Jhaveri Flexo India Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2010

We have audited the attached Balance Sheet of M/S JHAVERI FLEXO (I) LIMITED as at 31st March 2010 and the Profit and Loss Account of the Company for the period 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 report.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those standard require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimate 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 company law board in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such books and records as were considered appropriate and according to the formation and explanation given to us during the course of audit, we give our comments in the Annexure attached herewith.

Further to our comments in the Annexure referred to in paragraph 1 above.

(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 accounts 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 and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section 3(c) of section 211 of the companies Act 1956 and are in agreement with the books of accounts of the Company.

(d) On the basis of written representation from the directors, taken on record by the Board of Directors, none of the directors is disqualified as on 31s1 March, 2010 from being appointed as a director under Section274 (1 )(g) of the companies Act, 1956.

(e) In our opinion and to the best of our knowledge and according to the explanations given to us, the said accounts together with the notes give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

ii) In the case of the Profit and Loss Account, of the Profit for the ended on that date; and

iii) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT Referred to at Paragraph 1 in our audit report on the accounts of M/S JHAVERI FLEXO INDIA LIMITED for the year ended 31st March 2010.

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

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanations given to us, there is no substantial disposal of fixed assets during the year.

(ii) (a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures 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. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information furnished, the Company has granted and/or taken unsecured loans to/from the parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In respect of loans and advances in the nature of loans given by the Company to other parties, where stipulations have been made, the parties are generally repaying the principal amounts as stipulated and have also been regular in payment of interest wherever applicable. In respect of loans taken from other parties, the Company is generally regular in repaying the principal and in payment of interest as stipulated. The Company has taken unsecured loan from the director, the terms and conditions of which are not prime facie prejudicial to the interests of the company. Interest free loans have been given to the employees only who are repaying the same as stipulated.

(c) There is no overdue amount of loans taken or granted by the Company.

(iv) 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 purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) (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 transactions that need to be entered into the register maintained under Section 301 have been so entered.

(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 lakh 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.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

(viii) Maintenance of cost records has not been prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956.

(ix) (a) According to the information and explanation given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, custom duty, excise-duty, cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31sl March, 2010 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues of sales tax, income-tax, customs, wealth-tax, excise duty, cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Nature of Nature of Amount the statute dues pending Demanded

1. Income Tax Act 1961 1. Income Tax for A. Y. 2000-01 Rs. 15.70 Lacs Non computation of book profit Paid by the Co.

2. Income Tax for A.Y. 01-02 Rs. 43.61 Lacs Penalty demand for concealment Unpaid of Income

3. Income Tax for 2003-04 Rs. 11.66 Lacs Disallowing some expenses Paid

4. Income tax for 2005-06 Rs. 11.77 Lacs Disallowing some expenses Paid

2. Central Excise Excise rate difference and cenvat Rs. 8.15 Lacs credit taken on rejected RM. Paid

Demand raised on claim of Rs. 55.15 Lacs depreciation on cenvated goods. Paid

Demand raised on non payment of Rs. 36.04 Lacs excise on sale of unused cylinder. Paid

Demand raised on non payment of Rs. 6.06 Lacs excise on debit on unused cylinder. Paid

Demand raised on warehousing Rs. 0.85 Lacs, charge Paid

Demand raised on short Payment Rs. 12.34 Lacs, of Excise duty Paid

3. Sales Tax Act Demand raised for AY 2003-04 due Rs. 40.12 Lacs to not received of C forms.

Demand raised for AY 2004-05 on Rs. 1.80 Lacs non submission of export documents/forms



Namture of Forum where the statue dispute is

1. Income Tax Act 1961 IT Tribunals, Appeal filed by the revenue dept.

IT Tribunals, Appeal Filed by the company.

IT Tribunals, Appeal filed by the revenue dept.

IT Tribunals, Appeal filed by the revenue dept.

2. Central Excise Commissioner Excise

Commissioner Excise Remand Back by the Dept.

Excise Tribunal Remand Back by the Dept.

Excise Tribunal

Commissioner Excise

High Court against the order of tribunal

3. Sales Tax Act Commissioner Sales Tax (Appeal)

Commissioner Sales Tax (Appeal)

(x) The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) Based on our examination of the records and that information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) Clause (xiii) of the Order is not applicable to the Company as the Company is not a Chit Fund Company or nidhi / mutual benefit fund/society.

(xiv) The Company does not deal or trade shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by others from bank or financial institutions are, in our opinion, prima facie, not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on 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 assets. No long-term funds have been used to finance short-term assets and hence the question of commenting of their utilization does not arise.

(xviii) The company has not made any preferential allotment during the year.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issues during the year covered by our report.

(xxi) As per the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For Bhatter & Company. Chartered Accountants

Place: Mumbai Daulal H Bhatter

Dated: 28th May 2010 Proprietor

M. No. 16937