Mar 31, 2011
1) We have audited the attached Balance Sheet of Varun Industries
Limited as at 31st March 2011 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. These Standards require that we plan and
perform the audit to obtain reasonable assurance whether the financial
statements are free from any material misstatement. An audit includes,
examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3) As required by the Companies (Auditor's Report) Order, 2003 and
amendments thereto (together referred to as Ãthe Order') 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 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 it 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 Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
e) On the basis of representations made by the Directors and taken on
record by the Board of Directors and the information and explanations
given to us, none of the directors is disqualified as on 31st March
2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956 on said date;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements, read
together with the Company's Accounting Policies and Notes thereto, 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 and Loss Account, of the Profit for the
year ended on that date; and
iii) in the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
ANNEXURE TO AUDITORS' REPORT
Re: VARUN INDUSTRIES LIMITED
Referred in para 3 of our report of even date:
i. In respect of its Fixed Assets: -
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) The fixed assets have been physically verified during the year by
the management at a regular interval which, in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on such
verification.
c) During the year, Company has disposed off certain fixed assets which
are not substantial or major part of fixed assets. Therefore, it has
no effect on the going concern status of the Company.
ii. In respect of its Inventories: -
a) As explained to us, the inventories have been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
b) In our opinion, and according to the information and explanations
given to us, the procedure 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, and according to the information and explanations
given to us and on the basis of our examination of the record of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material and have been properly dealt with in
the books of account.
iii. (a) The Company has granted unsecured loans to its subsidiary
companies which are covered in the register maintained under section
301 of the Companies Act, 1956. The maximum amount outstanding during
the year was Rs. 300.56 lacs and the year-end balance of such loans was
Rs. 300.56 lacs.
(b) In our opinion, the rate of interest and other terms and conditions
on which loans have been granted to the companies listed in register
maintained under section 301 of the Companies Act, 1956 are not, prima
facie, prejudicial to the interest of the company.
(c) The Company has not taken any loans from companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956.
iv. In our opinion, and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to the sale
of goods. During the course of our audit, no major weakness has been
noticed in the internal controls.
v. According to the information and explanations given to us, there are
no contracts or arrangements referred to in section 301 of the
Companies Act, 1956 that need to be entered in the register required to
be maintained under that section;
vi. In our opinion and according to the information & explanations
given to us, the Company has not accepted any deposits from the public
and therefore the provisions of Section 58A and 58AA of the Companies
Act, 1956 & Rules there under are not applicable to the Company;
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business;
viii. We have broadly reviewed the records made and maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under the provisions of Section 209(1) (d)
of the Companies Act, 1956 in respect of the Company's products to
which the said rules are made applicable, are of the opinion that,
prima-facie, the prescribed accounts and records have been made and
maintained. We have, however not made a detailed examination of the
records with a view to determine whether they are accurate or complete;
ix. In respect of Statutory dues.
a) According to the information and explanations given to us and on the
basis of our examination of the records of the Company, amounts
deducted/accrued in the books of the account in respect of undisputed
statutory dues including Provident Fund, Income Tax, Service Tax and
other material statutory dues have been generally regularly deposited
during the year by the Company with the appropriate authorities. As
explained to us, the company did not have any dues on account of
Employees' State Insurance, Sales-Tax, Wealth-Tax, Custom Duty, Excise
Duty, Cess and Investor Education and Protection fund.
b) According to the information & explanations given to us, there were
no undisputed amounts payable in respects of Provident Fund, Sales Tax,
Customs Duty, Excise Duty, Income Tax and other material statutory dues
were in arrears as at 31st March 2011 for a period of more than six
months from the date they became payable.
c) According to information and explanations given to us, there are no
dues of Income Tax, Provident Fund, Wealth Tax, Service Tax and other
Material statutory dues which have not been deposited with the
appropriate authorities on account of any dispute. As per the
information available with us and explanations given by the company,
applications for rectification are made with Income Tax Department.
x. The Company does not have accumulated losses as at the end of the
year and the Company has not incurred any cash losses in the current
and the immediately preceding financial year.
xi. Based on our audit procedure and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions/banks.
xii. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
xiii. The provisions of any Special Statute applicable to Chit Fund,
Nidhi or Mutual Benefit Fund / Societies are not applicable to the
Company.
xiv. a) Based on the records examined by us and according to the
information and explanations given to us, we are of the opinion that
the company is maintaining proper record of the transactions and
contracts of dealing in shares and securities and timely entries have
been made in these records.
b) Based on our audit procedures and to the best of our knowledge and
belief and according to the information and explanations given to us,
the shares and securities have been held by the company in its own
name.
xv. In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
guarantees for loans taken by others form banks are not prejudicial to
the interest of the company.
xvi. To the best of our knowledge and belief and according to the
information and explanations given to us, term loan availed by the
company was, prima facie, applied by the company during the year, for
which the loan was obtained.
xvii. According to the Cash Flow Statement and records examined by us
and according to the information and explanations given to us, on an
overall basis, funds raised on short term basis have, prima facie, not
been used during the year for long term investment.
xviii. The Company has made allotment of 70,00,000 Equity Shares of Rs.
10/- each on conversion of equal numbers of warrants at a price of Rs.
43.20/- including a premium of Rs.33.20/- per share, on exercise of
option for conversion warrant holders. These allotments have been made
in accordance with Companies Act, 1956, Chapter XIII of Securities and
Exchange Board of India (Disclosure and Investor Protection
Guidelines), 2000 as replaced by Chapter VII of SEBI (Issue of Capital
and Disclosure Requirements) Regulations,2009 (the "Guidelines"/ "SEBI
Guidelines"). In our opinion, the price at which the convertible Equity
Share Warrants have been converted is not prejudicial to the interest
of the Company.
xix. According to the information and explanations given to us and
records examined by us, there were no debentures issued during the year
so the question of charge does not arise.
xx. The Company has not raised money by making any public issues during
the year and hence the question of disclosure and verification of end
use of such money does not arise.
xxi. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
For CHUNNILAL & COMPANY
Chartered Accountants
Firm Registration No.101947W
CA. Amit Chunnilal Choudhary
Partner
Membership No. 133866
Place: Mumbai
Dated: 6th May, 2011
Mar 31, 2010
1) We have audited the attached Balance Sheet of Varun Industries
Limited as at 31st March 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
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2) We conducted our audit in accordance with auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance whether the financial
statements are free from any material misstatement. An audit includes,
examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3) As required by the Companies (Auditors Report) Order, 2003 and
amendments thereto (together referred to as the Order") 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 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 it 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 Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
e) On the basis of representations made by the Directors and taken on
record by the Board of Directors and the information and explanations
given to us, none of the directors is disqualified as on 31st March
2010 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956 on said date;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements, read
together with the Companys Accounting Policies and Notes thereto, 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 and Loss Account, of the Profit for the
year ended on that date; and
iii) in the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT Re: VARUN INDUSTRIES LIMITED Referred In
para 3 of our report of even date:
i. In respect of its Fixed Assets: -
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) The fixed assets have been physically verified during the year by
the management at a regular interval which, in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on such
verification.
c) During the year, Company has disposed off certain fixed assets which
are not substantial or major part of fixed assets. Therefore, it has
no effect on the going concern status of the Company.
ii. In respect of its Inventories: -
a) As explained to us, the inventories have been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
b) In our opinion, and according to the information and explanations
given to us, the procedure 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, and according to the information and explanations
given to us and on the basis of our examination of the record of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material and have been properly dealt with in
the books of account.
iii. (a) The Company has granted unsecured loans to its subsidiary
companies which are covered in the register maintained under section
301 of the Companies Act, 1956. The maximum amount outstanding during
the year was Rs. 130.76 lac and the year-end balance of such loans was
Rs. 130.76 lac.
(b) In our opinion, the rate of interest and other terms and conditions
on which loans have been granted to the companies listed in register
maintained under section 301 of the Companies Act, 1956 are not, prima
facie, prejudicial to the interest of the company.
(c) The Company has not taken any loans from companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956.
iv. In our opinion, and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to the sale
of goods. During the course of our audit, no major weakness has been
noticed in the internal controls.
v. According to the information and explanations given to us, there are
no contracts or arrangements referred to in section 301 of the
Companies Act, 1956 that need to be entered in the register required to
be maintained under that section;
vi. In our opinion and according to the information & explanations
given to us, the Company has not accepted any deposits from the public
and therefore the provisions of Section 58A and 58AA of the Companies
Act, 1956 & Rules there under are not applicable to the Company;
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business;
viii. We have broadly reviewed the records made and maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under the provisions of Section 209(1) (d)
of the Companies Act, 1956 in respect of the Companys products to
which the said rules are made applicable, are of the opinion that,
prima-facie, the prescribed accounts and records have been made and
maintained. We have, however not made a detailed examination of the
records with a view to determine whether they are accurate or complete;
ix. In respect of Statutory dues.
a) According to the information and explanations given to us and on the
basis of our examination of the records of the Company, amounts
deducted/accrued in the books of the account in respect of undisputed
statutory dues including Provident Fund, Income Tax, Service Tax and
other material statutory dues have been generally regularly deposited
during the year by the Company with the appropriate authorities. As
explained to us, the company did not have any dues on account of
Employees State Insurance, Sales-Tax, Wealth-Tax, Custom Duty, Excise
Duty, Cess and Investor Education and Protection fund.
b) According to the information & explanations given to us, there were
no. undisputed amounts payable in respects of Provident Fund, Sales
Tax, Customs Duty; Excise Duty, Income tax and other material statutory
dues were in arrears as at 31st March 2010 for a period of more than
six months from the date they became payable.
c) According to information and explanations given to us, other than
Income Tax aggregating to Rs. 10.11 lac for the Assessment Year
2006-2007, there are no dues of, Provident Fund, Wealth Tax, Service
Tax and other Material statutory dues which have not been deposited
with the appropriate authorities on account of any dispute. As per the
information available with us and explanations given by the company,
applications for rectification are made with Income Tax Department.
x. The Company does not have accumulated losses as at the end of the
year and the Company has not incurred any cash losses in the current
and the immediately preceding financial year.
xi. Based on our audit procedure and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions/banks.
xii. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
xiii. The provisions of any Special Statute applicable to Chit Fund,
Nrdhi or Mutual Benefit Fund / Societies are not applicable to the
Company.
xiv. a) Based on the records examined by us and according to the
information and explanations given to us, we are of the opinion that
the company is maintaining proper record of the transactions and
contracts of dealing in shares and securities and timely entries have
been made in these records.
b) Based on our audit procedures and to the best of our knowledge and
belief and according to the information and explanations given to us,
the shares and securities have been held by the company in its own
name.
xv. In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
guarantees for loans taken by others form banks are not prejudicial to
the interest of the company.
xvi. To the best of our knowledge and belief and according to the
information and explanations given to us, term loan availed by the
company was, prima facie, applied by the company during the year, for
which the loan was obtained.
xvii. According to the Cash Flow Statement and records examined by us
and according to the information and explanations given to us, on an
overall basis, funds raised on short term basis have, prima facie, not
been used during the year for long term investment.
xviii.The Company has made preferential allotment of convertible Equity
Share Warrants to Mr. Kiran N. Mehta and Mr. Kailash S. Agarwal, both
parties covered in the register maintained under section 301 of the
Companies Act, 1956, during the year. These allotments have been made
in accordance with Preferential Issue Guidelines issued by Securities &
Exchange Board of India ("SEBI") contained in Chapter XIII of
Securities and Exchange Board of India (Disclosure and Investor
Protection Guidelines), 2000 as amended (the "Guidelines"/ "SEBI
Guidelines"). In our opinion, the price at which the convertible Equity
Share Warrants have been issued is not prejudicial to the interest of
the Company.
xix. According to the information and explanations given to us and
records examined by us, there were no debentures issued during the year
so the question of charge does not arise.
xx. The Company has not raised money by making any public issues during
the year and hence the question of disclosure and verification of end
use of such money does not arise.
xxi. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
For CHUNNILAL & COMPANY
Chartered Accountants
Firm Registration No.101947 W
CA. Chunnilal Choudhary
Partner
M. No.: 037784
Place: Mumbai.
Dated: 22nd July 2010