ABL Bio-Technologies Ltd Auditor Reports

ABL BIOTECHNOLOGIES LIMITED ANNUAL REPORT 2011-2012 AUDITORS REPORT TO THE MEMBERS OF ABL BIOTECHNOLOGIES LIMITED 1) We have audited the attached Balance Sheet of ABL BIOTECHNOLOGIES LIMITED as at 31st March 2012 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2) We conducted our audit in accordance with 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 (a) examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements (b) assessing the accounting principles used in the preparation of financial statements (c) assessing significant estimates made by management in the preparation of financial statements and (d) evaluating the overall financial statement preparation. We believe that our audit provides a reasonable basis for our opinion. 3) As required by the Companies (Auditors Report) Order, 2003 and Companies (Auditors Report) amendment order, 2004, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred 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, audit. b. In our opinion, the Company has kept proper books of accounts as required by law so far, as appears from our examination of those books. c. The Balance Sheet and Profit and Loss Account and 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, comply with the Accounting Standards referred to in Sub- section (3C) of Section 211 of the Companies Act, 1956. e. Based on the verification of documents, one of the director is disqualified as on 31st March, 2012 from being appointed as directors in terms of Clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956; f. We draw attention to the following notes on accounts in schedule 20 i) Note No. 16 The company has given corporate guarantee to Axis Bank and M/s. Shantha Biotechnics Private Limited for Rs. 1.91 Crore and 2.61 Crore respectively. g. The company is irregular in paying undisputed statutory dues. h. Balance of Creditors, Debtors, Loans & Advances and Bank Balances are subject to confirmation, including the amount due from M/s. Samudra towards Royalty receivable, Technology Sale Income Receivable, Loan others and Trade Advance. i. Subject to point e, f, g and h above, In our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. In the case of Balance sheet, of the state of affairs of the Company as at 31st March,2012 and ii. In the case of Profit and loss Account, of the Loss for the year ended 31st March 2012. iii. In the case of Cash Flow Statement, of the cash flows for the year ended on that date. For and on behalf of PRATAP KARAN PAUL & CO., Chartered Accountants, Firm Registration No. 002777S Pratapkaran Paul Date : 3rd September, 2012 Partner. Place: Chennai Membership No:023810 Annexure referred to in paragraph 3 of Auditors Report to the Members of M/S. ABL BIOTECHNOLOGIES LIMITED on the accounts for the year ended 31st March 2012. In terms of the information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under: 1) The company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. As explained to us, all the assets have been physically verified by the management at a reasonable interval during the year. According to the information and explanation given to us, no material discrepancies were noticed on such verification. The company has written off considerable amount of fixed assets, however as per information and explanation provided by management, which will not affect its status as going concern. 2) The stocks of inventory have been physically verified during the year by the Management at reasonable intervals. In our opinion the procedure of physical verification of the Inventory followed by the management are, in our opinion reasonable and adequate in relation to the size of the company and nature of its business. The company is maintaining proper records of Inventory. The discrepancies noticed on physical verification of stocks as compared to book records were not material, however, the same have been properly dealt with in the books of accounts. 3) a) In our opinion, the company has granted Rs. 38,39,061/- to M/s. Samudra Biopharma Private Limited covered in the Register maintained under section 301 of the Companies Act, 1956. b) In our opinion, loan of Rs.2,30,45,724/- taken by the Company from its Director covered in the register maintained under section 301 of the Companies Act, 1956, the rate of interest and other terms and conditions of loans taken by the company are not prima facie prejudicial to the interest of the company. The principal amount is still due as on date. 4) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, for purchase of Inventory, Fixed Assets and for the sale of goods. In our opinion, there is no continuing failure to correct major weakness in internal control systems. 5) (a) In our opinion, the particulars of contracts and arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section; and * In our opinion, each of these transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. 6) The Company has not accepted any deposits within the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975. 7) The Company does have an internal audit system commensurate with its size and nature of its business. 8) The company has not maintained cost records pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956. 9) The company has not been regular in depositing undisputed statutory dues including Provident Fund, TDS, Employees State Insurance, Income Tax, Sales Tax, Excise Duty and cess with the appropriate authorities. Details of amount due exceeding 6 months 1. Provident Fund - Rs. 23,69,934 2. Tax Deducted at Source - Rs. 49,37,153 3. Fringe Benefit Tax - Rs. 7,08,264 4. Income Tax - Rs. 37,48,830 5. Professional Tax - Rs. 2,69,198 6. Employees State Insurance - Rs. Rs. 77,055 10) The company has reported accumulated losses to be carried forward and it has also incurred cash losses in the financial year under report. 11) The company has defaulted in repayment of dues to financial institutions and Banks. Details of them are Short term loan from Axis Bank - Rs. 1,09,46,880/- Government Soft Loan - Rs. 6,84,92,785/- 12) As explained to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13) The company is not a chit fund, nidhi or mutual benefit fund/society. 14) The company is not dealing or trading in shares, securities, debentures and other investments. 15) The company has given guarantee for loans taken by M/s. Samudra Biopharma Private Limited from Axis bank and M/s. Shantha Biotechnics Private Limited for Rs. 1,91,20,000 and Rs. 2,61,03,200 respectively. 16) Term loans are applied for the purpose of which they were obtained. 17) The funds raised on short-term basis have not been used for long term investment. 18) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. 19) The company has not issued debentures during the year. 20) The company has not raised any money through a public Issue during the year. 21) During the checks carried out by us, any fraud on or by the company has not been noticed For and on behalf of PRATAP KARAN PAUL & CO., Chartered Accountants, Firm Registration No. 002777S Pratapkaran Paul Date : 3rd September, 2012 Partner. Place: Chennai Membership No:023810