Uniflex Cables Ltd merged Auditor Reports

UNIFLEX CABLES LIMITED ANNUAL REPORT 2010-2011 AUDITORS REPORT TO THE MEMBERS We have audited the attached Balance Sheet of UNIFLEX CABLES LIMITED as at 31st March, 2011, the Profit and Loss Account and also 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. 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 of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure 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. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex here to a Statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: 1. 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. 2. 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 such books of the Company. 3. The Balance Sheet, Profit and Loss Account and the Cash Flow Statement referred to in this report are in agreement with the books of account. 4. In our opinion the attached Balance Sheet as on 31st March, 2011 and the Profit and Loss Account and the Cash Flow Statement for the period ended on that date, comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956. 5. Based on representations made by all the Directors of the Company and the information and explanations as given by the Directors, none of the Directors of the Company are disqualified as on 31st March, 2011 from being appointed as directors in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956. We report that in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with relevant notes thereon, give the information required by the Companies Act, 1956, in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India: - i) In so far as it relates to the Balance Sheet, of the State of affairs of the Company as at 31st March, 2011, ii) In so far as it relates to the Profit and Loss Account, of the loss of the Company for the period ended on that date and iii) In so far as it relates to the Cash Flow Statement, of the cash flows for the period ended on that date. For RASHMIZAVERI & CO. Chartered Accountants RASHMI ZAVERI Partner Place: Mumbai Membership No. 5299 Date : 26th May, 2011 Firm No. 108683W ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE ON THE ACCOUNT FOR THE PERIOD ENDED 31st MARCH, 2011 OF UNIFLEX CABLES LTD. On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we state that: i) a) The Company has generally maintained proper records showing particulars including quantitative details and situation of fixed assets. b) As explained to us, some of the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. Accordingly, a portion of the Fixed Assets has been physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such physical verification. c) During the year, the Company has not disposed off any substantial part of the Fixed Assets, so as to affect its going concern status. ii) a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. As per the explanations given to us, no inventory was lying with outside parties. b) 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) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. iii) a) According to the information and explanations given to us the Company has not taken or granted any loans, secured or unsecured from/ to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 except unsecured loans of Rs.1,77,24,24,815/- (Maximum amount outstanding Rs. 1,77,24,24,815/- during the year) had been taken from two parties during the year as listed in the register maintained under Section 301 of the Companies Act, 1956. b) The rate of interest & other terms & condition of the loan taken by the Company is prima facie not prejudicial to the interest of the Company. c) Since there is no stipulation of the repayment of the loan, the question of repayment of the same does not arise. The Company is regular in paying the interest on the above-mentioned loan taken. iv) In our opinion and according to the information and explanations given to us, there are generally 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. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls. v) a) On the basis of audit procedures performed by us and according to information and explanations and representations given to us, we are of the opinion that the disclosure of interest by Directors in Company in which such directors were interested as contemplated under Section 299 of the Companies Act, 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, have been so entered. b) In our opinion and according to information and explanations given to us, the transactions made in pursuance of contacts or arrangement entered in the register maintained under Section 301 of the Companies Act, 1956 exceeding the value of rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at that time or prices at which transactions, if any, for similar goods/services have been made with other parties at the relevant time. vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any Deposits from Public. The Company Law Board has passed no order in respect of the Company. vii) The Company has appointed a firm of Chartered Accountant as an Internal Auditor. The Internal Auditors have generally covered the various aspects of the working of the Company. viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Order made by the Central Government for the maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however not made a detailed examination of the records with a view to determining whether they are accurate and complete. ix) a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, cess, investors education and protection fund and other material statutory dues applicable to it. b) On the basis of our examination of the documents and records, the following disputed statutory dues on account of excise duty, income tax, which have not been deposited with the appropriate authorities, are as follows: Nature of Amount (Rs.) Forum where Period the dues In lacs dispute is to which pending relates Excise Duty 66,92,604 CESTAT, 2001 (Penalty) Mumbai Excise Duty 15,16,541 CESTAT, Vapi 2001 Sales Tax 3,91,94,483 CST, Surat, 2006/07 Sales Tax 10,49,705 CST, Jaipur 2008/09 x) In our opinion, the accumulated losses of the Company are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year covered by our audit. The Company had incurred cash loss in the immediately preceding financial year. In fact, the entire net worth of the Company has been eroded at the end of the financial year xi) The Company has not defaulted in repayments of dues to banks and debenture holders. There was no borrowing from financial institution during the year. xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company. xiv) According to the information and explanations given to us and the representations made by the management, we are of the opinion that the Company has not given any guarantees for loans taken by others from banks or financial institutions. xv) The Term Loans have been applied for the purpose for which the Loans have been obtained. xvi) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company and after placing reliance on the reasonable assumptions made by the Company for classification of long term and short-term usages of the funds, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital. xvii) The Company has not made preferential allotment of shares to parties covered in the register maintained under Section 301 of the Act during the year. xviii) There are no debentures outstanding at the end of the year. xix) The Company has not made any public issue during the year. xx) According to the information and explanations given to us and to the best of our knowledge and belief, no fraud on or by the Company has been noticed or reported by the Company during the course of our audit. For RASHMIZAVERI & CO. Chartered Accountants RASHMI ZAVERI Partner Place: Mumbai Membership No. 5299 Date : 26th May, 2011 Firm No. 108683W