Mar 31, 2014
We have audited the accompanying financial statements of DHARTI
PROTEINS LTD.,("the company") which comprise the Balance Sheet as
at 31/03/2014, and the Statement of Profit and Loss cash flow statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management Responsibility for the Financial Statements :
Management is responsible for the preparation of these financial
statements that give a true and fair view of financial position,
financial performance and cash flow of the company in accordance with
the accounting standards referred to in sub -section (3C) of section
211 of the Companies Act 1956 ("the Act") read with the General
Circular 15/ 2013 dated 13th September 2013 of the Ministry of
Corporate Affairs in respect of section 133 of the Companies Act, 2013.
The responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and presentation of
financial statements that give a true and fair view and are free from
material misstatements, whether due to fraud or error.
Auditor''s 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 misstatements.
Audit involves performing procedure to obtain audit evidence about the
amounts and disclosure in the financial statements. The procedure
selected depend upon auditor''s judgement, including the assessment of
the risk of material misstatements of the financial statements, whether
due to fraud or error. In making those risk assessment, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedure that are appropriate in the circumstances ,but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall
presentation of financial statements.
We believe that 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 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 case of the Balance Sheet, of the state of affairs of the
Company as at 31/03/2014;
(b) in case Statement of Profit and Loss Account, of the Loss for the
year ended on that date; and
(c) in case of the Cash Flow Statements, of the cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements :
1) As required by the Companies (AuditorÂs Report) Order,2003("the
order") issued by Central Government of India in terms of sub-section
(4A) of section 227 of the Act, We give in the Annexure a statements on
the matters specified in paragraphs 4 and 5 of the order.
2) Further to our comments in the Annexure referred to above, we
comment that:
a) Company has not made provision for doubtful trade receivable more
than six months of Rs.21855685 and long term loans and advances of
Rs. 49820583/- shall resulting in to increasing loss for the year
and over statement of debtors and loans and advances to the extent of
above amount.
b) Permanent diminution in market value of quoted investments of book
value of Rs. 617550/- and value of unquoted shares of Classic Co. Op.
Bank Ltd. for Rs. 125440/- and unquoted shares of Rs. 8000100
and NSC of Rs. 20000/- have not been provided shall resulting into
increasing loss for the year and over statement of Investments.
c) Confirmations were not available for debtors, loans, Advances taken
and given and creditors.
d) Company has granted interest free loans and advance of Rs.
12996405/- to two number of parties (Refer para (iii) (a) (iii)
(b)(iii) (c) (iii)(d) annexure to this report) prejudicial to the
interest of the company.
e) Internal control system need to be strengthened for recovery of
outstanding dues and proper financial management
f) Most of the funds of company are block and movements in those
account are negligible so we are of opinion that going concern status
is effected due to above blockage of funds
3) As required by section 227(3) of the Act, Subject to our foregoing
observation in para 4 and its consequential effects on profit/ loss
and assets/ liabilities for the year as at 31st March 2014 we report
that :
a. We have obtained all 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 examinations of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and cash flow
statments 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 statments comply with the Accounting Standards referred
to in sub-section(3C) of section 211 of the Companies Act,1956, read
with the General Circular 15/2013 dated 13th September 2013 of the
Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013 except mentioned below;
i) Company has not followed AS 13 for perma4nent reduction in value of
long-term investments.
e. On the basis of written representations received from the directors
as on 31/03/2014 and taken on record by the Board of Directors, none of
the director is disqualified as on 31/03/2014, from being appointed as
a director in terms of clause (g) of sub-section (1) of section 274 of
the Companies Act, 1956.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITOR''S REPORT OF EVEN
DATE
(i) (a) The company is maintaining fixed assets records to show full
particulars, including quantitative details and situation of fixed
assets. Such register is at the stage of updating during the year.
(b) According to the information and explanations given to us, fixed
assets have been physically verified by the management in phase
periodical manner during 3 the years. We have been informed that no
material discrepancies were noticed on such verification.
(c) There has been no disposal of substantial part of the fixed assets
during the year, which may affect the going concern status of the
company.
(ii) (a) According to the information and explanation given to us,
inventories have been physically verified by the management during the
year. In our opinion the frequency of verification is reasonable having
regard to the size of the company and the nature of its business.
(b) In our opinion and according to the 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 the nature of its business.
(c) The Company is maintaining proper records of inventory. No material
discrepancies were noticed on physical verification between the
physical stocks and the book records.
(iii) In respect of the loans, secured or unsecured granted or taken by
the company from companies, firm or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
(a) The Company has granted interest free loan to 2 companies, Nil firm
and Nil other parties. In respect to of the said loan, the maximum
amount outstanding at any time during the year is Rs. 132.70 Lacs and
year-end balances are is Rs.129.96 Lacs.
(b) In our opinion and according to the information and explanation
given to us, all interest free loans/advances are prima facie
prejudicial to the interest of the company.
(c) In respect of loan given to associate companies, firms and other
parties of the company have no repayment schedule.
(d) In respect of the loan given by the company, there is no repayment
schedule therefore the question of overdue amount does not arise.
(e) The Company has taken unsecured loan during the year from Nil
companies, Nil firm and 1 other parties. The maximum amount involved
during the year was Rs. 36.47 Lacs and the year-end balance of loan
taken from such parties is Rs. 36.47 Lacs.
(f) In our opinion and according to the information and explanation
given to us the rate of interest and other terms and condition are not
prima facie prejudicial to the interest of the company.
(g) The said loan was taken from associate companies, firms and other
parties of the company are repayable on demand and there is no
repayment schedule.
(iv) In our opinion and according to the information and explanation
given to us, there are not adequate internal control procedure
commensurate with size of the company and the nature of its business
through personal supervision of management of the company with regard
to purchase of inventories, purchase of fixed assets and for the sale
of goods and services. According to us, Internal control system needs
to be strengthening for recovery of loans, advances and debt recovery.
(v) (a) In our opinion and according to the information and
explanations given to us the transaction made in
pursuance of contract or arrangement that need to be entered into the
register maintained under section 301 of the companies act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the companies act, 1956 and exceeding the value of Rs. Five lacs have
been so entered if required.
(vi) On the basis of information and explanations given to us company
has accepted deposit in violation during the year from the public,
within in violation of section 58A and 58AA of the companies act 1956
and companies (Acceptance of deposits) Rule 1975 with regard to
acceptance and payment of deposits from public.
(vii) In our opinion based on the information and explanation given to
us, the Company has not an Internal Audit system during the year.
(viii) Based on the information and explanations given to us
maintenance of cost records has not been prescribed by the central
government under clause (d) of sub section (1) of section 209 of the
act.
(ix) (a) According to the information and explanation given to us, the
company is not regular in depositing with appropriate authorities
undisputed statutory dues including Investor Education protection fund,
Income tax, sales tax, wealth tax, cess and other material statutory
dues, applicable to it.
(b) According to the information and explanation given to us, company
has no undisputed amounts payable in respect of income tax, Investor
Education Protection fund, wealth tax, cess and other material dues
were in arrears as at 31st March, 2014 for a period of more than 6
months from the date they became payable to it otherwise than mentioned
below.
Statement of arrears of Statutory Dues Outstanding for More than Six
Months :
Name of Nature of Amount Period to Due Date of
the Statute the Dues (Rs.) which the Date Payment
amount relates
Sales Tax Sales Tax 1812421/- 2005-06 Already Due --
2006-07
In absence of Sales Tax return copy and non filling for 2005-06,
2006-07 and 2007-08, 2008-09, 2009- 10, 2010-11, 2011-12 and 2012-13.
We cannot quantify the liabilities of sales tax. We cannot quantify for
interest and penalty on all undisputed due.
(c) According to the information and explanation given to us, there are
no dues outstanding of customs duty, Income tax, Sales tax, wealth tax,
Excise and on account of dispute except followings.
Statement of Disputed of Statutory Dues as on 31.3.2014 :
Name of Nature of Amount Period to Due date Date of
the Statute the Dues (Rs.) which the Payement
amount
relates
Income Tax CIT Appeal 2033191/- 2004-05 17/12/2010 --
Income Tax CIT Appeal 1901976/- 2005-06 17/12/2010 --
Income Tax CIT Appeal 665060/- 2006-07 24/02/2011 --
Income Taxd CIT Appeal 382518/- 2007-08 17/12/2010 --
Details of Accounting Year 2004-05, 2005-06, 2006-07 and 2007-08 are
considered on the basis of notice received of Income Tax office dated
21/12/2012. Liabilities on account of interest on tax cannot be
accertainable.
(x) Accumulated losses at the end of the financial year is not less
than fifty percent of companyÂs net worth and company has incurred
cash losses in the current year and immediately preceding financial
year.
(xi) In our opinion and according to the information and explanation
given to us, the company has not generally defaulted in repayment of
dues to Financial Institutions, Banks or Debenture holders.
(xii) According to the information and explanation given to us and
based on the documents and records produced to us, the company has not
granted loans and advance on the security by way of pledge of shares,
Debenture 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 (AuditorÂs Report) Order, 2003 are not applicable to
the company.
(xiv) In our opinion, the company is dealing in or trading in shares,
securities, debentures and other investment. Proper records have not
been maintained of the transactions and contracts and timely entries
have been made therein. The shares, securities, debentures and other
securities have been held by the company. NSC, Shares of Classic Co.
Op. Bank Ltd, and Unquoted shares have not been available for
verification.
(xv) According to the information and explanation given to us the
company has not given, during the year any guarantee for loans taken by
others from Banks or financial Institutions. As a result the question
of our commenting whether the term and conditions are prejudicial to
the interest of the company does not arise.
(xvi) In our opinion and according to the information given to us,
company has not taken term loan during the year.
(xvii) Company has not raised fresh short term and long term funds
during the year. Most of the fund of company has been block. In absence
of movement of funds, we are unable to comment. CompanyÂs equity
funds have been blocked in long term advances and investment.
(xviii) According to the information and explanation given to us the
company has not made during the year any preferential allotment of
shares to parties and companies covered in the register maintained
under section 301 of the Companies act, 1956.
(xix) According to the information and explanation given to us, the
company has not issued any debentures during the year.
(xx) The company has have not raised money from the public during the
year.
(xxi) On the basis of our examination of the books of accounts and
other relevant records and information made available to us,
prima-facie we have not noticed any fraud on or by the company during
the year, Further the management has represented to us that no fraud on
or by the company has been reported during the year. However we are
unable to determine/ verify as to whether any such reporting has been
made during the year.
FOR NIMESH M. SHAH & CO.,
(Chartered Accountants)
Reg No.: 115204W
Date : 02/08/2014 NIMESH M. SHAH
Place : AHMEDABAD PARTNER
M. No.: 047856
Mar 31, 2013
Report on the Financial Statements :
We have audited the accompanying financial statements of DHARTI
PROTEINS LIMITED, ("the company") which comprise the Balance Sheet
as at 31/03/2013 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 Responsibility for the Financial Statements :
Management is responsible for the preparation of these financial
statements that give a true and fair view of financial position,
financial performance and cash flow of the company in accordance with
the accounting standards referred to in sub -section (3C) of section
211 of the Companies Act 1956 ("the Act") The responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of financial statements
that give a true and fair view and are free from material
misstatements, whether due to fraud or error.
Auditor''s 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 misstatements.
Audit involves performing procedure to obtain audit evidence about the
amounts and disclosure in the financial statements. The procedure
selected depends upon auditor''s judgment, including the assessment of
the risk of material misstatements of the financial statements, whether
due to fraud or error. In making those risk assessment, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedure that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of financial statements.
We believe that 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 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 case of the Balance Sheet, of the state of affairs of the
Company as at 31/03/2013;
(b) in case of Profit and Loss Account, of the Loss for the year ended
on that date; and
(c) in case of the Cash Flow Statements, 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 Central Government of India in terms of
sub-section (4A) of section 227 of the Act, We give in the Annexure a
statements on the matters specified in paragraphs 4 and 5 of the order.
2) Further to our comments in the Annexure referred to above, we
comment that:
a) Company has not made provision for doubtful trade receivable more
than six months of Rs. 21855685 and long term loans and advances of Rs.
42635526 shall resulting in to increasing loss for the year and over
statement of debtors and loans and advances to the extent of above
amount.
b) Permanent diminution in market value of quoted investments of book
value of Rs. 8198248 and value of unquoted shares of Classic Co. Op.
Bank Ltd. for Rs. 125440 and unquoted shares of Rs. 8020100 have not
been provided shall resulting into increasing loss for the year and
over statement of Investments.
c) Confirmations were not available for debtors, loans, Advances taken
and given and creditors.
d) Company has granted interest free loans and advance of Rs. 13269905
to number of parties (Refer para (iii) (a) (iii) (b)(iii) (c) (iii)(d)
annexure to this report) prejudicial to the interest of the company.
e) Internal control system need to be strengthened for recovery of
outstanding dues and proper financial management
f) Most of the funds of company are block and movements in those
account are negligible so we are of opinion that going concern status
is effected due to above blockage of funds
3) As required by section 227(3) of the Act, Subject to our foregoing
observation in para 4 and its consequential
effects on profit/ loss and assets/ liabilities for the year as at 31st
March 2013 we report that :
a. We have obtained all 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 examinations of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and cash flow
statements 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 statements comply with the Accounting Standards referred
to in sub-section(3C) of section 211 of the Companies Act,1956 except
mentioned below :
i) Company has not followed AS 13 for permanent reduction in value of
long-term investments.
e. On basis of information provided by the board of directors we
report that Shri Dhiren Thakkar is disqualified as on 31st March, 2013
from being appointed as a director in terms of clause (g) of
sub-section (1) of the section 274 of the Act.
(i) (a) The company is maintaining fixed assets records to show full
particulars, including quantitative details and situation of fixed
assets. Such register is at the stage of updating during the year.
(b) According to the information and explanations given to us, fixed
assets have been physically verified by the management in phase
periodical manner during 3 the years. We have been informed that no
material discrepancies were noticed on such verification.
(c) There has been no disposal of substantial part of the fixed assets
during the year, which may affect the going concern status of the
company.
(ii) (a) According to the information and explanation given to us,
inventories have been physically verified by the management during the
year. In our opinion the frequency of verification is reasonable having
regard to the size of the company and the nature of its business.
(b) In our opinion and according to the 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 the nature of its business.
(c) The Company is maintaining proper records of inventory. No material
discrepancies were noticed on physical verification between the
physical stocks and the book records.
(iii) In respect of the loans, secured or unsecured granted or taken by
the company from companies, firm or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
(a) The Company has granted interest free loan to 3 companies, 1 firm
and Nil other parties. In respect to of the said loan, the maximum
amount outstanding at any time during the year is Rs. 151.44 Lacs and
year-end balances are is Rs. 132.70 Lacs.
(b) In our opinion and according to the information and explanation
given to us, all interest free loans/advances are prima facie
prejudicial to the interest of the company.
(c) In respect of loan given to associate companies, firms and other
parties of the company have no repayment schedule.
(d) In respect of the loan given by the company, there is no repayment
schedule therefore the question of overdue amount does not arise.
(e) The Company has taken unsecured loan during the year from Nil
companies, Nil firm and 1 other parties. The maximum amount involved
during the year was Rs. 71.72 Lacs and the year-end balance of loan
taken from such parties is Rs. 36.47 Lacs.
(f) In our opinion and according to the information and explanation
given to us the rate of interest and other terms and condition are not
prima facie prejudicial to the interest of the company.
(g) The said loan was taken from associate companies, firms and other
parties of the company are repayable on demand and there is no
repayment schedule.
(iv) In our opinion and according to the information and explanation
given to us, there are not adequate internal control procedure
commensurate with size of the company and the nature of its business
through personal supervision of management of the company with regard
to purchase of inventories, purchase of fixed assets and for the sale
of goods and services. According to us, Internal control system needs
to be strengthening for loans, advances and debt recovery.
(v) (a) In our opinion and according to the information and
explanations given to us the transaction made in pursuance of contract
or arrangement that need to be entered into the register maintained
under section 301 of the companies act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the companies act, 1956 and exceeding the value of Rs. Five lacs have
been so entered if required.
(vi) On the basis of information and explanations given to us company
has accepted deposit in violation during the year from the public,
within in violation of section 58A and 58AA of the companies act 1956
and companies (Acceptance of deposits) Rule 1975 with regard to
acceptance and payment of deposits from public.
(vii) In our opinion based on the information and explanation given to
us, the Company has not an Internal Audit system during the year.
(viii) Based on the information and explanations given to us
maintenance of cost records has not been prescribed by the central
government under clause (d) of sub section (1) of section 209 of the
act.
(ix) (a) According to the information and explanation given to us, the
company is not regular in depositing with
appropriate authorities undisputed statutory dues including Investor
Education protection fund, Income tax, sales tax, wealth tax, cess and
other material statutory dues, applicable to it.
(b) According to the information and explanation given to us, company
has no undisputed amounts payable in respect of income tax, Investor
Education Protection fund, wealth tax, cess and other material dues
were in arrears as at 31st March, 2013 for a period of more than 6
months from the date they became payable to it otherwise than mentioned
below.
Statement of arrears of Statutory Dues Outstanding for More than Six
Months :
Name of Nature of Amount Period to Due Date of
the
Statute the Dues (Rs.) which the Date Payment
amount
relates
Sales Tax Sales Tax 1812421/- 2005-06 Already
Due -
2006-07
In absence of Sales Tax return copy and non filling for 2005-06,
2006-07 and 2007-08, 2008-09, 200910, 2010-11 and 2011-12. We cannot
quantify the liabilities of sales tax. We cannot quantify for interest
and penalty on all undisputed due.
(c) According to the information and explanation given to us, there are
no dues outstanding of customs duty, Income tax, Sales tax, wealth tax,
Excise and on account of dispute except followings.
Statement of Disputed of Statutory Dues as on 31.3.2013 :
Name of Nature of Amount Period to Due Date of
the
Statute the Dues (Rs.) which the Date Payment
amount
relates
Income Tax CIT Appeal 2033191/- 2004-05 17/12/2010 --
Income Tax CIT Appeal 1901976/- 2005-06 17/12/2010 --
Income Tax CIT Appeal 665060/- 2006-07 24/02/2011 --
Income Taxd CIT Appeal 382518/- 2007-08 17/12/2010 --
Details of Accounting Year 2004-05, 2005-06, 2006-07 and 2007-08 are
considered on the basis of notice received of Income Tax office dated
21/12/2012. Liabilities on account of interest on tax cannot be
ascertainable.
(x) Accumulated losses at the end of the financial year is less than
fifty percent of company''s net worth and company has incurred cash
losses in the current year and immediately preceding financial year.
(xi) In our opinion and according to the information and explanation
given to us, the company has not generally defaulted in repayment of
dues to Financial Institutions, Banks or Debenture holders. Company has
not paid bank interest with in stipulated time
(xii) According to the information and explanation given to us and
based on the documents and records produced to us, the company has not
granted loans and advance on the security by way of pledge of shares,
Debenture 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 dealing in or trading in shares,
securities, debentures and other investment. Proper records have been
maintained of the transactions and contracts and timely entries have
been made therein. The shares, securities, debentures and other
securities have been held by the company. NSC, Shares of Classic Co.
Op. Bank Lt, Shares of Kanel Oil & Export And Ltd and Unquoted shares
have not been available for verification.
(xv) According to the information and explanation given to us the
company has not given, during the year any guarantee for loans taken by
others from Banks or financial Institutions. As a result the question
of our commenting whether the term and conditions are prejudicial to
the interest of the company does not arise.
(xvi) In our opinion and according to the information given to us,
company has not taken term loan during the year.
(xvii) Company has not raised short term and long term funds during the
year. Short Term Loan taken during the year has been used for repayment
of dues only. Working Capital loans have not been utilized for business
purpose.
(xviii) According to the information and explanation given to us the
company has not made during the year any preferential allotment of
shares to parties and companies covered in the register maintained
under section 301 of the Companies act, 1956.
(xix) According to the information and explanation given to us, the
company has not issued any debentures during the year.
(xx) The company has have not raised money from the public during the
year.
(xxi) On the basis of our examination of the books of accounts and
other relevant records and information made available to us,
prima-facie we have not noticed any fraud on or by the company during
the year, Further the management has represented to us that no fraud on
or by the company has been reported during the year. However we are
unable to determine/ verify as to whether any such reporting has been
made during the year.
FOR NIMESH M. SHAH & CO.,
(Chartered Accountants)
Reg No.: 115204W
Date : 02/09/2013 NIMESH M. SHAH
Place : AHMEDABAD PARTNER
M. No.: 047856
Mar 31, 2012
(1) We have audited the attached Balance Sheet of DHARTI PROTEINS LTD.
as at March 31, 2012, Profit & Loss Account and the cash flow statement
of the company 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 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 the
financial statements are free of material misstatement. An audit
includes, examining on a test check basis, evidence supporting the
amounts and disclosures in the financial statement. 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 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 and as per the information and
explanations furnished to us and the books and records examined by us
in the normal course of audit. We enclose in the annexure 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
comment that :
(a) Company has not made provision for doubtful trade receivable more
than six months of Rs. 23871630/- and long term loans and advances of
Rs. 42811313/- shall resulting in to increasing loss for the year and
over statement of debtors and loans and advances to the extend of above
amount.
(b) Permanent diminution in market value of quoted investments of book
value of Rs. 8198248/ and value of unquoted shares of Classic Co. Op.
Bank Ltd. for Rs. 125440/- and unquoted shares of Rs. 8021101/- have
not been provided shall resulting into increasing loss for the year and
over statement of Investments.
(c) Confirmations were not available for debtors, loans, Advances taken
and given and creditors.
(d) Company has granted interest free loans and advance of Rs.
13494292/- to number of parties (Refer para (iii) (a) (iii) (b)(iii)
(c) (iii)(d) annexure to this report)
(e) Internal control system need to be strengthened for recovery of
outstanding dues and proper financial management
(f) Most of the funds of company are block and movements in those
account are negligible so we are of opinion that going concern status
is effected due to above blockage of funds
(5) Subject to our foregoing observation in para 4 and its
consequential effects on profit/ loss and assets/ liabilities for the
year as at 31s1 March 2012 we report that:-
(a) We have obtained all the information and explanation 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 except our observations under para 4 above:
(c) The Balance sheet, Profit & Loss account and the cash flow
statement dealt with by this report are in agreement with the books of
accounts.
(d) In our opinion the Balance sheet, profit & Loss account and the
cash flow statement have been prepared in compliance with the
applicable accounting standards referred to in sub-section (3C) of the
section 211 of the Companies Act 1956 except mentioned below,
(i) Company has not followed AS 13 for permanent reduction in value of
long-term investments.
(e) On basis of information provided by the board of directors we
report that Shri Dhirect Thakkar is disqualified as on 31st March, 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of the section 274 of the Act.
(f) Subject to the effects of such adjustments if any, as referred in
paragraph 4 as might have been determined to be necessary, had we been
able to satisfy ourselves. In our opinion and to the best of our
information and according to explanations given to us, the said
accounts read together with other notes thereon and statement on
significant accounting policies give in the prescribed manner the
information required by the act, and also give a true & 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 March 31, 2012 and
(ii) in the case of the Profit & Loss account of the loss for the year
ended on that date;
(iii) in the case cash flow statement of the cash flow for the year
ended on that date
(i) (a) The company is maintaining fixed assets records to show full
particulars, including quantitative details
and situation of fixed assets. Such register is at the stage of
updating during the year.
(b) According to the information and explanations given to us, fixed
assets have been physically verified by the management in phase
periodical manner during 3 the years. We have been informed that no
material discrepancies were noticed on such verification.
(c) There has been no disposal of substantial part of the fixed assets
during the year, which may affect the going concern status of the
company.
(ii) (a) According to the information and explanation given to us,
inventories have been physically verified by the management during the
year. In our opinion the frequency of verification is reasonable having
regard to the size of the company and the nature of its business.
(b) In our opinion and according to the 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 the nature of its business.
(c) The Company is maintaining proper records of inventory. No material
discrepancies were noticed on physical verification between the
physical stocks and the book records.
(iii) In respect of the loans, secured or unsecured granted or taken by
the company from companies, firm or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
(a) The Company has granted interest free loan to 4 companies, 1 firm
and Nil other parties. In respect to of the said loan, the maximum
amount outstanding at any time during the year is Rs. 173.35 Lacs and
year-end balances are is Rs. 134.94 Lacs.
(b) In our opinion and according to the information and explanation
given to us, all interest free loans/advances are prima facie
prejudicial to the interest of the company.
(c) In respect of loan given to associate companies, firms and other
parties of the company have no repayment schedule.
(d) In respect of the loan given by the company, there is no repayment
schedule therefore the question of overdue amount does not arise.
(e) The Company has taken unsecured loan during the year from Nil
companies, Nil firm and 1 other parties. The maximum amount involved
during the year was Rs. 5.86 Lacs and the year-end balance of loan
taken from such parties are Rs. 5.86 Lacs.
(f) In our opinion and according to the information and explanation
given to us the rate of interest and other terms and condition are not
prima facie prejudicial to the interest of the company.
(g) The said loan was taken from associate companies, firms and other
parties of the company are repayable on demand and there is no
repayment schedule.
(iv) In our opinion and according to the information and explanation
given to us, there are not adequate internal control procedure
commensurate with size of the company and the nature of its business
through personal supervision of management of the company with regard
to purchase of inventories, purchase of fixed assets and for the sale
of goods and services. According to us, Internal control system needs
to be strengthen for loans, advances and debt recovery.
(y) (a) In our opinion and according to the information and
explanations given to us the transaction made in pursuance of contract
or arrangement that need to be entered into the register maintained
under section 301 of the companies act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the companies act, 1956 and exceeding the value of Rs. Five lacs have
been so entered if required.
(vi) On the basis of informations and explanations given to us company
has accepted deposit in violation during the year from the public,
within in violation of section 58A and 58AA of the companies act 1956
and companies (Acceptance of deposits) Rule 1975 with regard to
acceptance and payment of deposits from public.
(vii) In our opinion based on the information and explanation given to
us, the Company has not an Internal Audit system during the year.
(viii) Based on the information and explanations given to us
maintenance of cost records has not been prescribed by the central
government under clause (d) of sub section (1) of section 209 of the
act.
(ix) (a) According to the information and explanation given to us, the
company is not regular in depositing with appropriate authorities
undisputed statutory dues including Investor Education protection fund,
Income tax, sales tax, wealth tax, cess and other material statutory
dues, applicable to it.
(b) According to the information and explanation given to us, company
has no undisputed amounts payable in respect of income tax, Investor
Education Protection fund, wealth tax, cess and other material dues
were in arrears as at 31st March, 2012 for a period of more than 6
months from the date they became payable to it otherwise than mentioned
below.
Statement of arrears of Statutory Dues Outstanding for More than Six
Months :
Name of Nature of Amount Period to Due Date of
the Statute the Dues (Rs.) which the Date Payment
amount
relates
Sales Tax Sales Tax 1812421/- 2005-06 Already
Due -
2006-07
Income Tax CIT Appeal 1324370/- 2003-04 24/02/2011 -
Income Tax CIT Appeal 2033191/- 2004-05 17/12/2010 -
Income Tax CIT Appeal 1901976/- 2005-06 17/12/2010 -
Income Tax CIT Appeal 665060/- 2006-07 24/02/2011 -
Income Tax CIT Appeal 382518/- 2007-08 17/12/2010 -
In absence of Sales Tax return copy and non filling for 2005-06,
2006-07 and 2007-08, 2008-09, 2009- ID, 2010-11 and 2011-12. We can not
quantify the liabilities of sales tax. We can not quantify for interest
and penalty on all undisputed due.
(c) According to the information and explanation given to us, there are
no dues outstanding of customs duty, Income tax, Sales tax, wealth tax,
Excise and on account of dispute.
(x) Accumulated losses at the end of the financial year is less than
fifty percent of company's net worth and it has incurred cash losses
in the current year immediately preceding financial year.
(xi) In our opinion and according to the information and explanation
given to us, the company has generally defaulted in repayment of dues
to Financial Institutions, Banks or Debenture holders. Company has not
paid bank interest with in stipulated time
(xii) According to the information and explanation given to us and
based on the documents and records produced to us, the company has not
granted loans and advance on the security by way of pledge of shares,
Debenture 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 dealing in or trading in shares,
securities, debentures and other investment. Proper records have been
maintained of the transactions and contracts and timely entries have
been made therein. The shares, securities, debentures and other
securities have been held by the company. NSC, Shares of Classic Co.
Op. Bank Ltd. and Unquoted shares have not been available for
verification.
(xv) According to the information and explanation given to us the
company has not given, during the year any guarantee for loans taken by
others from Banks or financial Institutions. As a result the question
of our commenting whether the term and conditions are prejudicial to
the interest of the company does not arise.
(xvi) In our opinion and according to the information given to us,
company has not taken term loan during the year.
(xvii) Company has raised short term and long term funds during the
year. Short Term Loan taken during the year have been used for
repayment of dues only. Working Capital loans have not been utilized
for business purpose.
(xviii) According to the information and explanation given to us the
company has not made during the year any preferential allotment of
shares to parties and companies covered in the register maintained
under section 301 of the Companies act, 1956.
(xix) According to the information and explanation given to us, the
company has not issued any debentures during the year.
(xx) The company has have not raised money from the public during the
year.
(xxi) On the basis of our examination of the books of accounts and
other relevant records and information made available to us,
prima-facie we have not noticed any fraud on or by the company during
the year, Further the management has represented to us that no fraud on
or by the company has been reported during the year. However we are
unable to determine/ verify as to whether any such reporting has been
made during the year.
For, NIMESH M. SHAH & CO.,
Chartered Accountants
Reg. No. : 115204W
Date : 5th September, 2012 (Nimesh M. Shah)
Place : Ahmedabad Partner
Membership No. : 047856
Mar 31, 2011
(1) We have audited the attached Balance Sheet of DHARTI PROTEINS LTD.
as at March 31, 2011, Profit A Loss Account and the cash flow statement
of the company 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 statement based on our audit.
(2) 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 the
financial statements are free of material misstatement. An audit
includes, examining on a test check basis, evidence supporting the
amounts and disclosures in the financial statement. 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 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 and as per the information and
explanations furnished to us and the books and records examined by us
in the normal course of audit. We enclose in the annexure 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
comment that :
(a) Company has not made provision for doubtful debtors more than six
months . of Rs. 23871630/- and loans of Rs. 33133991/- and advance
recover able in cash or kind of Rs. 13996520/- and advance to creditor
Rs. 2870768/- and Deposits Rs. 100000/- resulting in to increasing loss
for the year and over statement of debtors and loans and advances to
the extend of above amount. (Refer schedule- 17 Notes to the Financial
Statements Point-6)
(b) Permanent diminution in market value of quoted investments of book
value of Rs. 9853888/- and value of unquoted shares of Classic Co. Op.
Bank Ltd. for Rs. 125440/- and unquoted shares of Rs. 8000000/- have
not been provided resulting into increasing loss for the year and over
statement of Investments. (Schedule-17 Accounting policies Point-E)
(c) Confirmations were not available for debtors, loans, Advances taken
and given and creditors, (schedule-17 Notes to the Financial Statements
Point-16)
(d) Company has granted interest free loans and advance of Rs.
24687135/- to number of parties (Refer para (iii) (a) (iii) (b)(iii)
(c) (iii)(d) annexure to this report)
(e) Company's holding of 470000 shares of M/s Kanel oil and exports
industries ltd. are lying with SICOM for availing loan to Kanel oil 4
Exports Industries Ltd.
(f) Internal control system need to be strengthened for recovery of
outstanding dues and proper financial management (Schedule-17 Notes to
the Financial Statements Point-17)
(g) Most of the funds of company are block and movements in that
account are negligible so we are of opinion that going concern status
is effected due to above blockage of funds
(5) Subject to our foregoing observation in para 4 and its
consequential effects on æ profit/ loss and assets/ liabilities for the
year as at 31st March 2011 we report æ that:-
(a) We have obtained all the information and explanation 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 I the company so far as appears from our examination of those
books except I our observations under para 4 above: I
(c) The Balance sheet. Profit & Loss account and the cash flow
statement dealt with by this report are in agreement with the books of
accounts.
(d) In our opinion the Balance sheet, profit & Loss account and the
cash flow statement have been prepared in compliance with the
applicable accounting standards referred to in sub-section (3C) of the
section 211 of the Companies Act 1956 except mentioned below,
(i) Company has not followed AS 13 for permanent reduction in value of
long-term investments.
(e) On basis of information provided by the board of directors we
report that none of the directors is qualified as on 31st March, 2011
from being appointed as a director in terms of clause (g) of
sub-section (1) of the section 274 of the Act. In absence of disclosure
from all the directors we are not able to comment on their
qualification.
(f) Subject to the effects of such adjustments if any, as referred in
paragraph 4 as might have been determined to be necessary, had we been
able to satisfy ourselves. In our opinion and to the best of our
information and according to explanations given to us,
the said accounts read together with other notes thereon and
statement on significant accounting policies give in the
prescribed manner the information required by the act, and also give a
true A 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 March 31, 2011 and
(ii) in the case of the Profit <& Loss account of the loss for the year
ended on that date;
(iii) in the case cash flow statement of the cash flow for the year
ended on that date
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITOR'S REPORT OF EVEN
DATE
(i) (a) The company is maintaining fixed assets records to show full
particulars, including quantitative details and situation of fixed
assets. Such register is at the stage of updating during the year.
(b) According to the information and explanations given to us, fixed
assets have been physically verified by the management in phase
periodical manner during 3 the years. We have been informed that no
material discrepancies were noticed on such verification.
(c) There has been no disposal of substantial part of the fixed assets
during the year, which may affect the going concern status of the
company.
(ii) (a) According to the information and explanation given to us,
inventories have been physically verified by the management during the
year. In our opinion the frequency of verification is reasonable having
regard to the size of the company and the nature of its business.
(b) In our opinion and according to the 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 the nature of its business.
(c) The Company is maintaining proper records of inventory. No material
discrepancies were noticed on physical verification between the
physical stocks arid the book records.
(iii) In respect of the loans, secured or unsecured granted or taken by
the company from companies, firm or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
(a) The Company has granted interest free loan to 4 companies, 1 firm
and Nil other parties. In respect to of the said loan, the maximum
amount ' outstanding at any time during the year is Rs. 261.61 Lacs and
year-end balances are is Rs. 246.87 Lacs.
(b) In our opinion and according to the information and explanation
given to us, all interest free loans/advances are prima facie
prejudicial to the interest of the company. .
(c) In respect of loan given to associate companies, firms and other
parties of the company have no repayment schedule.
(d) In respect of the loan given by the company, there is no repayment
i schedule therefore the question of overdue amount does not arise. æ
(e) The Company has taken unsecured loan during the year from Nil
companies. Nil firm and 1 other parties. The maximum amount involved
during the year was Rs. 19.31 Lacs and the year-end balance of loan
taken from such parties are Rs. 5.13 Lacs.
(f) In our opinion and according to the information and explanation
given to us I the rate of interest and other terms and condition are
not prima facie | prejudicial to the interest of the company.
(g) The said loan was taken from associate companies, firms and other
parties of the company are repayable on demand and there is no
repayment schedule. I
(iv) In our opinion and according to the information and explanation
given to i us, there are adequate internal control procedure
commensurate with si2e of the company and the nature of its business
through personal supervision of management of the company with regard
to purchase of inventories, purchase of fixed assets and for the sale
of goods and services.
According to us, Internal control system needs to be strengthen for
loans, advances and debt recovery.
(v) (a) In our opinion and according to the information and
explanations given to us the transaction made in pursuance of contract
or arrangement that need to be entered into the register maintained
under section 301 of the companies act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the companies act, 1956 and exceeding the value of Rs. Five lacs have
been so entered if required. In absence of daily market price and heavy
volatility in the daily price, we practically can not comment on reas
nobleness of market price at which such goods or similar goods,
material service s have been entered with other parties.
(vi) On the basis of information and explanations given to us company
has accepted deposit during the year from the public, within the
meaning of section 58A and 58AA of the companies act 1956 and companies
(Acceptance of deposits) Rule 1975 with regard to acceptance and
payment of deposits from public.
(vii) In our opinion based on the information and explanation given to
us, the Company has not an Internal Audit system during the year.
(viii) Based on the information and explanations given to us
maintenance of cost records has not been prescribed by the central
government under clause (d) of sub section (1) of section 209 of the
act.
(ix) (a) According to the information and explanation given to us, the
company is not regular in depositing with appropriate authorities
undisputed statutory dues including Investor Education protection fund.
Income tax, sales tax, wealth tax, cess and other material statutory
dues, applicable to it.
(b) According to the information and explanation given to us, company
has no undisputed amounts payable in respect of income tax. Investor
Education Protection fund, wealth tax, cess and other material dues
were in arrears as at 31st March, 2011 for a period of more than 6
months from the date they became payable to it otherwise than mentioned
below.
Statement of arrears of Statutory Dues Outstanding for More than Six
Months
Name of Nature of Amount
the the Dues (Rs.)
Statute
Sales Tax Sales Tax 1812421/-
Income CIT 1324370/-
Tax Appeal
Income CIT 1901976/-
Tax Appeal
Income CIT 665060/-
Tax Appeal
Income CIT 382518/-
Tax Appeal
Period to Due Date Date of
which the Payment
amount relates
2005-06 Already
2006-07 Due
2003-04 Already
Due
2005-06 Already
Due
2006-07 Already
Due
2007-08 Already
Due
In absence of Soles Tax return copy and non filling for 2005-06, 2006-
07 and 2007-08, 2008-09, 2009-10 and 2010-11. We can not quantify the
liabilities. We can not quantify for interest and penalty on undisputed
due.
(c) According to the information and explanation given to us, there are
no dues outstanding of customs duty. Income tax. Sales tax, wealth
tax,
Excise and on account of dispute otherwise than mention below :_
Statement of Dispute Dues
Name of the Nature of Amount (Rs.) Period to Forum where
Statute the Dues which the dispute is
amount pending
relates
Income Tax CIT Appeal 5941420 2004-05 ITAT Appeal
We can not quantify interest and penalty on outstanding amount.
(x) Accumulated losses at the end of the financial year is less than
fifty percent of company's net worth and it has incurred cash losses in
the current year immediately preceding financial year.
(xi) In our opinion and according to the information and explanation
given to us, the company has not generally defaulted in repayment of
dues to Financial Institutions, Banks or Debenture holders.
(xii) According to the information and explanation given to us and
based on the documents and records produced to us, the company has not
granted loans and advance on the security by way of pledge of shares.
Debenture 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 dealing in or trading in shares,
securities, debentures and other investment. Proper records have been
maintained of the transactions and contracts and timely entries have
been made therein. The shares, securities, debentures and other
securities have been held by the company. 2950 Number of shares are not
available for physical verification so we have been write off such
shares. Profit/Loss Account does not show true and fair view to that
extent.
(xv) According to the information and explanation given to us the
company has not given, during the year any guarantee for loans taken by
others from Banks or financial Institutions. As a result the question
of our commenting whether the term and conditions are prejudicial to
the interest of the company does not arise. Company's owned 470000
shares of Kane I Oil & Exports Industries Ltd. (Associate) are lying as
collator to SI COM. All Investments are doubtful of recovery
(xvi) In our opinion and according to the information given to us,
company has not taken term loan during the year.
(xvii) Company has raised short term and long term funds during the
year. Term Loan taken during the year have been used for repayment of
dues only.
(xviii) According to the information and explanation given to us the
company has not made during the year any preferential allotment of
shares to parties and companies covered in the register maintained
under section 301 of the Companies act, 1956.
(xix) According to the information and explanation given to us, the
company has not issued any debentures during the year.
(xx) The company has have not raised money from the public during the
year.
(xxi) On the basis of our examination of the books of accounts and
other relevant records and information made available to us,
prima-facie we have not noticed any fraud on or by the company during
the year. Further the management has represented to us that no fraud on
or by the company has been reported during the year. However we are
unable to determine/ verify as to whether any such reporting has been
made during the year.
For. NIAAESH AA. SHAH & CO.,
Chartered Accountants
Reg. No. : 115204W
(Nimesh AA. Shah) Date: 2nd September. 2011
Partner Place: Ahmedabad.
Membership No. : 047856
Mar 31, 2010
(1) We have audited the attached Balance Sheet of DEVIKA PROTEINS LTD.
as at March 31, 2010, Profit & Loss Account and the cash flow statement
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 statement based on our audit.
(2)We have conducted our auditor 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 misstatement. An audit includes,
examining on a test check basis, evidence supporting the amounts and
disclosures in the financial statement. 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 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 and as per the information and
explanations furnished to us and the books and records examined by us
in the normal course of audit. We enclose in the annexure 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
comment that:
(a) Company has not made provision for doubtful debtors more than six
months of Rs. 14037980/- and loans of Rs. 34210837/- and advance
recover able in cash op kind of Rs. 15764520/- and advance to creditor
Rs. 2211818/- and Deposits Rs. 100000/- resulting in to increasing loss
for the year and over statement of debtors and loans and advances to
the extend ëf above amount. (Refer schedule- 17 Notes on accounts
Point-6)
(b) Permanent diminution in market value of quoted investments of book
value of Rs. 9929246/- ard value of unquoted shares of Classic Co. Op.
Bank Ltd. for Rs. 125440/- have not been provided resulting into
increasing loss for the year and over statement of Investments.
(Schedule-17 Accounting policies Point-5)
(c) Confirmations were not available for debtors, loans. Advances taken
and given and creditors, (schedule-17 Notes on accounts Point-16)
(d) Company has granted interest free loans and advance of Rs.
34210837/- to number of parties (Refer para (iii) (a) (iii) (b)(iii)
(c) (iii)(d) annexure to this report)
(e) Companys holding of 470000 shares of M/s Kanel oil and exports
industries ltd. are lying with SICOfA for availing loan to Kanel oil &
Exports Industries Ltd.
(f) Internal control system need to be strengthened for recovery of
outstanding dues, (Schedule-17 Notes on Account Point-17)
(5) Subject to our foregoing observation in para 4 and its
consequential effects on profit/ loss and assets/ liabilities for the
year as at 31st March 2010: we report that:-
(a) We have obtained all the information and explanationa 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 except our observations under para 4 above:
(c) The Balance sheet, Profit & Loss account and the cash flow
statement dealt with by this report are in agreement with the books of
accounts.
(d) In our opinion the Balance sheet, profit & Loss account and the
cash flow statement have been prepared in compliance with the
applicable accounting standards referred to in sub-section (3C) of the
section 211 of the Companies Act 1956 except mentioned below,
(i) Accounting entry of deferred tax assets and deferred tax
liabilities has passed only at the end of the year.
(ii) Company has not followed AS 13 for permanent reduction in value of
long- term investments.
(e) On basis of information provided by the board of directors we
report that none of the directors is qualified as on 31st March, 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of the section 274 of the Act. In absence of
disclosure from all the directors we are not able to comment on their
qualification.
(f) Subject to the effects of such adjustments if any, as referred in
paragraph 4 as might have been determined to be necessary, had we been
able to satisfy ourselves. In our opinion and to the best of our
information and according to explanations given to us, the said
accounts read together with other notes thereon and statement on
significant accounting policies give in the prescribed manner the
information required by the act, and also give a true & 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 Narch 31, 2010 and
(ii) in the case of the Profit & Loss account of the loss for the year
ended on that date;
(iii) in the case cash flow statement of the cash flow for the year
ended on that date
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN
DATE
(i) (a) The company is maintaining fixed assets records to show full
particulars, including quantitative details and situation of fixed assets.
Such register is at the stage of updating during the year.
(b) According to the information and explanations given to us, fixed
assets have been physically verified by the management in phase
periodical manner during the year. We have been informed that no
material discrepancies were noticed on such verification.
(c) There has been no disposal of substantial part of the fixed assets
during the year, which may affect the going concern status of the
company.
(ii) (a) According to the information and explanation given to us,
inventories have been physically verified by the management during the
year. In our opinion the frequency of verification is reasonable having
regard to the size of the company and the nature of its business.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the mar-egsment are reasonable and adequate in relation to
the size of the company end the nature of its business. Stock lying
with third partys factory have-been taken on the basis of stock
certified by third party.
(c) The Company is maintaining proper records of inventory. No material
discrepancies were noticed on physical verification between the
physical stocks and the book records.
(iii) In respect of the loans, secured or unsecured granted or taken by
the company to/ from companies, firm or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
(a) The Company has granted interest free loan to 4 companies, 1 firm
and 2 other parties. In respect to of the said loan, the maximum amount
outstanding at any time during the year is Rs. 313.56 Lacs and year-end
balances are is Rs. 241.99 Lacs.
(b) In our opinion and according to the information and explanation
given to us, all interest free loans/advances are prima facie
prejudicial to the interest of the company.
(c) In respect of loan given to associate companies, firms and other
parties of the company have no repayment schedule.
(d) In respect of the loan given by the company, there is no
repayment schedule therefore the question of overdue amount does not
arise.
(e) The Company has taken unsecured loan during the year from 1
companies, Nil firm and 2 other parties. The maximum amount involved
during the year was Rs. 47.11 Lacs and the year-end balance of loan
taken from such parties are Rs. 47.11 Lacs.
(f) In our opinion and according to the information and explanation
given to us the rate of interest and other terms and condition are not
prima facie prejudicial to the interest of the company.
(g) The said loan was taken from associate companies, firms and other
parties of the company are repayable on demand and there is no
repayment schedule.
(iv) In our opinion and according to the information and explanation
given to us,there are adequate internal control procedure commensurate
with size of the company and the nature of its business through
personal supervision of management of the company with regard to
purchase of inventories, purchase of fixed assets and for the sale of
goods and services. According to us, Internal control system need to
be strengthen for loans, advances and debt recovery.
(v) (a) In our opinion and according to the information and
explanations given to us the transaction made in pursuance of contract
or arrangement that need to be entered into the register maintained
under section 301 of the companies act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the companies act, 1956 and exceeding the value of Rs. Five lacs have
been so entered if required. In absence of daily market price and heavy
volatility in the daily price, we practically can not comment on
reasonableness of market price at which such goods or similar goods,
material services have been entered with other parties.
(vi) On the basis of informations and explanations given to us company
has not accepted any deposit during the year from the public, within the
meaning of section 58A and 58AA of the companies act 1956 and companies
(Acceptance of deposits) Rule 1975 with regard to acceptance and
payment of deposits from public.
(vii) In our opinion based on the information and explanation given to
us, the Company has not an Internal Audit system during the year.
(viii) Based on the information and explanations given to us
maintenance of cost records has not been prescribed by the central
government under clause (d) of sub section (1) of section 209 of the
act.
(ix) (a) According to the information and explanation given to us, the
company is not regular in depositing with appropriate authorities
undisputed statutory dues including Investor Education protection fund,
Income tax, sales tax, wealth tax, cess and other material statutory
dues, applicable to it.
(b) According to the information and explanation given to us, company
has no undisputed amounts payable in respect of income tax, Investor
Education Protection fund, wealth tax, cess and other material dues
were in arrears as at 31st March, 2010 for a period of more than 6
months from the date they became payable to it otherwise than mentioned
below.
Statement of arrears of Statutory Dues Outstanding for More than Six
Months
Name of Nature of Amount Period to Due Date Date of
the the Dues (Rs.) which the Payment
Statute amount
relates
Sales Tax Sales Tax 1812421 2005-06 Already ------
2006-07 Due
Municipal Municipal 38403 2008-09 Already ------
Tax Tax Due
Inabsence of Sales Tax return copy and non filling for 2005-06, 2006-07
and 2007-08, 2008-09 and 2009-10. We can not quantify the liabilities.
We can not quantify for interest and penalty on undisputed due.
(c) According to the information and explanation given to us, there are
no dues outstanding of customs duty, Income tax, Sales tax, wealth tax,
Excise and on account of dispute otherwise than mention below :
Statement of Dispute Dues
Name of the Nature of Amount (Rs.) Period to Forum where
Statute the Dues which the dispute is
amount pending
relates
Income Tax Order u/s. 1324370 2003-04 CIT Appeal
153A
Income Tax Order u/s. 5941420 2004-05 CIT Appeal
153A 4728416 ITAT Appeal
Income Tax Order u/s. 1901976 2005-06 CIT Appeal
153A
Income Tax Order u/s. 665060 2006-07 CIT Appeal
153A
Income Tax Order u/s. 382518 2007-08 CIT Appeal
153A
We can not quantify interest and penalty on outstanding.
(x) Accumulated losses at the end of the financial year is less than
fifty percent of companys net worth and it has incurred cash losses in
the current year and incurred cash profit in immediately preceding
financial year.
(xi) In our opinion and according to the information and explanation
given to us, the company has not generally defaulted in repayment of dues
to Financial Institutions, Banks or Debenture holders.
(xii) According to the information and explanation given to us and
based on the documents and records produced to us, the company has not
granted loans and advance on the security by way of pledge of shares,
Debenture 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
(xiii) of the companies (Auditors Report) Order, 2003 are not applicable
to the company.
(xiv) In our opinion, the company is dealing in or trading in shares,
securities, debentures and other investment. Proper records have been
maintained of the transactions and contracts and timely entries have
been made therein. The shares, securities, debentures and other
securities have been held by the company, in its own name except to the
extent of the exemption, if any, granted under section 49 of the Act.
(xv) According to the information and explanation given to us the
company has not given, during the year any guarantee for loans taken by
others from Banks or financial Institutions. As a result the question
of our commenting whether the term and conditions are prejudicial to
the interest of the company does not arise. Companys owned 470000
shares of Kane/ Oil & Exports Industries Ltd. are lying as collotary to
SICOM. All Investments are doubtful of recovery.
(xvi) In our opinion and according to the information given to us,
company has not taken term loan during the year.
(xvii) Company has not raised short term and long term funds during the
year.
(xviii) According to the information and explanation given to us the
company has not made during the year any preferential allotment of
shares to parties and companies covered in the register maintained
under section 301 of the Companies act, 1956.
(xix) According to the information and explanation given to us, the
company has not issued any debentures during the year.
(xx) The company has have not raised money from the public during the
year.
(xxi) Or the basis of our examination of the books of accounts and
other relevant records and information made available to us,
prima-facie we have not noticed any fraud on or by the company during
the year, Further the management has represented to us that no fraud on
or by the company has been reported during the year. However we are
unable to determine/ verify as to whether any such reporting has been
made during the year.
For, NIMESHM. SHAH & CO.
Chartered Accountants
Reg. No. : 115204W
(Nimesh M. Shah) Date : 2nd September, 2010
Partner Place : Ahmedabad.
Membership No.: 047856
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