AUDITORSTO THE MEMBERS OF OMKAR SPECIALITY CHEMICALS LIMITED
1. We have audited the attached Balance Sheet of OMKAR SPECIALITY CHEMICALS LIMITED,as at March 31, 2012 and also the Profit and Loss Account and the Cash Flow Statement forthe year ended on that date annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 as amended by theCompanies (Auditor’s Report) (Amendment) Order, 2004 (the ‘Order’), issuedby the Central Government of India in terms of sub-section (4A) of Section 227 of theCompanies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph (3) above, wereport that:
a) We have obtained all the information and explanations, which to the best of ourknowledge 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 theCompany, so far as appears from our examination of those books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss Account and CashFlow Statement dealt with by this report comply with the Accounting Standards referred toin sub-section (3C) of Section 211 of the Companies Act, 1956;
e) On the basis of the written representations received from the directors, as on March31, 2012, and taken on record by the Board of Directors, we report that none of thedirectors of the Company are disqualified as on March 31, 2012 from being appointed as adirector, in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act,1956;
f) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read together with the significant accounting policies andnotes thereon give the information required by the Companies Act, 1956, in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the Company as at March31, 2012
ii) in the case of the Profit and Loss Account, of the profit of the Company for theyear ended on that date, and
iii) in the case of the cash flow statement, of the cash flows for the year ended onthat date.
For J.P.J. Associates
Chartered Accountants
Firm Registration No. 113012W
CA Pravin Deshpande
Partner
M.No. 045249
Place : Mumbai
Date :May 19, 2012
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 3 of our Report of even date)
(i) (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets except for certain items ofFixed Assets, the quantitative details of which, we were informed, are in the process ofbeing compiled.
(b) The fixed assets have been physically verified by the management during the yearand in our opinion the frequency of verification is reasonable having regard to the sizeof the Company and the nature of its assets. No material discrepancies were noticed onsuch physical verification.
(c) The company has not disposed of a substantial part of its fixed asset during theyear and the going concern status of the company is not affected.
(ii) (a) As explained to us and on the basis of verification of relevant records,the inventories have been physically verified by the Management at regular intervalsduring the year. In our opinion, the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) In our opinion and according to the information and explanations given to us, theCompany has maintained proper records of inventory. No material discrepancies were noticedon verification between the physical stocks and the book records.
(iii) In respect of the loans, secured or unsecured, granted or taken by theCompany to / from companies, firms or other parties covered in the register maintainedunder Section 301 of the Companies Act, 1956:
(a) The Company has granted unsecured loans to its subsidiaries, the maximum amountoutstanding at any time during the year was Rs.1,276.83 Lacs and the year end balanceRs.973.95 Lacs. This includes interest free loan of Rs.43.84 Lacs.
(b) In our opinion and according to the information and explanations given to us, therate of interest and other terms and conditions of the loans given by the Company, are notprima facie prejudicial to the interest of the Company.
(c) According to the information and explanations given to us, the principal amountsare repayable over a period of five years and the interest is recovered at the discretionof the Company.
(d) In respect of the said loans and interest thereon, there are no overdue amounts.
(e) During the year the Company has taken unsecured loan from a directors. The balanceoutstanding as at 31st March 2012 is Rs.Nil (Previous Year Rs. 181.02 Lacs). Maximumbalance outstanding is 181.02 Lacs.
(f) In our opinion and according to the explanation given to us the rate of interest,any other terms and conditions of the Loan taken are not prima-facie prejudicial to theinterest of the Company.
(g) The loans taken are repaid during the year.
(iv) (a) In our opinion and according to the information and explanations given tous, there are adequate internal control systems commensurate with the size of the Companyand the nature of its business with regard to purchases of inventory and fixed assets andwith regard to the sale of goods and services. During the course of our audit, we have notobserved any continuing failure to correct major weaknesses in internal control system.
(v) (a) In our opinion and according to the information and explanations given tous, the particulars of contracts or arrangements referred to in Section 301 of theCompanies Act, 1956 have been entered in the register required to be maintained under thatSection.
(b) In our opinion, and according to the information and explanation given to us, thesetransactions made in pursuance of such contracts and arrangements entered in the Registermaintained under Section 301 of the Companies Act, 1956 and exceeding Rs.5 Lacs in respectof each party have been made at prices which are reasonable having regards to theprevailing market prices at the relevant time.
(vi) According to the information and explanation given to us the Company has notaccepted any deposits from public to which the provisions of Sections 58A, 58AA or anyother relevant provisions of the Companies Act, 1956 and the Companies (Acceptance ofDeposits) Rules, 1975 apply.
(vii) In our opinion, the Company has an internal audit system commensurate withthe nature of its business and size of the Company.
(viii) We have broadly reviewed cost records maintained by the Company pursuant tothe Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Governmentunder clause (d) of sub-section (1) of section 209 of the Act and are of the opinion thatprima facie the prescribed records have been maintained. However, we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
(ix) (a) According to the records of the Company and as per the information andexplanations given to us, the Company is generally regular in depositing with appropriateauthorities undisputed statutory dues including Provident Fund, Employees’ StateInsurance, Income tax, Wealth tax, Service tax, Custom Duty, and other material statutorydues applicable to it. According to the information and explanation given to us, noundisputed amounts payable in respect of the aforesaid dues were outstanding as on31.3.2012 for a period of more than six months from the date of becoming payable.
(b) According to the information and explanations given to us and records examined byus, there are no disputed dues of Sales Tax, Income Tax, Wealth tax, Service tax, Customsduty, excise duty and cess outstanding as on 31st March, 2012.
(x) The Company has no accumulated losses as on 31st March, 2012 and has notincurred cash losses during the financial year covered by our audit as also during theimmediate preceding financial year.
(xi) In our opinion and according to the information and explanations given to us,the Company has not defaulted in repayment of dues to a financial institutions or banks.
(xii) Based on our examination of the records and the information and explanationsgiven to us, the Company has not granted any loans and advances on the basis of securityby way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefitfund/society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicableto the Company.
(xiv) The Company is not dealing or trading in shares, securities, debentures andother investments, hence, the provisions of clause 4 (xiv) of the Order are not applicableto the Company.
(xv) The Company has given guarantees for loans taken by Others from banks andfinancial institutions. According to the information and explanations given to us, we areof the opinion that the terms and conditions thereof are not prima facie prejudicial tothe interest of the Company.
(xvi) In our opinion, the term loans have been applied for the purpose for whichthey were raised.
(xvii) According to the information and explanations given to us and on an overallexamination of the Balance Sheet of the Company, we report that no funds raised onshort-term basis have been used for long-term investment.
(xviii) According to the information and explanations given to us, the Company hasnot made any preferential allotment of shares to parties and companies covered in theregister maintained under Section 301 of the Act.
(xix) The Company has not issued any debentures during the financial year andtherefore the question of creating securities or charge in respect thereof does not arise.
(xx) The Company has not made any public issue during the year.
(xxi) Based upon the audit procedure performed and according to the information andexplanation given to us, no fraud on or by the company has been noticed or reported duringthe year.
For J.P.J. Associates
Chartered Accountants
Firm Registration No. 113012W
CA Pravin Deshpande
Partner
M.No. 045249
Place : Mumbai
Date :May 19, 2012