Oxides & Specialities Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2014

We have audited the accompanying financial statements of OXIDESAND SPECIALITIES LIMITED, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act,1956 read with the General Circular 15/2013 dated September 13,2013 of The Ministry of Corporate Affairs in respect of Section 133 of The Companies Act 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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 the Balance Sheet of the state of affairs of the Company as at March 31, 2014.

(b) in the case of the Profit and 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 flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies(Auditors'' Report )(Amendment )Order 2004,issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act hereinafter referred to as the "Order", and on the basis of such checks of the Books and records of the company as we considered appropriate and according to the information and explanations given to us we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227 (3) of the Act, 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by the Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated September 13,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013.

e. On the basis of written representative received from the directors as on March, 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS'' REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2014 OF M/S OXIDES AND SPECIALITIES LIMITED

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we state that.

1) In respect of its Fixed Assets:

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

b) During the year, no physical verification of the fixed assets has been conducted by the management. As explained, discrepancy, if any, will be adjusted in the year of physical verification.

c) No substantial part of fixed assets has been disposed off by the company during the year.

2) In respect of its Inventories:

a) The inventory has been physically verified by the management at reasonable intervals during the year.

b) In our opinion the procedure 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) On the basis of examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) In respect of loans, Secured or Unsecured, granted or taken by the company to/from Companies, firms or other parties listed in the register maintained under section 301 of the companies act, 1956.

a) Based on the audit procedure applied by us and according to the information and explanation provided by the management, Company has not granted any loans or advances to Companies, firms or other parties listed in the register maintained under section 301 of the companies act, 1956.

b) During the financial year covered under audit, the Company has taken interest free unsecured loans of Rs. 26066/ (including opening balance) from one party listed in the register maintained under section 301 of the act. In respect of the said loan, maximum amount outstanding at any time during the period covered under audit was Rs. 26066/- and the year end balance of the said loan is Rs.26066/- which are payable whenever demanded by lenders.

c) In our opinion, other terms and conditions on which loans have been taken are prima facie not prejudicial to the interest of the company.

d) Loans taken by the company were re-payable on demand. As informed, repayment have been made during the year whenever demanded by the lender, thus there has been no default on the part of the Company.

4. In our opinion, and according to information and explanations given to us, there is adequate internal control commensurate with the size of the company and the nature of the business for the 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 control system.

5. (a) According to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered where ever applicable.

(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 in pursuance of Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us the company has not accepted any deposits from public during the year as stated in the provisions of section 58A, 58AA or any other relevant provisions of the companies act, 1956 or the rules framed there under.

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

8. The Company is maintaining the cost records which has been prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, for the products manufactured by the Company.

9. (a) The company is generally regular in depositing undisputed statutory dues including provident Fund, Investor Education and Protection Fund, Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, Service Tax, Cess and other statutory dues applicable to the Company with the appropriate authorities. No undisputed amount payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for a period of more than six months from the date they become payable except Rs.902044/- towards Provident Fund Rs. 1,72,952/- towards Sales Tax, Rs. 5,22217/— towards Professional Tax, Rs. 39,956/- towards MVAT, Rs. 34,173.78 towards Excise Duty and Rs. 6,11,631/- towards Chiplun Gram Panchayat Tax. The Company is under BIFR perview and proposes to pay the statutory dues as mentioned in the draft rehabilitation scheme.

(b) According to the records of the Company, there are no dues of Income Tax, Sales Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute

10 The accumulated losses as at 31st March, 2014 of the Company are more than hundred percent of its net worth. The Company has incurred cash losses during the current financial year and in the immediately preceding financial year. On account of this the company has approached BIFR for restructuring and the application and Draft Rehabilitation Scheme is under consideration.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that Company has not defaulted in repayment of dues to financial institutions / bank.

12. According to the information and explanations given 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.

13. The company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the company.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of this clause are not applicable on the Company.

15. According to the records of the company and on the basis of information and explanations given to us, the Company has not given any guarantee during the year for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, clause 4 (xvi) is not applicable to the company as the company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short-term basis have not been used for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained u/s.301 of the Act.

19. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the company has not issued any debentures.

20. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the company has not raised any fund by way of public issue.

21. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, no fraud on or by the Company was noticed or reported during the year.

For BKG & ASSOCIATES CHARTERED ACCOUNTANTS

CA. B.K. Gupta Partner Place : Mumbai Membership No. 040889 Date : 12th May, 2014. Firm Reg. No.:114852W

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Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s OXIDES AND SPECIALITIES LIMITED as at 31st March, 2012 and also the annexed Profit and Loss Account and the Cash Flow statement for the year ended on that date. 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.

2. 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 the 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 (Auditor''s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (hereinafter referred to as the "Act"), we annex hereto 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, we report that:

a) Inventories which are lying in stock since more then two years, are valued at cost which needs to be values at cost or net realisable value of inventories whichever is less, as per Accounting Standard 2 "Valuation of Inventories" issued by the Institute of Chartered Accountants of India (ICAI).

b) 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, except for those mentioned in clause a to c above.

c) In our opinion, proper Books of Account as required by law have been kept by the Company so far as appear from our examination of the books.

d) The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

e) In our opinion, the Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in section 211(3C) of the Companies Act, 1956, to the extent applicable, except for the Accounting Standard 2 "Valuation of Inventories.

f) On the basis of the written representation received from the directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012, from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

g) Subject to paragraphs a to c above, 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 :

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012 and

ii) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date: and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS'' REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2012 OF M/S OXIDES AND SPECIALITIES LIMITED

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we state that:

1) In respect of its Fixed Assets:

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

b) During the year, no physical verification of the fixed assets has been conducted by the management. As explained, discrepancy, if any, will be adjusted in the year of physical verification.

c) No substantial part of fixed assets has been disposed off by the company during the year.

d)i) During the financial year 2010-11, the Company has provided excessive depreciation on plant & machineries, which was more than net block, resulting into written down value of the block being negative. During the current financial year, excessive depreciation provided during the FY 2010-11, to the extent of the negative balance, have been reversed.

ii) Further the management has not carried out Impairment test for estimation of recoverable amount of fixed assets in accordance with the requirement of mandatory Accounting standard-28 "Impairment of Asset", and written down the entire Net Block of Plant & Machinery has been written off during the FY 2010-2011.

2) In respect of its Inventories:

a) The inventory has been physically verified by the management at reasonable intervals during the year.

b) In our opinion the procedure 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) On the basis of examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) In respect of loans, Secured or Unsecured, granted or taken by the company to/ from Companies, firms or other parties listed in the register maintained under section 301 of the companies act, 1956:

a) Based on the audit procedure applied by us and according to the information and explanation provided by the management, Company has not granted any loans or advances to Companies, firms or other parties listed in the register maintained under section 301 of the companies act, 1956.

b) During the financial year covered under audit, the Company has taken interest free unsecured loans of Rs. 56,35,0000/- from one party listed in the register maintained under section 301 of the act. In respect of the said loan, maximum amount outstanding at any time during the period covered under audit was Rs. 23,61,408/- and the year end balance of the said loan is Rs. 31,408/- which are yet to payable whenever demanded by lenders.

c) In our opinion, other terms and conditions on which loans have been taken are prima facie not prejudicial to the interest of the company.

d) In respect of such loans taken by the company were re-payable on demand. As informed, repayment have been made during the year whenever demanded by the lender, thus there has been no default on the part of the Company.

4. In our opinion, and according to information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of the business for the 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 control system.

5. (a) According to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered where ever applicable.

(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 in pursuance of Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us the company has not accepted any deposits from public during the year as stated in the provisions of section 58A, 58AA or any other relevant provisions of the companies act, 1956 or the rules framed there under.

7. In our opinion, the Company do not have adequate internal audit system commensurate with the size of the Company and nature of its business.

8. The Company is maintaining the cost records which has been prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, for the products manufactured by the Company.

9. (a) The company is generally regular in depositing undisputed statutory dues including provident Fund, Investor Education and Protection Fund, Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, Service Tax, Cess and other statutory dues applicable to the Company with the appropriate authorities. No undisputed amount payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for a period of more than six months from the date they become payable except following statutory dues which are pending for the period of more than six months.

(b) According to the records of the Company, there are no dues of Income Tax, Sales Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute

10. The accumulated losses as at 31st March, 2012 of the Company are more than hundred percent of its net worth. The Company has incurred cash losses during the current financial year and in the immediately preceding financial year. On account of this the company has approached BIFR for restructuring and the application has been accepted and Draft Rehabilitation Scheme has been submitted for the approval for revival of operation.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that Company has not defaulted in repayment of dues to financial institutions / bank.

12. According to the information and explanations given 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.

13. The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the company.

14 In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of this clause are not applicable on the Company.

15 According to the records of the company and on the basis of information and explanations given to us, the Company has not given any guarantee during the year for loans taken by others from banks or financial institutions.

16 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, clause 4 (xvi) is not applicable to the company as the company has not raised any term loan during the year.

17 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short-term basis have not been used for long term investment.

18 The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained u/s.301 of the Act.

19 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the company has not issued any debentures.

20 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the company has not raised any fund by way of public issue.

21 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, no fraud on or by the Company has been noticed or reported to/by us during the course of our audit.

For Parekh Shah & Lodha

Chartered Accountants

Firm reg. No. 107487W

Ashutosh Dwivedi

Place : Mumbai (Partner)

Date : 13th August, 2012 M. No. : 410227

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Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s OXIDES AND SPECIALITIES LIMITED as at 31 st March, 2010 and also the annexed Profit and Loss Account 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 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 the 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 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (hereinafter referred to as the. "Act"), we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to bur comments in the Annexure referred to in paragraph 3 above, we report that:

a) Following legal advice, accumulated losses of Rs. 51366863 continue to remain adjusted against the revaluation reserve arising on the revaluation of certain fixed assets in an earlier year (Refer note no. 4(b) in schedule 16). This treatrr.cr-.i is not in accordance with the views of the Institute of Chartered Accountants of India on treatment of reserves created on revaluation and strictly not in accordance with Accounting Standard - 10 "Accounting for Fixed Assets" issued by them;

b) The management has not ascertained the impairment loss, if any, required to be provided for in accordance with the requirement of mandatory Accounting standard-28 "Impairment of Assets" issued by The Institute of Chartered Accountants of India. In view of it involving judgment of the management, we are unable to quantify the same;

c) We are unable to express our opinion about the current liabilities, which are being shown outstanding for a long period, and reconciliation/ confirmation of the same in most of the case are pending. In view of the fact and management is hopeful of setting the same after reconciliation of the accounts with the concerned parties, we are unable to quantify the same.

d) We are unable to express our opinion as to when and to what extent overdue debtors of Rs. 3,42,785/- would be recovered. As explained, the management is hopeful of realising in due course;

e) 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;

f) Subject to our comments at paragraph ( c) above, 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 those books;

g) The said Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

h) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the Accounting standards referred in to in sub-section (3 C) of section 211 of the Act, to the extent applicable, except for the Accounting Standard 28 "Impairment.of Assets", and Accounting Standard -10 "Accounting for Fixed Assets", the details and effect of which have been disclosed in paragraph (a) and (b) above;

i) On the basis of the written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director-of the company in terms of clause (g) of sub-section (1) of Section 274 of the Act; (Refer Note No. 8 in Schedule 16);

j) without considering items mentioned at paragraph (b), and (c) above the effect of which could not be determined, had the observations made by us in paragraphs (a) & (d) above been considered, the loss for the year, accumulated losses, sundry Debtors and unsecured loans would have been charged accordingly, as against the reported figures the same.

Subject to the above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and other notes appearing in Schedule 16 and elsewhere in the financial statements and our comments in the annexure referred above, give the information required by the Act, in the manner so required and give 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 the Company as at 31st March, 2010;

(ii) in the case of Profit and Loss Account, of the loss for the year ended on that date; and

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2010 OF M/S OXIDES AND SPECIALITIES LIMITED

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we state that:

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

b) During the year, no physical verification of the fixedassets has been conducted by the management. As explained, discrepancy, if any, will be adjusted in the year of physical verification.

c) No substantial part of fixed assets has been disposed off by the company during the year.

d) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were property dealt in with the books of accounts.

2) a) The inventory has been physically verified by the management at reasonable intervals during the year.

b) In our opinion the procedure 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) On the basis of examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) In respect of loans. Secured or Unsecured, granted or taken by the company to/from Companies, firms or other parties listed in the register maintained under section 301 of the companies act, 1956:

a) The company has taken unsecured loans from the parties listed in the register maintained under section 301 of the act. The maximum amount involved during the year was Rs. 96,31,124/-and year end balance was Rs. 96,31,124/-.

b) In our opinion, other terms and conditions on which loans have been taken are prima facie not prejudicial to the interest of the company.

c) In respect of such loans taken by the company, no interest is payable and the principal amount is repayable on demand.

4) In our opinion, and according to information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of the business for the 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 control system.

5) a) Based on the audit procedure applied by us and according to the information and explanation provided by the management, we are of the opinion that the particulars of contracts or arrangements 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, there are no transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies act, 1956 exceeding the value of five lakh rupees of any party during the year.

6) In our opinion and according to the information and explanations given to us the company has not accepted any deposits from public during the year as stated in the provisions of section 58A, 58AA or any other relevant provisions of the companies act, 1956 or the rules framed there under.

7) In our opinion, the Company has an. adequate internal audit system commensurate with fr»e size of the Company and nature of its business.

8) The Company is maintaining the cost records which has been prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, for the products manufactured by the Company.

9) a) The company is generally regular in depositing undisputed statutory dues including provident Fund, Investor Education and Protection Fund, Income Tax, Wealth Tax, Sales Tax, -Customs Duty, Excise Duty, Service Tax, Cess and other statutory dues applicable to the Company with the appropriate authorities. As explained to us, the provisions of Employees State insurance Act, 1948 are not applicable to the Company. No undisputed amount payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for a period of more than six months from the date they become payable except Rs. 12,57,919 towards Provident Fund ,Rs. 1,63,983 towards Sales Tax, Rs. 4,67,722 towards Professional Tax and Rs. 182,752 towards Chiplun Gram Panchayat Tax.

b) According to the records of the Company, there are no dues of Income Tax, Sales Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute

10) The accumulated losses as at 31st March, 2010 of the Company are more than hundred percent of its net worth. The Company has incurred cash losses during the current financial year and in the immediately preceding financial year. On account of this the company has approached BIFR for restructuring and the application has been accepted. -

11) As explained to us the company has not granted any loans against securities or pledge of shares, debentures or other securities.

12) The provisions of the chit funds, nidhi or mutual benefit society do not apply to the company.

13) In our opinion and as explained to us the company is not dealing or trading in shares, debentures and other investments.

14) According to the records of the company and on the basis of information and explanations given to us, the Company has not given any guarantee during the year for loans taken by others from banks or financial institutions.

15) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, clause 4 (xvi) is not applicable to the company as the company has not raised any term loan during the year.

16) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short-term basis have not been used for long term investment.

17) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained u/s.301 of the Act

18) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the company has not issued any debentures.

19) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the company has not raised any fund by way of public issue.

20) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, no fraud on or by the Company has been noticed or reported to/by us during the course of our audit.

For INDANI & ASSOCIATES Chartered Accountants

(CA Gokul Indani) Place : NAVI MUMBAI Proprietor

Date : 17th Day of May, 2010 M. No. 406446