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SHARDA SOLVENT LIMITED
ANNUAL REPORT 2006-2007
AUDITORS' REPORT
To,
The Members
Sharda Solvent Limited
We have audited the attached Balance Sheet of SHARDA SOLVENT LIMITED, as at
31st March, 2007 and the Profit & Loss Account 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.
1. 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 of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
2. As required by the Companies (Auditor's Report) Order 2004 issued by the
Central Government of India in terms of sub-section (4A) of section 227 of
the Companies Act, 1956, we enclose in the Annexure hereto a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
3. Further to our comments in the Annexure referred to in paragraph 2
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) 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.
c) The Balance Sheet and Profit & Loss Account referred to in this report
are in agreement with the books of account.
d) In our opinion, the Profit & Loss Account and Balance Sheet comply with
the Accounting Standards referred to in Section 211 (3C) of the Companies
Act, 1956 to the extent possible.
e) As per information and explanations given to us by the Directors of the
Company, we report that none of the Director is disqualified from being
appointed as Director of the Company under clause (g) of subsection (1) of
Section 274 of the Companies Act 1956.
f) In our opinion and to the best of our information and according to the
explanations given to us, the said Balance Sheet and Profit & Loss Account
subject to note No.4 & 6 of schedule 20' and read together with other
notes thereon give the information required by the Companies Act, 1956 in
the manner so required and give a true and fair view:
i) In so far as it relates to Balance Sheet of the state of affairs of the
Company as at 31st March, 2007, and
ii) In so far as it relates to profit & Loss Account of the Profit for
the year ended on that date.
For KRISHNA GUPTA & CO
CHARTERED ACCOUNTANTS
Place : BHOPAL (M.P.) (S.K. Gupta)
Dated : 4th August, 2007 Partner
ANNEXURE TO AUDITORS REPORT
(Referred) in paragraph 2 of our report of even date.
(1) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the basis
of available information.
(b) As explained to us, the fixed assets have been physically verified by
the management during the year in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the Company and nature
of its assets. No material discrepancies were noticed on such physical
verification.
(c) In our opinion, the Company has not disposed of substantial part of
fixed assets during the year and the going concern status of the Company is
not affected.
(2) In respect of its inventories:
(a) As explained to us, inventories have been physically verified by the
management at regular intervals during the year.
(b) In our opinion and according to the information and explanations 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 has maintained proper records of inventories. As explained
to us, there were no material discrepancies noticed on physical
verification of inventory as compared to the book records.
(3) In respect of loans:
(a) The Company has not granted Secured/Unsecured loans to Companies, firms
or other parties covered with Register mentioned under section 301 of the
Companies Act, 1956.
(b) Not applicable, as the Company has not given any loan.
(c) Not applicable, as the Company has not given any loan.
(d) Not applicable, as the Company has not given any loan.
(e) The Company has taken unsecured loan from the parties covered under
section 301 of the Act to the extent of Rs. 1256.24 Lacs from 10 parties.
(f) In our opinion and according to the information and explanations given
to us, the rate of interest, wherever applicable and other terms and
conditions are not prima facie prejudicial to the interest of the company.
(g) In respect of loans taken by the Company, the interest payments
wherever applicable are regular and the principal amount is repayable on
demand, and as informed to us, that no notices have been received from the
parties concerned about its repayment the question of irregularity of
repayment of loan/ interest does not arise.
(4) In our opinion and according to the information and explanation given
to us, there are adequate internal control procedures commensurate with the
size of the Company and nature of its business for the purchase of
inventory, fixed assets and also for sale of goods. During the course of
our audit, we have not observed any major weaknesses in internal controls,
(5) In respect of transactions covered under Section 301 of the Companies
Act, 1956:
(a) In our opinion and according to the information and explanations given
to us, the transaction made in pursuance of contracts or arrangements, that
needed to be entered into in 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, there are transactions in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Companies Act,
1956 aggregating during the year to Rs. 5,00,000 or more in respect of any
party and each of these transaction have been made at prices which are
reasonable having regard to prevailing market prices at the relevant time.
(6) The Company has not accepted any deposits from the public.
(7) In our opinion, the internal audit system of the Company is
commensurate with its size and nature of its business.
(8) The Central Government has prescribed maintenance of Cost Records under
Section 209(l)(d) of the Companies Act, 1956. We have broadly reviewed the
accounts and records of the Company in this connection and are of opinion,
that prima facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the same.
(9) In respect of statutory dues:
(a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund, Employees
State insurance, Income Tax, Sales tax, Wealth Tax, Customs Duty, Excise
Duty, Cess and other statutory dues have been generally regularly deposited
with the appropriate authorities. According to the information and
explanations given to us, no undisputed amounts payable in respect of the
aforesaid dues were outstanding as at 31st March, 2007 for a period of more
than six months from the date of becoming payable.
(b) As explained to us there is no disputed amount in respect to statutory
dues is outstanding at the end of the financial year.
(10) The Company has no accumulated losses and has not incurred any cash
losses during the financial year covered by our audit or in immediately
preceding financial year.
(11) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions and banks.
(12) In our opinion and according to the information and explanation given
to us, no loans and advances have been granted by the Company on the basis
of security by way of pledge of shares, debentures and other securities.
(13) In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund/ society. Therefore, clause 4 (xiii) of the Companies
(Auditor's Report) Order, 2003 is not applicable to the Company.
(14) The Company is not dealing in Shares, Securities, debentures and
other investments.
(15) The Company has not given any guaranties for loan taken by others
from Banks or financial institutions and prima facie prejudicial to the
interest of the Company.
(16) The Company has raised term loans, which were applied for the purpose
for which loans were obtained.
(17) According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that the Company has not utilised short-term resources towards long
term investment.
(18) During the year, the Company has not made any preferential allotment
of shares to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
(19) The Company has not issued any debenture.
(20) The Company has not raised any money by way of public issue during the
year.
(21) In our opinion and according to the information and explanations given
to us, no fraud on or by the Company has been noticed or reported during
the year, that causes the financial statements to be materially misstated.
For KRISHNA GUPTA & CO
CHARTERED ACCOUNTANTS
Place : BHOPAL (M.P.) (S.K. Gupta)
Dated : 4th August, 2007 Partner
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