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Auditor Report of Sharda Motor Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/S SHARDA MOTOR INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated 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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting 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 adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical 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 but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act,2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Companies Act 2013, we report that :

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

c. The Balance Sheet, 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 there are no financial transactions or matters that may have adverse effect on the functioning of the Company

f. On the basis of written representations received from the directors as on March 31,2015 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31,2015 from being appointed as a director in terms of sub-section (2) of section 164 of the Companies Act, 2013;

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

i. On the basis of written representation received from the management of the Company, no litigation is pending against the Company's which would impact its financial position, except mentioned in point no. (vi) & (vii) of Note No. 29.

ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in Paragraph 1 under the heading of "Report on Other Legal & Regulatory Requirements" of our report of even date)

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

(b) As explained to us, physical verification of major fixed assets has been conducted by the management at appropriate intervals. In our opinion, the program is reasonable having regard to the size of the Company and the nature of the fixed assets. No material discrepancies were noticed on such verification.

ii) (a) On the basis of information and explanation provided by the management, Inventories have been physically verified by the

management during the year except the inventories in transit and lying with the third parties. In our opinion, the frequency and the procedure of physical verification followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(b) In our opinion, frequency and 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 is maintaining proper records of inventory. We have been explained that discrepancies noticed on physical verification as compared to book records were not material and the same have been properly dealt with in the books of account.

iii) (a) to (b) According to information and explanation given to us, the company has not granted loan to Companies, firms or other parties covered in the register maintained u/s 189 of the Companies Act, 2013 during the year. Therefore the provisions of the clause (iii) (a) to (b) of the Companies (Auditor's Report) Order, 2015 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 systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices, there is no continuing failure to correct the weaknesses in the aforesaid internal control systems.

v) In our opinion and according to the information and explanation given to us, since the company has not accepted any deposits therefore the question of the compliance of any directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under does not arise.

vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Companies Act, 2013 in respect of its manufactured goods and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii) (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion,

the Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Employees' State insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to it. There was no undisputed amount outstanding at the year end for a period more than six months from the date they become payable except custom duty of Rs.6.59 lacs.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute, are as follows:

S. Name of the Nature of Dues Amount Period to which No. Statute (Rs.) the amt. relates

1. U. P. Entry Tax Act Entry Tax 0.90 lacs F.Y.2001-02

2. Service Tax under Service Tax 11.07 lacs F.Y.2008-09 Finance Act, 1994

3. Central Excise Act CENVAT Credit 2.24 lacs F.Y 2007-08

4. Central Sales Tax Sales Tax 10.74 lacs F.Y.2008-09 Act 5. Central Excise Act CENVAT Credit 440 lacs F.Y.2008-09 & 2009-10

6. Income Tax Act Income Tax 24.04 lacs A.Y.2004-05 7. Income Tax Act Income Tax 39.26 lacs A.Y. 2009-10 8. Income Tax Act Income Tax 39.03 lacs A.Y. 2011-12

9. Indian Contract Act Security 4.42 lacs F.Y.2014-15 Services

S. Name of the Forum where the dispute is No. Statute pending 1. U. P. Entry Appellate Authority UP Trade Tax Tax Act CESTAT,Custom, Central 2. Service Tax under Excise & Service Tax, Appellat Tribunal, Delhi 3. Central Excise Adjudicating Authority, Large Act Taxpayer Unit Delhi 4. Central U.P. Sales Tax Authority Act 5. Central Excise Hon'ble Supreme Court of India Act 6. Income Tax Act ITAT, New Delhi 7. Income Tax Act ITAT, New Delhi 8. Income Tax Act ITAT, New Delhi 9. Indian Contract District Court, Saket Act c) On the basis of information and explanations given to us by the management, no amount was required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under.

viii) The Company does not have accumulated losses as at 31st March, 2015 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

ix) On the basis of information and explanation provided by the management, the Company has not made any default in the repayment of dues to the financial institutions and banks. During the year, the Company has not issued any debentures.

x) The company has not given guarantees for loans taken by others from banks or financial institutions. Therefore, the provisions of clause 3(x) of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

xi) According to the information and explanations given to us, term loans taken by the Company have been applied for the purpose for which they were obtained.

xii) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by the management.

For S. R. DINODIA & CO. LLP CHARTERED ACCOUNTANTS, REGN. NO. 001478N/N500005

PLACE : New Delhi Sandeep Dinodia DATED : 26th May, 2015 Partner M.NO. 083689


Mar 31, 2014

We have audited the accompanying financial statements of M/S SHARDA MOTOR INDUSTRIES LIMITED, ("the Company"), which comprise the Balance Sheet as at 31st March, 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.

2. Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular No. 8/2014 dated 4th April 2014 of the Ministry of Corporate Affairs. 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.

3. Auditor''s Responsibility

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

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

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

5. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

6. Report on Other Legal and Regulatory Requirements

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.

As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular No.8/2014 dated 4th April 2014 of the Ministry of Corporate Affairs;

e. On the basis of written representations received from the directors as on 31st March 2014 and taken on record by the Board of Directors, we report that 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 section 274 of the Companies Act, 1956;

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

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 1 of report on legal and regulatory requirements'' paragraph on our audit report of even date)

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets

(b) As explained to us, physical verification of major fixed assets has been conducted by the management at appropriate intervals. In our opinion, the program is reasonable having regard to the size of the Company and the nature of the fixed assets. No material discrepancies were noticed on such verifcation as compared to book records.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year.

ii) (a) On the basis of information and explanation provided by the management, Inventories have been physically verifed by the management during the year except the inventories in transit and lying with the third parties. In our opinion, the frequency and the procedure of physical verifcation followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(b) In our opinion, frequency and the procedures of physical verifcation 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 is maintaining proper records of inventory. We have been explained that discrepancies noticed on physical verifcation as compared to book records were not material and the same have been properly dealt with in the books of account..

iii) (a) According to information and explanation given to us, the company has not granted loan to Companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 during the year

(b) According to information and explanation given to us, the Company has taken unsecured loans from four parties entered in the register maintained u/s 301 of the Companies Act, 1956 during the year. (Maximum amount due during the year is 6471.84 lacs and closing balance is Rs.6292.16 lacs. The rate of interest and other terms and conditions on which such loan has been taken are not prima facie prejudicial to the interest of the Company. The company is regular in repayment of principal and interest amount as stipulated.

(c) During the year, the company has received mobilization advance from its customer covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and year end balance of such advances is Rs.666.61 lacs

(d) In our opinion and according to the information and explanations given to us, rate of interest and other terms and conditions on which such mobilization advance has been received are not prima facie prejudicial to the interest of the Company.

(e) The aforesaid mobilization advance, as also informed by the management, has been adjusted against the supplies to the said customer

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system

commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets, sales of goods and services. According to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

v) (a) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to explanation given to us, transactions made in pursuance of contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. Five Lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

vi) The Company has not accepted any deposits during the year from the public as Defined in section 58A and 58AA or any

other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.

vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central

Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prime facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view of determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident

Fund, Investor Education and Protection Fund, Employees'' State insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to it. There was no undisputed amount outstanding at the year end for a period more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute, are as follows:

S Name of the Nature of Amount Period to Which the Statute Dues (Rs.) Amt. relates

1 U. P. Entry Tax Act Entry Tax 2.27 lacs 2001 to 2003

2 Service Tax under Service Tax 11.07 lacs 2008 to 2009 Finance Act,1994

3 Central Excise Act CENVAT 2.24 lacs 2007 Credit

Names of Forum where the dispute is Statute pending

U. P. Entry Tax Act Appellate Authority UP Trade Tax

Service Tax Under CESTAT,Custom, Central Excise & Finance Act 1994 Service Tax, Appellate Tribunal, Delhi

Central Excise Act Adjudicating Authority, Large Taxpayer Unit Delhi

x) The Company does not have accumulated losses as at 31st March, 2014 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi On the basis of information and explanation provided by the management, the Company has not made any default in the repayment of dues to the financial institutions and banks. During the year, the Company has not issued any debentures.

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, during the year under audit.

xiii) In our opinion considering the nature of activities carried on by the company during the year, the provision of any special statue applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to it.

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

xv) On the basis of information and explanation provided, the Company has not given guarantee for loans taken by other from the bank during the year

xvi) On the basis of records available and information and explanation given to us, the terms loans have been applied for the purpose for which they were raised.

xvii) On the basis of information and explanation given to us and an overall examination of the balance sheet, we report that no funds raised on short-term basis have been used for long-term investments by the Company.

xviii) According to information and explanation given to us, 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 Companies Act, 1956.

xix) The Company has not issued any debentures during the year.

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

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

For S. R. DINODIA & CO. CHARTERED ACCOUNTANTS, REGN. NO. 001478N/N500005

(SANDEEP DINODIA) PARTNER M.NO. 083689

PLACE : New Delhi DATED : 22nd May, 2014


Mar 31, 2013

We have audited the accompanying financial statements of M/S SHARDA MOTOR INDUSTRIES LIMITED, ("the Company"), which comprise the Balance Sheet as at 31st March, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2013;

(b) in the case of the Statement of Profit and Loss, of the profit forthe year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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.

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 forthe purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

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

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

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

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 1 of report on legal and regulatory requirements'' paragraph on our audit report of even date)

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, physical verification of major fixed assets has been conducted by the management at appropriate intervals. In our opinion, the program is reasonable having regard to the size of the Company and the nature of the fixed assets. No material discrepancies were noticed on such verification as compared to book records.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year.

ii) (a) On the basis of information and explanation provided by the management, Inventories have been physically verified by the management during the year except the inventories in transit and lying with the third parties. In our opinion, the frequency and the procedure of physical verification followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(b) In our opinion, frequency and 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 is maintaining proper records of inventory. We have been explained that discrepancies noticed on physical verification as compared to book records were not material and the same have been properly dealt with in the books of account.

iii) (a) According to information and explanation given to us, the company has not granted loan to Companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 during the year

(b) According to information and explanation given to us, the Company has taken unsecured loans from four parties entered in the register maintained u/s 301 of the Companies Act, 1956 during the year. (Maximum amount due during the year is and closing balance is Rs 422,056,975/-). The rate of interest and other terms and conditions on which such loan has been taken are not prima facie prejudicial to the interest of the Company. The company is regular in repayment of principal and interest amount as stipulated.

(c) During the year, the company has received mobilization advance from its customer covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs.22,500,000/-.and year end balance of such advances is Nil.

(d) In our opinion and according to the information and explanations given to us, rate of interest and other terms and conditions on which such mobilization advance has been received are not prima facie prejudicial to the interest of the Company.

(e) The aforesaid mobilization advance, as also informed by the management, has been adjusted against the supplies to the said customer.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets, sales of goods and services. According to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

v) (a) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to explanation given to us, transactions made in pursuance of contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

vi) The Company has not accepted any deposits during the year from the public as defined in section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.

vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prime facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view of determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to it. There was no undisputed amount outstanding at the year end for a period more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute, are as follows:

S. No. Name of the Nature of Amount Statute Dues (Rs.)

1 U. P. Entry Tax Act Entry Tax 227,265

2. Service Tax under Service Tax 1,106,897 Finance Act,1994

3. Central Excise Act Excise Duty 44,000,000

4. Central Excise Act CENVAT 224,378 Credit

Name Period to Forum where the dispute is which the pending amt. relates

U. P. Entry Tax Act 2001 to 2003 Appellate Authority UP Trade Tax

Service Tax under 2008-2009 Custom, Central Excise & Service Tax, Appellate Tribunal, Delhi

Central Excise Act 2008-2009 Custom, Central Excise & Service Tax, Appellate Tribunal, Delhi

Central Excise Act 2007 Adjudicating Authority, Large Taxpayer Unit Delhi

x) The Company does not have accumulated losses as at 31st March, 2013 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi) On the basis of information and explanation provided by the management, the Company has not made any default in the repayment of dues to the financial institutions and banks. During the year, the Company has not issued any debentures.

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, during the year under audit.

xiii) In our opinion considering the nature of activities carried on by the company during the year, the provision of any special statue applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to it.

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

xv) On the basis of information and explanation provided, the Company has not given guarantee for loans taken by other from the bank during the year

xvi) On the basis of records available and information and explanation given to us, the terms loans have been applied for the purpose for which they were raised.

xvii) On the basis of information and explanation given to us and an overall examination of the balance sheet, we report that no funds raised on short-term basis have been used for long-term investments by the Company.

xviii) According to information and explanation given to us, 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 Companies Act, 1956.

xix) The Company has not issued any debentures during the year.

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

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

ForS. R. DINODIA&CO.

CHARTERED ACCOUNTANTS

(REGN. No. 01478N)

PLACE : New Delhi (SANDEEP DINODIA)

DATED: 28th May, 2013 PARTNER

M.NO. 083689


Mar 31, 2012

We have audited the attached Balance sheet of M/S SHARDA MOTOR INDUSTRIES LIMITED, as at 31st March 2012 and Statement of Profit & Loss Account and 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.

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

As required by the Companies (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 Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order.

Further to our comments in the annexure referred to above, we report that :

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 Company''s Balance sheet, Statement of Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of 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 Companies Act, 1956.

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

iii) in the case of cash flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS'' REPORT

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

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, physical verification of major fixed assets has been conducted by the management at appropriate intervals. In our opinion, the program is reasonable having regard to the size of the Company and the nature of the fixed assets. No material discrepancies were noticed on such verification as compared to book records.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year.

ii) (a) On the basis of information and explanation provided by the management, Inventories have been physically verified by the management during the year except the inventories in transit and lying with the third parties. In our opinion, the frequency and the procedure of physical verification followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(b) In our opinion, frequency and 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 is maintaining proper records of inventory. We have been explained that discrepancies noticed on physical verification as compared to book records were not material and the same have been properly dealt with in the books of account.

iii) (a) According to information and explanation given to us, the company has not granted loan to Companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 during the year

(b) According to information and explanation given to us, the Company has taken unsecured loans from four parties entered in the register maintained u/s 301 of the Companies Act, 1956 during the year. (Maximum amount due during the year is Rs. 372,750,000 and closing balance is Rs 361,800,000). The rate of interest and other terms and conditions on which such loan has been taken are not prima facie prejudicial to the interest of the Company. The company is regular in repayment of principal and interest amount as stipulated.

(c) During the year, the company has received mobilization advance from its customer covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs.88,726,759/- and year end balance of such advances is Rs.45,725,383/-.

(d) In our opinion and according to the information and explanations given to us, rate of interest and other terms and conditions on which such mobilization advance has been received are not prima facie prejudicial to the interest of the Company.

(e) The aforesaid mobilization advance, as also informed by the management, will be adjusted against the supplies to the said customer.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets, sales of goods and services. According to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

v) (a) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to explanation given to us, transactions made in pursuance of contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

vi) The Company has not accepted any deposits during the year from the public as defined in section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.

vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii) On the basis of records produced, we are of opinion that prime facie, the cost records and accounts prescribed by the Central Government under section 209 (1)(d) of the Companies Act,1956 has been maintained by the Company, but, we were not required to carry out and have not carried out any detailed examination of such records and accounts.

(ix) (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to it. There was no undisputed amount outstanding at the year end for a period more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute, are as follows:

S. No. Name of the Nature of Amount Period to Forum where the dispute is Statute Dues (Rs.) which the pending amt. relates

1 U. P. Entry Tax Act Entry Tax 227,265 2001 to 2003 Appellate Authority UP Trade Tax

2. Service Tax under Service Tax 1,106,897 2008-2009 CESTAT,Custom, Central Excise & Finance Act,1994 Service Tax, Appellate Tribunal, Delhi

3. Central Excise Act Excise Duty 44,000,000 2008-2009 CESTAT,Custom, Central Excise & Service Tax, Appellate Tribunal, Delhi

4. Central Excise Act CENVAT 224,378 2007 Adjudicating Authority, Large Credit Taxpayer Unit Delhi

5. Income Tax Act Income Tax 5,432,553 2008-09 Commissioner of Income Tax, Large Demand Taxpayer Unit (Appeal), Delhi

6. Income Tax Act Income Tax 3,772,302 2003-04 Commissioner of Income Tax, Large Demand Taxpayer Unit (Appeal), Delhi

x) The Company does not have accumulated losses as at 31st March, 2012 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi) On the basis of information and explanation provided by the management, the Company has not made any default in the repayment of dues to the financial institutions and banks. During the year, the Company has not issued any debentures.

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, during the year under audit.

xiii) In our opinion considering the nature of activities carried on by the company during the year, the provision of any special statue applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to it.

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

xv) On the basis of information and explanation provided, the Company has not given guarantee for loans taken by other from the bank during the year

xvi) On the basis of records available and information and explanation given to us, the terms loans have been applied for the purpose for which they were raised.

xvii) On the basis of information and explanation given to us and an overall examination of the balance sheet, we report that no funds raised on short-term basis have been used for long-term investments by the Company.

xviii) According to information and explanation given to us, 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 Companies Act, 1956.

xix) The Company has not issued any debentures during the year.

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

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

For S. R. DINODIA & CO.

CHARTERED ACCOUNTANTS

(REGN. No. 01478N)

PLACE : New Delhi (SANDEEP DINODIA)

DATED : 27th July, 2012 PARTNER

M.NO. 083689


Mar 31, 2011

We have audited the attached Balance sheet of M/S SHARDA MOTOR INDUSTRIES LIMITED, as at 31st March 2011 and the Profit & Loss Account and 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.

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

As required by the Companies (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 Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order.

Further to our comments in the annexure referred to above, we report that :

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 Company''s Balance sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, 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 Companies Act, 1956.

e) On the basis of written representations received from the directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as director in term of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

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

iii) in the case of cash flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS'' REPORT

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

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, physical verification of major fixed assets has been conducted by the management at appropriate intervals. In our opinion, the program is reasonable having regard to the size of the Company and the nature of the fixed assets. No material discrepancies were noticed on such verification as compared to book records.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year.

ii) (a) On the basis of information and explanation provided by the management, Inventories have been physically verified by the management during the year except the inventories in transit and lying with the third parties. In our opinion, the frequency and the procedure of physical verification followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(b) In our opinion, frequency and 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 is maintaining proper records of inventory. We have been explained that discrepancies noticed on physical verification as compared to book records were not material and the same have been properly dealt with in the books of account.

iii) (a) According to information and explanation given to us, the company has not granted loan to Companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 during the year.

(b) According to information and explanation given to us, the Company has taken unsecured loans from four parties entered in the register maintained u/s 301 of the Companies Act, 1956 during the year. (Maximum amount due during the year is Rs. 347,700,000 and closing balance is Rs 342,200,000). The rate of interest and other terms and conditions on which such loan has been taken are not prima facie prejudicial to the interest of the Company. The company is regular in repayment of principal and interest amount as stipulated.

(c) During the year, the company has received mobilization advance from its customer covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs.27,112,454-.and year end balance of such advances is Rs.20,000,000-.

(d) In our opinion and according to the information and explanations given to us, rate of interest and other terms and conditions on which such mobilization advance has been received are not prima facie prejudicial to the interest of the Company.

(e) The aforesaid mobilization advance, as also informed by the management, will be adjusted against the supplies to the said customer.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets, sales of goods and services. According to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

v) (a) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to explanation given to us, transactions made in pursuance of contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

vi) The Company has not accepted any deposits during the year from the public as defined in section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.

vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii) On the basis of records produced, we are of opinion that prime facie, the cost records and accounts prescribed by the Central Government under section 209 (1)(d) of the Companies Act,1956 has been maintained by the Company, but, we were not required to carry out and have not carried out any detailed examination of such records and accounts.

(ix) (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to it. There was no undisputed amount outstanding at the year end for a period more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute, are as follows:

S. No. Name of the Statute Nature of Amount Period to Forum where the dispute Dues (Rs.) which the is pending amt. relates

1 U. P. Entry Tax Act Entry Tax 227,265 2001 to 2003 Appellate Authority UP Trade Tax

2 Central Excise Act Excise Duty 97,461 2008-2009 Adjudicating Authority, Large Taxpayer Unit Delhi

3 Central Excise Act Excise Duty 44,000,000 2008-2009 CESTAT, Custom, Central Excise & Service Tax, Appellate Tribunal, Delhi

4 Central Excise Act Excise Duty 4,072,313 2008-2009 Commissioner, Central Excise & Service Tax, Large Taxpayer Unit Delhi

5 Service Tax under Finance Service Tax 1,106,897 2008-09 Additional Commissioner Act ,1994 of Excise and Service Tax, New Delhi

x) The Company has no accumulated losses as at 31st March, 2011 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi) On the basis of information and explanation provided by the management, the Company has not made any default in the repayment of dues to the financial institutions and banks. During the year, the Company has not issued any debentures.

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, during the year under audit.

xiii) In our opinion considering the nature of activities carried on by the company during the year, the provision of any special statue applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to it.

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

xv) On the basis of information and explanation provided, the Company has not given guarantee for loans taken by other from the bank during the year

xvi) On the basis of records available and information and explanation given to us, the terms loans have been applied for the purpose for which they were raised.

xvii) On the basis of information and explanation given to us and an overall examination of the balance sheet, we report that no funds raised on short-term basis have been used for long-term investments by the Company.

xviii) According to information and explanation given to us, 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 Companies Act, 1956.

xix) The Company has not issued any debentures during the year.

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

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

For S.R. DINODIA & CO.

Chartered Accountants

PLACE : NEW DELHI SANDEEP DINODIA

DATED : 6th May'' 2011 Partner

(M. No. 083689)


Mar 31, 2010

We have audited the attached Balance sheet of M/S SHARDA MOTOR INDUSTRIES LIMITED, as at 31st March 2010 and the Profit & Loss Account and 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.

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

As required by the Companies (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 Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order.

Further to our comments in the annexure referred to above, we report that :

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 Company''s Balance sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, 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 Companies Act, 1956.

e) On the basis of 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 director in term of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

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

iii) in the case of cash flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS'' REPORT

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

i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, physical verification of major fixed assets has been conducted by the management at appropriate intervals. In our opinion, the program is reasonable having regard to the size of the Company and the nature of the fixed assets. No material discrepancies were noticed on such verification as compared to book records.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year.

ii) (a) On the basis of information and explanation provided by the management, Inventories have been physically verified by the management during the year except the inventories in transit and lying with the third parties. In our opinion, the frequency and the procedure of physical verification followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(b) In our opinion, frequency and 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 is maintaining proper records of inventory. We have been explained that discrepancies noticed on physical verification as compared to book records were not material and the same have been properly dealt with in the books of account.

iii) (a) According to information and explanation given to us, the company has granted loan to Companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 during the year and the year end balance is Rs 569,193,665. The rate of interest and other terms and conditions on which such loan has been granted are not prima facie prejudicial to the interest of the Company. The company is regular in repayment of principal and interest amount as stipulated.

(b) According to information and explanation given to us, the Company has taken unsecured loans from four parties entered in the register maintained u/s 301 of the Companies Act, 1956 during the year. (Maximum amount due during the year is Rs. 330,100,000 and closing balance is Rs 259,200,000). The rate of interest and other terms and conditions on which such loan has been taken are not prima facie prejudicial to the interest of the Company. The company is regular in repayment of principal and interest amount as stipulated.

(c) During the year, the company has received mobilization advance from its customer covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs.30,330,390/- and year end balance of such advances is Rs.31,112,454/-.

(d) In our opinion and according to the information and explanations given to us, rate of interest and other terms and conditions on which such mobilization advance has been received are not prima facie prejudicial to the interest of the Company.

(e) The aforesaid mobilization advance, as also informed by the management, will be adjusted against the supplies to the said customer.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets, sales of goods and services. According to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control systems.

v) (a) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of opinion that the particulars of contracts or arrangements that need to be entered into a register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to explanation given to us, transactions made in pursuance of contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

vi) The Company has not accepted any deposits during the year from the public as defined in section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.

vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

viii) On the basis of records produced, we are of opinion that prime facie, the cost records and accounts prescribed by the Central Government under section 209 (1)(d) of the Companies Act,1956 has been maintained by the Company, but, we were not required to carry out and have not carried out any detailed examination of such records and accounts.

ix) (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to it. There was no undisputed amount outstanding at the year end for a period more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute, are as follows:

S. No. Name of the Statute Nature Amount(Rs.) of Dues

1 U. P. Entry Tax Act Entry Tax 227,265

2. Central Excise Act Excise Duty 97,461

3. Central Excise Act Excise Duty 44,000,000

4. Central Excise Act Excise Duty 4,072,313

Name of the Statute Period to Forum where which the the dispute is amt. relates pending

U P Entry Tax Act 2001 to 2003 Appellate Authority UP Trade Tax

Central Excise Act 2008-2009 Adjudicating Authority, Large Taxpayer Unit Delhi

Central Excise Act 2008-2009 Commissioner, Central Excise & Service Tax, Large Taxpayer Unit Delhi

Central Excise Act 2008-2009 Commissioner, Central Excise & Service Tax, Large Taxpayer Unit Delhi

x) The Company has no accumulated losses as at 31st March, 2010 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi) On the basis of information and explanation provided by the management, the Company has not made any default in the repayment of dues to the financial institutions and banks. During the year, the Company has not issued any debentures.

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, during the year under audit.

xiii) In our opinion considering the nature of activities carried on by the company during the year, the provision of any special statue applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to it.

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

xv) On the basis of information and explanation provided, the Company has not given guarantee for loans taken by other from the bank during the year

xvi) On the basis of records available and information and explanation given to us , the terms loans have been applied for the purpose for which they were raised.

xvii) On the basis of information and explanation given to us and an overall examination of the balance sheet, we report that no funds raised on short-term basis have been used for long-term investments by the Company.

xviii) According to information and explanation given to us, 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 Companies Act, 1956.

xix) The Company has not issued any debentures during the year.

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

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

For S. R. DINODIA & CO.

Chartered Accountants

PLACE: NEW DELHI SANDEEP DINODIA

DATED: 22nd May, 2010 Partner

(M. No : 083689)

 
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