Sep 30, 2014
1. Report on the Financial Statements
We have audited the accompanying financial statements of Duncans
Industries Limited ("the Company"), which comprise the Balance Sheet as
at September 30, 2014, the Statement of Profit and Loss, the Cash Flow
Statement, significant accounting policies and other notes thereon for
the year ended on that date.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting 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. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
3. Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors'' judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, 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 the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
4. Basis for Qualified Opinion
(I) Attention is invited to the following notes to the financial
statements:
a) Note 10 (a) (i) and 10(b)(i) regarding shortfall in value of loans
and advances given to certain companies;
b) Note 19(i) regarding non ascertainment of impact of wage revision
pending negotiations thereof;
c) Note 26 regarding non-provision of Rs. 811.67 lacs demanded by the
appropriate authorities as ''Salami'' on renewal of lease in certain
circumstances;
d) Note 27 regarding payment of managerial remuneration amounting to
Rs.719.30 lacs (including Rs.196.68 lacs for the year) which is subject
to approval of the Central Government;
e) Note 28 regarding certain debit and credit balances including
advances, trade receivables, trade payables and other liabilities which
are subject to confirmation and reconciliation thereof;
(II) Impacts with respect to Para a) to e) above are presently not
ascertainable and as such cannot be commented upon by us.
5. Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the
matters described in the Basis for Qualified Opinion paragraph, 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 the case of the Balance Sheet, of the state of affairs of the
Company as at 30th September, 2014;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
6. Emphasis of Matter
Without qualifying our opinion on this matter, we draw attention to
Note 24 (a) to the financial statements which indicate that inspite of
the Company''s networth becoming negative, the accounts have been
prepared on going concern basis. The Company''s ability to continue as a
going concern is dependent upon the outcome of the measures as per BIFR
scheme under implementation and other ameliorative steps and prospects
thereof and as such, we are unable to comment on the same.
7. Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors'' Report) Order, 2003 as amended
by the Companies (Auditors'' Report) (Amendment) Order, 2004 (''the
Order'') issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. Except for the possible effects of the matters described in Para
4(I)(b) above under Basis for Qualified Opinion paragraph (Note 19(i)
of the financial statements), in our opinion, the Balance Sheet,
Statement of Profit and Loss and Cash Flow Statement comply with the
Accounting Standards referred to in Section 211 (3C) of 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; and
e. As per the legal opinion received and on the basis of written
representations received from the directors as on September 30, 2014,
and taken on record by the Board of Directors, none of the directors is
disqualified as on September 30, 2014, from being appointed as a
director in terms of clause (g) of sub-section (1) of section 274 of
the Act.
ANNEXURE TO THE AUDITORS'' REPORT REFERRED TO IN PARAGRAPH 6 THEREOF
i) a) The Company has maintained proper records to show full
particulars including quantitative details and situation of its fixed
assets.
b) All the fixed assets have not been verified by the management during
the year but according to the information and explanations given to us,
there is a regular programme of verification which, in our opinion, is
reasonable having regard to the size and the nature of its assets. In
respect of assets verified during the year, no material discrepancies
have been noticed.
c) In our opinion, during the year, the company has not disposed off
substantial part of its fixed assets.
ii) a) The inventory, as explained to us, has been physically verified
during the year by the management in a phased manner. Necessary
confirmations with respect to year end stock lying with third parties
was not available. In respect of certain materials stored in heaps such
verification has been done on the basis of visual estimation / survey
and/ or volumetric measurement technique.
b) In our opinion, read together with Para (ii) (a) above, the
procedure of physical verification of inventory 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, the company has maintained proper records of its
inventory and as explained to us, the discrepancies observed on such
verification between the physical stock and the book records were not
material.
iii) a) During the year, the Company has not granted any loan secured
or unsecured to any company, firm or other party covered in the
Register maintained under Section 301 of the Act. In respect of
unsecured loan given in earlier years (Note 10(b) (i) to the financial
statements), recoverable from a company covered in the register
maintained under Section 301 of the Act, the aggregate maximum amount
involved and the year end balance was Rs.1685 lacs.
b) The aforesaid loan as stated in Note 10(b) (i) to the financial
statements is repayable to the Company by March, 2015 and is interest
free and having regard to the explanations given by the management of
the same being strategic in nature, the terms and conditions of the
said loan is prima facie not prejudicial to the interest of the
Company.
c) As stated above, the aforesaid loan is repayable to the Company by
March, 2015. During the year, the Company has not received any amount
in this respect.
d) Having regard to Para (c) above, there is no overdue amount of loan
and accordingly clause 4 (iii) (d) is not applicable to the company.
e) The Company, during the year has not taken any loan secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act. Accordingly, clause 4
(iii) (e) to (g) of the order are not applicable to the company.
iv) In our opinion, and having regard to the nature and exigencies of
business and the practices followed and the explanation that certain
items purchased are of a special nature and therefore in certain cases
alternative quotations are not available, there is an adequate internal
control procedure commensurate with the size of the Company and nature
of its business with regard to purchase of inventory, fixed assets and
with regard to sale of goods. During the course of our audit, we have
not observed any continuing failure to correct the major weaknesses in
internal controls.
v) According to information and explanation given to us and as per the
records of the company, there is no transaction that needs to be
entered, in the Register maintained under Section 301 of the Act.
Accordingly, the provisions of the clause 4 (v) (b) of the said order
is not applicable to the Company.
vi) The Company has not accepted any deposits from public during the
year within the meaning of the provisions of the section 58A, 58AA or
any other relevant provision of the Act and rules made thereunder.
Deposits accepted in the earlier years have been repaid in terms of the
scheme sanctioned by Board for Industrial and Financial Reconstruction
(BIFR) and to the extent lying unclaimed has been kept deposited in a
separate bank account.
vii) The Company''s internal audit has been conducted by independent
consultants as per the phased programme of verification. Internal audit
reports with respect to areas covered till 31st March, 2014 were
received and the same was in progress for the remaining period. In our
opinion the internal audit system in respect of the areas covered is
commensurate with the size and nature of the business of the Company.
viii) On the basis of records produced, we are of the opinion that
prima facie the cost records and accounts prescribed by the Central
Government under Section 209(1) (d) of the Act have been maintained.
However, we have not carried out any detailed examination of such
records with a view to determine whether they are accurate or complete.
ix) a) According to the information and explanations given to us,
undisputed dues with respect to provident/pension fund (including
interest thereon), tax deducted at source (including interest thereon),
service tax, works contract tax, professional tax, cess and other
statutory payables, as applicable, were not deposited regularly with
appropriate authorities. The details of material statutory dues
outstanding for a period exceeding six months as provided for in the
accounts are given below:
Statute Nature of Dues Amount (Rs.
in Lacs)
The Income Tax Act, Tax Deducted at Source 565.58
1961 (including interest) Tax
collected at source 5.35
West Bengal Rural Cess on Green Leaf 219.04
Employment &
Production Act, 1976
The Employee''s Contribution to Provident 2041.89
Provident Funds and and Pension Fund
Miscellaneous Provisions
Act, 1952 Interest on Provident and 705.19
Pension Fund
Employees'' Contribution to 88.73
Provident Fund
West Bengal State Professional Tax 0.39
Tax On Professions,
Trades, Callings And
Employments Act, 1979
West Bengal Value Works Contract Tax 3.76
Added Tax Act,
2003
West Bengal Value Purchase Tax 3.25
Added Tax Act, 2003
Service Tax Service tax 3.43
Statute Period to which the amount
relates to
The Income Tax Act, 2011-14
1961
2013-14
West Bengal Rural 2001-06 and 2011-12
Employment &
Production Act, 1976
The Employee''s 2010-13 (including Rs. 1908.62
Provident Funds lacs in respect of which instalment
Miscellaneous Provisions facility has been granted (Refer
Act, 1952 Note 25)
2004-14
2013-14
West Bengal State 2013-14
Tax On Professions,
Trades, Callings And
Employments Act, 1979
West Bengal Value 2010-14
Added Tax Act,
2003
West Bengal Value 2004-14
Added Tax Act, 2003
Service Tax 2013-14
b) According to the information and explanations given to us, there are
no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty,
Service Tax and Cess which have not been deposited on account of any
dispute except as given below:
Statute Nature of Tax Forum where Amount
Dispute is Pending (Rs. in
Lacs)
The Income Tax Income Tax High Court CIT 47.32
Act, 1961
(Appeals) 41.51
The Central Sales Central
Sales Tax ACCT 2.41
Tax Act, 1956
The West Bengal Sales Tax ACCT 12.16
Sales Tax Act,
1994
The West Bengal VAT WBTT 15.77
Value Added Tax, WBCT 8.84
2003 Additional 21.86
Commissioner
Statute Period to which
amount relates
The Income Tax 1976-78 &2005-07
Act, 1961
The Central Sales
2004-05
Tax Act, 1956
The West Bengal 1996-98, 2001-02,
Sales Tax Act, 2003-05
1994
The West Bengal 2007-08
Value Added Tax, 2008-09
2003 2010-12
x) The accumulated losses of the Company as at the end of the financial
year are more than 50 percent of its net worth. The Company has
incurred cash losses during the financial year and in the immediately
preceding financial year covered by our audit.
xi) In our opinion and on the basis of information and explanations
provided by the management, except as given in Note 4(a) and (b) (iv)
of the financial statements, the Company has not defaulted in repayment
of dues, if any, to financial institutions, banks and debenture
holders.
xii) The Company has not granted any loan and advances on the basis of
security by way of pledge of shares, debentures and other security.
xiii) In our opinion, the Company is not a chit fund or nidhi / mutual
benefit fund / society. Therefore, the provisions of the clause 4
(xiii) of the said order are not applicable to the Company.
xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provision of clause 4 (xiv) of the Order is not applicable to the
Company.
xv) The Company has not given any guarantee during the year for loan
taken by others. The guarantee of Rs. 830 lacs given in earlier years
to group/associate companies in respect of loans taken by them from
bank, considering the long term involvement with those companies when
issued, was not prima facie prejudicial to the interest of the Company.
xvi) As per the information and explanations given to us, no fresh term
loan has been taken during the year.
xvii) According to the information and explanation given to us, on an
overall examination of the Balance Sheet of the Company, we report that
funds amounting to Rs.15,572.98 lacs raised on short-term basis have
been used for long term investment, i.e. for fixed assets, funding the
losses etc of the Company.
xviii) The Company has made preferential allotment of shares at par to
companies covered in the Register maintained under Section 301 of the
Act during the year. Considering the terms of rehabilitation sanctioned
by BIFR, the price at which the shares have been issued is not
prejudicial to the interest of the Company.
xix) The Company has not issued any secured debentures during the year.
Accordingly, clause 4 (xix) of the order is not applicable to the
company.
xx) The Company has not raised any money through a public issue during
the year.
xxi) During the course of our examination of books and records of the
Company carried out in accordance with generally accepted auditing
practices in India, we have neither come across any instances of fraud
on or by the Company, noticed and/or reported during the year, nor have
we been informed of any such case by the management.
For Lodha & Co.
Chartered Accountants
Firm ICAI Registration No: 301051E
R.P.Singh
Place: Kolkata Partner
Date: 18th November, 2014 Membership No. 52438
Sep 30, 2013
1. Report on the Financial Statements
We have audited the accompanying financial statements of Duncans
Industries Limited ("the Company"), which comprise the Balance Sheet as
at September 30, 2013, the Statement of Profit and Loss, the Cash Flow
Statement, significant accounting policies and other notes thereon for
the period of eighteen months (''period'') ended on that date.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
3. Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors'' judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
4. Basis for Qualified Opinion
(I) Attention is invited to the following notes to the financial
statements:
a) Note 10 (a) (i) and (ii) regarding shortfall in value of loans and
advances given to certain companies;
b) Note 28 regarding non-provision of Rs. 811.67 lacs demanded by the
appropriate authorities as "Salami" on renewal of lease in certain
circumstances; and
c) Note 29 regarding payment of managerial remuneration amounting to
Rs. 522.40 lacs (including Rs 176.20 lacs for the eighteen months
period) which is subject to approval of the Central Government.
(II) Impacts with respect to Para a) to c) above are presently not
ascertainable and as such cannot be commented upon by us.
5. Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the
matters described in the Basis for Qualified Opinion paragraph, 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 the case of the Balance Sheet, of the state of affairs of the
Company as at 30th September, 2013;
(b) in the case of the Statement of Profit and Loss, of the loss for
the period ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
6. Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors'' Report) Order, 2003 as amended
by the Companies (Auditors'' Report) (Amendment) Order, 2004 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Act; and
e. As per the legal opinion received and on the basis of written
representations received from the directors as on September 30, 2013,
and taken on record by the Board of Directors, none of the directors is
disqualified as on September 30, 2013, from being appointed as a
director in terms of clause (g) of sub-section (1) of section 274 of
the Act.
ANNEXURE TO THE AUDITORS'' REPORT REFERRED TO IN PARAGRAPH 6 THEREOF
i) a) The Company has maintained proper records to show full
particulars including quantitative details and situation of its fixed
assets.
b) All the fixed assets have not been verified by the management during
the period but according to the information and explanations given to
us, there is a regular programme of verification which, in our opinion,
is reasonable having regard to the size and the nature of its assets.
In respect of assets verified during the period, no material
discrepancies have been noticed.
c) In our opinion, during the period, the company has not disposed off
substantial part of its fixed assets.
ii) a) The inventory, as explained to us, has been physically verified
during the period by the management in a phased manner. No
confirmations with respect to stock lying with third parties were
obtained. In respect of certain materials stored in heaps such
verification has been done on the basis of visual estimation / survey
and/or volumetric measurement technique.
b) In our opinion, read together with Para (ii) (a) above, the
procedure of physical verification of inventory 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, the company has maintained proper records of its
inventory and as explained to us, the discrepancies observed on such
verification between the physical stock and the book records were not
material.
iii) a) During the period, the Company has not granted any loan secured
or unsecured to any company, firm or other party covered in the
Register maintained under Section 301 of the Act. In respect of
unsecured loan given in earlier years (Note 10(a) (i) to the financial
statements), recoverable from a company covered in the register
maintained under Section 301 of the Act, the aggregate maximum amount
involved and the year end balance was Rs.1685 lacs.
b) The aforesaid loan as stated in Note 10(a) (i) to the financial
statements is repayable to the Company by March, 2015 and is interest
free and having regard to the explanations given by the management of
the same being strategic in nature, the terms and conditions of the
said loan is prima facie not prejudicial to the interest of the
Company.
c) As stated above, the aforesaid loan is repayable to the Company by
March, 2015. During the period, the Company has not received any
amount in this respect.
d) Having regard to Para (c) above, there is no overdue amount of loan
and accordingly clause 4 (iii) (d) is not applicable to the company.
e) The Company, during the period has not taken any loan secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act. Accordingly, clause 4
(iii) (e) to (g) of the order are not applicable to the company.
iv) In our opinion, and having regard to the nature and exigencies of
business and the practices followed and the explanation that certain
items purchased are of a special nature and therefore in certain cases
alternative quotations are not available, there is an adequate internal
control procedure commensurate with the size of the Company and nature
of its business with regard to purchase of inventory, fixed assets and
with regard to sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct the major
weaknesses in internal controls.
v) According to information and explanation given to us and as per the
records of the company, there is no transaction that needs to be
entered, in the Register maintained under Section 301 of the Act.
Accordingly, the provisions of the clause 4 (v) (b) of the said order
is not applicable to the Company.
vi) The Company has not accepted any deposits from public during the
period within the meaning of the provisions of the section 58A, 58AA or
any other relevant provision of the Act and rules made thereunder.
Deposits accepted in the earlier years have been repaid in terms of the
scheme sanctioned by Board for Industrial and Financial Reconstruction
(BIFR) and to the extent lying unclaimed has been kept deposited in a
separate bank account.
vii) The Company''s internal audit has been conducted by independent
consultants as per the phased programme of verification. Internal audit
reports with respect to areas covered till 31st March, 2013 were
received and the same was in progress for the remaining period. In our
opinion the internal audit system in respect of the areas covered is
commensurate with the size and nature of the business of the Company.
viii) On the basis of records produced, we are of the opinion that
prima facie the cost records and accounts prescribed by the Central
Government under Section 209(1) (d) of the Act have been maintained.
However, we have not carried out any detailed examination of such
records with a view to determine whether they are accurate or complete.
ix) a) According to the information and explanations given to us,
excepting provident fund and pension fund, tax deducted at source, cess
on green leaf and professional tax, the company is generally regular in
depositing with appropriate authorities undisputed statutory dues in
respect of Investor Education & Protection Fund, Income Tax, Sales Tax
and other material statutory dues applicable to it. The details of
material statutory dues outstanding for a period exceeding six months
as provided for in the accounts are given below:
Statute Nature of Amount Period to which the
Dues (Rs. in amount relates to
Lacs)
The Income Tax
Act, 1961 Tax Deducted 257.82 2011-12
at Source 2012-13
West Bengal Rural Cess on 218.67 2001-06 and
Employment &
Production Green Leaf 2011-12
Act, 1976
The Employee''s
Provident Contribution to 1515.97 2010-13
Funds and
Miscellaneous Provident and
Provisions Act,
1952 Pension Fund
Interest on 566.05 2004-13
Provident and
Pension Fund
Employees'' 19.07 2012-13
Contribution to
Provident Fund
West Bengal Labour Employees'' 0.14 2011-12 &
Welfare Fund Act,
1974 Contribution to 2012-13
Labour Welfare
Fund
West Bengal State
Tax On Professional Tax 0.95 2011-12 &
Profession Trades, 2012-13
Calling and
Employments
Act, 1979
West Bengal Value Works Contract 3.72 2010 -11,
2011-12
Added Tax Act,
2003 Tax 2012-13
b) According to the information and explanations given to us, there are
no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty,
Service Tax and Cess etc which have not been deposited on account of
any dispute except as given below:
Statute Nature of Forum where Amount Period to which
Tax Dispute is (Rs. in amount relates
Pending Lacs)
The Income Income Tax High Court 47.32 1976-78 &
Tax Act, 1961 CIT (Appeals) 41.51 2005 -07
The Central Central ACCT 2.41 2004-05
Sales Tax
Act, Sales Tax
1956
The West
Bengal Sales Tax ACCT 12.16 1996-98,
Sales Tax
Act , 2001-02,
1994 2003-05
The West
Bengal VAT WBTT 15.77 2007-08
Value Added
Tax, WBCT 8.84 2008-09
2003 Commissioner 213.04 2009-11
x) The accumulated losses of the company have exceeded fifty percent of
its net worth. The Company has incurred cash losses during the period
and in the immediately preceding financial year.
xi) In our opinion and on the basis of information and explanations
provided by the management, except as given in Note 4 (a) & (b) (v) of
the financial statements, there is no default in repayment of dues, if
any, to financial institutions, banks and debenture holders.
xii) The Company has not granted any loan and advances on the basis of
security by way of pledge of shares, debentures and other security.
xiii) In our opinion, the Company is not a chit fund or nidhi / mutual
benefit fund / society. Therefore, the provisions of the clause 4
(xiii) of the said order are not applicable to the Company.
xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provision of clause 4 (xiv) of the Order is not applicable to the
Company.
xv) The Company has not given any guarantee during the period for loan
taken by others. Guarantees given in earlier years to group/associate
companies in respect of loans taken by them from banks and financial
institutions, considering the long term involvement with those
companies when issued was not prima facie prejudicial to the interest
of the Company.
xvi) As per the information and explanations given to us, no fresh term
loan has been taken during the period.
xvii) According to the information and explanation given to us, on an
overall examination of the Balance Sheet of the Company, we report that
funds amounting to Rs.14,879.10 lacs raised on short-term basis have
been used for long term investment, i.e. for fixed assets, funding for
losses etc.
xviii) The Company has made preferential allotment of shares at par to
companies covered in the Register maintained under Section 301 of the
Act during the period. Considering the terms of rehabilitation
sanctioned by BIFR, the price at which the shares have been issued is
not prejudicial to the interest of the Company.
xix) The Company has not issued any secured debentures during the
period. Accordingly, clause 4 (xix) of the order is not applicable to
the company.
xx) The Company has not raised any money through a public issue during
the period.
xxi) During the course of our examination of books and records of the
Company carried out in accordance with generally accepted auditing
practices in India, we have neither come across any instances of fraud
on or by the Company, noticed and/or reported during the period, nor
have we been informed of any such case by the management.
For LODHA & CO.
Chartered Accountants
Firm ICAI Registration No. 301051E
R. P. Singh
Place:Kolkata Partner
Date :27th November, 2013 Membership No. 52438
Mar 31, 2012
We have audited the attached Balance Sheet of Duncans Industries
Limited as at 31st March, 2012 and also the Statement of Profit and
Loss and the Cash Flow Statement of the Company for the year ended on
that date. These financial statements of the company are the
responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We 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 from material misstatements. An audit includes
examining, on 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 overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
order"), as amended by the Companies (Auditor's Report) (Amendment)
Order, 2004 issued by the Central Government in exercise of the powers
conferred by Section 227 (4A) of the Companies Act 1956, ("the Act")
and according to the information and explanations given to us and on
the basis of such checks as we considered appropriate, we state that :
I. a) The Company has maintained proper records to show full
particulars including quantitative details and situation of its fixed
assets.
b) All the fixed assets have not been verified by the management during
the year but according to the information and explanations given to us,
there is a regular programme of verification which, in our opinion, is
reasonable having regard to the size and the nature of its assets. In
respect of assets verified during the year, no material discrepancies
have been noticed.
c) In our opinion, during the year, the company has not disposed off
substantial part of its fixed assets.
II. a) The inventory, as explained to us, has been physically verified
by the management in a phased manner. No confirmations with respect to
stock lying with third parties were obtained. In respect of certain
materials stored in heaps such verification has been done on the basis
of visual estimation/survey and/or volumetric measurement technique.
b) In our opinion, read together with Para (II) (a) above, the
procedure of physical verification of inventory 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, the company has maintained proper records of its
inventory and as explained to us, the discrepancies observed on such
verification between the physical stock and the book records were not
material and have been properly dealt with in the books of account.
III. a) a) During the year, the Company has not granted any loan
secured or unsecured to any company, firm or other party covered in the
Register maintained under Section 301 of the Act. In respect of the
unsecured loan given in earlier years to a company covered in the
register maintained under said section, the aggregate maximum amount
involved was Rs.1685 lacs. The said loan has been assigned to another
company during the year as indicated in Note 10(a) (i) to the financial
statements.
b) As given above the said loan has been assigned to an another company
and accordingly clause III (b) to (d) are not applicable to the
company.
c) The Company, during the year has not taken any loan secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act. Accordingly, clause 4
(III) (e) to (g) of the order are not applicable to the company.
IV. In our opinion, and having regard to the nature and exigencies of
business and the practices followed and the explanation that certain
items purchased are of a special nature and therefore in certain cases
alternative quotations are not available, there is an adequate internal
control procedure commensurate with the size of the Company and nature
of its business with regard to purchase of inventory, fixed assets and
with regard to sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct the major
weaknesses in internal controls.
V. According to information and explanation given to us and as per the
records of the company, there is no transaction that needs to be
entered, in the Register maintained under Section 301 of the Act.
Accordingly, the provisions of the clause 4 (v) (b) of the said order
is not applicable to the Company.
VI. The Company has not accepted any deposits from public during the
year within the meaning of the provisions of the section 58A, 58AA or
any other relevant provision of the Act and rules made thereunder.
Deposits accepted in the earlier years in excess of the limit
prescribed for the purpose and were due for repayment have been dealt
with as prescribed in the scheme sanctioned by Board for Industrial and
Financial Reconstruction (BIFR) and transferred to Kanpur Fertilizers
and Cements Limited (KFCL) on demerger of Fertiliser Division to said
company (Note 29.1 (c) to the financial statements). The said liability
as stated in Note. 4(b)(v) to the financial statements have since been
repaid out of the funds provided to the Company by KFCL.
VII. The Company's internal audit has been conducted in a phased
manner by a firm of Chartered Accountants. In our opinion the internal
audit system in respect of the areas covered during the year is
commensurate with the size and nature of the business of the Company.
VIII. On the basis of records produced, we are of the opinion that
prima facie the cost records and accounts prescribed by the Central
Government under Section 209(1) (d) of the Act have been maintained.
However, we have not carried out any detailed examination of such
records with a view to determine whether they are accurate or complete.
IX. a) According to the information and explanations given to us,
excepting employer's
contribution for provident fund and cess on green leaf, the company is
generally regular in depositing with appropriate authorities undisputed
statutory dues in respect of Investor Education & Protection Fund,
Income Tax, Sales Tax, Professional Tax and other
material statutory dues applicable to it. The details of material
statutory dues outstanding for a period exceeding six months as
provided for in the accounts are given below:
Statute Nature of Amount Period to
Dues (Rs. in which the
Lacs) amount
relates to
The Income Tax Act, Tax Deducted 17.97 2011-12
at Source
West Bengal Rural Cess on 190.67 2001-06 and
Employment & Production Green Leaf 2011-12
Act, 1976
The Employee's Provident Contribution to 1437.62 2003-12
Funds and Miscellaneous Provident and
Provisions Act, 1952 Pension Fund
b) According to the information and explanations given to us, there are
no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Cess etc
which have not been deposited on account of any dispute except as given
below:
Statute Nature of Forum where Amount Period
Tax Dispute is (Rs. in to which
Pending Lacs) amount
relates
The Income Income Tax High Court 47.32 1976-77 &
Tax Act, 1961 Assessing 597.01 2010-11
officer
CIT (Appeals) 41.51 2005-07
The Central Central ACCT 2.41 2004-05
Sales Tax Act, Sales Tax WBCT 1.72 2007-08
1956
The West Bengal Interest ACCT 1.35 1996-97 &
Sales Tax Act, 1997-98
1994 Sales Tax ACCT 2.39 2004-05
The West Bengal VAT WBCT 16.77 2007-08
Value Added Tax, Senior Joint 232.88 2008-10
2003 Commissioner
X. The accumulated losses of the company have exceeded fifty percent
of its net worth. The Company has incurred cash losses during the
financial year and immediately preceding financial year.
XI. The company has defaulted in repayment of interest on cash credit
which has become due and amount outstanding in this respect as on 31st
March, 2012 is Rs. 433.37 lacs.
XII. The Company has not granted any loan and advances on the basis of
security by way of pledge of shares, debentures and other security.
XIII. In our opinion, the Company is not a chit fund or nidhi/mutual
benefit fund/society. Therefore, the provisions of the clause 4 (XIII)
of the said order are not applicable to the Company.
XIV. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provision of clause 4 (XIV) of the Order is not applicable to the
Company.
XV. The Company has not given any guarantee during the year for loan
taken by others. Guarantees given in earlier years to group/associate
companies in respect of loans taken by them from banks and financial
institutions, considering the long term involvement with those
companies when issued was not prima facie prejudicial to the interest
of the Company.
XVI. As per the information and explanations given to us, no fresh
term loan has been taken during the year.
XVII. According to the information and explanation given to us, on an
overall examination of the Balance Sheet of the Company, we report that
funds amounting to Rs.15,670 lacs raised on short-term basis have been
used for long term investment, i.e., for funding losses of the Company.
XVIII. The Company has not made any preferential allotment of shares
to parties and companies required to be covered, in the Register
maintained under Section 301 of the Act, during the year.
XIX. The Company has not issued any secured debentures during the
year. Accordingly, clause 4 (XIX) of the order is not applicable to the
company.
XX. The Company has not raised any money through a public issue during
the year.
XXI. During the course of our examination of books and records of the
Company carried out in accordance with generally accepted auditing
practices in India, we have neither come across any instances of fraud
on or by the Company, noticed and/or reported during the year, nor have
we been informed of any such case by the management.
2. Without qualifying our report, we draw attention to Note 29.1 and
29.2 to the financial statements regarding impact of the rehabilitation
scheme sanctioned by the BIFR and the manner in which these are dealt
with while preparing these financial statements. Certain provisions of
the scheme as given in Note 29.2 are however pending implementation and
will be given effect to on disposal of matter by the Appellate
Authority for Industrial and Financial Reconstruction (AAIFR)
3. Attention is invited to the following notes to the financial
statements, impacts whereof are presently not ascertainable:
a) Note 10 (a) (i) and (ii) regarding shortfall in value of loans and
advances given to certain companies;
b) Note 32 regarding non-provision of Rs. 811.67 lacs demanded by the
appropriate authorities as "Salami" on renewal of lease in certain
circumstances; and
c) Note 34 regarding payment of managerial remuneration amounting to Rs
597.29 lacs (including Rs.105.78 lacs for the year) which is subject to
approval of the Central Government.
4. Further to above, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement referred to in this report are in agreement with the books of
account;
c) 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 such
books;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section 3(c) of Section 211 of the Act;
e) Attention is invited to Note 31 to the financial statements
regarding the Company's contention, for applicability of section
274(1)(g) of the Act. As per the legal opinion received on which we
have placed reliance, the directors of the Company are not disqualified
from being appointed as directors in terms of Section 274(1)(g) of the
Act;
f) In our opinion and to the best of our information and according to
the explanations given to us, subject to our remarks as given in Para 3
above impact whereof are presently not ascertainable, and read together
with the other notes thereon, these accounts 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:
i. in the case of the Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2012;
ii. in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
For LODHA & CO.
Chartered Accountants
Firm ICAI Membership no. 301051E
R. P. Singh
Partner
Membership No. 52438
Place : Kolkata
Dated : 27th July, 2012
Mar 31, 2010
We have audited the attached Balance Sheet of Duncans Industries
Limited as at 31st March, 2010 and also the Profit and Loss Account and
the Cash Flow Statement of the Company for the year ended on that date.
These financial statements of the company are the responsibility of the
companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We 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 from material misstatements. An audit includes
examining, on 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 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 (Ãthe
orderÃ), as amended by the Companies (Auditors Report) (Amendment)
Order, 2004 issued by the Central Government in exercise of the powers
conferred by Section 227 (4A) of the Companies Act 1956, (Ãthe ActÃ)
and according to the information and explanations given to us and
subject to non availability of certain details and records as given in
paragraph 4 below on the basis of such checks as we considered
appropriate, we state that :
I. a) The Company has maintained proper records to show full
particulars including quantitative details and situation of its fixed
assets except in respect of Fertilizer division where such records are
not accessible.
b) All the fixed assets have not been verified by the management during
the year but according to the information and explanations given to us,
there is a regular programme of verification which, in our opinion, is
reasonable having regard to the size and the nature of its assets.
However, as stated in Note 9(c)(ii) of Schedule No. 12 in case of
Fertiliser Division such verification has not been carried out. In
respect of assets verified during the year, no material discrepancies
have been noticed.
c) In our opinion, during the year, the company has not disposed off
substantial part of its fixed assets.
II. a) The inventory, as explained to us, has been physically verified
by the management in a phased manner. In respect of Fertilizer Division
as given in Note 9(c) (i) of Schedule 12 such verification could not be
carried out. No confirmations with respect to stock lying with third
parties were obtained. In respect of certain materials stored in heaps
such verification has been done on the basis of visual estimation/survey
and/or volumetric measurement technique.
b) In our opinion, read together with Para (II) (a) above, the
procedure of physical verification of inventory 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, read with Note 9(c) (i) of Schedule 12 the company
has maintained proper records of its inventory and as explained to us,
the discrepancies observed on such verification between the physical
stock and the book records were not material and have been properly
dealt with in the books of account.
III. a) During the year, the Company has not granted any loan secured
or unsecured to any company, firm or other party covered in the Register
maintained under Section 301 of the Act. In respect of the unsecured loan
given in earlier years to a company covered in the register maintained
under said section, the aggregate maximum amount involved and the year end
balance was Rs.1685 lacs. The said loan continues to be interest free
and yet to be repaid as indicated in Note 20 of Schedule 12.
b) The amount has been advanced as promoters contribution and in the
absence of any specific terms for repayment etc it is not possible to
ascertain and comment whether the same is prima facie prejudicial to
the interest of the Company. Accordingly, clause III (c) and (d) are
not applicable to the company.
c) The Company, during the year has not taken any loan secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act. Accordingly, clause 4
(III) (e) to (g) of the order are not applicable to the company.
IV. In our opinion, and having regard to the nature and exigencies of
business and the practices followed and the explanation that certain
items purchased are of a special nature and therefore in certain cases
alternative quotations are not available, there is an adequate internal
control procedure commensurate with the size of the Company and nature
of its business with regard to purchase of inventory, fixed assets and
with regard to sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct the major
weaknesses in internal controls.
V. According to information and explanation given to us and as per the
records of the company, there is no transaction that needs to be
entered, in the Register maintained under Section 301 of the Act.
Accordingly, the provisions of the clause 4 (v) (b) of the said order
is not applicable to the Company.
VI. Deposits accepted by the company in earlier years which were in
excess of the limits prescribed for the purpose are due for repayment.
The Company Law Board (CLB) on an application made by the Company,
rescheduled the repayment of deposits vide its order dated 18th June
2002. However, the rescheduled terms and conditions could also not be
adhered to and the matter has been dealt with as stated in the Note 10
of Schedule 12.
VII. The Companys internal audit in respect of the tea division has
been conducted in a phased manner by a firm of Chartered Accountants.
In the Fertilizer division of the Company, no such audit was carried
out during the year. Accordingly, internal audit system needs to be
strengthened further.
VIII. We have been explained that in the absence of any production of
Urea during the year no cost records are required to be maintained.
Further in respect of Tea division, on the basis of records produced,
we are of the opinion that prima facie the cost records and accounts
prescribed by the Central Government under Section 209(1) (d) of the
Act have been maintained. However, we have not carried out any detailed
examination of such records with a view to determine whether they are
accurate or complete.
IX. a) As stated in Note 11 of Schedule 12 outstanding dues in respect
of Employees Provident Fund is deposited in terms of repayment schedule
provided by the appropriate authorities. Having regard to this and
according to the information and explanations given to us the company
is generally regular in depositing with appropriate authorities
undisputed statutory dues in respect of Provident Fund, Investor
Education & Protection Fund, Sales Tax, Cess, Professional Tax and other
material statutory dues applicable to it. The details of material
statutory dues outstanding for a period exceeding six months as provided
for in the accounts are given below:
Statute Nature of Amount Period to which the
Dues (Rs. in amount relates to
Lacs)
The Income
Tax Act,
1961 Tax Deducted 33.54 2003-04 to 2006-07
at Source
Bihar
Sales Tax Turnover Tax 17.54 2001-2003
The Central
Sales Sales Tax 36.40 2002-03 to 2004-05
Tax Act,
1956
The West
Bengal
Sales Purchase Tax 2.91 2004-05 to 2008-09
Tax Act,
1944
b) According to the information and explanations given to us, there are
no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty
and Cess which have not been deposited on account of any dispute except
as given below:
Statute Nature of Forum where Amount Period to which
Tax Dispute is (Rs. in amount relates
Pending Lacs)
The Income Income Tax High Court 47.32 1976-77 &
Tax Act,
1961 1977-78
The Central
Sales Central Sales ACCT 3.64 2004-05
Tax Act,
1956 Tax
The West
Bengal Interest ACCT 1.34 1996-97&
1997-98
Sales Tax
Act, Sales Tax ACCT 9.31 2004-05
1994
The Central Excise Duty Commissio
ner 86.60 March94
Excise Act,
1944 to June95
X. The accumulated losses of the company have exceeded fifty percent
of its net worth. The Company has not incurred cash losses during the
financial year covered by our audit but had incurred cash losses in the
immediately preceding financial year. The effect of qualifications has
not been taken into consideration for the purpose of making comment in
respect of this clause.
XI. As stated in Note 8.1 of schedule 12 amounts payable to Banks and
Financial institutions have been restructured/rescheduled. The details
of default in payment of dues to bank and financial institution and
debenture holders considering the said restructured terms
and conditions and in cases where such restructured terms are pending
acceptances are as follows:
Type Period of default Principal Interest Total
(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)
Debentures 2001-03 to2009-10 1,638.15 1,254.90 2,893.05
Financial
Institutions 2001-03 to2009-10 14,640.31 8,041.37 22,681.68
Banks 2009-10 7,994.50 3,446.95 11,441.45
24,272.96 12,743.22 37,016.18
As given in Note 22.2 in Schedule 12 amount of additional / penal
interest etc., are presently not ascertainable and therefore the same
has not been included in the above amounts. However, the Companys
Draft Rehabilitation Scheme (DRS) is pending with the BIFR and as given
in Note 8.3 of Schedule 12, the amounts payable to Banks and financial
Institutions will finally be determined and given effect to on sanction
of the scheme and as such amounts arrived as above are subject to the
impact on sanction of the DRS by BIFR.
XII. The Company has not granted any loan and advances on the basis of
security by way of pledge of shares, debentures and other security.
XIII. In our opinion, the Company is not a chit fund or nidhi / mutual
benefit fund / society. Therefore, the provisions of the clause 4
(XIII) of the said order are not applicable to the Company.
XIV. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provision of clause 4 (XIV) of the Order is not applicable to the
Company.
XV. The Company has not given any guarantee during the year for loan
taken by others. Guarantees given in earlier years to group/associate
companies in respect of loans taken by them from banks and financial
institutions, considering the long term involvement with those
companies when issued was not prima facie prejudicial to the interest
of the Company.
XVI. As per the information and explanations given to us, no fresh
term loan has been taken during the year.
XVII. According to the information and explanation given to us and in
view of Note 8.1 of Schedule 12 and on an overall examination of the
Balance Sheet of the Company, we report that funds amounting to Rs
75,615 lacs raised on short-term basis have been used for long term
investment, i.e., for funding losses of the Company.
XVIII. The Company has not made any preferential allotment of shares
to parties and companies required to be covered, in the Register
maintained under Section 301 of the Act, during the year.
XIX. The Company has not issued any secured debentures during the
year. Accordingly, clause 4 (XIX) of the order is not applicable to the
company.
XX. The Company has not raised any money through a Public issue during
the year.
XXI. During the course of our examination of books and records of the
Company carried out in accordance with generally accepted auditing
practices in India, we have neither come across any instances of fraud
on or by the Company, noticed and/or reported during the year, nor have
we been informed of any such case by the management.
2. As indicated in Note 7 of schedule 12, pending approval of the
Draft Rehabilitation Scheme (DRS) by BIFR, the accounts have been
prepared on a going concern basis. However, its ability to continue as
a going concern is dependent upon the rehabilitation measures which are
yet to be finalized and implemented and its future performance and the
profitability, on which we are unable to express any opinion presently.
3. As indicated in Note 20 of Schedule 12, regarding loan given to a
company and effective recovery thereagainst and resultant impact
thereof on the losses if any is presently not ascertainable.
4. As indicated in Note 9 and 24 of Schedule 12, relevant records and
details in respect of Fertilizer Division and certain records,
confirmations and reconciliation for the purpose of the audit, were not
available and certain year end verification exercises as such could not
be carried out. In view of the above and in the absence of relevant
details/records and/or full information/ reconciliations/confirmations,
we are unable to express any opinion on the extent of adjustments
arising there from and their impact on amounts of various assets and
liabilities, contingent liabilities, expenses and income and impact
thereof on the profit of the Company.
5. Attention is invited to the following Notes in Schedule 12 :
a) Note 12 regarding non provision of various employee related expenses
amounting to Rs. 2546 lacs (including Rs.858 lacs for the year) and
thereby profit for the year is higher to the extent of Rs. 858 lacs and
the accumulated balance is lower to the extent of Rs. 2546 lacs.
b) Note 8.1(a), 8.1 (b)and Note 22.1 regarding non-provision of
interest of Rs. 22888.26 lacs (including Rs. 5673.54 lacs for the year)
on certain borrowings and Note 4 and 22.2 regarding differential/penal
interest etc. on various statutory and other liabilities, borrowings,
creditors, etc. due to the reason mentioned in Note 22.3. Impact with
respect to the same on the accounts pending finalization of DRS is
presently not ascertainable
c) Note 23(b) regarding non ascertainment of liability related to
employee benefits under defined benefit plans pertaining to Fertilizer
division and those related to Superannuation Fund thereof as required
in terms of AS 15.
6. Further attention is also invited to the following Notes in
Schedule 12, impacts whereof are presently not ascertainable:
a) Note 3.2 regarding non recognition of the liability for surcharge on
electricity demanded by Kanpur Electric Supply Co;
b) Note 6.2 regarding non availability of details regarding micro,
small and medium enterprise as defined under Micro, Small and Medium
Enterprise Development Act,2006 ,
c) Note 8.3 regarding impact of the various proposals envisaged in the
DRS pending sanction thereof by BIFR.
d) Note 18.5 regarding non-provision of Rs. 811.67 lacs demanded by the
appropriate authorities as ÃSalamià on renewal of lease in certain
circumstances; and
e) Note 32.2 regarding payment of managerial remuneration amounting to
Rs 392.81 lacs (including Rs.47.54 lacs for the year) which is subject
to approval of the Central Government.
7. We further report that, without considering Para 2 to 4,5(b) to (d)
and 6 impacts of which on the companys profit for the year and the
accumulated balance thereof have not been ascertained and as such
cannot be commented upon by us, had the impact of items 5 (a ) above
been considered, the profit for the year would have been Rs.132.75 lacs
as against the reported profit of Rs.990.75 lacs and accumulated
balance thereof would have been Rs.145719.27 lacs as against the
reported figures of Rs.143173.27 lacs.
8. Further to above, we report that:
a) Subject to Para 4 and Para 6(b) above, we have obtained all the
information and explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit;
b) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
referred to in this report are in agreement with the books of account;
c) 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 such
books;
d) In our opinion, excepting provision/ascertainment of certain
employee related expenses and disclosure in terms of Accounting
Standard 15 on Employee Benefits as stated in Note 23(b) of Schedule 12
and non ascertainment of contingent liabilities and disclosures thereof
in respect of Fertilizer Division as required in terms of Accounting
Standard 29 on Provisions, Contingent Liabilities and Contingent
Assets, the Balance Sheet, Profit and Loss Account, and Cash Flow
Statement comply with the Accounting Standards referred to in
sub-section 3(c) of Section 211 of the Act;
e) In view of the defaults made in repayment of deposits and interest
thereon reference is invited to Note 13 of schedule 12 regarding the
Companys contention, for applicability of section 274(1)(g) of the
Act. In view of the legal opinion received on which we have placed
reliance, the Directors of the Company are not disqualified from being
appointed as directors in terms of Section 274(1)(g) of the Act;
f) In our opinion and to the best of our information and according to
the explanations given to us, subject to our remarks as given in Para 2
to 6 above whereby excepting as given in Para 7 above, we are unable to
ascertain the impact on these accounts and read together with the other
Notes thereon, these accounts 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:
i. in the case of the Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2010;
ii. in the case of the Profit and Loss Account, of the loss of the
Company for the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
For LODHA & CO.
Chartered Accountants
Firm ICAI Membership no. 301051E
R. P. Singh
Place: Kolkata Partner
Dated: 28th July, 2010 Membership No. 52438