Raghav Industries Ltd Under Liquidation Auditor Reports

RAGHAV INDUSTRIES LIMITED ANNUAL REPORT 2010-2011 AUDITORS REPORT To, The members of, Raghav Industries Limited. We have audited the attached Balance sheet of Raghav Industries Limited as at 31st March 2011, the Profit & Loss Account for the year ended on that date and Cash flow statement for the period ended annexed thereto. These financial statements are the responsibility of the companys management. Ours is to express an opinion on these financial statements based on our audit. We 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 misstatements. 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 forming our opinion. 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, we enclosed in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2. Further to our comments in the annexure referred to in paragraph 1 above, we report that: i) 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; ii) 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 of accounts. iii) The Balance Sheet, Profit and Loss Accounts and Cash Flow Statement dealt with by this report are in agreement with the books of account. iv) 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 sub section (3C) of section 211 of the Companies Act, 1956 subject to non provision for diminution in value of investments in one company under the same management (Refer Note No. 3 of Notes on Accounts & Accounting Policies). v) On the basis of written representation received from the directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the director is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. 3. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with Significant Accounting Policies and Notes on Accounts in Schedule T 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; a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2011; b) In the case of the Profit and Loss account, of the Profit for the year ended on that date; and c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date. For M. AGARWAL & ASSOCIATES Chartered Accountants FRN: 013215S CA. Mahesh Agarwal Place: Coimbatore Proprietor Date: 01.09.2011 M. No. 510408 ANNEXURE TO THE AUDITORS REPORT OF EVEN DATE (REFER TO IN PARAGRAPH-1 THEREOF) (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, major fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. (c) During the year, the company has not made substantial disposal of fixed assets. (ii) (a) According to the information and explanation given to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. The management has not observed any material discrepancies during the year under the audit. (b) In our opinion, 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) In our opinion and according to the information and explanation given to us, the company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification. (iii) (a) to (d) According to the information and explanation given by the management, all the transactions with the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not in the nature of granting of any loans, secured or unsecured and they are relating to regular trading transactions, advances given against supply of trading and capital goods and services. The company has not received any interest in respect of the transactions with these parties. The balance (after netting) receivable from the companies under the same managements would get adjusted on the future trading transactions / services to be received / rendered from that companies. The maximum amount outstanding and closing balances of the transactions with these parties are stated in point no.13 - Related Party Transactions - of Notes on Accounts. (e) According to the information and explanation given by the management, the company has taken unsecured loan of Rs. 2529891/- repayable on demand from one party covered in the register maintained under section 301 of the Companies Act, 1956. (f) The rate of interest and other terms and conditions on such borrowings are not prima facie prejudicial to the interest of the company. (g) Since the loan is repayable on demand, so there is no comment on regularity of payment of principal amount. However Rs. 522206/- is repaid towards principal amount and Rs. 221392/- towards interest. All other transactions with the Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not in the nature of accepting of loans, secured or unsecured and they are relating to regular trading transactions, advances received against supply of trading and capital goods and consignment sales. The company has not charged any interest in respect of the transactions with these parties. The balance (after netting) payable to the companies under the same management would get adjusted on the future trading transactions / services to be made to that companies. The maximum amount outstanding and closing balances of the transactions with these parties are stated in point no.13 - Related Party Transactions - of Notes on and forming part of Accounts. (iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct the major weaknesses in internal control system of the company. (v) (a) According to the information and explanations given to us, we are of the opinion that the transactions entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered. (b) As explained to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. (vi) The company has not accepted any deposit from the public. (vii) In our opinion and according to the information given to us, the company has an internal audit system commensurate with the size and nature of its business. (viii) It has been explained that the cost records and accounts prescribed by the Central Govt. of India under section 209 (1) (d) of the Act, are being made up and maintained. (ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance Corporation, Income-Tax, Sales Tax, Service Tax, Custom Duty, Excise duty, Cess and other statutory dues to the extent applicable to the company. According to the information and explanations given by the management none of the employees employed for a continuous period of five years and the provisions of Gratuity Act not applicable to the company for the year under Audit. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, service tax, excise duty, and cess were in arrears, as at 31st March 2011 for a period of more than six months from the date they become payable. (c) According to the information and explanation given to us, there is a dispute in respect of Central Excise, Income-tax, Sales Tax and Service Tax. The nature of transaction and the amount involved in relation to that disputed liability is stated in point no.11 of Notes on and forming part of Accounts. (x) In our opinion, the company is not having any accumulated losses as at 31.03.2011 and it has not incurred any cash loss during the year under audit and also immediately preceding current financial year under audit. (xi) According to the information and explanations given to us, the company has not defaulted in repayment of dues to banks. (xii) According to the information and explanations given 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. (xiii) The company is not a chit fund or nidhi, mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company. (xiv) According to information and explanation given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, clause 4(xiv) of the order is not applicable. (xv) According to the information and explanation given to us, the company has not given any guarantee for loans taken by others/companies under the same management, from banks or financial institutions. (xvi) The term loans obtained by the company have been applied for the purpose for which they were raised. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment of the company. (xviii) The company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained u/sec 301 of the Companies Act, 1956. (xix) The company has not issued any debentures during the year. (xx) The company has not made any public issue of shares during the year. (xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit. For M. AGARWAL & ASSOCIATES Chartered Accountants FRN: 013215S CA. Mahesh Agarwal Place: Coimbatore Proprietor Date: 01.09.2011 M.No. 510408.