Mar 31, 2010
1. We have audited the attached Balance sheet of CHEMCEL BIOTECH
LIMITED as at 31st March, 2010 and related Profit and Loss account of
the Company 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 accounting 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 over all financial
statements presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies, (Auditors Report) Order 2003 issued
by the Central Government in terms of Sub Section (4A) of Section 227
of the Companies Act, 1956, we enclose in the Annexure, a statement on
the matters specified in the paragraphs 4 and 5 of the said Order.
4. Further to our comments in the annexure referred to above, we
report that:
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.
In our opinion, proper books of accounts as required by law have been
kept by the Company so far as appears from our examination of those
books.
The Profit and Loss account and Balance sheet dealt with by this report
are in agreement with the books of accounts of the Company.
In our opinion, the Profit & Loss account and Balance sheet comply with
the accounting standards specified by the Institute of Chartered
Accountants of India referred to in Section 211(3C) of the Companies
Act, 1956.
On the basis of written representations received from the Directors as
on 31.03.2010, and taken on record by the Board of directors, we report
that none of the directors is disqualified as on 31.03.2010 from being
appointed as Directors under Section 274(1) (g) of the Companies Act,
1956.
5. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required, and give
a true and fair view in conformity with the accounting principles
generally accepted in India.
a. In the case of Balance sheet, of the state of affairs of the
Company as on 31" March, 2010.
b. In the case of Profit & Loss account, of the Profit for the period
ended on that date.
c. In the case of Cash Flow Statement for the year ended on 31" March,
2010
ANNEXURE TO THE AUDIT REPORT (Chemcel Biotech Ltd)
{Referred to in paragraph (3) of report of even date}
The Auditors report on the account of a Company to which this order
applies shall include a statement on the following matters, namely:- I.
a) The Company is maintaining proper records showing full particulars,
including quantitative details and situation of fixed assets;
b) All fixed assets have been physically verified by the management at
reasonable intervals; there is no material discrepancies noticed on
such verification.
c) The Company has not disposed off any substantial part of fixed
assets during this year.
II. a) The physical verification of inventory has been conducted at
reasonable intervals by the management;
b) The procedures of physical verification followed by the Management
are reasonable and adequate in relation to the size of the company and
the nature of its business. There are no inadequacies in such
procedures.
c) The company is maintaining proper records of inventory and as
informed to us, there is no material discrepancies noticed on physical
verification.
III. a) The Company has not granted any loans, secured or unsecured to
parties covered in the register maintained under section 301 of the
Companies Act, 1956. Accordingly, Clause (iii)(b) to iii(d) of
paragraph 4 of the Order are not applicable to the Company for the
current year.
b) The Company has taken interest free loan of Rs. 1,55,63,000/- from
Sri K. T. Vijay Kumar, the Managing Director of the Company, covered in
the register maintained under section 301 of the Companies Act 1956.
c) The rate of interest and other terms and conditions on which the
loans have been taken by the Company are not prima facie, prejudicial
to the interest of the company.
IV. The company has an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventory of fixed assets and for the
size of goods. There is no accounting failure to correct major
weaknesses in internal control.
V a) In our opinion and according to explanation and information given
to us, the particulars of contracts or arrangements referred to in
Section 301 of the Companies Act, 1956 have been so entered in the
Register required to be maintained under this Section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
VI. The Company has not accepted deposits from the public, as per the
provisions of Sections 58A and 58AA of the Act and the rules framed
there under.
VII. In our Opinion, the company has an internal audit system
commensurate with its size and nature of its business.
VIII. According to information and explanations given to us the
Central Government has not prescribed the maintenance of the cost
records by the company under clause (d) of sub section (I) of 209 of
Companies Act, 1956.
IX. a) The company is regular in depositing undisputed statutory dues
including Provident Fund, Employees State Insurance, Cess and any other
statutory dues within the time, with the appropriate authorities.
b) The Company is disputing the sales tax liability for an amount of
Rs. 8,37,576/- and income tax liability of Rs. 36,40,723/-. Since the
appeals are pending no provision has been made.
X. The company is a profit making company.
XI. The company has not defaulted in repayment of dues to a financial
institution or bank. The company has not issued any debentures.
XII. The company has not granted loans and advances on the basis of
security by way of Pledge of shares.
XIII. The Company is not a Chit Fund / Nidhi / Mutual Benefit fund /
society.
XIV According to the information and explanations given to us the
Company is not dealing or trading in shares, Securities, Debentures and
other Investments.
XV. The company has given guarantee for loans taken by others from
Andhra Bank and the terms and conditions whereof are not prejudicial to
the interest of the Company;
XVI. In our opinion the Term Loans availed by the Company during the
year were, prime facie, applied for the purpose for which they were
obtained.
XVII. The funds raised on short-term basis have been used for
short-term investment and vice versa; XVIII The Company has not made
bonus allotment and right allotment to the party Covered in the
Register maintained under section 301 of the Act.
XIX. The company has not issued any debentures.
XX. The company has not made public issue during this year. Hence the
matter to be replied as per 4(XXIV) does not arrive.
XXI In our Opinion and according to the information given to us, no
fraud on or by the Company has been noticed or reported during the
year.
Date:- 03.05.2010 T.NEHRU
Place :-Vijayawada Chartered Accountant
CP No.15207