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Auditor Report of Shri Gang Industries and Allied Products Ltd.

Jun 30, 2010

1. We have audited the attached Balance Sheet of Shri Gang Industries & Allied Products Limited (Formerly Suraj Vanaspati Limited) as at June 30, 2010 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 company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statements. 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 a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, 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 in paragraph 3 above, we report that:

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the applicable Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956.

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

f) To the best of our knowledge & belief, the provisions of Section 441A of the Companies Act, 1956 regarding the levy & collection of cess on turnover or gross receipts of the Company, have not yet been notified by the Central Government. Accordingly, we are unable to express our opinion on the compliance of the said section in terms of clause (g) of sub-section 3 of section 227 of the Companies Act, 1956 and clause 9 of the Annexure attached to our this report.

g) Subject to our comments in the statement referred to in paragraph 3 above, in our opinion and to the best of our information and according the explanations given to us, the said accounts, together with the notes thereon, give the information required by the Companies' Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

I) in the case of the Balance Sheet, of the state of affairs of the company, as at June 30, 2010; and

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF SHRI GANG INDUSTRIES & ALLIED PRODUCTS LIMITED, FOR THE YEAR ENDED JUNE 30,2010.

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

b) The management carries out the physical verification of fixed assets in a phased manner over a period of two years and accordingly, part of fixed assets were physically verified during the year and no material discrepancies are stated to have been observed on such verification as compared to books records. In our opinion, the frequency of physical verification is reasonable having regard to the size of the company and the nature of its fixed assets.

c) The company has not disposed any substantial part of its fixed assets during the year.

2. a) The stock of finished goods, stores, spares part and raw materials has been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

b) In our opinion, the procedure of physical verification of inventory, followed by the management, is reasonable and adequate in relation to the size of the company and nature of its business.

c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies between physical inventory and the book records, as observed on verification, which were not material in relation to the size of the company, have been properly dealt with in the books of accounts.

3. a) The company has taken interest free unsecured loan from one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 45.00 Lacs and the year-end balance of unsecured loans taken from such parties was Rs. 45.00 Lacs.

b) The interest and other terms and conditions on which unsecured loans have been taken from companies listed in the register maintained under section 301 are not, prima facie, prejudicial to the interest of the company.

c) The company is regular in repaying the principal amounts, wherever stipulated.

d) There is no overdue amount of loans taken from companies, firms or other parties listed in the register maintained under section 301

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purpose of purchase of inventory and fixed assets and for sale of goods. During the course of our audit, on random test check basis, no major weakness has been noticed in the internal controls in respect of these areas.

5. a) Based on the audit procedures applied by us 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 have been so entered.

b) According to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301, exceeding the value of five lakh rupees, in respect of any such party during the year.

6. According to information and explanations given to us, the company has complied with the provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under as are applicable.

7. According to information and explanation given to us the company has not introduced an Internal Audit system during the year.

8. 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, we are of the opinion that, prima facie, the prescribed accounts and records, relating to materials, labour and other items of cost, have been made and maintained.

9. a) According to the records of the company, the company is regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Trade Tax, State Development Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other statutory dues applicable to it. However, by virtue of order of the BIFR for the rehabilitation, an amount of Rs.2929.68 Lacs (Previous year Rs. 2751.88 Lacs) on account of Trade Tax /Vat/ State Development Tax/ Turnover Tax / Compounding tax, the payment has been deferred. See also Note no. 14 of part B of schedule M.

b) According to the records of the company and information and explanations given to us, there are no dues of Income Tax, Sales Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess on account of any dispute, except the following:

Name of Nature of Amount Period to Forum where the statute Dues (Rs.) which the dispute is amount pending relate

U.P. Trade Tax Trade Tax 0.16 Lacs 2003-04 Deputy Act Commissiner Trade tax

Remark: However the demand has been deposited under protest.

10. The accumulated losses of the company as at June 30, 2010 are more than its net worth. The company has incurred cash losses of Rs. 624.07 Lacs during the financial year covered by our audit as against cash losses of Rs. 1166.52 Lacs during immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to banks/FI's, as per rehabilitation scheme sanctioned by BIFR. See also Note No. 4 of Part B of Schedule M.

12. According to information and explanations given to us and based on the documents and records produced before us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, there is no special statute applicable to the company; hence provisions related to requirement of NOF, prudential norms for income recognition, appraisal of credit proposal etc. are not required to be complied by the company.

14. Based on our examination of the records, in our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of the clause regarding proper records of transactions and contracts in respect of shares etc., is not applicable to the company.

15. According to information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

16. Based on information and explanations given to us and in our opinion, no term loans have been raised by the company during the year.

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

18. 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

19. The company has not issued any debentures.

20. The company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For TAS ASSOCIATES Chartered Accountants Firm Registration NO-10520N

Sd/- (SUBODH GUPTA) Partner M. No.: 087099

Place : Delhi Dated : 26.11.2010


Jun 30, 2009

1. We have audited the attached Balance Sheet of Shri Gang Industries & Allied Products Limited (Formerly Suraj Vanaspati Limited) as at June 30, 2009 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 opiriion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statements. 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 a reasonable basis for our opinion.

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

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

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

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the applicable Accounting Standards referred to in section 211(3C) of the Companies Act, 1956.

e) On the basis of written representations received from the directors, as on 30* June, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) To me best of our knowledge & belief, the provisions of Section 441A of the Companies Act, 1956 regarding the levy & collection of cess on turnover or gross receipts of the Company, have not yet been notified by the Central Government. Accordingly, we are unable to express our opinion on the compliance of the said section in terms of clause (g) of sub-section 3 of section 227 of the Companies Act, 1956 and clause 9 of the Annexure attached to our this report.

g) Subject to our comments in the statement referred to in paragraph 3 above, in our opinion and to the best of our information and according the explanations given to us, the said accounts, together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

I) in the case of the Balance Sheet, of the state of affairs of the company, as at June 30, 2009; and

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

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



ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF SHRI GANG INDUSTRIES & ALLIED PRODUCTS LIMITED (FORMERLY KNOWN AS SURAJ VANASPATI LIMITED) FOR THE YEAR ENDED JUNE 30, 2009.

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

b) The management carries out the physical verification of fixed assets in a phased manner over a period of two years and accordingly, part of fixed assets were physically verified during the year and no material discrepancies are stated to have been observed on such verification as compared tbbooks records. In our opinion, the frequency of physical verification is reasonable having regard ,to (he size of the company and the nature of its fixed assets.

c) The company has not disposed any substantial part of its fixed assets during the year.

2. a) The stock of finished goods, stores, spares part and raw materials has been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

b) In our opinion, the procedure of physical verification of inventory, followed by the management, is reasonable and adequate in relation to the size of the company and nature of its business.

c) On the basis of our examination of die records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies between physical inventory and the book records, as observedpn verification, which were not material in relation jo the size of the company, have been properly dealt witti in the books of accounts.

3. a) The company has not taken/ granted any loan from / to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with, the size of the company and the nature of its business for the purpose of purchase of inventory and fixed assets and for sale of goods. During the course of our audit, on random test check basis, no major weakness has been noticed in the internal controls in respect of these areas.

5. a) Based on the audit procedures applied by us 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 have been so entered. b) According to the information and explanations given to us, there is no transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301, exceeding the value of five lakh rupees, in respect of any such party during the year.

6. According to information and explanations given to us, the company has complied with the provisions of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under as are applicable.

7. In our opinion, the company has an adequate Internal Audit system commensurate with its size and nature of its business.

8. 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, we are of the opinion that, prima facie, the prescribed accounts and records, relating to materials, labour and other items of cost, have been made and maintained.

9. a) According to the records of the company, the company is regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Trade Tax, State Development Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other statutory dues applicable to it. However, by virtue of order of the BIFR for the rehabilitation, an amount of Rs.2751.88 Lacs (Previous year Rs. 2292.99 Lacs) on account of trade tax /Vat/ State Development Tax/ Turnover Tax / Compounding tax, the payment has been deferred. See also Note no. 14 of part B of schedule M.

b) According to the records of the company and information and explanations given to us, there are no dues of Income Tax, Sales Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess on account of any dispute, except the following :

Name of Nature of Amount Period to which Forum where dispute the statute Dues (Rs.) the amount relate is pending

UP. Trade Trade Tax 0.16 Lacs 2003-04 Deputy Commissiner Tax Act Trade tax

Remark : However all these amounts have been deposited under protest

10. The accumulated losses of the company as at Jurie 30, 2009 are more than its net worth. The company has incurred cash losses of Rs. 1166.71 Lacs during the financial year covered by our audit as against cash losses of Rs. 755.70 Lacs during immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to banks/FIs, as per rehabilitation scheme sanctioned by BIFR. See also Note No. 4 of Part B of Schedule M.

12. According to information and explanations given to us and based on the documents and records produced before us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. .

13. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, there is no special statute applicable to the company; hence provisions related to requirement of NOF, prudential < norms for income recognition, appraisal of credit proposal etc. are not required to be complied by the company.

14. Based on our examination of the records, in our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of the clause regarding proper records of transactions and contracts in respect of shares etc., is not applicable to the company.

15. According to information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

16. Based on information and explanations given to us arid in our opinion, no term loans have been raised by the company during the year.

17. According to the information and explanation given to Us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investments by the company.

18. 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

19. The company has not issued any debentures.

20. The company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



For TAS ASSOCIATES Chartered Accountants Sd/- (SUBODH GUPTA) Place : NOIDA Partner Dated : 27/11/2009 M. No.: 087099

 
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