Ras Propack Lamipack Ltd Merged Auditor Reports

RAS PROPACK LAMIPACK LIMITED ANNUAL REPORT 2009-2010 AUDITORS REPORT To The Members of RAS PROPACK LAMIPACK LIMITED 1. We have audited the attached balance sheet of RAS PROPACK LAMIPACK LIMITED, as at 30th September, 2010, 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 have conducted our audit in accordance with the auditing standards generally accepted in India. These 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. 3. 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 the books and records, as we understand appropriate and according to the information and explanations given to us during the course of audit, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order. 4. Further to our comments in the Annexure referred to 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 purposes 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 those books; iii) The Balance Sheet, Profit and Loss account 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 except in case of Retirement benefits as referred to in note no. 12 in Schedule Q; to Notes to Accounts v) On the basis of written representations received from the directors, as on 30th September, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th September, 2010 from being appointed as a director in terms of clause (g) of sub- Section (1) of Section 274 of the Companies Act, 1956; vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read 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: a. In the case of the Balance Sheet, of the state of affairs of the company as at 30th September, 2010; b. In the case of the Profit and Loss Account, of the Profit of the company for the year ended on that date; and c. In the case of the cash flow statement, of the cash flows for the year ended on that date. For N.P. GANDHI & Co. Chartered Accountants Nilesh Gandhi Proprietor Place : MUMBAI, Membership No. 44294 Date : November 15, 2010 Firm Regn. No: 116574W ANNEXURE TO THE AUDITORS REPORT: (Referred to in paragraph 3 of our report of even date) 1. a) The company has maintained proper records showing full particulars including quantitative details and situations of fixed assets. b) As explained to us, all the assets have been physically verified by the management during the year. No material discrepancies were noticed on such verification. c) Based on the information and explanation provided to us, no substantial part of fixed assets has been disposed off during the year. Therefore, this does not affect the going concern concept on this account. 2. a) Since there is no inventory during the year, the issue of physical verification of inventory does not arise. b) In our opinion and according to the information and explanation given to us, since there is no inventory during the year, the issue of procedure of physical verification of inventories followed by the management does not arise. c) On the basis of our examination of the records of inventory, we are of the opinion that the company is generally maintaining proper records of inventory. Since there is no inventory during the year, the issue of discrepancies noticed on verification between the physical stocks and the books records does not arise. 3. a) The company has granted an interest free deposit to RAS Extrusions Ltd. amounting to Rs. 7 lacs (Rs. Seven Lacs only) covered in the Register maintained u/s 301 of the Act. b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which unsecured loan / deposit has been granted to a Company listed in the Register u/s 301 of the Companies Act, 1956 is not prima facie, prejudicial to the interest of the Company keeping in view of the long term relationship with Company. c) The above-said interest-free deposit is refundable after the expiry of lease year. d) The Company has not taken any loan secured or unsecured from Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956. e) In view of the above, clauses (f) & (g) Companies (Auditors Report) Order, 2003 are not applicable. 4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the 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, no major weaknesses have been noticed in the internal controls. 5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to-us Section 301 of the Act have been entered in the register required to be maintained under that section. b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 and exceeding the value of Five lacs rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available with the company. 6. The Company has not accepted any deposits from public during the year under review, therefore the directive issued by Reserve Bank of India and the provisions of Section 58A & Section 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable to the company. 7. In our opinion the company has an internal audit system commensurate with the size and nature of its business. 8. Based on the information & explanations provided to us, the Central Government has not prescribed the maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956 for any of the products of the company. 9. a) According to the review of the records of the company, undisputed statutory dues such as Provident Fund, Profession Tax, Income Tax, Cess, Sales Tax & Service Tax have been generally deposited with the appropriate authorities on the respective due dates. There were no dues payable in respect of Investor Education and Protection Fund and Wealth-tax. Un- deposited Custom Duty including interest & penalty of 1424.65 lacs (Rs.1867.93 Lacs) and Tax Deducted at source amounting to Rs. 4.32 lacs (Rs.2.59 lacs) is payable as of 30th September, 2010. As explained to us the company has been advised that Employees State Insurance Act is not applicable, as the factory is situated in non-implementable area. b) According to the information and explanation given to us, no undisputed amounts payable in respect of income-tax, Wealth-tax, Service-tax, Sales- tax, and Excise duty were outstanding as at 30th September, 2010 for a period of more than six months from the date they become payable, except Custom duty including interest / penalty of Rs. 1424.65 (Rs. 1867.93 Lacs) and Tax deducted at source of Rs. 4.32 lacs (Rs.2.59 lacs). c) According to the records of the company, there are no dues of Income- tax, Sales-tax, Wealth-tax, Service-tax, Custom duty, Cess etc. which have not been deposited on account of any dispute. 10. The accumulated losses of the company are more than fifty percent of its net worth and the company has incurred cash loss excluding extra- ordinary income/expense during the financial year covered by our audit and even in the immediately preceding financial year, the Company had incurred cash loss. 11. The Company has been declared as Sick Industrial Undertaking by BIFR vide its hearing dated 7th November 2001. BIFR has appointed IDBI as the Operating Agency vide its hearing dated May 29, 2007 to finalize the Rehabilitation Package for the Company. The Company had arrived at one time settlement with all its term lenders, banks and creditors and accordingly payments have been made to the respective term lenders, banks and creditors as per the scheme of Rehabilitation approved by BIFR. 12. Based on our examination of documents and records, we are of the opinion that the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion and according to the information and explanations given to us, provisions of any special statute applicable to chit fund, nidhi or mutual benefit fund/societies are not applicable to the Company. 14. Based on our examination of documents and records, we are of the opinion that the company is not dealing or trading in shares, securities, debentures and other investments. 15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. 16. According to the information and explanations given to us and based on our examination of documents and records, the company has not accepted / taken any fresh term loans during the financial year. 17. According to the information and explanation provided to us by the management and based on the overall review of the Cash Flow Statement as at 30th September, 2010 prima-facie, we are of the opinion that, funds raised from short term sources were not used for long term applications during the accounting year covered by our report. 18. Based on our examination of documents and records, during the financial year, the company has made Preferential allotment of shares to parties and Companies covered in the Register maintained under Section 301 of the Companies Act, 1956 as per the directives of BIFR vide its order dated February 17, 2009. 19. During the year covered by our audit report, the company has not issued any debentures. 20. During the financial year, the company has not raised any money by public issue of securities. 21. Based upon the audit procedures performed and according to the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit. For N.P. GANDHI & Co. Chartered Accountants Nilesh Gandhi Proprietor Membership No. 44294 Place : MUMBAI, Firm Regn No: 116574W Date : November 15, 2010