Galore Prints Industries Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2014

We have audited the attached Balance Sheet of GALORE PRINTS INDUSTRIES LIMITED, S-518, GROUND FLOOR, SCHOOL BLOCK, SHAKARPUR, DELHI-110092 as at 31st March, 2014 and also Profit & Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We 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 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.

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 those books;

(3) The Balance Sheet, Profit & Loss Account, and the Cash Flow Statement dealt with by this report are in agreement with the books of account:

(4) In our opinion, the Balance Sheet, Profit & Loss Account comply with the Accounting standards referred to in sub-section (3C) of section 211 of Companies Act, 1956;

(5) On the basis of written representations received from the Directors, as on 31st March, 2013 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2013 from being appointed director in terms of clause(g) of sub- section(1) of section 274 of Companies Act, 1956.

(6) In our opinion and 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 give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of Balance Sheet, of the state of affairs of the Company as 31st March, 2012;

(b) In the case of the Profit and Loss account, of the Loss for the year ended on that date.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) The company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in regular intervals. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory, except goods-in-transit, has been physically verified by the management in regular intervals. In our opinion, the frequency of such verification is reasonable.

(b) The procedure of physical verification of inventory 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. According to the information and explanation given to us by the management, no material discrepancies were noticed on physical verification.

(iii) (a) The company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and services. In our opinion and according to the information and explanation given to us, we have not observed any major weakness in the internal control system during the course of the audit.

(v) In our opinion and according to the information and explanations given to us, there are no contracts and arrangements, the particulars of which need 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.

(vii)In our opinion, since the company is neither a listed company nor any other company having a paid up capital and reserves exceeding Rs. 50 Lakhs as at the commencement of financial year concerned, or having an average annual turnover exceeding five crore rupees for a period of three consecutive financial years immediately preceding the financial year concerned, no internal audit system is required.

(viii) In our opinion and to the best of our knowledge, no cost records under clause (d) of sub-section (1) of section 209 of the Companies Act 1956, has been prescribed for the company''s line of business by the Central Government

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, Income-tax, wealth-tax, service tax, sales tax, central excise, customs duty and investor education and protection fund.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurancee, income-tax, wealth-tax, service tax, sales tax, central excise, customs duty, investors education and protection fund and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of income tax, wealth tax, service tax, sales tax, central excise and customs duty, which have not been deposited on account of any dispute.

(x) The company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to any bank. The company did not have any dues from any financial institution or any outstanding debentures during the year.

(xii)According to the information and explanations given to us and based on the documents and records produced 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) 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

(Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company. (xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause

4(xiv) of the Companies (Auditors'' Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) As per the information and explanation given my the management, the company has not given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company.

(xvi) Based on information and explanation given to us by the management, term loan were applied for the purpose for which the loans were obtained

(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 investments.

(xviii) The company ha not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year

(xx) We have verified that the end use of money raised by public issue is as disclosed in the notes to the financial statements.

(xxi) Based upon the audit procedure performed by us for expressing our opinion on these financial statements and 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 Prem P Lamba & Co Chartered Accoutnants

Sd/- (Prem P. Lamba) Place : New Delhi Patner Date : 28/05/2014 M.No. 96654 Firm Registration No. 004244N

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. Galore Prints Industries Ltd. as at 31st March, 2011 and also the Profit & Loss Account and the Cash Flow Statement for the year ended March 31, 2011 annexed thereto all of which we have signed under reference to this report. These financial Statements are the responsibilities of the Company's management. Our responsibility is to express our opinion on these Financial Statements based on our audit.

2. 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 amount and disclosures in the financial statement. 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. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon/attached thereto and the Statement on Significant Accounting Policies give in the prescribed manner the information required by the Companies Act, 1956 of India (the act) and also give respectively a true and fair view in conformity with the accounting principles generally accepted in India, subject to para (A) below:

a) In the case of Balance Sheet, of the affairs of the Company as at March 31, 2011

b) In case of Profit & Loss account of the Loss for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flow for the year ended on that date.

A. (i) Due to non confirmation of debit/credit balances of the debtors/creditors for goods and expenses, there can be loss/profit to the company which is not ascertainable as there are various transfer entry of all the previous creditors and debtors to different parties and all the payments made to third party and heavy cash receipts from Debtors in various debtors account. Some of these accounts are inoperative for long time. The company is of the view that the advances/debtors are good for recovery, however, on the basis of information provided to us, we are unable to form our opinion of loss/ income that may arise in respect of the same.

(ii) Confirmations of unsecured loans where huge amount received during the year and bills payable to M/s. Rajdhani Leasing & Industries Ltd., of Rs.41,051/- are not obtained, the liability of which may be different than that shown in the Balance Sheet due to incidence of interest/compound interest/penal interest and other charges leviable .

(iii) Non provision on account of following:

a) Interest/penal interest payable to M/s.Rajdhani Leasing & Industries Ltd. On bills payable of Rs.41,05,1/- (Previous year Rs.41051/=)

b) Penalty/Interest payable on non-payment/delayed payment of Sales Tax, Provident Fund and E.S.I. dues, T.D.S. The incidence of which cannot be estimated as no demand has been raised by the respective authorities till date.

(iv) The Company has paid substantial amounts to some related parties during the year without any contract or basis and the outstanding as on 31st March, 2011 in these accounts are Rs 37,13,149 as debit balance. There are various transactions of giving advances and receiving back during the year. No interest has been charged/paid on these advances and loans .

4. 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. In our opinion, proper books of accounts have been kept by the Company, as required by law so far as appears from our examination of these books and the aforementioned Balance Sheet, Profit and Loss Account and the Cash Flow Statement are in agreement therewith.

5. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement have been prepared in compliance with the applicable accounting standards referred to in sub-section (3C) of section 211 of the Act, except the provision for Leave Encashment and Gratuity payment has not been made as per AS 15 (Accounting for Retirement Benefits in Financial Statements of Employers).

6. On the basis of written representations received from the Directors, as on March 31, 2011 and taken on record by the Board of Directors of the Company, we report that none of the directors are disqualified as on March 31, 2011 from being appointed as a directors in terms of clause (g) of sub-section (1) of section 274 of the Act.

7. 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 Act and on basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that :

i) (a) Records to show full particulars including quantitative details and situation of fixed assets have not been produced before us.

(b) The fixed assets of the Company have been physically verified during the period by the management as per certificate given to us. The frequency of the same is not reasonable. Discrepancies if any, between book records and physical inventory is not ascertainable due to absence of fixed assets register.

(c) Substantial parts of the fixed assets have not been disposed off during the year and the same has not affected the going concern.The company has shifted its plant & machinery from 191-Nangli Sakrawati, Najafgarh, Delhi-43 to HP 1293(H-2) Phase-2, RIICO Industrial Area, Bhiwadi, Distt,. Alwar( Rajasthan) which shows a very negligible realisiable value . The company has received against Sale of Plant & Machinery of Rs.1551883.00 Where there is no proper records.

(ii) (a) The stocks of finished goods, stores, spare parts, raw material and packing material of the company have been physically verified by the management on 31.03.2011 at year end only and not at reasonable intervals

(b) In our opinion, the procedure of physical verification of stock followed by the management are not reasonable and adequate in relation to the size of the Company and nature of its business. The stock records of the raw materials are not proper in our opinion.

The stock of work in progress is based on the consolidated stock lying in the process without any reference to the parties for whom these are being manufactured. This is feasible as the specification, size and design for each customers is different. Hence the valuation and quantity of stock is not fair in our opinion.

(c) There is no discrepancy between physical stocks and book stocks as reported by the management.

(iii) (a) The Company has granted unsecured loan of Rs 27, 10,000/-, to the companies where one of the director was earlier interested to the companies, firms or other parties covered in the register maintained under section 301 and/or to the companies under the same management as defined under sub-section (1-B) of section 370 of the companies Act ,1956., paragraphs (iii)(b), (c) and (d) of the order. The repayment of principal are in accordance with the stipulated terms.

(b) The Company has taken unsecured loan from companies, firms, or other parties listed in the register maintained under section 301 of the companies Act 1956, and or from the companies under the same management as defined under the sub section (1B) of section 370 of the companies Act 1956.

(c) The comments regarding terms and conditions, repayment of the principal amount & interest thereon and overdue amount are without any stipulated terms.

(iii) 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 nature of its business for the purchase of inventory and fixed assets and for the sale of goods as the company is owner managed with greater degree of personal supervision and there is no continuing failure to correct major weaknesses in internal control.

(iv) In our opinion and according to the information and explanations given to us there are no transactions made in pursuance of contacts and arrangements entered in the register maintained under section 301 of the Act, aggregating during the year to Rs.500000/= or more in respect of any party.

(v) The Company has accepted deposits (unsecured loans) from various firms amounting to Rs.2,57,53,917/ = and Rs.2,00,000/= from the Directors of the Company, and consequently directives issued by Reserve Bank of India and provisions of Section 58A of the Act and the rules framed there under have not been complied with as the necessary formalities and documents have not been filed with Registrar of Companies.

(vi) The Company has no internal audit system commensurate with the nature and size of its business.

(vii) We have been informed that the Central Government has not prescribed the maintenance of costs records by the Company under section 209(1)(d) of the Act.

(viii) As per records produced before us the company was not regular in depositing undisputed Statutory dues with appropriate authorities and the extent of arrears of outstanding Statutory dues as at 31st March , 2011 for a period of more than 6 months from the date they become payable are given as under:- Sales Tax Rs.27,76,605/= Listing Fees Rs. 1,28,600/=

(ix) According to the information and explanations given to us, the outstanding of U.P . Financial Corporation, Indian Overseas Bank and National Small Industries Corporation Ltd has been settled under one time settlement and repaid fully in the last year, no dues certificate has been obtained from the above financial institutions..

(x) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of Shares, Debentures and other Securities.

(xi) According to the information and explanations given to us, provisions of any special Statute like Chit Fund, Nidhi, Mutual Benefit Fund/Societies are not applicable to the Company.

(xii) According to the information and explanations given to us &as per the corrigendum issued by the company, the Company has reduced its share capital by Rs 1,65,26,570/- by transferring to capital reduction account in the last year. The capital reduction is part of sanctioned scheme by B.I.F.R and special resolution was also passed in share holders meeting.

(xiii) According to the information and explanations given to us, no term loans were applied during the year.

(xiv) According to the information and explanations given to us, the funds raised on short term basis have not been used for long term investment and vis versa by Company.

(xv) According to the information and explanations given to us, the Company have not made any preferential allotment of shares to companies, firms and other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(xvi) According to the information and explanations given to us, the Company have not issued debentures and hence requirement of reporting regarding creation of securities in respect of debentures issued does not arise.

(xvii) According to the information and explanations given to us, the Company has not raised any money by public issue during the year ending 31st March, 2011.

(xviii) According to the information and explanations given to us, no fraud on/or by the Company has been noticed or reported during the year.

For Prem P. Lamba & Co

Chartered Accounts

Place : New Delhi Sd/-

Date: July 18, 2011 (PREM PRAKASH)

Partner