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Auditor Report of Mangalam Drugs and Organics Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of MANGALAM DRUGS & ORGANICS LIMITED(" the Company"),which comprise the Balance sheet as at 31st March, 2015, the Statement of Profit & Loss and the Cash Flow Statement of the Company for the year ended,and a summary of the 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 true & fair view of the financial position,financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act ,2013 (the Act)read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Company's Act ,2013 and in accordance with the accounting principles generally accepted in India .This responsibility includes the design,implementation and maintainence of internal control relevant to the preparation and presentation of the financial statements that give true and fair view and are free from material misstatement,whether due to fraud or error.

AUDITOR' 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 the 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 the disclosures in the financial statements. The procedures select depend on the auditor's judgement,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 the internal control relevant to the Company's preparation and fair presentation of the fianancial 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 the 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 principals generally accepted in India:

(a) In the case of the Balance Sheet,of the state of affairs of the Company as at 31st March ,2015;

(b) In the case of the Statement of Profit and Loss,of the Profit of the Company for the year ended on that date,and

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order,2015("the Order") issued by the Central Government of India in terms of Section 149 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 143 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 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 it appears from our examination of those books.

(c) The Balance Sheet,Statement of Profit and Loss,and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013.

(e) On the basis of the written representations received from the directors as on 31st March ,2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March,2015 from being appointed as a director in terms of clause(g) of sub-section(1) of section 164 of the Act.

Annexure to the Auditors report of the even date to the Members of

MANGALAM DRUGS AND ORGANICS LIMITED.

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

(b) The fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the company and the nature of its asset. The discrepancies noticed have been properly dealt with in the books of accounts.

ii) (a) The physical verification of inventory has been conducted at reasonable intervals by management.

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

(c) In our opinion the company has maintained proper records of inventory. The discrepancies between physical stock and the book stock were not material and have been properly dealt with in the books of accounts.

iii) As informed to us, during the year the company has not granted any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 189 of the Act.Hence we express our inability to give our comments on loan receipts of principal interest or steps taken for recovery of overdue amount exceeding Rs one lakh.

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

v) (a) As informed to us the company has not accepted any deposits during the year.We therefore,express our inability to comment whether the directives issued by Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions have been complied with.We have been informed that no order in this connection has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or other tribunal.

vi) The Company is maintaining cost records as prescribed by Central Government under section 148(1) of the Companies Act 2013 for the Company.

vii) a) According to the information and explanation given to us the company is generally regular in depositing undisputed statutory dues including Provident Funds, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues wherever applicable with appropriate authorities. There is no outstanding dues for a period of more than six months from the date they become payable.

b) The following are the disputed dues which have not been deposited:

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

1) Excise Duty & Service Tax

a) 2009-10 5.00 CESTAT, Ahmedabad.

b) 2011-12 24.82 Commissioner (Appeals) -Daman

c) 2011-12 364.64 Commissioner Central Excise & service tax- Daman

Sub Total 394.46

2) Income Tax

a) 2002 - 2003 00.86 Income Tax Appellant Tribunal Mumbai

b) 2003 - 2004 00.88 Income Tax Appellant Tribunal Mumbai

c) 2004 - 2005 22.09 Income Tax Appellant Tribunal Mumbai

d) 2005 - 2006 1.36 Commissioner of Income Tax Appeals-Mumbai

e) 2006 - 2007 21.42 Commissioner of Income Tax Appeals- Mumbai

f) 2010 - 2011 1715.29 Commissioner of Income Tax Appeals-Mumbai

Sub Total 1761.90

3) Maharashtra Sales Tax

a) 2005-2006-VAT 705.72 Dy.Commissioner of Sales Tax -Appeal-VI

b) 2005-2006-CST 23.11 Dy.Commissioner of Sales Tax -Appeal-VI

c) 2008-2009-VAT 633.44 Dy.Commissioner of Sales Tax -Appeal-VI

d) 2009-2010-VAT 33.19 Maharashtra Sales Tax Tribunal

Sub Total 1395.46

Total 3551.82

c) No amount has become transferable to investor education and protection fund in accordance with the relevant provisions of the Companies Act 2013.

viii) The company has been registered for a period of more than five years we therefore offer no comments regarding the accumulated losses being or not being more than 50% of its net worth.

ix) Based on our audit procedures and on the information and explanation given by the management, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holder

x) On the basis of the information and explanation given to us the company during the year has not given corporate guarantee for loans taken by others from banks.We therefore are unable to comment on , the terms and conditions thereof being or not being prima-facie prejudicial to the interest of the company.

xi) Based on the audit procedures performed and information and explanation given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

Place: Mumbai

Date: 15th ,May 2015

(CA Rakesh K. Milwani) Propreitor: Milwani Associates Membership No.36099 Firm Registration No.106405W




Mar 31, 2014

We have audited the accompanying financial statements of MANGALAM DRUGS & ORGANICS LIMITED(" the Company"),which comprise the Balance sheet as at 31st March, 2014, the Statement of Profit & Loss and the Cash Flow Statement of the Company for the year ended,and a sum- mary of the 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 true & fair view of the financial position,financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act ,1956 (the Act)read with the General Circular 15/2013 dated 13th Sepetember,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Company''s Act,2013 and in accordance with the accounting principles generally accepted in India .This responsibility includes the design,implementation and maintainence of internal control relevant to the preparation and presentation of the financial statements that give true and fair view and are free from material misstatement,whether due to fraud or error.

AUDITOR'' 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 the 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 the disclosures in the financial statements.The procedures select depend on the auditor''s judgement,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 the internal control relevant to the Company''s preparation and fair presentation of the fianancial statements in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the ap- propriateness of accounting policies used and the reasonableness of the accounting estimates made by the 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 principals generally accepted in India:

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

(b) In the case of the Statement of Profit and Loss,of the Loss of the Company for the year ended on that date,and

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order,2003("the Order") issued by the Central Government of India in terms of 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 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 it appears from our examination of those books.

(c) The Balance Sheet,Statement of Profit and Loss,and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013.

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

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

(b) The fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the company and the nature of its asset. The discrepancies noticed have been properly dealt with in the books of accounts.

(c) The asset disposed off during the year are not significant and therefore do not affect the going concern assumptions. ii) (a) The physical verification of inventory has been conducted at reasonable intervals by management.

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

(c) In our opinion the company has maintained proper records of inventory. The discrepancies between physical stock and the book stock were not material and have been properly dealt with in the books of accounts.

iii) As informed to us, during the year the company has not granted or taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Act.

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

v) (a) Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that the transaction that need to be entered into the register maintained under section 301 of the Act have been properly entered in the said register.

(b) In our opinion and according to the information and explanations given to us, the transactions entered in the registers maintained under section 301 and exceeding during the year by Rupees five lakh in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The company has not accepted any deposits from the public.

vii) The internal audit function carried out during the year by a firm of chartered accountant appointed by the company and the same is in our opinion, is commensurate with its size and nature of its business.

viii) The Company is maintaining cost records as prescribed by Central Government under section 209 (1) (b) of the Companies Act 1956 for the Company.

ix) a) According to the information and explanation given to us the company is generally regular in depositing undisputed statutory dues including Provident Funds, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues wherever applicable with appropriate authorities. There is no outstanding dues for a period of more than six months from the date they become payable.

b) The following are the disputed dues which have not been deposited:

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

1) Excise Duty & Service Tax

a) 2009-10 5.00 CESTAT, Ahmedabad.

b) 2011-12 24.82 Commissioner (Appeals)-Daman

c) 2011-12 364.64 Commissioner Central Excise & service tax- Dama Sub Total 394.46

2) Income Tax

a) 2002 – 2003 00.86 Income Tax Appellant Tribunal Mumbai

b) 2003 – 2004 00.88 Income Tax Appellant Tribunal Mumbai

c) 2004 – 2005 22.09 Income Tax Appellant Tribunal Mumbai

d) 2005 – 2006 1.36 Commissioner of Income Tax Appeals- Mumbai

e) 2006 – 2007 21.42 Commissioner of Income Tax Appeals- Mumbai

f) 2010 – 2011 1715.29 Commissioner of Income Tax Appeals- Mumbai

Sub Total 1761.90

3) Maharashtra Sales Tax

a) 2005-2006-VAT 705.72 Dy.Commissioner of Sales Tax –Appeal-VI

b) 2005-2006-CST 23.11 Dy.Commissioner of Sales Tax –Appeal-VI

c) 2008-2009-VAT 633.44 Dy.Commissioner of Sales Tax –Appeal-VI

d) 2009-2010-VAT 33.19 Dy.Commissioner of Sales Tax –Appeal-VI

Sub Total 1395.46

Total 3551.82

x) The company neither has accumulated losses at the end of the financial year nor has incurred cash losses during the year and in the immediately year preceding.

xi) Based on our audit procedures and on the information and explanation given by the management, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holder.

xii) Based on our examination and 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.

xiii) The company is not a chit/nidhi/mutul benefit fund/society and therefore clause xiii of the order is not applicable.

xiv) The company is not dealing or trading in shares, securities, debentures and other investment.

xv) On the basis of the information and explanation given to us the company during the year has not given corporate guarantee for loans taken by others from banks, the terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

xvi) In our opinion, the term loans were applied for the purpose for which they were raised.

xvii) On the basis of our examination of the books of accounts and the information and explanation given to us, in our opinion, the funds raised on short-term basis have not been used for long term investment.

xviii) During the year, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

xix) The company did not have any outstanding debentures during the year.

xx) The Company has not raised any money by public issues during the year.Accordingly ,the question of disclosure of end use of such monies does not arise.

xxi) Based on the audit procedures performed and information and explanation given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

(CA. RAKESH K. MILWANI) PROPRIETOR: MILWANI ASSOCIATES

Place : Mumbai Membership No.036099

Date : 29th, May 2014 Firm Registration No. 106405w


Mar 31, 2012

1. We have audited the attached Balance Sheet of MANGALAM DRUGS & ORGANICS LIMITED as at 31st March, 2012, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standard generally accepted in India. These Standard require that we plan and perform the audit to obtain reasonable assurance 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. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

4. 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.

5. 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 books and records.

6. The Company has received written representation from the directors as on 31st March, 2012 and on the basis of those representation, we report that none of the director is disqualified from being appointed as director under Section 274 (1)

(g) of the Companies Act, 1956.

7. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement are in agreement with the books of Account.

8. In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and give true and fair views :

a) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

b) In so far as it relates to the Profit and Loss Account, of the Profit of the Company for the year ended on that date.

c) In so far as it relates to the cash flow statement, of the cash flows of the company for the year ended on that date.

Annexure to the Auditors report of the even date to the Members

i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation

of fixed assets.

(b) The fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the company and the nature of its asset. The discrepancies noticed have been properly dealt with in the books of accounts.

(c) The asset disposed off during the year are not significant and therefore do not affect the going concern assumptions.

ii) (a) The physical verification of inventory has been conducted at reasonable intervals by management.

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

(c) In our opinion the company has maintained proper records of inventory. The discrepancies between physical stock and the book stock were not material and have been properly dealt with in the books of accounts.

iii) As informed to us, during the year the company has not granted or taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Act.

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

v) (a) Based on the audit procedures applied by us and according to the information and explanation provided by the

management, we are of the opinion that the transaction that need to be entered into the register maintained under section 301 of the Act have been properly entered in the said register.

(b) In our opinion and according to the information and explanations given to us, the transactions entered in the registers maintained under section 301 and exceeding during the year by Rupees five lakh in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The company has not accepted any deposits from the public.

vii) The internal audit function carried out during the year by a firm of chartered accountant appointed by the company and the same is in our opinion, is commensurate with its size and nature of its business.

viii) The Company is maintaining cost records as prescribed by Central Government under section 209 (1) (b) of the Companies Act 1956 for the Company.

ix) a) According to the information and explanation given to us the company is generally regular in depositing undisputed

statutory dues including Provident Funds, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues wherever applicable with appropriate authorities. There is no outstanding dues for a period of more than six months from the date they become payable. _

b) The following are the disputed dues which have not been deposited :



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

1) Excise Duty & Service Tax

a) 2004 - 05 5.00 CESTAT, Ahmedabad

b) 2007-08 2.52 CESTAT,Ahmedabad._

c) 2010-11 5.78 Commissioner (Appeals)

TOTAL 13.30

2) Income Tax

a) 2000 - 01 19.80 Income Tax Appellant Tribunal

b) 2001 - 02 5.65 Income Tax Appellant Tribunal

c) 2002 - 03 00.86 Income Tax Appellant Tribunal

d) 2003 - 04 00.88 Income Tax Appellant Tribunal

e) 2004 - 05 22.09 Income Tax Appellant Tribunal

f) 2005 - 06 1.36 Commissioner of Income Tax Appeals

g) 2006-07 21.42 Commissioner of Income Tax Appeals

TOTAL 72.06



N.B.:- The above demands of Income tax have been shown as they existed without considering the appeal relief in some of the appeals which have been decided.

x) The company neither has accumulated losses at the end of the financial year nor has incurred cash losses during the year and in the immediately year preceding.

xi) Based on our audit procedures and on the information and explanation given by the management, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holder.

xii) Based on our examination and 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.

xiii) The company is not a chit/nidhi/mutul benefit fund/society and therefore clause xiii of the order is not applicable.

xiv) The company is not dealing or trading in shares, securities, debentures and other investment.

xv) On the basis of the information and explanation given to us the company has given corporate guarantee for loans taken by others from banks, the terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

xvi) In our opinion, the term loans were applied for the purpose for which they were raised.

xvii) On the basis of our examination of the books of accounts and the information and explanation given to us, in our opinion, the funds raised on short-term basis have not been used for long term investment.

xviii) During the year, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

xix) The company did not have any outstanding debentures during the year.

xx) Based on the audit procedures performed and information and explanation given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

(CA. RAKESH K. MILWANI)

PROPRIETOR: MILWANI ASSOCIATES

Membership No.36099

Firm Registration No. 106405W

Place: Mumbai

Date : 23rd July, 2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of MANGALAM DRUGS & ORGANICS LIMITED as at 31 st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the 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 standard generally accepted in India. These Standard require that we plan and perform the audit to obtain reasonable assurance 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. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956,

4. 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.

5. 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 books and records.

6. The Company has received written representation from the directors as on 31 st March, 2010 and on the basis of those representation, we report that none of the director is disqualified from being appointed as director under Section 274 (1) (g) of the Companies Act, 1956.

7. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement are in agreement with the books of Account.

8. In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and give true and fair views :

a) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010

b) In so far as it relates to the Profit and Loss Account, of the Profit of the Company for the year ended on that date.

c) In so far as it relates to the cash flow statement, of the cash flows of the company for the year ended on that date.

Annexure to the Auditors report of the even date to the Members

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

(b) The fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the company and the nature of its asset. The discrepancies noticed have been properly dealt with in the books of accounts.

(c) The asset disposed off during the year are not significant and therefore do not affect the going concern assumptions. ii) (a) The physical-verification of inventory has been conducted at reasonable intervals by management.

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

(c) In our opinion the company has maintained proper records of inventory. The discrepancies between physical stock and the book stock were not material and have been properly dealt with in the books of accounts.

iii) As informed to us, during the year the company has not granted or taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Act.

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

v) (a) Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that the transaction that need to be entered into the register maintained under section 301 of the Act have been properly entered in the said register.

(b) In our opinion and according to the information and explanations given to us, the transactions entered in the registers maintained under section 301 and exceeding during the year by Rupees five lakh in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The company has not accepted any deposits from the public.

vii) The internal audit function carried out during the year by a firm of chartered accountant appointed by the company and the same is in our opinion, is commensurate with its size and nature of its business.

viii) The Company is maintaining cost records as prescribed by Central Government under section 209 (1) (b) of the Companies Act 1956 for the Company.

ix) a) According to the information and explanation given to us the company is generally regular in depositing undisputed statutory dues including Provident Funds, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues wherever applicable with appropriate authorities. There is no outstanding dues for a period of more than six months from the date they become payable.

b) The following are the disputed dues which have not been deposited :

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

1) Excise Duty & Service tax

a) 2004-05 5.00 CESTAT, Ahmedabad

b) 2005-06 30.17 Commissioner (Appeals)

c) 2006-07 47.78 Commissioner (Appeals)

d) 2007-08 39.79 Commissioner (Appeals)

e) 2008-09 17.72 Commissioner (Appeals)

f) 2009-10 8.09 Commissioner (Appeals)

Total 148.55

2) Income Tax

a) 2000-01 22.68 Income Tax Appellant Tribunal

b) 2001-02 57.94 Income Tax Appellant Tribunal

c) 2002-03 00.86 Income Tax Appellant Tribunal

d) 2003-04 00.88 Income Tax Appellant Tribunal

e) 2004-05 12.60 Income Tax Appellant Tribunal

f) 2005-06 1.36 Commissioner of Income Tax

g) 2006-07 5.22 (Appeals)

Total 101.54

i) The company neither has accumulated losses at the end of the financial year nor has incurred cash losses during the year and in the immediately year preceding.

ii) Based on our audit procedures and on the information and explanation given by the management, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holder.

iii) Based on our examination and 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.

iv) The company is not a chit/nidhi/mutual benefit fund/society and therefore clause xiii of the order is not applicable.

v) The company is not dealing or trading in shares, securities, debentures and other investment.

vi) On the basis of the information and explanation given to us the company has given corporate guarantee for loans taken by others from banks, the terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

vii) In our opinion, the term loans were applied for the purpose for which they were raised.

viii) On the basis of our examination of the books of accounts and the information and explanation given to us, in our opinion, the funds raised on short-term basis have not been used for long term investment.

ix) During the year, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

x) The company did not have any outstanding debentures during the year.

xi) Based on the audit procedures performed and information and explanation given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.



(RAKESH K. MILWANI)

PROPRIETOR: MILWANI ASSOCIATES

Membership No.36099

Place : Mumbai

Date: 29-05-2010





 
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