| Report on the Financial Statements
We have audited the accompanying financial statements of Bagalkot Udyog
Limited, which comprise the Balance Sheet as at March 31, 2013, 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 referred to in sub-section (3C) of section 211
of the Companies Act, 1956 "the Act). 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
statement, based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institution 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 disclosures 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
appropriations 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 the Company as at
March 31,2013;
(b) in the case of the Profit and Loss Account, of the loss for the
(c) In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
(a) As required by the Companies (Auditor's Report Order, 2003 ("the
Order") issued by the Central Government on India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
(b) As required by section 227(3) of the Act, we report that:
i. 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;
ii. 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;
iii. The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
iv. In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
v. On the basis of written representations received from the directors
as on March 31,2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE
1. In respect of Fixed assets:
a) The company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) According to the information and explanations given to us, the fixed
assets were physically verified by the management at reasonable
intervals during the year. We were informed that no material
discrepancies were noticed by the management on such verification.
c) Based on the scrutiny of records of the company and the information
and explanations received by us, we report that there was no sale of
fixed assets during the financial year ended 31.03.2013 substantial or
otherwise. Hence the question of reporting whether the sale of any
substantial part of fixed assets has affected the going concern of the
company does not arise.
2. As the company has not purchased/sold goods during the year nor
there is any opening stock, hence in our opinion requirement of
reporting on physical verification of stocks or maintenance of
inventory records is not applicable.
3. The company has not granted or taken any loans to/from companies,
firms or other parties covered in the register maintained u/s.301 of
the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business. Further,
on the basis of our examination of the books and records of the
company, carried out in accordance with the auditing standards
generally accepted in India and according to the information and
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct weaknesses in the
aforesaid internal control system.
5. Based on the audit procedures applied by us and the information and
explanations provided by the management, we are of the opinion that
there were no transactions during the year that need to be entered in
the register maintained under Section 301 of the Companies Act, 1956.
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. Therefore, the provision of Clause (vi) of the
Companies (Auditor's
Report) Order, 2003 are not applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. According to the information and explanations provided by the
management, the Company is not engaged in production, processing,
manufacturing or mining activities. Hence, the provisions of section
209(1 )(d) of the Companies Act, 1956 do not apply to the Company. "
Hence, in our opinion, no comment on maintenance of cost records under
section 209(1)(d) is required.
9. In respect of statutory dues
a) According to the records of the company, the Company is generally
regular in depositing with appropriate authorities undisputed statutory
dues, including Provident Fund, Employees State Insurance, Income Tax,
Wealth Tax, Custom Duty, Service Tax, Cess and other statutory dues
applicable to it.
b) According to information & explanation given there were no
undisputed amounts payable in respect of Income tax, service tax, sales
tax, custom duty, excise duty, Service Tax, cess & other statutory dues
which remained outstanding as at 31st March, 2013 for a period more
than six months from the date they became payable.
10. The accumulated losses of the company have exceeded fifty percent
of its net worth as at 31.03.2013. The Company has incurred a cash loss
of Rs. 8.58 lacs during the current financial year and Rs. 3.64 lacs
during the immediately preceding financial period.
11. According to records of the company, the company has neither
borrowed from banks or financial institutions or banks and in respect
of debentures the company do ) neither has any debentures outstanding
as on 31.03.2013 nor it has issued any debentures during the year under
audit, hence comments with regards to any default under the said clause
are not applicable.
12. According to the information and explanation given to us the
company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures or other securities.
13. In our opinion, and to the best of our information and according
to the explanations provided by the management, we are of the opinion
that the company is neither a Chit Fund nor a nidhi/mutual benefit
society. Hence, in our opinion, the requirements of para 4 (xiii) of
the Order do not apply to the comnsny
14. As per records of the company and information and explanations
given to us by the management, company is not dealing or trading in
shares, securities, and debenture and other investments.
15. According to the records of the company and the information and
explanations provided by the management, the company and the
information and explanations provided by the management, the company
has given guarantee of Rs. 60 Lacs for loans taken by a Company from
financial institutions. The Company on behalf of whom guarantee has
been given is under liquidation. Hence we are unable to comment on
whether this would be prejudicial to the interest of the Company.
16. According to the records of the Company, the Company has not
obtained any term loans during the year. Hence, comments under the
clause are not called for.
17. 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
investment by the company.
18. According to the records of the Company and the information H
explanations provided by the management, the Company has not made any
preferential allotment of shares to parties and companies covered in
the register maintained u/s.301 of the Companies Act, 1956.
19. No debentures have been issued by the Company during the year
covered by our audit report and hence, the question of creating
securities in respecf thereof does not arise.
20. The Company has not raised any money by public issue during the
year covered by our audit report.
21. Based upon the audit procedures performed 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
aduit.
For V.K.BESWAL & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Registration Number: 101083W
CAV. K. BESWAL
(Partner)
Membership Number: 30426
Mumbai, 30th May, 2013
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