majestic industries ltd Auditors report

MAJESTIC INDUSTRIES LIMITED ANNUAL REPORT 2008-2009 AUDITORS REPORT To The Members of MAJESTIC INDUSTRIES LIMITED We have audited the attached Balance Sheet of MAJESTIC INDUSTRIES LIMITED as at 31st March, 2009, the Profit & Loss Account and also the Cash Flow cement 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. 1. We have conducted our audit in accordance with the 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 arid 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. 2. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks of books and records as were considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters speed 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 & 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, Profit and 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 and Loss Account and Cash Flow Statement dealt with by this report, comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956; e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director 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 explanations given to us, the said financial statements, read together with the Significant Accounting Policies and Notes on Accounts attached thereto, 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, 2009; ii) in the case of Profit and Loss Account of the Loss for the year ended on that date; iii) in the case of Cash flow Statement, of the cash flows for the year ended on that date. For RAJESH GORA LAL & CO. CHARTERED ACCOUNTANTS Place : Barotiwala (RAJESH KUMAR AGGARWAL) Date : 02nd September, 2009 PROPRIETOR Membership No. 087934 ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 2 of our report of even date on financial statements of MAJESTIC INDUSTRIES LIMITED for the year ended 31st March, 2009) On the basis of such checks as we considered appropriate, we further report that: 1. (a) The Company has maintained reasonably proper records showing full particulars including quantitative details and situation of fixed assets, on the basis of available information which is consolidated in some cases. (b) As explained to us, fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets; and no material discrepancies were noticed on such verification. (c) The Company has sold I disposed off an old vehicle during the year under review. In accordance with the representation received from the management the said sale / disposal does-not have any impact on the going concern status of the company. 2. The Company did not carry any, inventories during the year. Thus, provisions of paragraph 4(ii)(a), (b) & (c) of the Companies Auditors Report) Order, 2003 are not applicable. 3. (a) As-explained to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, during the year. Therefore, provisions of paragraph 4 (iii) (a), (b), (c) & (d) of the Companies (Auditors Report) Order, 2003 are not applicable (b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 during the year, except interest free unsecured loan Rs.14.00 lacs (Maximum Balance Rs.14.00 lacs) received during the year from the Managing Director of the Company. (c) In our opinion and as explained to us, terms of the said interest free unsecured loan has prima-facie not been prejudicial to the interest of the Company. (d) Terms of repayment of the said interest free unsecured loan referred to in the foregoing paras have not been ascertained. However, the said loan has been repaid to the full after the balance sheet date. 4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business for the sale of fixed assets. There has been no purchase or sale of goods or services or purchase of fixed assets, during the year. During the course of our audit; we have not observed any continuing failure to correct major weaknesses in internal control systems. 5. (a) As explained to us, the transactions that needed to be entered into a register in pursuance of 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, the transactions made in pursuance of contracts or arrangements entered into the register maintained under section 301 of the Companies Act, 1956 and aggregating to more than Rs.500,000/- (Rupees Five lacs only) in respect of any party, during the year, have been made at prices which are reasonable having regard to the prevalling market prices at the relevant time. 6. The Company has not accepted any deposits from the public in terms of provisions of Section 58A, 58AA or any relevant provisions of the Companies Act, 1956 and the rules framed there under. As explained to 4s, the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal has not passed any order as regards the Company in respect of Public Deposits. 7. The Company does not have any formal internal audit system. However, the internal checks and controls exercised by the management appear to be adequate for size and nature of operations of the Company. 8. It has been explained to us that the provisions of para 4(viii) of the Companies (Auditors Report) Order, 2003 regarding maintenance of cost records pursuant to stipulations of section 209(1)(d) of the Companies Act, 1956, are not applicable to the Company. 9. (a) According to the records of the Company and as explained to us, the Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cass and any other statutory dues, wherever & to the extent applicable, except (i) provision for Fringe. Benefit Tax (Rs.6,149/-) the advance tax dues in respect of which have not been paid as per stipulated schedule; and (ii) Central Sales Tax (Rs. 500/-) demand (inclusive of interest & penalty) payable pursuant to an assessment order issued during the year. Other than the said Advance Fringe Benefit Tax & Central Sales Tax, there are no arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable. (b) As explained to us, there are no pending dues of sales tax/income tax/ custom tax wealth tax/service tax/ excise duty/cess on account of any dispute, except penalties levied by central excise authorities in a number of cases, aggregate amount of which has not yet been determined and which are pending with various appellate authorities including Central Excise & Service Tax Appellate Tribunal. 10. Accumulated losses at the end of the financial year under consideration are not less than fifty percent of its net worth Honble Board for Industrial & Financial Reconstruction (BIFR), vide order dated 09th August, 2005 in case No. 39/2002, has declared the Company as a sick industrial company under Section (3)(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Company has incurred cash loss during the financial year under review as well as in the preceding financial year. 11. According to the information & explanations given to us, there have been no dues, during the. year, towards any financial institution, bank or debenture holders. 12. As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. As explained to us, special statute applicable to chit fund does not apply to the Company. The provisions of pare 4(xiii); (a), (b), (c) & (d) of the Companies (Auditors Report) Order, 2003, are also not applicable. 14. As explained to us, the Company has not done any dealing or trading in shares, securities, debentures and other investments, during the year, therefore provisions of para 4(xiv) of the Companies (Auditors Report) Order, 2003, are not applicable. 15. It has been informed to us that the Company has not given any guarantees for loans taken by others from bank or financial institutions. 16. According to the information & explanations given to us, the Company,has not availed of any term loan, during the year, except interest free unsecured loans / deposits taken from a director, payable on demand. As explained to us, the said unsecured loans / deposits have been applied for the purpose for which those were obtained, barring temporary deployment pending allocation/adjustment. 17. According to information/explanation given to us, the funds raised on short tern basis have; prima facie, not been used during the year, for long term investments (fixed assets etc.), barring temporary deployment pending allocation/adjustment. 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 Companies Act, 1956; 19. The Company has not issued any debentures, therefore provisions of para 4(xix) of the Companies (Auditors Report) Order, 2003, are not applicable; 20. The Company has not raised any money by way of public issue, therefore provisions of pare 4(xx) of the Companies (Auditors Report) Order, 2003, are not applicable; 21. According to the information & explanations given to us, no fraud on or by the company has been noticed or reported during the year. For RAJESH GORA LAL & CO. CHARTERED ACCOUNTANTS Place : Barotiwala Date : 02nd September, 2009 (RAJESH KUMAR AGGARWAL) PROPRIETOR Membership No. 087934