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Auditor Report of Kavit Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial Statement ofKavit Industries Limited (Formerly known as Atreya Petrochem Ltd.) which comprises the Balance Sheet as at 31st March 2015, and the statemeni of Profit & Loss and Cash Flow Statement for the year ended arid 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 flow 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") and in accordance with the accounting principles generally accepted in India. This responsibility includes the feign, 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 tree 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 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: in the case of the Balance Sheet, of the state of affairs of the Company as at March 31. 2015 subject to below qualification;

During the current year company has issued 4.00,00,000 preference shares ofRs15 each at a premium of Rs5 fully convertible into equity shares, but has not increased its Authorized Capital by 40,00,00,000.

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, the cash flows for the year ended on that date.

Report on other legal and Regulatory Requirement

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 1 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 oi 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, and Statement of Profit and Loss, dealt with by this Report are in agreement with the books ofaceount.

d) in our opinion, the Balance Sheet, and Statement of Profit and Loss, comply with the Accounting Standards referred to in subsection (3Q of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

(i) Having regard to the nature of the Company's business/activities/results/during the year, clause (vu),(Vd),(xH),(xiii),(xix) of paragraph 4 of the Order are not applicable to the Company.

(ii) In Respect of its Fixed Assets:

(a) As informed to us, the Company is in the process of compiling records to showing full particulars ' including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets, according to the practice of the Company are physically verified by the management at reasonable intervals, in a phased verification-programme, which, in our opinion, is reasonable, looking to the size of the Company and the nature of its business. As informed to us, no material discrepancies have been noticed on verification;

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

(ii) In Respect of its Inventory:

(a) As informed to us, the Inventory of Finished and semi-finished goods and raw materials at works were physical verified by the management at reasonable intervals during the year. In our opinion, having regard to the nature and location of stock, 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 inventories followed by the management were reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory, and no material discrepancy were noticed on physical verification.

(iii) The Company has granted loans to 2companies andlisted in the register maintained under Section 301 of the Companies Act, 1956. The year balance of loans granted to these was 115.77 Lacs. (P.Y. X. 115.77Lacs.) '

In our opinion and according to the information and explanations given to us, the terms and condition of loan given to the parties covered under in the register maintained under section 301 ofthe Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

According to the information and explanations given to us, no repayment schedule has been specified and accordingly the question of regularity in payment of principal amount and interest wherever applicable does not arise. However the said loan is repayable on demand.

The Company has taken unsecured loans from 4 companies listed in the Register maintained under Section 301 of the Companies Act, 1956. The year balance of loans taken from these was 1.100,20 Lacs. (P.Y. 1202.53 Lacs)

In respect of above Loans taken, no repayment schedule has been specified with regard to the ' Interest / Repayment or any other terms and conditions.

Annexure to Independent Auditor's Report

(iv) In our opinion, and according to the information and explanations given to us. there is an 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. Further, on the basis of our examination of the books a.nd records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) According to the information and explanations given to us, the details of transaction that needed to be entered in the register in pursuance of section 301 of the Company Act. 1956. have been so entered.According to information and explanations given to us, the transactions of purchase and sale of goods/services made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(Vi) The Company has not accepted deposits from other corporate which attracting the provisions of , section 58A and 58AA of the Companies Act. 1956, and the rules framed there under.

(vii) The system of internal audit of the Company needs to be strengthened and commensurate with the size and nature of its business.

(viii) In respect of statutory dues:

(a) According to the information, explanation and records verified by us the Company has generally been regular in depositing Income Tax, Sales Tax, Wealth Tax, Service Tax. Custom duty, Excise Duty, Cess, other material statutory dues applicable to it with the appropriate authorities. We are informed' that the company intends to obtains exemption from Provident Fund, Employees state insurance Act.

(b) There were no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty. Custom Duty,Cess and other material statutory dues in arrears as at 31March,2015 for a period of more than six months for the date they become payable.

(d) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31 March,2015 on account of disputes are given below:

Name ofthe Statue Nature of Forum where Period to Dues Dispute is which amount pending relates

Income Tax Act, 1961 Income Tax Tribunal A.Y. 1999-2000

Income Tax Tribunal A.Y.2000-2001

Income Tax Assistant A.Y. 1995-1996 Commissioner

Name of the Statute Amount Involved (Amount in

Income Tax Act 1961 16,64,300

1,41,41,065

3,786

Name ofthe Statue Nature of Forum where Period to Dues Dispute is which amount pending relates

Income Tax Assistant A.Y.2003-2004 Commissioner

Income Tax Assistant A..Y.2004-2Q05 Commissioner

Name of the Statute Amount Involved (Amount in

Income Tax 12,820

Income Tax 5,781

X) Accumulated losses at the end of financial year ended on 31s1 March, 2015 is. 1,22,03,067.15/- which does not exceed 50% of its net worth and it has not incurred cash losses m the financial year ended on the date and in the immediately preceding financial Year.

(xi) The Company is dealing in or trading in share, securities, Debenture or other investment. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. Further such securities have been held by the Company in its own name or are in the process of transfer in its own Company name.

|xii) 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.

(xiii) According to the information and explanations given to us and as per records made available for our verification, the Company has not taken any term loan during the year.

(xiv) In our opinion and according to the information and explanation given to us and overall examination of the balance sheet of the company, we report that funds raised on short term basis have, prima facie, not been used during the year for long term investment.

jxv') As the Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of the Act, the provisions of clause 4(xviii) ofthe Order are not applicable to the Company.

(xvi) The Company has not raised any money by public issue during the year.

(xvii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud was noticed or reported during year.

For Sheetal Samriya & Associates Chartered Accountants, (Firm Registration No.: 011478C)

SD/- Abhitesh Dubey Partner (Membership No.: 147923)

Vadodara, 30 May, 2015


Mar 31, 2014

We have audited the accompanying financial Statement of Kavit Industries Limited (Formerly Known as Atreya Petrochem Ltd.)(the Company) which comprises the Balance Sheet as at 31st March 2014, and the statement of Profit & Loss and Cash Flow Statement for the year 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 flow 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") and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

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

Report on other legal and Regulatory Requirement

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, and Statement of Profit and Loss, dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, and Statement of Profit and Loss, 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.

Annexure to Independent Auditor''s Report

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

(i) Having regard to the nature of the Company''s business/activities/results/during the year, clause (vii),(xi),(xii),(xiii),(xix) of paragraph 4 of the Order are not applicable to the Company.

(ii) In Respect of its Fixed Assets:

(a) As informed to us, the Company is in the process of compiling records to showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets, according to the practice of the Company are physically verified by the management at reasonable intervals, in a phased verification-programme, which, in our opinion, is reasonable, looking to the size of the Company and the nature of its business. As informed to us, no material discrepancies have been noticed on verification;

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

(iii) In Respect of its Inventory:

(a) As informed to us, the Inventory of Finished and semi-finished goods and raw materials at works were physical verified by the management at reasonable intervals during the year. In our opinion, having regard to the nature and location of stock, 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 inventories followed by the management were reasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory, and no material discrepancy were noticed on physical verification.

(iv) The Company has granted loans to 2 company and listed in the register maintained under Section 301 of the Companies Act, 1956. The year balance of loans granted to these was Rs. 115.77 Lacs. (P.Y. Rs. 127.44 Lacs.)

In our opinion and according to the information and explanations given to us, the terms and condition of loan given to the parties covered under in the register maintained under section 301of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

According to the information and explanations given to us, no repayment schedule has been specified and accordingly the question of regularity in payment of principal amount and interest wherever applicable does not arise. However the said loan is repayable on demand.

The Company has taken unsecured loans from 3 companies and 1 Directors listed in the Register maintained under Section 301 of the Companies Act, 1956. The year balance of loans taken from these was Rs. 202.53 Lacs. (P.Y. Rs. 164.39 Lacs)

In respect of above Loans taken, no repayment schedule has been specified with regard to the Interest / Repayment or any other terms and conditions.

(v) In our opinion, and according to the information and explanations given to us, there is an 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. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

(vi) According to the information and explanations given to us, the details of transaction that needed to be entered in the register in pursuance of section 301 of the Company Act. 1956, have been so entered. According to information and explanations given to us, the transactions of purchase and sale of goods/services made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vii) The Company has not accepted deposits from other corporate which attracting the provisions of section 58A and 58AA of the Companies Act, 1956, and the rules framed there under.

(viii) The system of internal audit of the Company needs to be strengthened and commensurate with the size and nature of its business.

(ix) In respect of statutory dues:

(a) According to the information, explanation and records verified by us the Company has generally been regular in depositing Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess, other material statutory dues applicable to it with the appropriate authorities. We are informed that the company intends to obtains exemption from Provident Fund, Employees state insurance Act.

(b) There were no undisputed amounts payable in respect of Income Tax, Sales Tax , Wealth Tax, Service Tax, Excise Duty, Custom Duty, Cess and other material statutory dues in arrears as at 31March,2014 for a period of more than six months for the date they become payable, Except for Motor Spirit Tax of Rs. 226238/-.

(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31 March,2014 on account of disputes are given below:

Name of the Nature of Forum where Period to Amount Statue Dues Dispute is which amount involved pending relates (Amount in Rs.)

Income Tax Income Tax Tribunal A.Y.1999-2000 16,64,300 Act, 1961 Income Tax Tribunal A.Y.2000-2001 1,41,41,065 Income Tax Assistant A.Y.2003-2004 12,820 Commissioner

Income Tax Assistant A.Y.2004-2005 5,781 Commissioner Central Excise Duty Remanded by A.Y.2000-2001 8,87,65,288 Excise Act, Authority 1944

(x) Accumulated losses at the end of financial year ended on 31st March, 2014 is Rs. 1,32,23,922.49/- which does not exceed 50% of its net worth and it has not incurred cash losses in the financial year ended on the date and in the immediately preceding financial Year.

(xi) The Company is dealing in or trading in share, securities, Debenture or other investment. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. Further such securities have been held by the Company in its own name or are in the process of transfer in its own Company name.

(xii) 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.

(xiii) According to the information and explanations given to us and as per records made available for our verification, the Company has not taken any term loan during the year.

(xiv) In our opinion and according to the information and explanation given to us and overall examination of the balance sheet of the company, we report that funds raised on short term basis have, prima facie, not been used during the year for long term investment.

(xv) As the Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of the Act, the provisions of clause 4(xviii) of the Order are not applicable to the Company.

(xvi) The Company has not raised any money by public issue during the year.

(xvii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud was noticed or reported during year.

For Sheetal Samriya& Associates Chartered Accountants, (Firm Registration No.:011478C)

SD/- Abhitesh Dubey Partner Membership No.: 147923 Vadodara, 30 May, 2014


Mar 31, 2012

1. We have audited the attached Balance Sheet of Kavit Industries Ltd as at 31st March, 2012 the Profit and Loss Account and also the Cash Flow Statement of the Company for the year ended on that date (i.e. 01.07.2011 to 31.03.2012) 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 the Companies (Auditor''s Report) (Amendment) 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 matters specified in paragraphs 4 and 5 of the said Order, subject to notes 1-E.

Reference is invited: -

a) The company has not complied with the provision of Section 383A of the Companies Act, 1956 relating to appointment of a whole time secretary. Therefore, we are unable to comment on the maintenance of various statutory registers, records, compliance of Stock Exchange listing agreement, SEBI Rules & Regulation and The Companies Act, 1956.

b) For continuing contravention of Section 372A of the Companies Act, 1956 for aggregate inter-corporate Loan of Rs. 406.92 Lacs and investment of Rs. 40.62 Lacs in excess of the limit specified thereto.

c) As explain to us by the board, Rs. 139.64 Lacs loan given to directors, Firms and to the Companies in which Director/ relative are/were interested as director / partner / proprietor which is continuing contravention of Section 295 of companies Act, 1956.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that -

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

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of the books;

(c) The Balance Sheet, the Profit and Loss Account 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 Profit and Loss and Cash Flow Statement 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, subject to notes on accounts.

(e) On the basis of written representations received from the directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as on 31st March, 2012;

(ii) in the case of the Profit and Loss Account, of the profit of the company for the year ended on that date (i.e. 01.07.2011 to 31.03.2012); and

(iii) in the case of the Cash Flow Statement, of the Cash Flow of the company for the year ended on that date (i.e. 01.07.2011 to 31.03.2012).

ANNEXURE TO AUDITOR''S REPORT

Referred to in paragraph 3 of our report of even date on the accounts for the year ended 31st March, 2012 of Kavit Industries Ltd

(i) (a) AS informed to us, The Company is in the process of compiling records to showing full particulars including quantitative details and situation of fixed assets. However the same is not available for our verification.

(b) As explained to us, fixed assets, according to the practice of the Company are physically verified by the management at reasonable intervals, in a phased verification-programme, which, in our opinion, is reasonable, looking to the size of the Company and the nature of its business. As informed to us, no material discrepancies have been noticed on verification;

(c) No disposal of a substantial part of fixed assets of the company has taken place during the year.

(ii) (a) As informed to us, The Inventory were physical verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, company has reasonable and adequate procedure for physical verification of inventories in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory, and no major discrepancy reported by the management.

(iii) The Company has granted unsecured loans to 2 companies, and 1Interested Party listed in the register maintained under Section 301 of the Companies Act, 1956. The year balance of loans granted to these was Rs. 140.07 Lacs.

In our opinion and according to the information and explanations given to us, the terms and condition of loan given to the parties covered under in the register maintained under section 301of the Companies Act, 1956 are not prima facie prejudicial to the interest of the company except interest free loan given to party. Register maintained, if any u/s. 301 of the Companies Act, 1956 is not available for our verification

According to the information and explanations given to us, no repayment schedule has been specified and accordingly the question of regularity in payment of principal amount and interest wherever applicable does not arise. However the said loan is repayable on demand.

The Company has taken unsecured loans from 3 companies and 1 Directors listed in the register maintained under Section 301 of the Companies Act, 1956. The year balance of loans taken from these was Rs. 112.44 Lacs.

In respect of above Loans taken, no repayment schedule has been specified with regard to the Interest / Repayment or any other terms and conditions.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business.

(v) According to the information and explanations given to us, the details of transaction that needed to be entered in the register in pursuance of section 301 of the Company Act. 1956, have been so entered.

According to information and explanations given to us, the transactions of purchase and sale of goods/services made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from other corporate which attracting the provisions of section 58A and 58AA of the Companies Act, 1956, and the rules framed there under.

(vii) The system of internal audit of the company needs to be strengthened and commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956.

(ix) In respect of statutory dues:

(a) Account to the records of the Company examined by us, Company is not liable to Pay Provident Fund, Investor Education and Protection fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess no undisputed amounts payable in respect of such statutory dues which have remained outstanding as on 31st March, 2012 for a period of more than Six Month from the day they become payable except the following -

Central Sales Tax Rs. 6,77,642

Motor Spirit Tax Rs. 2,26,238

(b) According to the Information and explanation given to us there are no dues of Sales Tax, Custom Duty, Wealth Tax, Services Tax, Custom Duty, Excise Duty and Cess Which have not been deposited on account of any dispute except the Following -

Name of Status Rs. Period Pending at

Income Tax Act 1961 24,89,300 A.Y.1999-00 ITAT-Ahmadabad

Income Tax Act 1961 1,41,41,065 A.Y.2000-01 ITAT-Ahmadabad

Income Tax Act 1961 35,830 A.Y.2002-03 CIT(A)-Vadodara

Income Tax Act 1961 12,830 A.Y.2003-04 CIT(A)-Vadodara

Central Excise Act, 1944 8,87,65,288 A.Y.2000-01 Remanded by Authority.

(X) Accumulated losses at the end of financial year ended on 31st March, 2012 is Rs. 1,39,58,268/- which does not exceed 50% of its net worth and it has not incurred cash losses in the financial year ended on the date and in the immediately preceding financial Year.

(xi) According to the information and explanations given to us and records of the company examined by us, the Company has not obtained any loan from financial institutions or banks and has not issued any debentures. Therefore reporting on whether company has defaulted in repayment of dues is not applicable.

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

(xiii) As the Company is not a chit fund or a nidhi / mutual benefit fund / society to which the provisions of special statute relating to chit fund are applicable, the provisions of clause 4(xiii) of the Order are not applicable.

(xiv) The company is dealing in or trading in share, securities, Debenture or other investment. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. Further such securities have been held by the company in its own name or are in the process of transfer in its on company name.

(xv) 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.

(xvi) According to the information and explanations given to us and as per records made available for our verification, the Company has not taken any term loan during the year

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment, this clause is not applicable.

(xviii) As the Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of the Act, the provisions of clause 4(xviii) of the Order are not applicable to the Company.

(xix) As the Company has not issued any debentures, the provisions of clause 4(xix) of the Order are not applicable to the Company.

(xx) The Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during year.

For N. R. PARIKH & CO.

Chartered Accountants

FRN No. 107563W

Sd/-

N. R. Parikh

(Partner)

Membership No. - 007854

Vadodara


Mar 31, 2010

1. We have audited the attached Balance sheet of Atreya petrochem Ltd. as at 31st March,2010 and also the Profit and Loss Account of the Company for the year ended on that date annexed thereto. These financials 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 enquire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, An audit includes earning, 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 over all 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 the companies (authors report ) amendment Order 2004 issued by the central government of india in terms of sub-section of section 227 of the companies act 1956 we enclose in the annexure a statement on matters specified in paragraphs 4 and 5 of the said other

Reference is invited

A) That since the beginning the company has not complied with the provision of section 383 A do the companies act 1956 relating to appointment of a whole tome secretary .There fore we are unable to comment on the maintenance of various statutory registers records compliance of stock exchange listing agreement SEBI rules & regulation and The companies Act 1956

b) For continuing contravention of section 372 A of the companies act 1956 for aggregate inter -corporate loans of rs 273.21 laca and investment of Rs 98.85 lacs in excess of the limit specified there to It is also doubtful for recovered

c) As explain to us by the board no loan and advances have been made to directors firms and to the companies in which director /relative are were interested as director / partner/ proprietor during the year )how ever Rs.30.03 in past year to directors Firms and to the companies in which director /relevant are were interested as director /partner proprietor which is continuing contravention of section 295 of companies act 1956

4 Further to our comments in the annexure referred to in paragraph 3 above we report that

a) We have obtained all the information and explanation which to the bear of our knowledge and belief were necessary for the purpose of our audit

b) In our opinion proper books of account as requited by law have been kept by the company so far as appears form our examination of the books

c)The balance sheet and the profit and loss account dealt with by this report are in agreement with the books of account

d)In our opinion the balance sheet and the profit and loss account dealt with by this report comply with the accounting standards referred to in sub-section 211 of the companies act 1956

e)on the basis of written representations received form the directors as on March 31 2010 and taken on record by the board of director we report appointment as a director in terms of clause of sub-section of section 274 of the companies act 1956

f)In our opinion and to the best of our information explanation and according to the explanation given to us the said accounts read with the notes thereon given 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 princes generally accepted in india.

i) In the case of the balance sheet of the state of affairs of the company as on 31st march 2010

ii) In the case of the profit and loss account of the profit for the year ended on that date and

iii) In the case of the cast flow statement of the cash flow for the year ended on that date

ANNEXURE TO AUDTTOR'S REPORT

Referred to in paragraph 3 of our report of even date on the accounts for the year ended 31st March 2010 of Atreya Petroleum Ltd

i) (a) Except information available in the books of accounts The company has not maintained proper records showing full particulars including quantitative details and situation of fixed assets

b)No records available as to physical verification of assets carried out by the management at an time during the year . Therefore we are unable to report whether any material discrepancies exit or not

c)As per books of accounts the company has not disposed off any fixed assets during the year

ii) a)As informed to us The inventory were physical verified by the management at reasonable intervals during the year

b) In our opinion and according to the information and explanation given to us company has reasonable and adequate procedure for physical verification of inventories in relation to the size of the company and the nature of its business

c)In our opinion and according to the information and explanation given to us the company has maintained proper records of inventory and no major discrepancy reported by the management

iii) The company has granted unsecured loan to 3 companies and 1 interested party listed in the register maintained under section 301 of the companies Act 1956 .The year balance of loans granted to these was Rs.30.03 Lacs .We invite attention to note no 4

In our opinion Terms and condition of above loan granted are not prejudicial to the company except interest free loans given to above parties .However as informed to us the said loan is repayable on demand

There is not recovery of Interest during the year in respect of loans granted No provision has made for the interest payment / received of above loans

The Company has taken unsecured loans from 5 companies 2 Directors and 2 Interested party listed in the register maintained under section 301 of the 130.27 Lacs .We invite attention to note no 4

In respect of above Loans taken there are no covenants with regard to the interest /payment or any other terms and condition

Register maintained if any u/s 301 of the companies Act 1956 is not available for our verification

iv ) In our opinion and according to the information and explanations given to us there are no adequate internal control procedures commensurate with the size of the company and the nature of its business

v) According to the information and explanation given to us the company has not made any transaction in respect of any party that need to be entered into a register in pursuance of section 301 of the companies Act 1956 except Loan recovery of Rs 11.66 Lacs Loan Granted 71.22 Lacs and Loan repayment of Rs 2.80 Lacs

vi) The company has not accepted deposits from other corporate which attracting the provision of section 58 A and 58 AA of the companies Act 1956 and the rules framed there under

vii) The company is listed company and or having a paid up capital and reserved exceeding Rs 50 Lacs as at the commencement of the financial year and company does not have any internal audit system

viii) According to the information and explanation given to us the central government has not prescribed maintenance of cost records under section 209 of the companies Act 1956

ix) In respect of statutory dues

a) Account to the records of the company examined by us company is not liable to pay provident fund Investor education and protection fund employee state insurance sales tax wealth Tax , Service Tax custom duty excise Duty , cess no undisputed amount payable in respect of such statutory dues which have remained outstanding as on 31 st march 2010 for a period of more than six month from the day they become payable except the following

Central sales tax Rs 6,77,642

Motor spirit Tax Rs 2,26,238

b) According to the information and explanation given to us there are no dues of sales Tax ,Custom duty wealth tax services tax custom duty excise duty and cess which have not been deposited on account of any dispute except the following

Name of Status Rs. Period Pending at

Income Tax Act 1961 24,89,300 A.Y.1999-00 ITAT -Ahemedabad

Income Tax Act 1961 1,41.41.065 A.Y.2000-01 ITAT -Ahemedabad

Income Tax Act 1961 35,830 A.Y.2002-03 CIT (A)-Vadodara

Income Tax Act 1961 12.830 A.Y.2003-04 CIT (A)-Vadodara

Central Excise Act 1944 8,87,65,288 A.Y.2000-01 Remanded by Authority

x) Accumulated losses at the end of financial year ended on 31 st March 2010 is Rs 2.15.61.663 Which does not exceed 50 % of its net worth and it has not incurred cash losses in the financial year ended on the date and in the immediately proceeding financial year

xi) According to the information and explanation given to us and record of the company examined by us the company has not obtained any loans from financial institutions or banks and has not issued any debentures Therefore reporting on whether company has defaulted in repayment of dues in not applicable

xii) According to the information and explanations given to us the company has not granted any loans or advances on the basis of security by way of pledge of shares debenture and other securities

xiii) As the company is not a chit fund or a nidhi / mutual benefit fund / society to which the provisions of special statute relating to chit fund are applicable the provisions of clause 4 (xiii) of the order are not applicable

xiv) The company is not dealing in or trading in share securities debenture or other investment and hence requirement of paragraph 4 XIV is not applicable

xv) According to the information and explanation given to us the company has not given any guarantee for loans taken by other from banks of financial institutions .

xvi )According to the information and explanation given to us and as per records made available for our verification the company has not taken any term loan during the year

xvii) According to the information and explanation given to us and on an overall examination of the balance sheet of the company we report that no funds raised on short -term basis have been used for long -term investment this clause is not applicable

xviii) As the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act the provisions of clause 4 xviii of the order are not applicable to the company

xix) As the company has not issued any debentures the provisions of clause 4 xix of the order are not applicable to the company

xx) The company has not raised any money by public issue during the year

xxi) According to the information and explanations given to us no fraud on or by the company was noticed or reported during year.

For N.R. PARIKH & CO, Chartered Accountants FRN No. 107563W

N.R. Parikh (Partner) M.No. F-07854 Vadodara


Mar 31, 2008

1. We have audited the attached Balance Sheet of Atreya Petrochem Ltd. as at 31st March, 2008 and also the Profit and Loss Account 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 the Companies (Auditor's Report) (Amendment) 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 matters specified in paragraphs 4 and 5 of the said Order.

Reference is invited: -

a) That Since the F.Y. 2000-2001, the company has not undertaken any business activity.

b) That since the beginning the company has not complied with the provision of Section 383A of the Companies Act, 1956 relating to appointment of a whole time secretary.

Therefore, we are unable to comment on the maintenance of various statutory registers, records, compliance of Stock Exchange listing agreement, SEBI Rules & Regulation and The Companies Act, 1956.

c) The management of the company has not taken due care to arrange in order and or to preserve past years Books of Accounts, relevant records and Shareholder records etc. in proper manner & at proper place.

d) That company hold investment of 3,00,000 Nos. of Equity Shares of Rs. 30 00,000/- in Prabhav Industries Ltd. (Formerly : Empire Unifor Software Solutions Ltd.).

In our opinion, no realizable value expected from the above investment and no amount is ascertain from diminutions in the value at investment, No provision has been made for the diminution in the value of share

e) That accounts and balance of various major parties remain stagnant and unconfirmed since long back. Therefore, status as to receivable and or payable cannot be ascertained and commented.

f) For continuing contravention of Section 295 of companies Act 1956 for allowing Loans & Advances of Rs. 40.14 Lacs in past year to director, firms and to the Companies in which Director/ relative are/ were interested as director / partner / proprietor. It is also doubtful to be recovered. There were no terms and condition for the interest and recovery of principal.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we

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

(b) In our opinion, proper books of account as required by law have been books Company so far as appears from our examination of the books;

(c) The Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet and the 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, except.

"AS-22 Accounting for Taxes on Income" in view of no longer reasonably certain and convenience evidence that sufficient future taxable income will be available to recognized Deferred Tax Assets.

(e) on the basis of written representations received from the directors as on March 31, 2008 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31s: March 2008 from being appointed as a director in terms of Claus (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes 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:

(i) in the case of the Balance Sheet of the state of affairs of the Company as on 31st March 2008;

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

(iii) in the case of the Cash Flow Statement, of the Cash Flow for the year ended on that date.

(i) (a) Except information available in the books of accounts, The Company has not maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) No Records available as to physical verification of assets carried out by the management at any time during the year.

Therefore, we are unable to report whether any material discrepancies exist or not.

(c) As per Books of Accounts, the Company has not disposed off any fixed assets during the year.

(ii) (a) As informed to us the company have not purchase any materials during the year. Inventories of Finish Goods which were held since F.Y. 1999-2000, for which no physical verification has been conducted at any time by management.

(b) In our opinion and according to the information and explanation given to us, company does not have reasonable and adequate procedure for physical verification of inventories.

(c) In our opinion and according to the information and explanations given to us, the Company has not maintained proper records of inventory.

(iii) The Company has granted or taken any loans, secured or unsecured to / from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956,

Register maintained, if any u/s, 301 of the Companies Act, 1956 is not available for our verification.

However, on the basis of information with us the Company has granted and taken Loans to/from various parties in past years which required to be covered in the register u/s. 301 of the Act, are as under-

(a) Loans Granted

Name of the Party Amount

Galav Finance & Investment Pvt. Ltd. 22,52,000

Kavit Investment Pvt. Ltd, 7,76,000

Empire Housing Finance Ltd. 36,674

Pacific Finstock Ltd. 9,49,602

In respect of above, Loans given, there are no covenants with regard to the Interest/Recovery or any other terms and conditions.

There is no recovery of principal or Interest during the year in respect of above loans.

In absences of any covenants as to recovery in respect of above Loans we are unable to comment on overdue status and No steps taken for the recovery of the principal and interest.

(b) Loan Taken

Name of the Party Amount

Prabhav Industries Ltd. (Formerly: Empire 35,09,589 Unifor Software Solutions Ltd.)

Natural Expo Agro Industries Ltd. 24,84,080

Pacific Securities Ltd. 3,40,000

In respect of above Loans taken, there are no covenants with regard to the interest/ Repayment or any other terms and conditions.

There is no payment of principal or Interest during the year in respect of above loans.

No Provision has been made for the interest of above loans,

In absences of any covenants as to repayment in respect of above Loans we are unable to comment on overdue status and steps taken for the payment of the principal and interest.

(iv) In our opinion and according to the information and explanations given to us, there are no adequate internal control procedures commensurate with the size of the Company and the nature of its business.

(v) According to the information and explanations given to us, the company has not made any transaction respect of any party that need to be entered into a register pursuance of Section 301 of the Companies Act 1956 except Loan taken from Prabhav Industries Ltd. of Rs. 50,000/- during the year.

(vi) The company has accepted deposits from other corporate which attracting the provisions of section 58A and 58AA of the Companies Act, 1956, and the rules framed there under, The company has not been filed return of deposits as required U/s. 10 of Companies (Acceptance of Deposits) Rules 1975 with the concerned authorities.

(vii) The company is a listed company and or having a paid up capital and reserves exceeding Rs. 50 Lacks as at the commencement of the Financial Year and company does not have any Internal Audit System.

(Viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956.

(ix) In respect of statutory dues:

(a) Account to the records of the Company examined by us, Company is not liable to pay Provident Fund, Investor Education and Protection fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess no undisputed amounts payable in respect of such statutory dues which have remained outstanding as on 31st March 2008 for a period of more than Six Month from the day they become payable except the following -

Tax Deducted At Sources Rs.1,98 611

Central Sales Tax Rs.6,58,242

Motor Spirit Tax Rs.2,26,238

Professional Tax Rs.1,520

Taluka Vikas Adhikari, Savli Rs.31,931

(b) According to the information and explanation given to us there are no dues of sales Tax, Custom Duty' Wealth Tax' Services Tax, Custom Duty, Excise Duty and Cess Which have not been deposited on account of any dispute except the Following -

Name of status Rs period Pending at

Income Tax Act 1961 24,89,300 A.Y.1999-00 ITAT-Ahmedabad

Income Tax Act 1961 1,41,41,065 A.Y.2000-01 ITAT-Ahmedabad

Income Tax Act 1961 35,830 A.Y.2002-03 CIT(A)-Vododara

Income Tax Act 1961 12,830 A.Y.2003-04 CIT(A)-Vododara

(x) Accumulated losses at the end of financial year ended on 31st March, 2008 is Rs. 2,94,69,867/- which does not exceed 50% of its net worth and it has incurred cash losses in the financial year ended on the date and in the immediately preceding financial Year.

(xi) According to the information and explanations given to us and records of the company examined by us, the Company has not obtained any loan from financial institutions or banks and has not issued any debentures. Therefore reporting on whether company has defaulted in repayment of dues is not applicable.

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

(xiii) As the company is not a chit fund or a nidhi / mutual benefit fund / society to which the provisions of special statute relating to chit fund are applicable, the provisions of clause 4(xiii) of the order are not applicable.

(xiv) The company is not dealing in or trading in share, securities, Debenture or other investment ad hence requirement of paragraph 4 (XIV) is not applicable.

(xv) According to the information and explanations given to us the Company has not given guarantee for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us and as per records made available for our verification, the company has not taken any term loan during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment, this clause is not applicable.

(xviii) As the Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under section 301 of the Act, the provisions of clause 4(xviii) of the Order are not applicable to the Company.

(xix) As the Company has not issued any debentures, the provisions of clause 4(xix) of the Order are not applicable to the Company.

(xx) The Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during year.

For

N. R. PARIKH & CO.

Chartered Accountants

N. R. Parikh

Proprietor

Membership No. F-07854

 
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