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Auditor Report of Suraj Products Ltd.

Mar 31, 2014

1. Reports on the financial statements

We have audited the attached Balance Sheet of ''SURAJ PRODUCTS LIMITED'' (the ''Company'') as at 31st March, 2014, and the related Statement of Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, and a summary of significant accounting policies and other explanatory information which we have signed under reference to this report. 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. Management 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 Accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956 read with General circular 15/2013 dated 13th September, 2013 issued by Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards on auditing issued by ICAI. Those standards require that we comply with the ethical requirement and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

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 circumstance but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

An audit involves performing procedures to obtain audits, evidence about the amounts and disclosures in the financial statements. An audit also includes assessing the appropriateness of policies used and the reasonableness of the accounting estimates made by management as well as evaluating the overall presentation of the financial statements. An audit also includes evaluating the appropriateness of accounting policies used.

4. We believe that audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion excepting as stated below.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, 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. 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 purposes of our audit;

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

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

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the applicable accounting standards notified under the Companies Act, 1956 read with General Circular 15/2013 dated 13th September 2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013

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

ANNEXURE

Re: M/s Suraj Products Limited

Referred to in paragraph 3 of our report of even date,

i) a) The company has maintained proper records showing details of fixed assets including quantitative details and situation of fixed assets. However comprehensive fixed asset register is being complied.

b) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion is reasonable having regards to the size of the company and the nature of its assets. On the basis of explanation given to us, no material discrepancies have been noticed on such verifications.

c) In our opinion and according to information and explanations given to us, a substantial part of fixed assets has not been disposed off by the company during the year.

ii) a) According to information and explanation given to us the inventory of the company has been physically verified by the management during the year according to a phased program normally so designed that each material item is physically verified at least once in a year In our opinion, the frequency of verification is reasonable.

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

c) In our opinion and according to explanation given to us the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification between of stock as compared to the books and records.

iii) a) The company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly clauses (b), (c), (d) of the order are not applicable.

e) The company has taken loan from three parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 11,86,61,719/- and the year-end balance of loan taken was Rs. 4,47,93,837/- respectively.

f) In our opinion the rate of interest and other terms and condition on which loan has been taken from party listed in the register maintained under section 301 of the companies act 1956 are not, prime facie, prejudicial to the interest of the company.

g) During the year the company was regular in repaying principle amount as stipulated and has been regular in payment of interest.

iv) In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to purchases of inventory, fixed assets and with regard to sale of goods. Further on the basis of our examination of the books and records of the company, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedures.

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

b) According to information and explanation given to us, we are of the opinion that no transaction of purchase of goods and materials and sale of goods and materials and servicing made in pursuance of contract or arrangement entered in has taken place which is required to be entered into the register maintained U/s.301 of the Companies Act,1956.

vi) The company has not accepted any deposit from the public within the meaning of Section 58A and 58 AA of the Act and the rules framed there under.

vii) In our opinion, on the basis of the internal audit reports broadly reviewed by us, the coverage of internal audit function carried on by the management is commensurate with the size of the Company and the nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that, prima 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 to determine whether they are accurate or complete.

ix) a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employee state insurance, income tax, sales tax, service tax, excise duty, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, excise duty and cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

c) According to information and explanation given to us, there are disputed Sales Taxes, entry Tax and Excise Duty which has not yet been paid and are pending in at forum for redressal of dispute. The particulars of dues of Excise Duty, Sales Tax, Entry Tax which has not yet been deposited on account of dispute are as follows :

Name of Statute Nature of Dues Amount in Rs. (Lacs)

The Orissa Sales Dispute regarding 3.68 Tax Act 1947 ITC

The Orissa Entry Entry Tax on 9.7 Tax Rules, 1999 Inter-State Purchases

The Orissa Entry Entry Tax on 0.87 Tax Rules, 1999 Inter-State Purchases

Central Sales Non-submission of 3.12 Tax, 1956 C-Form Declaration

Central Sales Absence of documentation of 12.72 Tax, 1956 Pre-Existing contract in relation with Form-H Sales

Central Sales Non-submission of C-Form & 9.52 Tax, 1956 H-Form Declaration

Central Sales Non-submission of 28.57 Tax, 1956 H-Form Declaration

Central Excise Cenvat Credit on Cement 4.86 Rules 2004



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

The Orissa Sales 2005-2006 to Additional Commissioner Tax Act 1947 2007-2008 Sales Tax (Appeals) North Zone, Sambalpur

The Orissa Entry 2002-2003 to Dy. Commissioner (Appeals) Tax Rules, 1999 2003-2004 Sundargarh Range, Rourkela

The Orissa Entry 2005-2006 to Addl. Commissioner of Sales Tax Rules, 1999 2003-2004 Tax (Appeals), North Zone, Sambalpur.

Central Sales 2004-2005 Dy. Commissioner Sales Tax Tax, 1956 (Appeals), Sundargarh, Range, Rourkela

Central Sales 2004-2005 Deputy Commissioner of Sales Tax, 1956 Tax Pre-Existing contract in relation with Form-H Sales

Central Sales 2011-12 Addl. Commissioner of Sales Tax, 1956 Tax, (Appeals) North Zone, Sambalpur

Central Sales 2006-2008 to Addl. Commissioner of Sales Tax, 1956 2007-2008 Tax, (Appeals) North Zone, Sambalpur

Central Excise 2010-2011 to Commissioner of Appeals, Rules 2004 2011-2012 (Up to Central Excise Customs & December 2011) Service Tax, Bhubaneshwar

x) In our opinion the company do not have any accumulated losses and the company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi) In our opinion and according to information and explanation given to us the company has not defaulted in repayment of dues to financial institutions and banks.

xii) In our opinion and according to information and explanation given to us the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments and hence the clause is not applicable for the Company.

xv) In our opinion and according to information and explanation given to us the company has not given any guarantee for loan taken by others from banks or financial institutions.

xvi) In our opinion and information and explanation given to us on an overall basis the term loan has been applied for the purpose for which they were obtained.

xvii) According to the information and explanation given to us and on an overall examination of balance sheet of the company, we report that no funds raised on long term basis has been applied to finance short term assets. No short-term fund has been used to finance long-term investment except permanent working capital.

xviii) According to information and explanation given to us the company has made preferential allotment of 35,00,000 Equity Shares at the rate of Rs. 20/- per share (face value of Rs. 10/- per share with a premium of Rs. 10/- per share) aggregating to Rs. 7,00,00,000/- to companies covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion, the said issue was in accordance with SEBI guidelines for preferential allotment of shares in terms of size and price.

xix) According to information and explanation given to us the company has not issued any debentures during the period covered by our audit report. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

xx) According to information and explanation given to us the company has not made any public issue during the period covered by our audit report. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

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

For RUSTAGI & Co. Chartered Accountants Firm Registration No. 301094E

ASHISH RUSTAGI Place: Barpali (Partner) Dated : the 31st day of May 2014 Membership No. : 062982


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial 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 principles generally accepted in India including 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.

Auditors'' 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE

Re: M/s Suraj Products Limited

Referred to in paragraph 3 of our report of even date,

i) a) The company has maintained proper records showing details of fixed assets including quantitative details and situation of fixed assets. However comprehensive fixed asset register is being complied.

b) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion is reasonable having regards to the size of the company and the nature of its assets. On the basis of explanation given to us, no material discrepancies have been noticed on such verifications.

c) The Company has not disposed off any fixed assets during the year.

ii) a) According to information and explanation given to us the inventory of the company has been physically verified by the management during the year according to a phased program normally so designed that each material item is physically verified at least once in a year In our opinion, the frequency of verification is reasonable.

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

c) In our opinion and according to explanation given to us the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification between of stock as compared to the books and records.

iii) a) The company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly clauses (b), (c), (d) of the order are not applicable.

b) The company has taken loan from three parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year wasRs. 1,20,538,446/- and the year-end balance of loan taken was Rs. 11,31,60,738/- respectively.

c) In our opinion the rate of interest and other terms and condition on which loan has been taken from party listed in the register maintained under section 301 of the companies act 1956 are not, prime facie, prejudicial to the interest of the company.

d) During the year the company was regular in repaying principle amount as stipulated and has been regular in payment of interest.

iv) In our opinion, there is adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to purchases of inventory, fixed assets and with regard to sale of goods. Further on the basis of our examination of the books and records of the company, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedures.

v) a) Based on the audit procedure applied by us and according to information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under 301 have been so entered.

b) According to information and explanation given to us, we are of the opinion that no transaction of purchase of goods and materials and sale of goods and materials and servicing made in pursuance of contract or arrangement entered in has taken place which is required to be entered into the register maintained U/s.301 of the Companies Act, 1956.

vi) The company has not accepted any deposit from the public within the meaning of Section 58A and 58 AA of the Act and the rules framed there under.

vii) In our opinion, on the basis of the internal audit reports broadly reviewed by us, the coverage of internal audit function carried on by the management is commensurate with the size of the Company and the nature of its business.

viii) According to information provided and in our opinion, the maintenance of cost records prescribed by Central Government of 209(1 )(d) of the Companies Act is not applicable to the Company.

ix) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employee state insurance, income tax, sales tax, service tax, excise duty, cess and other material statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, excise duty and cess were in arrears, as at 31st March, 2013 for a period of more than six months from the date they became payable.

x) In our opinion the company do not have any accumulated losses and the company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi) In our opinion and according to information and explanation given to us the company has not defaulted in repayment of dues to financial institutions and banks.

xii) In our opinion and according to information and explanation given to us the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments and hence the clause is not applicable for the Company.

xv) In our opinion and according to information and explanation given to us the company has not given any guarantee for loan taken by others from banks or financial institutions.

xvi) In our opinion and information and explanation given to us the company has not availed any term loan from banks and financial institution during the year and hence relevant clause is not applicable.

xvii) According to the information and explanation given to us and on an overall examination of balance sheet of the company, we report that no funds raised on long term basis has been applied to finance short term assets. No short-term fund has been used to finance long-term investment except permanent working capital.

xviii) According to information and explanation given to us the company has not made any preferential allotment during the period covered by our audit report. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

xix) According to information and explanation given to us the company has not issued any debentures during the period covered by our audit report. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

xx) According to information and explanation given to us the company has not made any public issue during the period covered by our audit report. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

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

For RUSTAGI & Co.

Chartered Accountants

Firm Registration No. 301094E

ASHISH RUSTAGI

Place: Kolkata (Partner)

Dated : the 10th day of June, 2013 Membership No. : 062982


Mar 31, 2012

We have audited the attached Balance Sheet of "Suraj Products Limited" as at 31st March'2012 and the annexed Profit & Loss Account along with Cash Flow Statement for the year ending on that date. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standard 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 test basis evidences supporting the amount and disclosures in the financial statement. 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.

As required 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 Paragraphs 4 and 5 of the said order.

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

1. 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.

2. In our opinion proper books of accounts as required by law have been kept by the company so far as it appears from our examination of those books.

3. The Balance Sheet, Profit & Loss Account and Cash flow Statement dealt with by this report are in agreement with the books of accounts produced before us.

4. In our opinion prima facie, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standard, referred in sub-section 3(C) of section 211 of the Companies Act, 1961.

5. On the basis of written representation received from the director and taken on record by the Board of Directors, we report that prima facie none of the directors is disqualified as on 31.03.2012 from being appointed as a director in terms of clause(g) of sub-section(l) of section 274 of the Companies Act 1956.

6. In our opinion and to the best of our information and according to the explanation given to us, the balance sheet and profit & loss account read with schedules and notes on account annexed thereto gives the information required by the Companies Act, 1956 in the manner so required and gives a true and fair view in conformity with the accounting principles generally accepted in India

i) in the case of balance sheet of the state of affairs of the company as at 31st March 2012 and;

ii) in the case of profit & loss account of the Profit for the year ended on that date.

iii) in the case of Cash Flow Statement of the Cash Flow of the company for the year ended on that date.

i) a) The company has maintained proper records showing details of fixed assets including quantitative details and situation of fixed assets. However comprehensive fixed asset register is being complied.

b) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion is reasonable having regards to the size of the company and the nature of its assets. On the basis of explanation given to us, no material discrepancies have been noticed on such verifications.

c) The Company has not disposed off any fixed assets during the year.

ii) a) According to information and explanation given to us the inventory of the company has been physically verified by the management during the year according to a phased program normally so designed that each material item is physically verified at least once in a year. In our opinion, the frequency of verification is reasonable.

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

c) In our opinion and according to explanation given to us the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification between of stock as compared to the books and records.

iii) a) The company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly clauses (b), (c), (d) of the order are not applicable.

b) The company has taken loan from three parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1,258,42,325/- and the year-end balance of loan taken was Rs. 1,09,840,682/- respectively.

c) In our opinion the rate of interest and other terms and condition on which loan has been taken from party listed in the register maintained under section 301 of the companies act 1956 are not, prime facie, prejudicial to the interest of the company.

d) During the year the company was regular in repaying principal amount as stipulated and has been regular in payment of interest.

iv) In our opinion, there is adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to purchases of inventory, fixed assets and with regard to sale of goods. Further on the basis of our examination of the books and records of the company, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedures.

v) a) Based on the audit procedure applied by us and according to information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under 301 have been so entered.

b) According to information and explanation given to us, we are of the opinion that no transaction of purchase of goods and materials and sale of goods and materials and servicing made in pursuance of contract or arrangement entered in has taken place which is required to be entered into the register maintained U/s.301 of the Companies Act, 1956.

vi) The company has not accepted any deposit from the public within the meaning of Section 58A and 58 AA of the Act and the rules framed there under.

vii) In our opinion, on the basis of the internal audit reports broadly reviewed by us, the coverage of internal audit function carried on by the management is commensurate with the size of the Company and the nature of its business.

viii) According to information provided and in our opinion, the maintenance of cost records prescribed by Central Government of 209(1 )(d) of the Companies Act is not applicable to the Company.

ix) a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employee state insurance, income tax, sales tax, service tax, excise duty, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, excise duty and cess were in arrears, as at 31 st March, 2012 for a period of more than six months from the date they became payable.

c) According to information and explanation given to us, there are disputed Sales Taxes and Excise Duty which has not yet been paid and are pending in at forum for redressal of dispute. The particulars of dues of Excise Duty, Sales Tax which has not yet been deposited on account of dispute are as follows:

Name of Statute Nature of Dues Amount in

(Lacs)

The Orissa Sales Dispute regarding 3ll tax Act 1947 Sales Tax exemption set off on cement, consumption norms

The Orissa Sales Dispute regarding 3.68 tax Act 1947 ITC

The Orissa Entry Entry Tax on 97 Tax rules, 1999 Inter-State _Purchases

The Orissa Entry Entry Tax on 0.87

Tax rules, 1999 Inter-State Purchases

Central Sales Tax Non- submission of 2

C- Form Declaration

Central Sales Tax Absence of 12.72 documentation of Pre-Existing contract in relation with Form- H Sales

Central Sales Tax Non-submission of 9.52 C- Form & H-Form Declaration

Central Sales Tax Non-submission of 28.57 H-Form Declaration Central Excise Cenvat Credit on Iron 2398

Rules 2004 & Steel

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

The Orissa Sales 1999-2000 to Sales Tax Tribunal, tax Act 1947

The Orissa Sales 2003-2004 Orissa, Cuttack tax Act 1947

The Orissa Entry Tax 2005-2008 Addl. Commissioner rules, 1999 Sales Tax (Appeals) North Zone, Sambalpur

The Orissa SalesTax 2002-2003 to Dy. Commissioner rules, 1999 2003-2004 (Appeals) Sundargarh, Range, Rourkela

Central Sales Tax 2005-2008 Addl. Commissioner Sales tax (Appeals) North Zone, Sambalpur

Central Sales Tax 2004-2005 Dy. Commissioner Sales Tax (Appeals) North Zone, Sambalpur

Central Sales Tax 2004-2005 Dy. Commissioner Sales tax (Appeals) Sundargarh Range, Rourkeal

Central Sales Tax 2011-12 Addl. Commissioner Sales tax (Appeals) North Zone, Sambalpur

Central Sales Tax 2006-2008 Addl. Commissioner Sales Tax (Appeals) North Zone, Sambalpur

Central Excise 2002-2008 Commissioner of Rules 2004 Appeals .Central Excise Customs & Service Tax, Bhubaneshwar

x) In our opinion the company do not have any accumulated losses and the company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi) In our opinion and according to information and explanation given to us the company has not defaulted in repayment of dues to financial institutions and banks.

xii) In our opinion and according to information and explanation given to us the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments and hence the clause is not applicable for the Company.

xv) In our opinion and according to information and explanation given to us the company has not given any guarantee for loan taken by others from banks or financial institutions.

xvi) In our opinion and information and explanation given to us the company has not availed any term loan from banks and financial institution during the year and hence relevant clause is not applicable.

xvii) According to the information and explanation given to us and on an overall examination of balance sheet of the company, we report that no funds raised on long term basis has been applied to finance short term assets. No short-term fund has been used to finance long-term investment except permanent working capital.

xviii) According to information and explanation given to us the company has not made any preferential allotment during the period covered by our audit report. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

xix) According to information and explanation given to us the company has not issued any debentures during the period covered by our audit report. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

xx) According to information and explanation given to us the company has not made any public issue during the period covered by our audit report. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

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

For RUSTAGI & CO.

Chartered Accountants Firm Registration No. 301094E

(ASHISH RUSTAGI)

Place: Barpali Partner

Dated, the 26th day of May, 2012 Membership No.062982

 
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