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Auditor Report of Madhur Industries Ltd.

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of "MADHUR INDUSTRIES LTD.", 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 Statement

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. 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, 2013;

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

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

Report on Other Legal and Regulatory Requirements.

1. As required by the Companies (Auditor''s Report) Order, 2003 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 Reports on the accounts of Mumbai Branch audited by the branch auditor has been forwarded to us & have been appropriately dealt with while preparing our Report.

d) 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.

e) 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;

Except Accounting Standard -15 on Retirement benefits as no provision has been made for retirement benefits, The effect of the same can not be quantified, to that extent loss for the year and balance of Profit & Loss account and balance of current liabilities is understated.

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

g) The Bank accounts of the Company was frizzed by the CBI BS & FC, Mumbai in the financial year 2001-02, therefore no provision has been made for bank balance of Rs. 32,56,783, DD in Transit of Rs.32,372 , doubtful sundry debtors of Rs. 34.07 lacs & doubtful advance of Rs. 82.21 lacs exceeding six months . The Consequential effect of this is not ascertainable.

h) Note in Schedule relating to non provision of interest on fixed deposit (accepted in previous year u/s 58A) for the year ending on 31st March, 2013 and matured/encashed Fixed Deposits for which the cheques are issued from separate bank account (which is freezed CBI BS & FC, Mumbai) but not cleared due to suspension of banking operation of Madhavpura Mercantile Co. Op. Bank Ltd. Consquently the loss and liability are understated to the extent.

i) Subject to the above ,ln our opinion and to the best of our information and according to the explanations given to us, the said accounts, read in conjunction with the significant Accounting policies (Note-25), Notes to Financial Statements(Notes 1-24) 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:

j) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of MADHUR INDUSTRIES LTD. 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 showing full particulars including quantitative details and situation of its fixed assets.

(b) As per the information and explanation given to us, the assets have been physically verified by the management during the regular interval. However the details regarding the same are not available for our verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

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

(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. As per the information and explanations given to us, the Company has granted unsecured loans to six parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum balance outstanding during the year was Rs. 25,32,790.32

In our opinion, the rate of interest and other terms and conditions of such loan are not, prime facie, prejudicial to the interest of the Company.

The company is neither regular in making recovery of the principal amount nor its interest.

There is overdue amount of loans granted exceeding one lacs in case of three parties and company is in process of recovery of the amount to the. Parties covered in the register maintained under section 301 of the Companies Act, 1956.

As per the information and explanations given to us, the Company has taken unsecured loans from three parties covered in the Register maintained u/s. 301 of the Companies Act, 1956. The maximum balance outstanding during the year was Rs. 40,87,674

The terms and conditions of the above loans are prima facie not prejudicial to the interest of the company.

The company is neither regular in making repayment of the principal amount nor its interest.

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. 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) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

6. In our opinion and according to the information and explanations given to us, the company has not accepted/renewed the deposits falling within preview of Section 58A / 58AA of the Companies Act, 1956 during the financial year. However the honorable Company Law Board (CLB) western region bench Mumbai, by its order dated 29th April,2002 in company petition no 58AA/58A(9)/CLB/WR/2002/494 has order that there is a default on the part of the company to repay the small depositors their deposits as per terms and condition of acceptance of deposits. However considering the submission made by the company that the company is already having a separate Bank account for accepting and repaying fixed deposits with Madhavpura Mercantile Co. Op. Bank Ltd., the banker of the company and has transferred funds to the tune of Rs. 175 Lacs to the said amount ( which is frizzed by CBI BS & FC Mumbai) for repayment of depositors and since the clearing of the Madhavpura Mercantile Co. Op. Bank Ltd., the banker of the company has been suspended w.e.f. 13th March,2001 the company is unable to repay to depositors whose FD''s stand matured & for repayment of the premature FD''s Hon''ble Company Law Board has given directions to the company as contained in order. One of prime direction of the order is that:

The Company shall make repayment of deposits along with interest at the contracted rate till the date of payment to depositors whose deposits become matured and also to depositors who have requested the company for repayment of their premature fixed deposits within 30 days of start of clearing of Madhavpura Mercantile Co. Op. Bank Ltd. However clearance of Bank already has been started but the above bank account has been freezed by CBI BS & FC Mumbai hence company could not paid deposits.

7. As per information & explanations given by the management, the Company has no internal audit system commensurate with its size and the nature of its business.

8. In our opinion and 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.

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, and details produced for verification, there are dues of Income tax of Rs. 6,74,762 which have not been deposited as the said dispute is pending before CIT (Appeal).

10. In our opinion and according to the information and explanations given to us, the company has not incurred any cash losses during the financial year under review. Moreover, the company has accumulated losses of Rs. 3,11,52,628 at the end of the financial year.

11. According to the records of the company examined by us and on the basis of information and explanations given to us, the company has issued cheques of Rs. 2,10,07,851/-from its current account for repayment of Term Loan to Madhavpura Mercantile Co. Op. Bank Ltd by way of transfer of funds. We are unable to express our opinion because necessary documents are not available by bank to us whether same have been credited or not.

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 is not trading in Shares, Mutual funds,Securities,Debenture & other Investments .

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. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

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 no outstanding debentures during the period under audit.

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.

Date :- 30/05/2013 For, Purushottam Khandelwal & Co.

Place:- Ahmedabad Chartered Accountants

SD/-

(P.H. Khandelwal)

Proprietor

M.No.100601

FRN: 123825W


Mar 31, 2012

1. We have audited the attached Balance Sheet of MADHUR INDUSTRIES LTD., as at 31 March 2012/ and the statement of Profit and Loss Account and also the cash flow statement for the year ended on the date annexed thereto, in which are incorporated accounts of the Branch audited by the Branch Auditor whose reports have been considered in preparing this report. These financial statements are the I 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. These standards require that we plan and perform the aiidit to obtain reasonable assurance aboutr whether the financial statements are free of material misstatements. An audit includes examining, on 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 Companies (Auditor's Report) Order, 2003 and as amended by the Companies (Auditor's Report)(Amendment) Order, 2004 issued by Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of said order,

4. Further to our comments in the Annexure xeferred to above, we report that:

a. We have obtained all the mformation 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 appearsfrom om examination of those books and proper returnsadequate for the purposes of our audithavebeen received fromthe branch not visited by us;

c. The Reports on the accounts of Mumbai Branch audited by the branch auditor has been forwarded to us & have been appropriately dealt with while preparing our Report;

d. 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.

e. In our opinion, the Balance Sheet ,Profit & Loss Account and cash flow statement dealt with by this report comply with the i Accounting Standards referred to in sub-section 3C of Section 211 of the Companies Act, 1956;

Except Accounting Standard -15 on Retirement benefits as no provision has been made for retkement benefits , The effect of the same can not be quantified, to that extent loss for the year and balance of Profit & Loss account and balance of current liabilities is understated.

f. On the basis of written representations received from the directors as at 31 March, 2012 and taken on record by the Board of Directors and in accordance with the information and explanations as made available, the directors of the company do not have prima - facie have any disqualification as at 31March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

g. TheBankaccounts of the Company was frizzed by the CBI BS&FC, Mumbai in the financial year 2001-02, therefore no provision has been made for bank balance of Rs. 32,56,783, DD in Transit of Rs.32,372 , doubtful sundry debtors of Rs. 34.07 lacs & doubtful advance of Rs. 82J21 lacs exceeding six months . The Consequential effect of this is not ascertainable.

h. Note in Schedule relating to non provision of interest on fixed deposit (accepted in previous year u/s 58A) for the year ending on 3lst March, 2012 and matured/encashed Fixed Deposits for which the* cheques are issued frorn separate bank account (which is freezedCBI BS &FC, Mumbai) but not cleared due to suspension of banking operation of Madhavpura Mercantile Co, Op. Bank Ltd. Consquently the loss and liability are understated to the extent.

1 Subject to the above ,In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read in conjunction with the significant Accounting policies (Note-25), Notes to Fmancial Statements (Notes 1-24) give the information required by the Companies Act/1956, in the mariner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:



i In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2012.

ii In the case of the Profit and Loss Account, of the profit of the Company for the period ended on that date.

iii In the case of Cash Flow Statement, of the Cash Flow of the Company for the year ended on that date.

Date:- 28/05/2012 For Purushottam Khandelwal & Co.

Place: - Ahmedabad Chartered Accountants

Sd/-

(P.H. Khandelwal) Proprietor

ANNEXURE TO THE AUDrrdRS'REPORT

(Referred to in paragraph 3 of our report of even date)

1. (a) As per the information and explanation given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As per the information and explanation given to us, the assets have been physically verified by the management during the regular interval. However the details regarding the same are not available for our verification.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2. (a) As per the information and explanations given to us , the inventories has been psically verified during the year by the management.

(b) In our opinion and according to the mfprrnation and explanation given to us, the procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to me size of the company and me nature of its business.

(c) The company has maintained proper records of inventories. As explained to us, there were no material discrepancies that have been noticed on physical verification of inventories as compared to books records.

3. (a) As per the information and explanations given to us, the Company has granted unsecured loans to six parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum balance outstanding during the year was Rs. 23,52,971.34

(b) In our opinion, the rate of interest and other terms and conditions of such loan are not, prime facie, prejudicial to the interest of the Company.

(c): The company is neither regular in making recovery of the principal amount nor its interest.

(d) There is overdue amount of loans granted exceeding one lacs in case of three parties and company is in process of recovery of the amount to the. Partiesi covered in the register maintamed under section 301 of the Companies Act, 1956.

(e) As per the information and explanations given to us, the Company has taken unsecured loans from three parties covered in the Register maintained u/s. 301 of the Companies Act, 1956. The maximum balance outstanding during the year was Rs. 33,43,494

(f) The terms and conditions of the above loans are prima facie not prejudicial to me interest of the company.

(g) The company is neither regular in making repayment of the principal amount nor its interest

4. In our opinion and according to information and explanation given to us; there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and f fixed assets, and for the sale of goods and services. Further on the basis of J our examination of 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.

5. In our opinion and according to the information and explanations given to us, there is no transaction made m pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies act 1956 exceedingthe value ofRupees five lakhs in respect of any party during the Year.

6. In our opinion and according to the information and explanations given to us, the company has not accepted/renewed the deposits falling within preview of Section 58 A / 58 A A of the Companies Act, 1956 during the financial year. However the honorable Company Law Board (CLB) western region bench fvtfumbai, by its order dated 29th April,2002 in company petition no 58AA/58A(9)/CLB/WR/2002/494 has order that there is a default on the part of the company to repay the small depositors their deposits as per terms and condition of acceptance of deposits. However considering the submission made by the company that the company is already having a separate Bank account for accepting and repaying fixed deposits with Madhavpura Mercantile Co. Op. Banjk Ltd. thecompany and has tiansferred fund s to me said amount (Which is frizzed by CBIBS & FC Murhbai) for repayment of S depositors and since the clearing of the Madhavpura Mercantile Co. Op. Bank Ltd., the banker of the company has been suspended w.e.f. 13th March,2001 the company is unable to repay to depositors whose FD's stand matured & for repayment of thepremature FD's Hon'ble Company Law Board has given directions to the company as contained in order. One of prime direction of the order is that

The Company shall make repayment of deposits along with interest at the contracted rate till the date of payment to depositors whose deposits become matured and also to depositors who have requested the company for repayment of their premature fixed deposits within 30 days of start of clearing of Madhavpura Mercantile Co. Op. Bank Ltd. However clearance of Bank already has been started but the above bank account has been freezed by CBI BS & FC Mumbaihence company could not paid deposits.

7. In our opinion and according to the inforrnation and explanation given to us, the Company has no internal audit system commensurate with size and nature of its business.

8. In our opinion and 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.

9. (a)According to the information given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including income tax, sales tax, excise duty, cess and other material statutory dues applicable to it. And the Company had no arrears of such outstanding statutory dues as at 31st March, 2012 for a period more than six months; from the date they became payable .

, (b) According to the information and explanation given to us, and details produced for verification, there are dues of Income tax of Rs. 6,74,762which have not been deposited as the said dispute is pending before CIT (Appeal).

10. In our opinion and according to the information and explanations given to us, the company has not incurred any cash losses during the financial year under review. Moreover, the company has accumulated losses of Rs. 3,18,41,232 at the end of the financial year.

11. According to the records of the company examined by us and on the basis of information and explanations given to us, the company has issued cheques of Rs. 2,10,07,851/- from its current account for repayment of Term Loaii to Madhavpura Mercantile Co. Op. Bank Ltd by way of transfer of funds. We are unable to express our opinion because necessary documents are not available by bank to us whether same have been credited or not.

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

13. In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Cornpanies (Auditor's Report) Order, 2003 are not applicable to the company.

14. According to the informationand explanation given to us, the company is I not dealing or trading in shares, securities, Debentures and other Securities.

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

16. As per the Information made available to us, there are no Term Loans taken by the Company.

17. In our opinion and according to the information and explanations given to j I us, the Company has not used any funds raised on short term basis for long term mveslment.

18. The Conipany has not made any preferential allotment during the Year.

19. During the period covered by our audit report, the company has not issued any debentures.

20. As the company has not raised money by making Public issue during the Financial year.

21. As represented to us by the Management and based on our examination of the books and records of the Company in accordance with the generally accepted auditing practices in India, we have neither come across any material fraud in or by the company noticed or reported during the year nor we have been informed of any such case by the management that causes the financial statements to be materially misstated.

For, Purushottam Khandelwal & Co.

Chartered Accountants

Purushottam Khandelwal

Proprietor

Place: Ahmedabad.

Date : 28/05/2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of MADHUR INDUSTRIES LTD., as at 31 March 2010, the Profit and Loss Account of the Company for the year ended on that date and Cash Flow statement, annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 of material misstatements. An audit includes examining, on 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. This report includes statement on the matters specified in the paragraph 4 of the Companies (Auditors Report) Order,2005 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956.

4. Further to our comments in the Annexure referred to above, we report that:

a. We have obtained the available 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 Reports on the accounts of Mumbai Branches audited by the branch auditors has been forwarded to us & the same has been considering in preparing our report.

d. 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;

e. In our opinion, the Balance Sheet ,Profit & Loss Account and cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3C of Section 211 of the Companies Act, 1956; Except Accounting Standard -15 on Retirement benefits as no provision has been made for retirement benefits , The effect of the same can not be quantified, to that extent loss for the year and balance of Profit & Loss account and balance of current liabilities is si understated.

Accounting Standard -13 on Accounting for investments as no provision is made for diminution in the value of investment of group concern amounting to Rs. 63,90,965 lacs. |

f. On the basis of written representations received from the directors as at 31 March, 2010 and taken on record by the Board of Directors and in accordance with the information and explanations as made available, the directors of the company do not have prima - facie have any disqualification as at 31 March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

g. The Bank accounts of the Company was frizzed by the CBI BS & FC, Mumbai in the financial year 2001-02, therefore no provision has been made for bank balance of Rs. 32,56,783, DD in Transit of Rs.32,372 , doubtful sundry debtors of Rs. 34.07 lacs & doubtful advance of Rs. 82.21 lacs exceeding six months . The Consequential effect of this is not ascertainable.

h. Note in Schedule relating to non provision of interest on fixed deposit (accepted in previous year u/s 5 8A) for the year ending on 31st March, 2010 and matured/enchased Fixed Deposits for which the cheques are issued from separate bank account (which is freezed CBI BS & FC, Mumbai) but not cleared due to suspension of banking operation of Madhavpura Mercantile Co. Op. Bank Ltd. Consquently the loss and liability are understated to the extent.

i. Subject to the above ,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 given a true and fair view in conformity with the accounting principles generally accepted in India:

i In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2010.

ii In the case of the Profit and Loss Account, of the loss of the Company for the period ended on that date.

iii In the case of Cash Flow Statement, of the Cash Flow of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our report of even date)

1. (a) As per the information and explanation given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As per the information and explanation given to us, the assets have been physically verified by the management during the regular interval.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2. (a) As per the information and explanations given to us , the inventories has been physically verified during the year by the management.

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

(c) The company has maintained proper records of inventories. As explained to us, there were no material discrepancies that have been noticed on physical verification of inventories as compared to books records.

3. (a) As per the information and explanations given to us, the Company has granted unsecured loans to six parties covered in the registered maintained u/s 301 of the Companies Act, 1956. The maximum balance outstanding during the year was Rs. 11,26,917.

(b) In our opinion, the rate of interest and other terms and conditions of such loan are not, prime facie, prejudicial to the interest of the Company.

(c) The company is neither regular in making recovery of the principal amount nor its interest.

(d) There is overdue amount of loans granted exceeding one lacs in case of three parties and company is in process of recovery of the amount to the Parties covered in the register maintained under section 301 of the Companies Act,1956.

(e) As per the information and explanations given to us, the Company has taken unsecured loans from three parties-covered in the Register maintained u/s. 301 of the Companies Act, 1956. The maximum balance outstanding during the year was Rs. 2,38,814.

(f) The terms and conditions of the above loans are prima facie not prejudicial to the interest of the company.

(g) The company is neither regular in making repayment of the principal amount nor its interest.

4. In our opinion and according to information and explanation given to- us; there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets, and for the sale of goods and services. Further on the basis of our examination of 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.

5. In our opinion and according to the information and explanations given to us, there is no transaction during the year as referred to in Section 301 of the Companies Act, 1956.

6. In our opinion and according to the information and explanations given to us, the company has not accepted/renewed the deposits falling within preview of Section 58A / 58AA of the Companies Act, 1956 during the financial year. However the honourable Company Law Board (CLB) western region bench Mumbai, by its order dated 29* April,2002 in company petition no 58AA/58A(9)/CLB/WR/2002/494 has order that there is a default on the part of the company to repay the small depositors their deposits as per terms and condition of acceptance of deposits. However considering the submission made by the company that the company is already having a separate Bank account for accepting and repaying fixed deposits with Madhavpura Mercantile Co. Op. Bank Ltd., the banker of the company and has transferred funds to the tune of Rs. 175 Lacs to the said amount (which is frizzed by CBI BS & FC Mumbai) for repayment of depositors and since the clearing of the Madhavpura Mercantile Co. Op. Bank Ltd., the banker of the company has been suspended wef 13* March,2001 the company is unable to repay to depositors whose FDs stand matured & for repayment of the premature FDs Honble Company Law Board has given directions to the company as contained in order. One of prime direction of the order is that:

The Company shall make repayment of deposits along with interest at the contracted rate till the date of payment to depositors whose deposits become matured and also to depositors who have requested the company for repayment

of their premature fixed deposits within 30 days of start of clearing of Madhavpura Mercantile Co. Op. Bank Ltd. However clearance of Bank already has been started but the above bank account has been freezed by CBI BS & FC Mumbai hence company could not paid deposits.

7. In our opinion and according to the information and explanation given to us, the Company has not adequate internal audit system commensurate with size and nature of its business.

8. In our opinion and 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.

9. (a)According to the information given to us, the Company is generally regular

in depositing with appropriate authorities undisputed statutory dues including income tax, sales tax, excise duty, cess and other material statutory dues applicable to it. and the Company had no arrears of such outstanding statutory dues as at 31st March, 2010 for a period more than six months from the date they became payable except TDS of preceding years of Rs.4069 not deposited.

(b) According to the information and explanation given to us, and details produced for verification, there are dues of Income tax of Rs. 69,83,703 which have not been deposited as the said dispute is pending before CIT (Appeal).

10. In our opinion and according to the information and explanations given to us, the company has incurred cash losses of Rs. 1,11,77,265 during the financial year under review. Moreover, the company has accumulated losses of Rs. 3,29,84,650 at the end of the financial year.

11. According to the records of the company examined by us and on the basis of information and explanations given to us, the company has issued cheques of Rs. 2,10,07,851/- from its current account for repayment of Term Loan to Madhavpura Mercantile Co. Op. Bank Ltd by way of transfer of funds. We are unable to express our opinion because necessary documents are not available by bank to us whether same have been credited or not.

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

13. In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

14. According to the information and explanation given to us, the company is

dealing or trading in shares, securities; Proper records have been maintained of the transactions and contracts and timely entries have been made therein. The other investments have been held by the company in its own name except to the extent of exemption, if any granted under section 49 of the act.

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

16. As per the information and explanation given to us, the company has not taken term loans during the financial year.

17. In our opinion and according to the information and explanations given to us, the Company has not used any funds raised on short term basis for long term investment.

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

19. During the period covered by our audit report, the company has not issued any debentures.

20. As the company has not raised money by making Public issue during the financial year.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For, Purushottam Khandelwal & Co.

Chartered Accountants

Purushottam Khandelwal

Proprietor Mem. No. 100601 FRN:-123825W

Place : Ahmedabad. Date :03/09/2010


Mar 31, 2009

We have audited the attached Balance Sheet of MADHUR INDUSTRIES LTD., as at 31st March, 2009 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an ppinion on these financial statements based on our audit.

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

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.

Further to our comments in the Annexure referred to 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 accounts as required by law have been kept by the company so far as appears from our examination of the books of accounts;

(c) The Reports on the accounts of Mumbai Branches audited by the branch auditors has been forwarded to us & the same has been considered in preparing our report.

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

(e) In our opinion, the Balance Sheet of the company comply with the Accounting Standards as referred in Sub-Section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

(fj Based on the representations made by the Directors of the Company and taken on records by the Board of Directors, and in accordance with the information and explanations as made available, the Directors of the Company do not prima- facie have any disqualification as referred to in Section 274 (1) (g) of the act.

(g) The bank accounts of the company was frizzed by CBI BS & FC, Mumbai in the financial year 2001-02 therefore no provision has been made for bank balance of Rs. 119.47 lacs, and no provision has been made for diminution in the value of investment of group concern amounting to Rs. 72.91 lacs, doubtful sundry debtors of Rs. 34.07 lacs & doubtful advance Rs. 82.21 lacs exceeding six month. The consequential effect of this is not ascertainable.

(h) Company has not disclosed the information in respect of dues to SSI units as required and

(i) Note in Schedule relating to non provision of interest on Fixed deposit, (accepted in previous years u/s. 58 A) for the year ending on 31st March, 2009 and matured/encashed Fixed Deposits for which the cheques are issued from separate bank account, (which is frizzed CBI BS & FC, Mumbai) but not cleared due to suspension of banking operation of Madhavpura Mercantile co-op Bank Ltd. Consequently the loss and liability are understated to the extent.

(j) Subject to above, in our opinion and to the best of our information and according to explanation given to us, the said accounts give the information required by the Companies Act, 1956 in manner so required and given a true and fair view in conformity with the accounting principles generally accepted in India.

(i) in case of Balance Sheet, of the state of the affairs of the company as at 31st March 2009 and

(ii) In case of Profit and Loss Account, of the Loss of the Company for the year ended on that date &


ANNEXURE TO THE AUDITORS REPORT Referred to in our Report of even date:

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

(b) As explained to us, all the assets have been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) No substantial part of fixed assets has been disposed off during the year.

2. (a) As explained to us, the Inventories has been physically verified during the year

by the management.

(b) In our opinion and according to the information and explanation given to us, the procedure of physical verification of Inventories followed by the management is reasonable and adequate i;i relation to the size of the Company and the nature of its Business.

(c) The Company has maintained proper records of Inventories. As explained to us, there were no material discrepancies have been noticed on physical verification of Inventories as compared to book records.

3. Company has granted loan to following four group concern amount of Rs. 853645/- In respect of loans granted to and .taken from the companies, firms or other parties listed in the register maintained u/s. 301 of the companies Act, 1956 where no stipulation as to repayment is fixed along with non provision of interest on loan is made.

Payment of the Principal amount and interest are.not regular.

4. In our opinion, according to the information and explanations given to us, there are adequate internal control procedures, commensurate with the size of the Company and nature of its Business for purchase of inventories & Purchase and sale of plant and machinery, equipment and other assets.

5. (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered in to a register in pursuance of section 301 of the companies act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contract or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding rupees five lakhs each have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted /renewed the deposits falling within the preview of Section 58A / 58AA of the Companies Act, 1956 during the financial year. However, the honorable Company Law Board (CLB) western region bench Mumbai, by its order dated 29th April, 2002 in company petition no 58AA/58A(9)/CLB/WR/2002/494 has order that there is a default on the part of the company to repay the small depositors their deposits as per terms and conditions of acceptance of deposits. However considering the submissions made by the company that the company is already having a separate Bank account for accepting and repaying fixed deposits with Madhavpura Mercantile Co. Op. Bank Ltd., the banker of the company, and has transferred funds to the tune of Rs. 175 lacs to the said amount (which is frizzed by CBI BS & FC, Mumbai) for repayment of depositors and since the clearing of the Madhavpura Mercantile Co. Op. Bank Ltd., the banker of the company has been suspended w.e.f. 13th March, 2001 the Company is unable to repay to depositor whose FDs stands matured & for repayment of their prematured FDs Honble Company Law Board has given directions to the company as contained in order. One of prime direction of the order i? that:

The Company shall make repayment of deposits along with interest at the contracted rate till the date of payment to depositors whose deposits become matured and also to depositors who have requested the company for repayment of their premature fixed deposits within 30 days of start of clearing of Madhavpura Mercantile Co. Op. Bank Ltd. However clearance of Bank already has been started but the above bank account has been freezed by CBI BS & FC Mumbai hence company could not paid deposits.

7. In our opinion, according to the information and explanations given to us, the Company has not adequate Internal Audit System commensurate with size and nature of its Business.

8. As informed to us , the maintenance of cost records has not been prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956.

9. (a) According to information and explanation given to us no undisputed amount in respect of Income Tax, Sales Tax, Wealth Tax, Custom Duty, Cass and excise duty and no other statutory liabilities were outstanding for a period more than six month as on 31st March, 2009 except TDS of preceding years Rs. 4069/- not deposited.

(b) Disputed claims pending before different Appellate forum are as under.

Item Amount Forum Where dispute is pending Income Tax Rs. 6983703 CIT (Appeal)

10. The Company has incurred cash losses during the financial year covered under the audit. The company has accumulated Losses of previous years Rs. 234283607-

11. The Company has issued cheque of Rs. 21007851/- from its current account for repayment of Term Loan to Madhavpura Mercantile Co. Op. Bank Ltd by way of transfer of funds. We are unable to express our opinion because necessary documents are not available by bank to us whether same have been credited or not.

12. Company has not granted such loans & advances during the year.

13. Not Applicable

14. During the year the Company has carried out transactions of trading in shares/ Commodities. Proper records have been maintained of the transactions and contracts and timely entries have been made therein. The other investments have been held by the Company, in its own name except to the extent of exemption, if any, granted under section 49 of the Act.

15. No

16. No Term Loan has been taken during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilized short term sources towards repayment of long term borrowings and acquisition of fixed assets.

18. No such allotment has been made.

19. The Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

20. Not Applicable

21. In our Opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For, RAM N. AGARWAL & CO. Chartered Accountants

s/d-

Place : Ahmedabad R. N. AGARWAL

Date: 07/09/2009 Proprietor



 
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