Mar 31, 2015
We have audited the accompanying financial statements of RAJ OIL MILLS
LIMITED, (the "Company"), which comprise of the Balance Sheet as at
March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters in
section 134(5) of the Companies Act, 2013 ("the Act") with respect to
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 principles generally
accepted in India, including the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes the maintenance of
adequate accounting records in accordance with the provision of the Act
for safeguarding of the assets of the Company and for preventing and
detecting the frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and design, implementation
and maintenance of internal financial control, that were operating
effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under.
We have conducted our audit in accordance with the Standards on
Auditing specified under section 143(10) of the Act. Those Standards
require that we comply with ethical 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 financial control relevant to the Company's
preparation of the financial statements that give true and fair view 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 Company's Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements, give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
b) in the case of the Statement of Profit and Loss, Loss of 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.
Emphasis of Matters
We draw attention to the following matters in the Notes to the
financial statements:
a) In the financial statement which indicates that the Company has
accumulated losses and its net worth has been fully eroded, the Company
has incurred a net cash outflow during the current and previous year
(s) and, the Company's current liabilities exceeded its current assets
as at the balance sheet date. However, the financial statements of the
Company have been prepared on a going concern basis for the reasons
stated in the said Note.
b) The Company is required to maintain the cost record for the
manufacturing process but has not maintained the cost of material
consumed on actual consumption basis, instead accounted for the
difference of inventory as "presumed to be consumed " against
production cost of unit produced, resultantly all the normal and
abnormal losses (if any) are adjusted in the production cost.
Our opinion is not modified in respect of this matter.
Report on other Legal and Regulatory Requirements
As required by section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit.
b) In our opinion proper books of account as required by law have been
kept by the company so far as appears from our examination of those
books.
c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e) In our opinion Directors of the Company are disqualified as on 31st
March 2015 from being appointed as Director in terms of clause (b) of
sub-section (2) of section 164 of the Companies Act, 2013 on account of
non-payment of public deposit.
f) With respect to the other matters included in the Auditor's Report
and to our best of our information and according to the explanations
given to us :
i. The companydid not have any long-term contracts including
derivatives contracts for which there were any material foreseeable
losses.
ii. There are no amounts which required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure to the Auditors' Report
The Annexure referred to in our Independent Auditor's report to the
Members of Raj Oil Mills Limited on the financial statements for the
year Ended 31st March, 2015. We report that:
(i) (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of its
fixed assets;
(b) The Company has a program of verification of fixed assets to cover
all the items in a phased manner which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
Pursuant to the program, certain fixed assets were physically verified
by the Management during the year. According to the information and
explanations given to us no material discrepancies were noticed on such
verification
(ii) (a) Physical verification of inventory has been conducted at
reasonable intervals by the management.
(b) In our opinion and according to the information and explanation
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) On the basis of our examination of inventory records, we are of the
opinion that the Company is maintaining proper records of inventory.
The discrepancies noticed on physical verification of inventory as
compared to book records, were not material enough.
(iii) In respect of loans, the Company has not granted secured and
unsecured loan to companies, firms or other parties covered in the
register maintained under section 189 of the Companies Act, 2013.
Accordingly, the clause 3(iii) (a) and 3(iii) (b) of the Order are not
applicable.
(iv) In our opinion and according to the information and explanation
given to us, the Company has adequate internal control system in place,
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 except in some cases materials are purchased
for alternative source are not readily available for obtaining
comparable quotations. The company needs to take appropriate steps for
purchase of material.
(v) In our opinion and according to the information and explanation
given to us, the company has complied with the provision of sections 73
to 76 or any other relevant provision thereof, except for the default
in repayment of Principal and payment of interest there on during the
year, for compliance with the 'Companies (Acceptance of Deposits)
Rules,1975' with regard to the deposits accepted from the public.
According to the information and explanation given to us,order has been
passed by the Company Law Board or National Company Law Tribunal or any
court or any other Tribunal on the company for the repayment of the
said deposit along with up-to date interest in respect of complaints
received on aforesaid deposits. As per information given to us company
has been registered under BIFR before 31/03/2015 and already filed a
petition with Registrar of Company(ROC), Company Law Board (CLB) and
BIFR for repayment of Public Deposit.
(vi) Maintenance of cost records has been specified by the Central
Government under sub-section (1) of section 148 of the Companies Act,
to the company , however as per information and explanation given to
us, the company is in the process to compliance with the prescribed
records.
(vii) (a) According to the information and explanations given to us,
undisputed amounts payable in respect of provident
fund, income tax, sales tax, wealth tax, service tax, duty of customs,
value added tax, cess and other material statutory dues were in arrears
as at 31 March 2015 for a period of more than six months from the date
they became payable are mentioned here under.
Name of the statute Amount outstanding for more than
6 months as on 31/03/2015
(Excluding Interest) (in Crores.)
Provident Fund 0.49
Employees State
Insurance 0.04
Income Tax 16.03
T.D.S. 1.39
Professional Tax 0.11
MVAT 8.83
Service Tax 0.16
(b) According to the information and explanations given to us, the
detail of statutory dues of sales tax which have not been deposited on
account of dispute is as under.
Name of the Nature of Amount (in Period to Fourm
statute dues Crores) which the where
amount dispute
relates is pending
Sales Tax Sales Tax 9.84 F.Y 05-06 and Sales Tax
08-09 Appeal
Income Tax Income Tax 225.22 F.Y 05-06 to CIT Appeal
11-12
Income Tax Income Tax 16.03 F.Y 05-06 to ITAT
11-12
(c) There are no amounts which required to be transferred to the
Investor Education and Protection Fund by the Company in accordance
with the relevant provision of the companies Act 2013 and rules made
there under.
(viii) The accumulated losses of the company at the end of the
financial year exceeds more than fifty percent of its net worth (100%
networth eroded) and it has generated cash loss in current financial
year and incurred cash loss in the immediately preceding financial
year.
(ix) According to the records of the company examined by us and the
information and explanation provided to us, the Company has defaulted
in repayment of dues to financial institution, Bank or fixed deposit
holders as at the balance sheet date as follows:
Sr. Particulars Principal and Interest
No. (Amount in Crores)
Fund Based
1 SVC Term Loan 0.40*
2 Edelweiss Assets Reconstruction Co. Ltd. 68.07*
3 SVC (C/C) 23.29*
4 Public Deposits (inclusive of interest) 6.84
5 Inter-Corporate Deposit 0.66*
Non Fund Based
1 SICOM (Bill Discounting) 11.56*
2 SIDBI (Bill Discounting) 2.40*
3 IFCI Factors(Bill Discounting) 9.92*
* - Exclusive of Interest
(x) In our opinion, and according to the information and explanations
given to us, The Company has not given any guarantee for loans taken by
others from bank or financial institution during the year.
(xi) In our opinion, and according to the information and explanation
given to us, The Company has not applied for any term loan.
(xii) According to information and explanations given to us there were
no fraud noticed or reported by company for the year under review.
For B. M. Gattani & Co.
Chartered Accountants
FRN: 113536W
Sd/-
B. M. Gattani
Date: 30/05/2015 Proprietor
Place: Mumbai. Membership No. 047066
Mar 31, 2014
1. We have audited the accompanying financial statements of RAJ OIL
MILLS LIMITED, (the "Company"), which comprise the Balance Sheet as at
March 31, 2014 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, which we have
signed under reference to this report.
Management''s Responsibility for the Financial Statements
2. The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and Cash Flows of the Company in
accordance with the Accounting Standards referred to in sub-section
(3C) of the section 211 of ''the Companies Act, 1956'' of India read with
general circular 15/2013 dated September 13, 2013 of the Ministry of
Corporate Affairs in respect of Sec. 133 of the Company Act 2013. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. We have conducted our audit in accordance with auditing standard
generally accepted in India except with regard to under mentioned point
a to d, where we have not been able to perform the audit in conformity
with the relevant auditing standards on account of unavailability of
audited documents and information.
a. As Regards Trade receivables & Loans & Advances aggregating of Rs.
280.38 crores have been provided for Exceptional Item and Bad
Debts/Balance Written off during the year and same was already approved
by the management. However, Trade receivables from a party are also
adjusted against Trade Payables to other party without any contractual
arrangement between such Parties.
b. In the absence of details testing of Impairment of Assets viz.
Production / Refinery Plant which were completely non-operational
during the period under audit, we are unable to state whether provision
if any, is required to be made in this regard.
c. In consideration of prudence, of prudence, the Company has not
recognized deferred tax. As per Accounting Standard 22 in financial
statement in the current year, since it is not virtually certain
whether the company will have the sufficient taxable income in near
future against which such deferred tax liabilities can be set off. The
same would be considered at appropriate time keeping in view of the
availability of sufficient future taxable income against which Deferred
Tax Liabilities can be realized.
d. The Company is required to maintain the cost record for the
manufacturing process but has not maintained the cost of material
consumed on actual consumption basis, instead accounted for the
difference of Inventory as "presumed to be consumed "against production
cost of unit produced, resultantly all the normal and abnormal losses
(if any) are adjusted in the production cost.
4. Our responsibility is to express an opinion on these financial
statements based on our audit. Except for matters mentioned in point no
3, We conducted our audit in accordance with the Standards on Auditing
and other applicable authoritative pronouncements 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.
5. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' 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 auditors consider internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by Management, as well
as evaluating the overall presentation of the financial statements.
6. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
1. In our opinion, and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) In the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
2. As required by ''the Companies (Auditor''s Report) Order, 2003'', as
amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'',
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the
Act (hereinafter referred to as the "Order"), and on the basis of such
checks of the books and records of the Company as we considered
appropriate and according to the information and explanations given to
us, we give in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the Order.
3. As required by Section 227(3) of the Act, we report that:
Except for matters reported earlier in this report
(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) In our Opinion Directors of the company are disqualified as on 31st
March 2014 from being appointed as director in terms of clause (g) of
sub-section of (1) of Section 274 of the Companies Act, 1956 on account
of nonpayment of Public Deposit.
(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 dealt with by this report comply with the
Accounting Standards notified under the act read with general circular
15/2013 dated September 1 3, 201 3 of the Ministry of Corporate Affairs
in respect of Sec. 1 33 of the Company Act, 201 3.
ANNEXURE TO AUDITORS'' REPORT
(Referred to in Paragraph 7 of our Independent Auditor'' Report of even
date on the financial statements as of and for the
year ended 31st March, 2014)
We report that:
In respect of fixed assets:
(i) (a) RAJ OIL MILLS LIMITED in respect of fixed assets generally
maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) As informed to us, a major portion of the fixed assets has been
physically verified by the management during the year in accordance
with a phased program of verification adopted by the company. In our
opinion and as per the information received the frequency of
verification is reasonable having regard to the size of the company &
nature of its assets. As informed to us, no material discrepancies were
noticed on such physical verification. However we have not received any
report on physical verification of asset being conducted by the
Management for the current year.
(c) No substantial part of the fixed assets has been disposed off
during the year, which has a bearing on the going concern assumption.
(ii) (a) As explained to us, the inventory has been physically verified
by the management during the year end. In our opinion the frequency of verification is reasonable as per accounting standards & practices.
(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) On the basis of our examination of inventory records, we are of the
opinion that the Company is generally maintaining proper records of
inventory. The discrepancies noticed on physical verification of
inventory as compared to book records, which were not material enough.
(iii) (a) In respect of loans, according to the information and
explanations given to us, the Company has not granted any secured or
unsecured loans to companies, firms or other parties covered in the
register to be maintained under section 301 of the Companies Act,
1956. Accordingly clauses (iii) (a) to (d) of paragraph 4 of the
Order are not applicable.
(e) The Company has taken unsecured loans, from two Parties covered in
the register maintained under Section 301 of the Act. The maximum
amount involved during the year and the year-end balance of such loans
aggregated to Rs. 319.17 lakhs and Rs. 304.24 lakhs, respectively. As
informed to us they are interest free loans, therefore there is no
interest paid or provided for on these unsecured loans during the year,
and hence the clauses (iii) (f) & (iii) (g) of paragraph 4 of the said
order are not applicable to the Company.
(iv) In our opinion, and according to the information and explanations
given to us, except for weaknesses in internal controls for collection
from debtors and in area of sales and purchased for which the
Management is yet to take remedial measures, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business. Further, on the basis of our examination of
the books and records of the Company, and according to the information
and explanations given to us, we have neither come across nor have been informed of any other continuing failure to correct major weaknesses in
the aforesaid internal control system. The internal control system
however needs to be strengthened in the following areas:
(a) Obtaining periodic confirmation of balances outstanding and
reconciliation and follow up there -off of amounts due from/to debtors,
creditors, and balances under other account heads.
(b) Pursuant to the management information and decision in respect
debts which are appearing in the books for more than 2years, It has
been informed by management upon their taking decision to write off the
same. In view of the facts that the same are not recoverable despite
regular follow up even there is a special appointment of Chartered
Accountant firm to ensure correct off. Accordingly the same has been
done.
(v) (a) According to the information and explanation given to us, we
are of the opinion that the Company has not entered all the transactio
-ns required to be entered in the register maintained under section
301 of the Companies Act, 1 956. b) In our opinion, and according to
the information and explanations given to us, the transactions made
in pursuance of such contracts or arrangements and exceeding the value
of Rupees Five Lakhs in respect of any party during the year have been
made at prices which are reasonable having regard to the prevailing
market prices at the relevant time.
(vi) In our opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions thereof, except for
default in repayment of Principal and payment of interest there on
during the year, for compliance with the ''Companies (Acceptance of
Deposits) Rules, 1975'' with regard to the deposits accepted from the
public. According to the information and explanations given to us,
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal on
the Company in respect of the aforesaid deposits.
(vii) In our opinion the Company has internal audit system commensurate
with the size and nature of its business, we recommend that the
internal control system needs to be further strengthened.
(viii) The Central Government of India has prescribed the maintenance
of cost records under clause (d) of sub-section (1) of Section 209 of
the Act. However, according to the information and explanation given to
us, the prescribed accounts and records have not been made.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, 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 have not been
regularly deposited with the appropriate authorities and there have
been serious delays in a large number of cases.
Name of Statute Amount outstanding for more than 6 months
as on 31/03/2014 (Excluding Interest)
(Amount in Crores)
Provident Fund 0.52
Employees state insurance 0.05
Income Tax 16.03
T.D.S. 1.01
Professional tax 0.09
MVAT 6.58
Service Tax 0.10
Following undisputed statutory dues payable for a period of more than
six month from the date they became payable as at end of the financial
year are as follows:
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income tax, sales tax, wealth tax, service tax, customs duty and excise
duty as 31st March 2014 which have not been deposited on account of a
dispute are as follows:
Name of Statute Nature of Amount Period to which Forum where
Dues (in Crores) the amount relates dispute is
pending
Income Tax Income Tax 169.79 AY 05-06 to 11-12 CIT(Appeal)
Sales Tax (Inv) MVAT 38.52 F.Y. 05-06 to 12-13 Sale tax
(Appeal)
(x) The accumulated losses of the Company exceeded fifty percent of its
net worth as at 31st March 2014 and it has incurred cash losses of
286.11 Crores in the financial year ended on that date and 1 6.3 Crores
in the immediately preceding financial year.
(xi) According to the records of the Company examined by us and the
information and explanations given to us, it has defaulted in repayment
of dues to financial institution, banks or fixed deposit holders as at
the balance sheet date. The details of the defaults of repayment are
as follows.
Sr. no. Particulars Principal and Interest (Amounts in Crores)
1 SVC Term Loan 0.39
2 SVC (C/C) 23.28
3 Edelweiss Assets Reconstruction Co. Ltd (EARC) 68.07
4 Public Deposits 4.75
5 IFCI, SICOM, SIDBI, (Bill Discounting) 26.56
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities. Therefore, the provisions of Clause 4(xii) of the Order are
not applicable to the Company.
(xiii) As the provision of any special statue applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
company, the clause 4(xiii) order not applicable to the Company.
(xiv) In our opinion the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly the
provisions of clause 4(xiv) of the order are not applicable.
(xv) In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 4(xv) of the Order are not
applicable.
(xvi) The Company has not raised any term loans. Accordingly the
provisions of the clause 4(xvi) of the order are not applicable.
(xvii) The Company has not raised any loans on short term basis.
Accordingly, the provisions of Clause 4(xvii) of the Order are not
applicable to the Company.
(xviii) The Company has not made any preferential allotment of shares
to the parties and companies covered in the register maintained under
section 301 of the Act during the year. Accordingly, the provisions of
clause 4(xviii) of the order are not applicable to the company.
(xix) The Company has not issued any debentures during the year and
does not have any debentures outstanding as at the beginning of the
year and at the year end. Accordingly, the provisions of Clause 4(xix)
of the Order are not applicable.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, the provisions of Clause 4(xx) of the Order are not
applicable to the Company.
(xxi) During the course of our examination of books of Accounts and the
records of the RAJ OIL MILLS LIMITED, carried out in accordance with
the generally accepted auditing practices in India and according to the
information and explanation given to us, we have neither come across
any instance of material fraud on or by the Company, noticed or
reported during the year, nor we have been informed of any such case by
the management.
For B. M. Gattani & Co.
Chartered Accountants
FRN: 113536W
B. M. Gattani
Date: 29th May, 2014 Proprietor
Place: Mumbai Membership No. 047066
Mar 31, 2013
1. We have audited the attached Balance Sheet of RAJ OIL MILLS LIMITED
as at 31st March 2013 and also the Statement of Profit & Loss and the
Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the CompanyÂs
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We have 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. The audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. The audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation for correctness and observation of standards. We believe
that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order 2003, as
amended by the Companies (Auditors Report) (Amendment) order, 2004,
issued by the Central Government in terms of Section 227(4A) of the
Companies Act 1956. We enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the said order.
4. Further to our comments in the annexure referred to in Paragraph 3
above, we report that:
a) We have obtained all the information and explanations, checked the
required books of accounts, which to the best of our knowledge and
belief were necessary for the purpose of our audit.
b) In our opinion the company has kept proper books of Accounts as
required by law so far, as appears from our examination of such books.
c) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with this report are in agreement with the Books of
Account.
d) In our opinion the Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement comply with the Accounting Standards, referred in
to sub section (3C) of section 211 of the Companies Act, 1956.
e) On the basis of written representations received from the Directors,
and taken on record by Board of Directors, we report that none of the
Directors is disqualified as on 31st March 2013 from being appointed as
director in terms of clause (g) of sub-section of (1) of Section 274 of
the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us the said Balance Sheet and Profit & Loss
account read together with the Notes thereon give a true & fair view:
except balance:
i) In the case of Balance Sheet of the state of affairs of the company
as at 31st March, 2013 and ii) In the case of Statement of Profit &
Loss, of the Loss for the year ended on that date. iii) In the case of
Cash Flow Statement, of the Cash Flow for the year ended on that date.
ANNEXURE TO AUDITORSÂ REPORT
[Referred to in paragraph 3 of the Auditors Report of even date to the
members of RAJ OIL MILLS LIMITED on the financial statements for the
year ended 31/03/2013]
i. 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 Fixed Assets of the Company have been
physically verified by the Management during the year and no material
discrepancies between thebook records and the physical inventory have
been noticed. In our opinion, the maintained books and the frequency of
verification is reasonable.
c. In our opinion and according to the information and explanations
given to us, theCompany has not disposed of substantial part of Fixed
Assets during the year.
ii. a. As explained to us, the inventory of the Company has been
physically verified by the Management during the year. In our opinion,
the frequency of verification is reasonable as per accounting standards
& practices.
b. In our opinion, and according to the information and explanation
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. They are in
line with the practice followed by the oil industry.
c. In our opinion and according to the information and explanations
given to us, the company has maintained proper records of inventory.
The discrepancies noticed on physical verification of inventory as
compared to book records were not material and significant.
iii. a. The company has not granted loans, secured or unsecured, to any
parties covered in theregister maintained under Section 301 of the Act
during the year.
In our opinion and according to the information and explanation given
to us, the rate of interest, where applicable and other terms and
condition, are not prima facie prejudicial to the interest of the
company.As there is no interest paid or provided on unsecured loans
clauses (iii)(b),(iii)(c ) &(iii)(d) of paragraph 4 of the said Order
are not applicable to the Company.
b. As informed to us, the Company has taken unsecured loans of Rs.0.91
Crores
(Previous Year Rs. 10.42Crores) from Directors of the company. As there
is no interest paid or provided on unsecured loans clauses (iii)(f),
&(iii)(g) of paragraph 4 of the said Order are not applicable to the
Company.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systemscommensurate
with the size of the Company and the nature of its businessexcept with
regard to purchase of inventory.
v. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956 :
a. In our opinion and according to the information and explanations
providedby the management, we are of the opinion that the transactions
that need to be entered into the register maintained under Section 301
of the companies Act, 1956 have been entered in the register required
to be maintained under that section and are in order.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered into the register in pursuance of Section 301 of
the Act, and exceeding the value of Rupees Five Lakhs in respect of any
party during the year, have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi. Thecompany has not accepted during the year any deposits from the
public under the provision of Section 58A and 58AA or any relevant
provision of the companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975.
vii. In our opinion, an internal audit functions carried out during the
year by firm of Chartered Accountants appointed by the management have
been commensurate with the size of the Company and the nature of its
business.
viii. We have been informed that the Company is maintaining Cost
records as prescribed by the Central Government under clause (d) of
sub-section (1) of Section 209 of the Act.
ix. a. According to the information and explanations given to us and as
per the records of the Company examined by us, in our opinion, the
Company is regularin depositing the undisputed statutory dues including
provident fund, employees state insurance, income-tax and other
material statutory dues as applicable with the appropriate authorities
except the following undisputed statutory dues payable for a period of
more than six months from the date they became payable as at end of the
financial year are as follows.:
b. According to the information and explanations given to us and the
records of the Company examined by us, following are dues of sales tax,
income tax, wealth tax, service tax, excise duty and cess, which have
not been deposited on account of any dispute.
x. the company has not any accumulated losses at the end of the
financial year, however company hasincurred cash losses during the
immediately preceding financial year and in the current financial year.
xi. According to the records of the Company examined by us and the
information and explanation given to us, the Company has defaulted in
repayment of dues to the following loans fromFinancial Institution/
Banks/public deposits as at the balance sheet date. The details of the
defaults of repayment is as follows :
xii. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares and other securities.
xiii. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
Company.
xiv. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments. Accordingly the provision
of clause 14 of the Companies (AuditorÂs Report) order, 2003 are not
applicable to the company.
xv. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
xvi. To the best of our knowledge and belief and according to the
information and explanations given to us, the term loans have been
applied for the purposes for which they were obtained.
xvii.On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on the short-term
basis, which have been used for long-term investment.
xviii.The Company has not made any preferential allotment of equity
shares to parties and Companies covered in the register maintained
under Section 301 of the Companies Act, 1956 during the year.
xix. According to the information and explanations given to us, the
Company has not issued any debentures during the year hence provision
of clause 19 of paragraph 4 of the said order are not applicable to the
company.
xx. According to the information and explanations given to us, the
Company has raised Rs. 43.40 Crores by way of GDR issues during the
financial year. The management has disclosed the end use of money
raised by GDR issue (Refer point no. 7 of note 25 (II) )and the same
has been verified by us.
xxi. 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 nor we have been informed of such case by the
management, that causes the financial statements to be materially
misstated.
For B. M.Gattani& Co.,
Chartered Accountants
Firm Reg. No. 113536W
B. M. Gattani
Place: Mumbai Proprietor
Dated: 29th May, 2013 M. No. 047066
Mar 31, 2012
1. We have audited the attached Balance Sheet of RAJ OIL MILLS LIMITED
as at 31st March 2012 and also the Profit & Loss Account and the Cash
Flow Statement 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 have 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. The audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. The audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation for correctness and observation of standards. We believe
that our audit provides a reasonable basisforouropinion.
3. As required by the Companies (Auditors Report) Order 2003, as
amended by the Companies (Auditors Report) (Amendment) order, 2004,
issued by the Central Government in terms of Section 227(4A) of the
Companies Act 1956. We enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the said order.
4. Further to our comments in the annexure referred to in Paragraph 3
above, we report that:
a) We have obtained all the information and explanations, checked the
required books of accounts, which to the best of our knowledge and
belief were necessary for the purpose of our audit.
b) In our opinion the company has kept proper books of Accounts as
required by law so far, as appears from our examination of such books.
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with this report are in agreement with the Books of Account.
d) In our opinion the Balance Sheet, Profit & Loss Account and Cash
Flow Statement comply with the Accounting Standards, referred in to sub
section (3C) of section 211 of the Companies Act, 1956.
e) On the basis of written representations received from the Directors,
and taken on record by Board of Directors, we report that none of the
Directors is disqualified as on 31st March 2012 from being appointed as
director in terms of clause (g) of sub-section of (1) of Section 274 of
the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us the said Balance Sheet and Profit & Loss
account read together with the Notes thereon give a true & fair view:
i) In the case of Balance Sheet of the state of affairs of the company
as at 31st March, 2012 and
ii) In the case of Profit & Loss Account, of the Loss for the year
ended on that date.
iii) In the case of Cash Flow Statement, of the Cash Flow for the year
ended on that date.
[Referred to in paragraph 3 of the Auditors' Report of even date to the
members of RAJ OIL MILLS LIMITED on the financial statements for the
year ended 31/03/2012]
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 Fixed Assets of the Company have been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed. In our opinion, the maintained books and the frequency of
verification is reasonable.
c. In our opinion and according to the information and explanations
given to us, the Company has not disposed of substantial part of Fixed
Assets during the year.
2. a. As explained to us, the inventory of the Company has been
physically verified by the Management during the year. In our opinion,
the frequency of verification is reasonable as per accounting standards
& practices.
b. In our opinion, and according to the information and explanation
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. They are in
line with the practice followed by the edible oil industry.
c. In our opinion and according to the information and explanations
given to us, the company has maintained proper records of inventory.
The discrepancies noticed on physical verification of inventory as
compared to book records were not material and significant.
3. a. As informed to us, the Company has not granted any loans,
secured or unsecured, to Companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
As the Company has not granted any loans, clauses (3)(b), (3)(c),
(3)(d) of paragraph 4 of the said Order are not applicable to the
Company.
b. As informed to us, the Company has taken unsecured loans of Rs.10.42
Crores (Previous Year Rs. 6.89 Crores) from Directors of the company.
As there is no interest paid or provided on unsecured loans clauses
(iv)(f), &(iv)(g) of paragraph 4 of the said Order are not applicable
to the Company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business except with
regard to purchase of inventory.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a. In our opinion and according to the information and explanations
provided by the management, we are of the opinion that the transactions
that need to be entered into the register maintained under Section 301
of the companies Act, 1956 have been entered in the register required
to be maintained under that section and are in order.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered into the register in pursuance of Section 301 of
the Act, and exceeding the value of Rupees Five Lakhs in respect of any
party during the year, have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. The company has accepted deposits from the public under the
provision of Section 58Aand 58AAor any relevant provision of the
companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975.
7. In our opinion, an internal audit functions carried out during the
year by firm of Chartered Accountants appointed by the management have
been commensurate with the size of the Company and the nature of its
business.
8. We have been informed that the Central Government of India has not
prescribed the maintenance of cost records under clause (d) of
sub-section (1) of Section 209 of the Act for any of the products of
the Company.
9. a. According to the information and explanations given to us and as
per the records of the Company examined by us, in our opinion, the
Company is regularin depositing the undisputed statutory dues including
provident fund, employees' state insurance, income-tax and other
material statutory dues as applicable with the appropriate authorities
except the following undisputed statutory dues payable for a period of
more than six months from the date they became payable as at end of the
financial year are as follows.:
(Amount in Crores)
Particulars Amount outstanding
as on 31/03/2012
Provident Fund 0.40
Employees State Insurance 0.02
TDS 0.69
Professional Tax 0.05
MVAT 5.08
APMC Tax 0.02
Subsequently the company has deposited the arrears of all statutory
dues in respect of Provident Fund, Employee State Insurance, and Tax
Deducted at Source, Professional Tax, and APMC Tax as on the date of
Audit Report.
b. According to the information and explanations given to us and the
records of the Company examined by us, following are dues of sales tax,
income tax, wealth tax, service tax, excise duty and cess, which have
not been deposited on account of any dispute.
(Amount in Crores)
Name of Statute Pending to Amount demanded
IncomeTax CIT(A) 1.27
IncomeTax ITAT 0.35
Sales Tax Sales Tax(lnvst.) 1.52
10. The Company has neither accumulated losses nor had any cash losses
in the immediately preceding financial year. However the company has
incurred cash losses during the current financial year.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues except the following loans from Financial
Institution/Banks/public deposits as at the balance sheet date. The
details of the defaults of repayment is as follows:
(Amount in Crores
Particulars Amount(Principal lnterest)
1. SVC Term Loan 0.38
2. City Home Loan(Total) 0.03
3. SVC (C/C) 2.11
4. KVB (C/C) 2.13
5. Public Deposits 0.75
6. IFCI, SICOM, SIDBI
(Bill Discounting) 26.71
12. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
byway of pledge of shares and other securities.
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
Company.
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments. Accordingly the
provision of clause 14 of the Companies (Auditor's Report) order, 2003
are not applicable to the company.
15. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. To the best of our knowledge and belief and according to the
information and explanations given to us, the term loans have been
applied for the purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on the short-term
basis, which have been used for long-term investment.
18. The Company has not made any preferential allotment of equity
shares to parties and Companies covered in the register maintained
under Section 301 of the Companies Act, 1956 during the year.
19. According to the information and explanations given to us, the
Company has not issued any debentures during the year hence provision
of clause 19 of paragraph 4 of the said order are not applicable to the
company.
20. According to the information and explanations given to us, the
Company has not raised any money by way of public issues during the
financial year.
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 nor we have been informed of such case by the
management, that causes the financial statements to be materially
misstated.
For Agarwal Desai & Shah.
Chartered Accountants
Firm Reg. No. 124850W
Rishi Shekhari Partner
M. No. 126656
Place: Mumbai
Dated: 21st August, 2012
Mar 31, 2010
1. We have audited the attached Balance Sheet of Raj Oil Mills Limited
as at 31st March 2010 and also the Profit and Loss Account and the Cash
Flow Statement for the period 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 have conducted our audit in accordance with the auditing
standards generally acceptable 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 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 the management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides
reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act 1956 (The Act), we
enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and 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 Act, subject to non disclosure of details as defined in the
Accounting Standard 15(Refer Note No. 14 of Schedule 23).
(v) On the basis of the written representations received from the
directors as on 31st March 2010 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March 2010 from being appointed as a director in terms of the
clause (g) of sub-section (1) of section 274 of the Act;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with significant
accounting policies and other notes thereon, give the information
required by the Act, in the manner so required and give true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2010;
(b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date and
(c) in the case of the Cash Flow Statement, of the Cash Flow for the
year ended on that date.
Annexure to the Auditors Report Re: Raj Oil Mills Limited
(Referred to in para 3 of our report of even date)
(i) (a) The company has maintained records showing full particulars
including quantitative details and situation of fixed assets.
(b) As explained to us, all the fixed assets of the company 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
nature of its fixed assets. No material discrepancies were noticed on
such verification.
(c) As explained to us, the company has not disposed off any
substantial part of fixed assets during the year, so as to affect the
going concern.
(ii) (a) As explained to us, the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of 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 according to the information and explanations
given to us, the company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
(iii) (a) As informed to us, the company has not granted any loans
secured or unsecured to companies, firms or other parties covered in
the register maintained under section 301 of the Companies Act 1956.
Hence the sub-clauses (b), (c) and (d) are not applicable.
(b) As informed to us, the company has taken unsecured loan of Rs.163
Lakhs from Director, Mr. Shaukat S. Tharadra. As there is no interest
paid or provided on unsecured loan clauses (f) and (g) are not
applicable.
(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 purchases of inventory, fixed assets and with regard to the sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
controls.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangement
referred to in section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
(vi) The company has not accepted any deposits from the public under
the provisions of sections 58A and 58AA or any relevant provisions of
the Companies Act, 1956 and the Companies (Acceptance and Deposits)
Rules, 1975.
(vii) In our opinion, the company have an internal audit system
commensurate with the nature of business
(viii) According to the information given to us, Central Government has
not prescribed the maintenance of cost records under section 209 (1)
(d) of the Act, in case of the Company.
(ix) (a) As per information and explanations given to us, the company
has generally been regular during the year in depositing undisputed
statutory dues including provident fund, employees state insurance,
income tax, sales tax, wealth tax, service tax, excise duty, cess and
other material statutory dues applicable with the appropriate
authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, service tax, excise duty and cess were in outstanding as at 31st
March 2010, for a period of more than six months from the date they
became payable.
(c) According the information and explanation given to us, the disputed
Income Tax penalty aggregating to Rs. 34.72 Lakhs, that have not been
deposited on account of Appeal pending before Commissioner of Income
Tax (Appeals) for A.Y. 2008-09.
(x) The Company does not have accumulated losses at the end of the
year, nor incurred cash losses during the current and the immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayments of dues to
financial institution or banks or debenture.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
Accordingly, clause 4(xii) of the said order is not applicable.
(xiii) 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.
(xiv) In our opinion, the company is not dealing in or trading in
Shares, Securities, Debentures and other investments. Accordingly, the
provision of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the company.
(xv) In our opinion and according to the information and explanations
given to us, Company has not given guarantee for loans taken by others
from a bank of financial institution.
(xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, the term loans have been
applied for the purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that, prima facie, no funds raised on short-term basis have been used
for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made allotment of equity shares on preferential basis
to persons including persons covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debenture and hence provisions of
clause (xix) of paragraph 4 of the said Order are not applicable to the
Company.
(xx) According to the information and explanation given to us, the
company has raised Rs. 11400 Lakhs by way of public issue during the
financial year. The management has disclosed the end use of money
raised by public issue (Refer note No.10 Schedule 23) and the same has
been verified by us.
(xxi) To the best of our knowledge and belief and as per the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year nor we have been informed of
such case by the management.
For M. K. Gohel & Associates
Chartered Accountants
Firm Registration No: 103256W
Mukesh K. Gohel
Proprietor
Membership No. 038823
Place : Mumbai
Date : 3 rd September, 2010
Dec 31, 2008
1. We have audited the attached Balance Sheet of Raj Oil Mills Limited
as at 31 st December 2008 and also the Profit and Loss Account and the
Cash Flow Statement 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 have conducted our audit in accordance with the auditing
standards generally acceptable 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 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 the management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides
reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act 1956 (The Act), we
enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv>In our opinion, the Balance Sheet, Profit and 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 Act;
(v) On the basis of the written representations received from the
directors as on 31 st December 2008 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31 st December 2008 from being appointed as a director in terms of the
clause (g) of sub-section (1) of section 274 of the Act;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with significant
accounting policies and other notes thereon, give the information
required by the Act, in the manner so required and give true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st December 2008;
(b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date and
(c) in the case of the Cash Flow Statement, of the Cash Flow for the
year ended on that date.
Annexure to the Auditors Report (Referred to in para 3 of our report
of even date)
(i) (a) The company has maintained records showing full particulars
including quantitative details and situation of fixed assets. All the
fixed assets of the company 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 nature of its fixed assets. No
material discrepancies were noticed on such verification.
(b) As explained to us, the company has not disposed off any
substantial part of fixed assets during the year, so as to affect the
going concern.
(ii) (a) As explained to us, the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of 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 according to the information and explanations
given to us, the company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
(iii) (a) As informed to us, the company has not granted any loans
secured or unsecured to companies, firms or other parties covered in
the register maintained under section 301 of the Companies Act 1956.
Hence the sub-clauses (b), (c), (d), (e), (f) & (g) are not applicable
(iv) In our opinion and according to the information and explanations
given to us, internal control system is inadequate commensurate with
the size of the company and the nature of its business with regard to
purchases of inventory, fixed assets and with regard to the sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
controls.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangement
referred to in section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lacs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
(vi) The company has not accepted any deposits from the public under
the provisions of sections 58A and 58AA or any relevant provisions of
the Companies Act, 1956 and the Companies (Acceptance and Deposits)
Rules, 1975. No order has been passed by the Company Law Board or
National Company Law Tribunal or Reserve Bank" of India or any Court or
any other Tribunal.
(vii) In our opinion, the company does not have an internal audit
system commensurate with the nature of business.
(viii) According to the information given to us, Central Government has
not prescribed the maintenance of cost records under section 209 (1)
(d) of the Act, in case of the Company
(ix) (a) As per information and explanations given to us, undisputed
statutory dues including provident fund, employees state insurance,
income tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess and other material statutory dues applicable to the company
have generally been regularly deposited with the appropriate
authorities except the following:
(i) During the previous year 2007 the Income Tax Department conducted a
survey on 12th December 2007. The company has accepted the capital
expenditure of Rs. 245.00 Lacs, being wrongly shown as book- debts in
the books of accounts and accepted to rectify the same in the current
year. The department is of the opinion that the same is unaccounted
expenditure and added to the income of current year. The management is
of the opinion that said addition is not likely to effect the income of
the current year.
(ii) Regarding Assessment Year 2006-07, the Deputy Commissioner of
Income Tax passed an Order dated 24/12/08 u/s 143(3) whereby he
assessed our Income at Rs. 25,21,562 u/s 115JB as against the returned
income of Rs. 21,03,958/- and raised a demand of Rs. 13,34,555/- on us.
Our Company has filed an Appeal before the Honble Commissioner Of
Income Tax-Appeals on January 07,2009 against the said order. The case
is still pending.
(iii) Regarding Assessment Year 2005-06, the Deputy Commissioner of
Income Tax passed an Order dated 26/12/07 u/s 143(3) whereby he
assessed our Income at Rs. 65,39,972 u/s 115JB as against the returned
income of Rs. 64,76,225 and raised a demand of Rs. 62,099/- on us. Our
Company has filed an Appeal before the Honble Commissioner Of Income
Tax-Appeals, against the said order. The Company before filing of the
Appeal on 1 st January, 2008 paid the amount of Rs 62,099/-. The case
is still pending.
(iv) For the Assessment Year 2003-04, the Deputy Commissioner of Income
Tax passed Order dated 30 January, 2006 whereby it determined the total
loss of our Company at Rs 1,38,07,305 against loss of Rs 2,58,63,258
declared by our Company. Our Company had filed an Appeal before the
Honble Commissioner Of Income Tax-Appeals to set aside the Order. The
said Appeal was decided against our Company vide Order dated 18th June,
2007 and thereafter, the company has filed appeal against the above
order of the Commissioner of Income Tax (Appeals) before the Income Tax
Appellate Tribunal. The case is still pending.
(v) The Deputy Commissioner of Income Tax passed Order dated 30 March,
2009, along with Demand Notice, whereby he has levied penalty order u/s
271 (1 )(c) of the Income Tax Act, 1961 for amount of Rs. 12,23,870/-
for non - payment of Income Tax assessed for the Assessment Year
2003-04. Our Company had filed an Appeal before the Honble
Commissioner of Income Tax (Appeals) on 8th April, 2009, to set aside
the Order and grant stay against the demand recovery till the disposal
of the appeal.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, service tax, customs duty, excise duty and cess were in arrears,
as at 31 st December, 2008 for a period of more than six months from
the date they became payable.
(c) According the information and explanation given to us, there are no
dues of income tax, sales tax, wealth tax, Service tax, custom duty,
excise duty and cess, which have not been deposited on account of any.
(x) The Company does not have accumulated losses at the end of the
year, nor incurred cash losses during the current and the immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayments of dues to the
banks, except the following:
The Company has vide a Multi-Option Facility Agreement dated March 29,
2008, availed of a credit facility of INR 1,000.00 lakhs from the
Barclays Bank Pic,. As per the terms of the multi-facility agreement,
the Company was required to create a charge on its immovable
properties, movable fixed assets and current assets within 180 days of
the first disbursement of funds. Pursuant to failure of the Company to
furnish such security to Barclays Bank Pic, the lender has vide a
letter dated November 15th, 2008 called upon the Company to repay the
outstanding amount Rs. 4.5 crores in 2 installments Rs. 2 crores by
November 30th, 2008 and the balance Rs. 2.5 crores by December 31st,
2008. The said letter further stipulates that non-payment of the dues
would attract penal interest at 24%p.a. The amount to be repaid as on
date 31st March, 2009isRs. 150.90lacs.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
Accordingly, clause 4(xii) of the said order is not applicable
(xiii) 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.
(xiv) In our opinion, the company is not dealing in or trading in
Shares, Securities, Debentures and other investments. Accordingly, the
provision of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the company.
(xv) In our opinion and according to the information and explanations
given to us, the terms and condition on which the company has given
guarantee for loans taken by others from a bank are not prima facie
prejudicial to the interest of the company. The said guarantees have
been revoked on 27th February 2009.
(xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, the term loans have been
applied for the purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that, prima facie, no funds raised on short-term basis have been used
for long-term investment.
(xviii) The Company has made allotment of equity shares on preferential
basis. Such preferential allotment was made to persons including
persons covered in the register maintained under section 301 of the
Companies Act, 1956. The price at which the said preferential allotment
of equity shares has been made is not prejudicial to the interest of
the company.
(xix) The Company has not issued any debentures or made any public
issue during the year and accordingly clause 4(xix) and 4(xx) of the
said order are not applicable to the company.
(xx) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given to us by the management, we
report that no fraud on or by the company was noticed or reported
during the year.
For M. K. Gohel & Associates
Chartered Accountants
Mukesh K. Gohel
Proprietor
Membership No. 38823
Place: Mumbai
Date: 8th April 2009
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