence overdue amount cannot be ascertained. Out of above, Rs. 178 lacs due is considered doubtful of recovery for which no provision has been made in the accounts as referred to in Note No. 14.1 of the Notes to Financial Statement. b) The company has taken interest-free unsecured loan in earlier years from a party listed in the register maintained under Section 301 of the Companies Act, 1956, whose outstanding balance at the year end is Rs. 18.54 lacs for which, as informed to us, no terms of repayment has been stipulated and hence overdue amount cannot be ascertained.

4 In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods and services. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5 a) On the basis of the Audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the transactions in which directors were interested and which were required to be entered into the register maintained under section 301 of the companies Act, 1956 have been entered. (b) In our opinion and according to the information and explanation given to us and excluding certain transactions of purchase and sale of goods and material of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, where each of such transactions is in excess of rupees five lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time and other relevant circumstances.

6 In our opinion and according to the information and explanations given to us, the company has not accepted deposits from the public except from an agent and a director. Therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules there under are not applicable to the company

7 As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8 We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the central government for the maintenance of cost records under section 209(1 )(d) of the companies Act, 1956 in respect of the company''s products to which the said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and / or complete.

9 As per the records of the Company, undisputed statutory dues of Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues other than mentioned in (b) below have generally been regularly deposited with the appropriate authorities.

10 As per the accounts of the company, the company has accumulated losses of Rs. 8190.92 lacs at the end of the financial year and the accumulated losses of the company are not less than fifty percent of its net worth.

As per the accounts of the company, the company has incurred cash loss of Rs. 47.93 lacs during the financial year under reference. However no such cash loss was incurred in the immediately preceding financial year.

11 Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12 According to the information and explanations given 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 Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14 According to information and explanations given to us, the Company has made investments in shares and securities in earlier years. These investments are held by the company in its own name.

15 According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16 In our opinion, the term loans have been applied for the purpose for which they were raised.

17 Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18 Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19 The Company has issued debenture certificate during the year for Zero Coupon Non-Convertible Debentures issued as per the scheme of compromise/arrangement by Bombay High Court order dated 20th June 2008 which is secured by first pari passu charge on all the existing asset of the company situated at Patalganga Unit.

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

21 Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For MAGANLAL & AJAY MEHTA

Chartered Accountants

Firm Registration No. 105730W

(MAGANLAL THACKER)

Place: Mumbai Partner

Date : May 20, 2013 Membership No. 4549


Mar 31, 2012

We have audited the attached Balance Sheet of JD ORGOCHEM LIMITED as at March 31, 2012 the statement of Profit & Loss Account and the Cash flow statement for the year ended on that date both 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.

1. 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 from any 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditors' Report) (Amendment) Order, 2004 (hereinafter referred to as "the Order") issued by the Central Government in terms of section 227 (4A) of the companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information given to us, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

3. Further to our comments in the Annexure referred to in Para (2) 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 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 & 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 & Loss Account and Cash flow statement dealt with by this report are in compliance with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except for our comments in para (v) below:

v) a) Adequacy of the provision made for meeting workers liability cannot be ascertained as referred to in note no. 7.1 & 8.1 of Notes to Financial Statement.

b) No provision has been made in the accounts for the diminution in the value of investments in the shares of Jaysynth Polychem Private Limited as referred to in note no. 13.2 of Notes to Financial Statement as well as of advances given as referred to in note no. 14.1 of Notes to Financial Statement resulting into the understatement of accumulated losses by Rs. 402.25 lacs.

c) No provision has been made of Rs. 12.91 lacs for the Gram Panchayat Tax payable for the year ended under reference resulting into understatement of losses to that extent.

vi) On the basis of written representation received from all the Directors of the company as on March 31, 2012 and taken on record by the Board of Directors and information about the company's failure to redeem its debentures on due date in earlier years and failure continued for more than one year, we report that all the directors are disqualified as on March 31, 2012 from being appointed as a director of any other public company in terms of clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956.

vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and subject to our remarks given in paragraph 3 (v) above and read together with other notes and their overall impact (to the extent ascertainable) present a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of Balance Sheet, of the state of affairs of the company as at March 31, 2012;

b) In the case of Profit & Loss Account, of the Loss of the company for the year ended March 31, 2012 on that date; and

c) In case of Cash flow statement, of the Cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF JD ORGOCHEM LIMITED

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

(b) As informed to us, the company had verified part of its fixed assets in regular programme of periodical verification during the year. According to the information and explanations given to us, the extent of discrepancies noticed on physical verification and the extent of un-reconciled differences for years prior to 31st March 1992, which are not material, are not yet been finally determined, since the same continue to be under scrutiny by the company. As explained to us, adjustments necessary on these counts will be made only after the said scrutiny is completed and reconciled with the book records.

(c) The accounts of the company have been prepared on the basis that the company is a going concern. The company has fixed assets at its unit at Patalganga. The Hon'ble High Court of Bombay on 20/06/2008 has approved the Scheme of Compromise/Arrangement between Secured Creditors and equity shareholders and the scheme has been effective from 04/07/2008. The company's plant at Patalganga was partially restarted in earlier year. During the year the company has sold some part of plant & machinery which is not substantial. Also no manufacturing activity is carried out during the year under reference and hence we are still unable to express any opinion about the company's ability to continue as a going concern in the foreseeable future.

2. (a) As informed to us, inventories have been physically verified during the year by the management.

(b) As explained to us, the procedures followed by the management for physical verification of inventories are, in our opinion, 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 of the company, we are of the opinion that the company is maintaining proper records of its inventory. Discrepancies that were noticed on physical verification of inventories as compared to book records have been properly dealt with in the books of accounts.

3. (a) The company has granted interest-free unsecured loan in earlier years to two parties listed in the register maintained under Section 301 of the Companies Act, 1956. The amount aggregates to Rs. 459.91 lacs for which, as informed to us, no terms of repayment has been stipulated and hence overdue amount cannot be ascertained. Out of above, Rs. 178 lacs due is considered doubtful of recovery for which no provision has been made in the accounts as referred to in Note No. 14.1 of the Notes to Financial Statement.

(b) The company has taken interest-free unsecured loan in earlier years from a party listed in the register maintained under Section 301 of the Companies Act, 1956, whose outstanding balance at the year end is Rs. 56.04 lacs for which, as informed to us, no terms of repayment has been stipulated and hence overdue amount cannot be ascertained.

(c) In our opinion, the other terms and conditions of the loans granted and received are prima facie, not prejudicial to the interest of the company.

4. In our opinion, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the company carried out in accordance with the auditing standards generally accepted in India, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) On the basis of the Audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the transactions in which directors were interested and which were required to be entered into the register maintained under section 301 of the companies Act, 1956 have been entered.

(b) In our opinion and according to the information and explanation given to us and excluding certain transactions of purchase and sale of goods and material of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, where each of such transactions is in excess of rupees five lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time and other relevant circumstances.

6. In our opinion and according to the information and explanations given to us, the company has not accepted deposits from the public except from the agents and inter-corporate deposit. Therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules thereunder are not applicable to the company.

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

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the central government for the maintenance of cost records under section 209(1)(d) of the companies Act, 1956 in respect of the company's products to which the said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and/or complete.

9. (a) As per records of the Company, undisputed statutory dues of Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues other than mentioned in (b) below have generally been regularly deposited with the appropriate authorities.

(b) As per records of the Company, the following undisputed statutory dues were outstanding as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

Nature of Dues Period to which the Amount amount relates (Rs. in lacs)

Power (Electricity) 01.05.2001 to 28.02.2002 111.70

Sales Tax 01.06.2001 to 31.03.2004 92.90

Gram Panchayat Tax 01.04.2000 to 31.03.2011 105.76

(c) As per records of the company, the following disputed dues have not been deposited.

Nature of Dues Forum where dispute is Amount Pending (Rs. in lacs)

Custom Duty (Shown Commissioner of Customs 510.99 as contingent - Mumbai liability)

Custom Duty Central Excise & Gold 53.99 Appellate Tribunal (CEGAT) - Mumbai

10. As per the accounts of the company, the company has accumulated losses of Rs. 7613.22 lacs at the end of the financial year and the accumulated losses of the company are not less than fifty percent of its net worth.

As per the accounts of the company, the company has not incurred any cash loss during the year under reference however in the immediately preceding financial year, the company has incurred cash loss of Rs. 0.07 lacs.

11. The company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities.

12. In our opinion, considering the nature of activities carried on by the company during the year, the provisions of any special statute applicable to Chit Fund, nidhi/mutual benefit fund/ societies are not applicable to it.

13. (a) Based on the records examined by us and according to the information and explanations given to us, we are of the opinion that the Company is maintaining proper record of the transactions and contracts of dealing in shares, securities and debentures and other investments during the year and timely entries have been made in these records.

(b) Based on our audit procedures and to the best of our knowledge and belief and according to the information and explanations given to us, the shares and securities have been held by the Company in its own name.

14. In our opinion, the term loans have been applied for the purpose for which they were raised.

15. In our opinion and according to information given to us, the company has not given any guarantee for loans taken by others from bank or financial institution during the year.

16. On the basis of an overall examination of the Balance Sheet of the company, in our opinion, there are no funds raised on a short-term basis, which have been used for long-term investment and vice versa.

17. Based on our examination of records and information provided to us by the management, we report that the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

18. The company has issued letter of allotment for issue of Zero Coupon Non-Convertible Debentures as per the scheme of compromise/arrangement by Bombay High Court order dated 20th June 2008 which is secured by first pari passu charge on all the existing asset of the company situated at Patalganga Unit. However, the company has not issued debenture certificates for the same & has so far not created charges in respect of these debentures.

19. The company has not raised money by Public Issue during the year.

20. During the course of our examination of the books of account 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 instance of fraud on or by the company, noticed or reported during the year nor have we been informed of such case by the management.



For MAGANLAL & AJAY MEHTA Chartered Accountants Firm Registration No. 105730W

(MAGANLAL THACKER) Partner Membership No. 4549

Place : Mumbai Date : August 13, 2012


Mar 31, 2010

We have audited the attached Balance Sheet of JD ORGOCHEM LIMITED as at March 31, 2010 and also the annexed Profit & Loss Account of the Company for the year ended on that date 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.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (hereinafter referred to as "the Order") issued by the Central Government in terms of section 227 (4A) of the companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

3. Further to our comments referred to in Para (2) 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 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 the books.

iii) The Balance Sheet, Profit & 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 & Loss Account and Cash Flow Statement dealt with by this Report are in compliance with the Accounting Standards (AS) referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except for our comments in para (v) below:

v) a) Adequacy of the provision made for meeting workers liability cannot be ascertained as referred to in note no.14 of Schedule 7?.

b) No provision has been made in the accounts for the diminution In the value of investments In the shares of Jaysynth Anthraquinones Limited and Jaysynth Polychem Private Limited as well as of advances given as referred to In note no. 15 of Schedule 7? resulting into the understatement of accumulated losses by Rs.1731.16lacs.

vi) b) On the basis of written representation received from all the Directors of the company as on March 31, 2010 and taken on record by the Board of Directors and Information about the companys failure to redeem its debentures on due date in earlier years and failure continued for more than one year, we report that all the directors are disqualified as on March 31, 2010 from being appointed as a director of any other public company In terms of clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956.

vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and subject to our remarks given in paragraph 3 (v) above and read

together with other notes and their overall impact (to the extent ascertainable) present a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of Balance Sheet, of the state of affairs of the company as at March 31, 2010;

b) In the case of Profit & Loss Account, of the Profit of the company for the year ended March 31,2010 on that date; and

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

ANNEXURE TO THE AUDITORS REPORT

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF JD ORGOCHEM LIMITED

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

(b) As informed to us, the company had verified part of its fixed assets in regular programme of periodical verification during the year. According to the information and explanations given to us, the extent of discrepancies noticed on physical verification and the extent of un-reconciled differences for years prior to 31st March 1992, which are not material, are not yet been finally determined, since the same continue to be under scrutiny by the company. As explained to us, adjustments necessary on these counts will be made only after the said scrutiny is completed and reconciled with the book records.

(c) The accounts of the company have been prepared on the basis that the company is a going concern. The company has fixed assets at its unit at Patalganga. The Honble High Court of Bombay on 20/06/2008 has approved the Scheme of Compromise/ Arrangement between Secured Creditors and equity shareholders and the scheme has been effective from 04/07/2008. The companys plant at Patalganga was partially restarted in earlier year. However no manufacturing activity is earned out during the year under reference and hence we are still unable to express any opinion about the companys ability to continue as a going concern in the foreseeable future.

2. (a)As informed to us, inventories have been physically verified during the year by the management.

(b) As explained to us, the procedures followed by the management for physical verification of inventories are, in our opinion, 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 of the company, we are of the opinion that the company is maintaining proper records of its inventory. Discrepancies that were noticed on physical verification of inventories as compared to book records have been properly dealt with in the books of accounts.

3. (a) The company has granted interest-free unsecured loan in earlier years to two parties listed in the register maintained under Section 301 of the Companies Act, 1956 which together with current years amount aggregates to Rs. 86,091,234/- for which, as informed to us, no terms of repayment has been stipulated and hence overdue amount cannot be ascertained. The entire amount of Rs. 86,091,234/- due as above is considered doubtful of recovery for which no provision has been made in the accounts as referred to note no. 15 of Schedule R.

(b) As informed to us, Rs.15,741,064/- outstanding at the year end represent advance received for supply of goods from a party listed in the register maintained u/s 301 of the Companies Act, 1956.

(c) In our opinion, the other terms and conditions of the loans granted and received are prima facie, not prejudicial to the interest of the company.

4. In our opinion, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the company carried out in accordance with the auditing standards generally accepted in India, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) On the basis of the Audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the transactions in which directors were interested and which were required to be entered into the register maintained under section 301 of the companies Act, 1956 have been entered.

(b) According to the information and explanation given to us and excluding certain transactions of purchase and sale of goods and material of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, where each of such transactions is in excess of Rupees Five Lakhs in respect of any party, in our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time and other relevant circumstances.

6. In our opinion and according to the information and explanations given to us, the company has not accepted deposits from the public except from the agents and inter-corporate deposit. Therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules thereunder are not applicable to the company.

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

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the central government for the maintenance of cost records under section 209(1)(d) of the companies Act, 1956 in respect of the companys products to which the said rules are made applicable and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and / or complete.

9. (a) As per records of the Company, undisputed statutory dues of Provident Fund, Investor

Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues other than mentioned in (b) below have generally been regularly deposited with the appropriate authorities.

(b) As per records of the Company, the following undisputed statutory dues were outstanding as at the last day of the financial year concerned for a period of more than six months from the date they became payab e._

Nature of Dues Period to which the amount relates Amount(Rs.)

Power (Electricity) 01.05.2001 to 28.02.2002 11,169,845

Sales Tax 01.06.2001 to 31.03.2004 10,632,562

Gram Panchavat Tax 01.04.2000 to 31.03.2009 8,124,968

(c) As per records of the company, the following disputed dues have no been deposited.

Nature of Dues Forum where dispute is Pending Amount (Rs.)

Custom Duty Commissioner of Customs - Mumbai 51,099,633

Custom Duty Central Excise & Gold Appellate 5,399,121 Tribunal (CEGAT) - Mumbai

10. As per the accounts of the company, the company has accumulated losses of Rs.690,927,006/- at the end of the financial year and the accumulated losses of the company are not less than fifty percent of its net worth.

As per the accounts of the company, the company has incurred cash loss of Rs.32,404,463/- during the year under reference and cash loss of Rs.16,190,669/- in the immediately preceding financial year. However, after accounting of an extra ordinary income of Rs.71,488,491/- (as referred to in Note No. 11 of schedule R), pursuant to waivers & compromise by secured & unsecured creditors consequent to one time settlement the net result is profit.

11. The company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities.

12. In our opinion, considering the nature of activities carried on by the company during the year, the provisions of any special statute applicable to Chit Fund, nidhi / mutual benefit fund/ societies are not applicable to it.

13. (a)Based on the records examined by us and according to the information and explanations

given to us, we are of the opinion that the Company is maintaining proper record of the transactions and contracts of dealing in shares, securities and debentures and other investments during the year and timely entries have been made in these records. (b) Based on our audit procedures and to the best of our knowledge and belief and according to the information and explanations given to us, the shares and securities have been held by the Company in its own name.

14. In our opinion, the term loans have been applied for the purpose for which they were raised.

15. On the basis of an overall examination of the Balance Sheet of the company, in our opinion, there are no funds raised on a short-term basis, which have been used for long-term investment and vice versa.

16. Based on our examination of records and information provided to us by the management, we report that the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

17. The company has issued letter of allotment for issue of Zero Coupon Non-Convertible Debentures as per the scheme of compromise/arrangement by Bombay High Court order dated 20th June 2008 which is secured by first paripassu charge on all the existing asset of the company situated at Patalganga Unit. However, the company has not issued debenture certificates for the same & has so far not created charges in respect of these debentures.

18. The company has not raised money by Public Issue during the year.

19. During the. course of our examination of the books of account 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 instance of fraud on or by the company, noticed or reported during the year nor have we been informed of such case by the management.

For Maganlal & Ajay Mehta

Chartered Accountants

Firm Registration No. -105730W

(Maganlal Thacker)

Place: Mumbai Partner

Date : August 13, 2010 Membership No. 4549

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