Birla Machining & Toolings Ltd merged Auditor Reports

BIRLA MACHINING AND TOOLINGS LIMITED (FORMERLY DAGGER FORST TOOLS LIMITED) ANNUAL REPORT 2010-2011 AUDITORS REPORT To, The Members of Birla Machining & Toolings Limited (Formerly Dagger Forst Tools Limited) 1. We have audited the attached Balance Sheet of Biria Machining & Toolings Limited (Formerly Dagger Forst Tools Limited), as at 31st March 2011, 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 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. Without qualifying our opinion, we invite attention to the following notes to Schedule 19: 1) note no 8 regarding delay in project implementation and capital expenditures (including project advances) amounting to Rs.9,50,40,090. No provision for impairment is considered necessary based on the representation given by the management. 2) note no 11 regarding the Company having sold all its undertakings and preparing the accounts on going concern basis, as explained in note mentioned therein. 4. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by Central Government of India in terms of Section 227(4A) of the Companies Act 1956, we give in the Annexure hereto a statement on the matters specified in the paragraphs 4 and 5 of the said order, to the extent applicable to the Company. 5. Further to our comments in the Annexure referred to in paragraph (3) above, we state 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 the books; c) the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; d) in our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956; e) On the basis of written representation received from the directors as at 31a March, 2011 and taken on record by the Board of Directors, we report that none of the directors of the Company are disqualified as on 31a March, 2011 from being appointed as a director in terms of Clause (g) of sub- section (I) 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 accounts together with notes thereon 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 the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011; (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 Cash Flow Statement, of the cash flows for the year ended on that date. For CHATURVEDI & SHAH Chartered Accountants Registration No: 101720W PARAG D. MEHTA Partner Membership No.: 113904 Place: Mumbai Dated: 8th August, 2011 ANNEXURE TO AUDITORS REPORT (Referred to in paragraph 3 of our report of even date) i.a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. b) According to the information and explanation given to us, all the fixed assets have been physically verified by the management at reasonable interval, 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 off substantial part of its fixed assets during the year. ii. As explained to us, there is no physical inventory in existence and hence the question of physical verification and comparison with the inventory records does not arise. iii.a) During the year the Company has granted unsecured loans to four Companies, covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is aggregating to Rs. 13,01,85,958 and year end balance of aforesaid loans is amounting to Rs 7,50,00,000. b) The Company has not taken any loans, secured or unsecured loans from the companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956. c) In our opinion the rate of interest and other terms and conditions of above loans are prima facie not prejudicial to the interest of the Company. d) The principal and interest is payable on demand. iv. In our opinion and according to the information and explanation given to us, there are adequate internal control System commensurate with the size of the Company and nature of its business for the purchase of fixed assets, sales of goods .The Company has not purchased any inventory nor given any services during the year. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls System. v.a) According to information and explanation given to us, we are of the opinion that the transactions made in pursuance of contracts or arrangement referred to in section 301 of the Companies Act, 1956 have been entered into a register required to be maintained under that section. b) In our opinion and according to the information and explanations given to us, the transactions of purchase of goods & material and sale of goods, materials & services made in pursuance of contracts or arrangement required to be entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000 (Rupees Five Lacs only) or more in respect of each party, has been made at prices which are reasonable having regard to the prevailing market prices. vi. The Company has not accepted deposits from public, hence directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under are not applicable for the year under audit. vii. In our opinion, the company internal audit system is commensurate with its size and nature of business. viii. The Central Government has not prescribed maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 in respect of activities carried on by the Company. Hence the provisions of clause 4 (viii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. ix.a) According to the records of the Company, undisputed statutory dues, including Provident Fund, Employees State Insurance Dues, Investor Education and Protection Fund, Income Tax, sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and other material statutory dues have generally been regularly deposited, by the Company during the year with the appropriate authorities in India. According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2011 for a period of more than six months from the date of becoming payable... b) As at March 31, 2011, there have been no disputed dues which have not been deposited with the respective authorities in respect of Income Tax, Custom Duty, Wealth Tax, Service Tax, Excise duty and Cess other than the following: Name of Nature of Amount Period to Forum where dispute is Statute the dues (Rs.) which pending amount relates Central Excise Service Tax 13,76,365 2006-07 to Commissioner of Central Act 2007-08 Excise Aurangabad Sales Tax Act BST and CST 70,09,147 2004-05 Joint Commissioner of Sales Tax (Appeals) Aurangabad x. In our Opinion, the accumulated losses of the Company are not more than fifty percent of its net worth as at March 31, 2011, and the Company has incurred cash loss during the financial year and in the immediately preceding financial year. xi. The Company has not borrowed money from any financial institution or bank or by issue of debentures and hence defaulting in repayment of its dues does not arise. Accordingly, the provision of clause 4 (xi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. xii. In our opinion and according to the information and explanation given by us, no loans and advances have been granted by the Company on the basis of the security by way of pledge of shares, debentures and other securities. xiii. In our opinion, the Company is not a chit fund, a nidhi or a mutual benefit society. Therefore, the provision of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 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 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. xv. According to the information and explanation given by the management, there is no outstanding guarantee given by the Company for loan taken by others from banks or financial institution. Therefore, the provision of clause 4 (xv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. xvi. According to the information and explanations given to us, the company has not accepted any term loan during the year. Therefore, the provision of clause 4 (xvi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. xvii. According to information and explanation given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2011, no funds raised on short-term basis have been used for long-term investment. xviii. According to the information and explanation given to us, the Company has not made preferential allotment of shares to parties and companies, covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company. xix. The Company has not issued any debentures, hence clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. xx. We have verified the end use of money raised by right - cum - public issue and the same has been disclosed in the notes to the financial statements (Refer note no.3 of Schedule 19). xxi. According to the information and explanation given to us, no fraud on or the Company has been noticed or reported during the year. For CHATURVEDI & SHAH Chartered Accountants Registration No: 101720W PARAG D. MEHTA Partner Membership No.: 113904 Place: Mumbai Dated: 8th August, 2011