Mar 31, 2010
We have audited the attached Balance Sheet of Blue Bird (India) Limited, as at March 31, 2010 and the Profit and Loss Account for the year ended on that date annexed thereto and cash flow statement for the year ended on that date. 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.
We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether 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.
1) As required by the Companies (Auditors 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 annex hereto, a statement on the matters specified in paragraph 4 of the said order,
2) 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 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 and Profit & Loss Account dealt with by this report are in agreement with the books of account of the Company;
d) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report are in compliance with 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 as on March 31, 2010 from being appointed as a director in terms 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, subject to note no. 11 regarding accounts prepared on going concern basis since the company is confident of revival after approval of CDR proposal despite cash loss and notices received from a lender and a few creditors u/s 433 and 434 of the Companies Act, 1956 and note no. 16 regarding estimated provision made for doubtful debtors, the said accounts read with Notes to 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2010; (ii) In the case of the Profit & Loss Account, of the loss of the Company for the year ended on
(iii) In the case of the Cash flow statement of the cash flows of the company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 1 of our report of even date on the accounts for the year ended March 31, 2010 of Blue Bird (India) Limited)
1) a) The Company has maintained proper computerised records showing full particulars, including quantitative details and situation of its fixed assets.
b) As informed to us, major fixed assets (Land, Buildings and Plant & Machinery) of the Company have only been physically verified by the Management during the year. The company has formulated a policy of verification of land, Buildings and Plant and Machinery once in a year and of other assets once in two years. No material discrepancies were reportedly noticed by the management on such verification.
c) The company has not disposed off a substantial part of fixed assets during the year.
2) a) As informed to us, the inventory of the company has once been physically verified by the
management during the year. Further detailed stock audit is conducted by independent auditors appointed by consortium banks, twice during the year.
b) In our opinion and according to the information and explanations given to us, the procedures for 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 the information and explanations given to us, the company has maintained proper records of its inventories and discrepancies noticed on physical verification between stock and the book records were not material and have been properly dealt with in the accounts.
3) The Company has taken unsecured interest free loan from directors. As per information and explanation given to us, the terms and conditions thereof are prima- facie, not prejudicial to the interests of the company. Except this, according to the information and explanations given to us, the company has not granted/ taken any loans secured or unsecured to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956.
4) In our opinion and according to the information and explanations given to us, the company has an internal control system for the purchase of inventory and fixed assets and for the sale of goods and services. However, the same (including for credit assessment of debtors and recovery from Debtors) needs to be strengthened so as to be commensurate with the size of the company and nature of its business. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have we been informed of any other instance of continuing failure to correct major weaknesses in internal control.
5) a) in our opinion and to the best of our knowledge and belief, and according to the information and
explanations given to us, the transactions that needed to be entered in the Register maintained under Section 301 of the Companies Act, 1956, have been so entered.
b) According to the information and explanation given to us, there are no transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956, exceeding the value of Rs. Five Lacs in respect of any party during the year.
6) As per the information and explanations given to us, there are no deposits accepted from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.
7) In our opinion, the Company has a reasonable internal audit system commensurate with its size and nature of its business.
8) According to the information and explanations, given to us, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) Section 209 of the Companies Act, 1956 for the industry in which the company operates.
9) 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 irregular in depositing undisputed amounts outstanding including Provident fund. Employees State Insurance, Sales tax and other material statutory dues with the appropriate authorities. TDS of Rs. 29.98 Lacs and Income Tax of Rs. 521.41 lacs was outstanding on 31st March 2010 for more than six months.
b) Disputed Income Tax demands have been deposited with the Income Tax Authorities.
10) The Company does not have accumulated losses as at 31.03.2010. However it has incurred cash losses during the financial year ended on that date.
11) According to the information and explanations given to us, the company defaulted in the payment of its dues to financial institutions, banks during the year. As mentioned in Note No. 11, the Company has submitted a CDR proposal, pending consideration by CDR cell of Reserve Bank of India.
12) According to the information and explanations given to us, the company has not granted any loans or advances on the basis of security byway of pledge of shares, debentures and other securities.
13) The company is not a chit or a nidhi /mutual benefit fund/society, therefore, the clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.
14) In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures or other investments and hence, the requirements of Para 4 (xiv) are not applicable to the company.
15) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.
16) The Company has not during the year, availed any term loans from Bank. Term loans availed in earlier years have not been utilized for the purpose for which they were sanctioned.
17) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow of the Company, we report that no funds raised on Short Term Basis have been used for Long Term Investment.
18) 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 during the year.
19) During the year, the company has issued Non Convertible Debentures. As informed to us, no security has been created for the same.
20) The Company has not raised any money by public issue of shares during the year.
21) According to the 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 M/s Shashank Patki & Associates
Firm Regn. No. 122054W
Membership No. 035151
Place: - Pune
Date: June 09, 2010