Sampada Chemicals Ltd Auditor Reports

SAMPADA CHEMICALS LIMITED ANNUAL REPORT 2010-2011 AUDITORS REPORT To The Members of Sampada Chemicals Ltd. 1. We have audited the attached Balance Sheet of SAMPADA CHEMICALS LIMITED as at 31st March 2011 Profit & Loss account for the year ended on that date. These financial statements are the responsibility of the Management. Our responsibility is to express an opinion on these financial statements based on our audit. We have 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 from material misstatements. An audit also 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. 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, we enclose in the Annexure a statement on the matters specified in Para 4 and 5 of the said Order. 3. Further to our comments in the annexure referred to above, we report that: (a) We have obtained all the information and explanation 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 and Profit & Loss Account and Cash Flow Statement dealt with this report are in agreement with the books of accounts. (d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred in section (3c) of Section 211 of the Companies Act, 1956 to the extent applicable, except for Non Provisions for diminution in the value of Long Term Investment which is non in accordance with Accounting Standard 13 on Accounting for Investments (Refer Notes to Accounts). (e) On the basis of written representations received from the directors as on 31st March 2011 and taken on record by the Board of Directors of the Company , none of the Directors 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 Act. (f) We further report that: (a) Unsecured Loans, Loans and Advances & Credit Balances are being subject to confirmation & reconciliation. (b) Shares held as long term investments were not produced to us for physical verification and therefore we are unable to comment on their physical existence and ownership. (g) In our opinion and to the best of our information and according 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 gives 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 Company as at 31st March, 2011, (ii) In the case of Profit & Loss Account of the Profit of the Company for the year ended on that date and (iii) In the case of Cash Flow Statement of the Cash Flow for the year ended on that date. For S.G. Kabra & Co. Chartered Accountant Malvika P. Mitra Membership No. 44105 Place: Mumbai Date : 16th August, 2011 ANNEXURE TO AUDITORS REPORT Referred to in paragraph 2 of our report of even date On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that: 1. In respect of its fixed assets: a) The Company has non maintained any Fixed Assets Register showing full particulars Including quantitative details and situation of its assets. b) As there are no Documentary evidences available we are not able to comment whether, the fixed assets have been physically verified by the management. (c) No substantial part of fixed assets has been disposed off during the year. 2. (a) The inventory has been physically verified during the year by the management .In our opinion , the frequency of verification is reasonable . (b) According to the information and explanations given to us the procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business (c) According to the records produced before us for our verification, there were no material discrepancies notices on physical verification of stocks referred to in para 2(a) above as compared to the books of accounts. 3. In respect to loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. a) The Company has granted unsecured loans to twelve parties aggregating of Rs. 206648331/- listed in register maintained under Section 301 of the Companies Act, 1956 during the year under audit. b) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. c) We are not able to comment on the regularity of repayment, as there was no stipulation made for repayment at the time of loan given. d) We are not able to comment on whether the amount outstanding which is in excess of Rs. 1 Lac in respect of loans granted in previous years to one company covered under the register maintained under section 301 of the Companies Act, 1956 is overdue as there was no stipulations made. e) The Company has also taken loan from twelve companies aggregating of Rs.27407433/- covered under the register maintained under Section 301 of the Companies Act, 1956. f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other listed in the register maintained under Section 301 of the Companies Act, 1956 are not prejudicial in the interest of the Company. g) We are not able to comment on the regularity of repayment as there was no stipulation made for repayment at the time of loan taken. 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, we have not observed any continuing failure to correct major weaknesses in internal controls. 5. In respect of transactions covered under Section 301 of the Companies Act, 1956. a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of controls or arrangements, that needed to be entered into in the register maintained under 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, there are no transactions in pursuance of contracts of arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5,00,000/- (Rs. Five Lacs Only) or more in respect of any party. 6. The Company has not accepted any deposits from the public. 7. Company does not have formal internal audit system. 8. The central Government has not prescribed maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 for any of the product of the Company. 9. In respect of statutory dues. a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Customes Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities except Service Tax of Rs. 3,92,291/- According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2011 for a period of more than six months from the date of becoming payable. b) There are no disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities. 10. In our opinion, the company is not having accumulated losses subject to our comments in notes to accounts and point no. 3 in our report. The company has not incurred cash losses during the financial year covered by our audit and also in the immediately preceding financial year. 11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. 12. In our opinion and accounting to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies (Auditors Report) Order 2003 is not applicable to the Company. 14. The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the company in its own name. 15. The Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company except for certain shares pledged by the company for loan taken by the other company. However, in the opinion of the management, the same is not prejudicial to the interest of the company. 16. The Company has not raised any new term loans during the year. 17. In our opinion, the funds raised on short - term on long - term basis have been used for the purpose for which they were raised. 18. During the year, 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 made any debenture issue. 20. The Company has not raised any money by way of public issue during the year. 21. In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated. For S.G. Kabra & Co. Chartered Accountant Malvika P. Mitra Membership No. 44105 Place: Mumbai Date : 16th August, 2011