sarang chemicals ltd Auditors report

SARANG CHEMICALS LIMITED ANNUAL REPORT 2010-2011 AUDITORS REPORT To The members of Sarang Chemicals Limited 1) We have audited the attached Balance Sheet of M/s. Sarang Chemicals Limited, as at 31st March, 2011 and also the annexed Profit & Loss Account of the company for the year ended on that date and the Cash Flow Statement for the year ended on that date. 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 generally accepted auditing standards 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 supposing 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 (CARO) issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, 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 in paragraph 3 above and the notes forming part of accounts attached here with, we report 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 those books. c) The Balance Sheet and Profit & Loss Account and cash flow statement dealt with this report are in agreement with the books of account. d) In our opinion, the Balance Sheet and Profit & Loss Account and cash flow statement dealt with this report comply with the Accounting Standards referred to in Section (3C) of section 211 of The Companies Act, 1956. e) On the basis of written representations from the directors, as on March 31, 2011, and taken on records by the Board of Directors, We report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of section 274 (1) (g) of The Companies Act, 1956. f) In our opinion and to the best of our information and according to the explanation given to us, the accounts subject to and read with the notes thereon and especially Note No. 1.6.3 of Scheduled 3 regarding non- provision of interest payable for secured loan, 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: 1. In the case of the Balance Sheet of the states of affairs, of the company as at 31st March, 2011. 2. In the case of Profit & Loss Account of the Loss, for the year ended on that date; 3. In the case of the cash flow statement, of the cash flows of the company for the year ended on that date. FOR PRAFUL N. SHAH & CO., Chartered Accountants (P.N. SHAH) Place: Ahmedabad Proprietor Date : April 26, 2011 Membership No.:- 15591 Annexure referred to in our report of even date (i) Since there are no trading/manufacturing activities during the year, clauses (v9), (x), (xii), (xiii), (xiv), (xv), (xviii), (xix) and (xx) of CARO are not applicable. (ii) (a) As explained to us and as verified by us, there are no trading or manufacturing activities in the Company during the year, following matters are not applicable : (a) Physical verification of inventory. (b) Procedures of physical Verification of inventories. (c) Maintenance of proper record of inventories. (iii) (a) The Company has not granted any loans, secured or unsecured, to /firm companies, firms or other or parties listed in the Register maintained under Section 301 of the Companies Act, 1956. (b) The company has accepted un-secured loans from parties, which are non bearing interest. (iv) As per the information and explanations given to us, since there is no trading/manufacturing activity during the year, there are no internal control procedures. (v) Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that there are no contacts or arrangement that needs to be entered into the register maintained under Section 301 of the Companies Act, 1956. (vi) The Company has not accepted any deposits from the public in the current year within the meaning of Section 58AA of the Act 1956 and the rules framed there under. (vii) The company has no internal audit system. (viii) The central government has not prescribed maintenance of the cost record under section 209(1) of the companies act, 1956. (ix) According to the information and explanations given to us in respect of statutory dues: i. The matter of depositing statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income- Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other material statutory dues is not applicable to the company. ii. There were no undisputed amounts payable in respect of Income-tax Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at March 31, 2011 for a period more than six months from the date they became payable, except Income Tax of Rs.2,40,000/- for the year ended on 31sf Mach 2009 and Rs. 1,16,000/- for the year ended on 31st Mach 2010. iii. The fees payable to the ROC Office in respect of increase in Authorised Share Capital from Rs. 17,50,00,000/- to Rs. 52,50,00,000/-, in last year is also yet not paid, for which the provision is also not made in the accounts. (x) The Company has defaulted in the repayment of dues to banks for the amount taken as Un Secured Loans in earlier years (refer to Para 4 (f) of Auditors Reports. (xi) During the year the company has incurred cash loss of Rs. 15,66,792/- (P.Y. Rs. Nil) There is accumulated loss of Rs. 2,14,33,913/-at the end of the financial year 31st Mach 2011 (As on 31, 2010 Rs. 1,98,67,121/-) (xii) According to the records of the company examined by us and the information and explanation given to us, during the year, company has not borrowed any money from financial institution or bank or debenture holders during the year. (xiii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly clause (xii) of Para 4 of the Companies (Auditor Report) Order 2004 is not applicable to the company for the current year. (xiv) In our opinion, and according to the information and explanation given to us, the provisions of any special statute applicable to chit fund /nidhi/mutual benefit fund/societies are not applicable to the company. Accordingly clause (xiii) of Para 4 of the Companies (Auditors Report) Order. 2004 is not applicable to the company for the current year. (xv) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments. Accordingly clause (xiv) of Para 4 of the Companies (Auditors Report) Order. 2004 not applicable to the company for the current year. (xvi) In our opinion, and 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 during the year. Accordingly clause (xv) of Para 4 of the Companies (Auditors Report) Order, 2003 is not applicable to the company for the current year. (xvii) Based on our examinations of the records and information and explanations given to us during the year no term loan has been obtained. (xviii) On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanation given to us, there are no funds raised on a short-term investment, and vice versa. (xix) The company has not made any preference allotment of its Equity Shares during the year. (xx) The Company has not issued any debentures, the matter as per clause (xix) of Para 4 of the Companies (Auditors Report) Order. 2004 is not applicable to the company for the year. (xxi) The company has not raised any money by public issue during the year. (xxii) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, no fraud (i.e. intentional material misstatements resulting from fraudulent financial reporting and misappropriation of assets) on or by the Company has been noticed or reported during the year by the Company. FOR PRAFUL N. SHAH & CO., Chartered Accountants (P.N. SHAH) Place: Ahmedabad Proprietor Date : April 26, 2011 Membership No.:- 15591