| 1) We have audited the attached Balance Sheet of ABL BIOTECHNOLOGIES
LIMITED as at 31st March 2012 and also the Profit and Loss Account and
the Cash Flow Statement 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.
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 (a) examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements (b) assessing the
accounting principles used in the preparation of financial statements
(c) assessing significant estimates made by management in the
preparation of financial statements and (d) evaluating the overall
financial statement preparation. We believe that our audit provides a
reasonable basis for our opinion.
3) As required by the Companies (Auditor's Report) Order, 2003 and
Companies (Auditor's Report) amendment order, 2004, issued by the
Central Government of India in terms of section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure 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:
a. We have obtained all the information and explanations, which, to the
best of our knowledge and belief, were necessary for the purpose of,
audit.
b. In our opinion, the Company has kept proper books of accounts as
required by law so far, as appears from our examination of those books.
c. The Balance Sheet and Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts.
d. In our opinion, the Balance Sheet, Profit & Loss Account and the
Cash Flow Statement, comply with the Accounting Standards referred to
in Sub-section (3C) of Section 211 of the Companies Act, 1956.
e. Based on the verification of documents, one of the director is
disqualified as on 31st March, 2012 from being appointed as directors
in terms of Clause (g) of Sub-section (1) of Section 274 of the
Companies Act, 1956;
f. We draw attention to the following notes on accounts in schedule 20
i) Note No. 16 The company has given corporate guarantee to Axis Bank
and M/s. Shantha Biotechnics Private Limited for Rs.1.91 Crore and
2.61 Crore respectively.
g. The company is irregular in paying undisputed statutory dues.
h. Balance of Creditors, Debtors, Loans & Advances and Bank Balances
are subject to confirmation, including the amount due from M/s. Samudra
towards Royalty receivable, Technology Sale Income Receivable, Loan
others and Trade Advance. i. Subject to point e, f, g and h 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 Balance sheet, of the state of affairs of the
Company as at 31st March,2012 and
ii. In the case of Profit and loss Account, of the Loss for the year
ended 31st March 2012.
iii. In the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 3 of Auditors' Report to the Members
of M/S. ABL BIOTECHNOLOGIES LIMITED on the accounts for the year ended
31st March 2012.
In terms of the information and explanations given to us and the books
and records examined by us in the normal course of audit and to the
best of our knowledge and belief, we state as under:
1) The company has maintained proper records showing full particulars,
including quantitative details and situation of its fixed assets. As
explained to us, all the assets have been physically verified by the
management at a reasonable interval during the year. According to the
information and explanation given to us, no material discrepancies were
noticed on such verification. The company has written off considerable
amount of fixed assets, however as per information and explanation
provided by management, which will not affect its status as going
concern.
2) The stocks of inventory have been physically verified during the
year by the Management at reasonable intervals. In our opinion the
procedure of physical verification of the Inventory followed by the
management are, in our opinion reasonable and adequate in relation to
the size of the company and nature of its business. The company is
maintaining proper records of Inventory. The discrepancies noticed on
physical verification of stocks as compared to book records were not
material, however, the same have been properly dealt with in the books
of accounts.
3) a) In our opinion, the company has granted Rs. 38,39,061/- to M/s.
Samudra Biopharma Private Limited covered in the Register maintained
under section 301 of the Companies Act, 1956.
b) In our opinion, loan of Rs.2,30,45,724/- taken by the Company from
its Director covered in the register maintained under section 301 of
the Companies Act, 1956, the rate of interest and other terms and
conditions of loans taken by the company are not prima facie
prejudicial to the interest of the company. The principal amount is
still due as on date.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business, for
purchase of Inventory, Fixed Assets and for the sale of goods. In our
opinion, there is no continuing failure to correct major weakness in
internal control systems.
5) (a) In our opinion, the particulars of contracts and arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section; and
- In our opinion, each of these transactions made in pursuance of such
contracts or arrangements have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6) The Company has not accepted any deposits within the provisions of
Sections 58A and 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposit) Rules, 1975.
7) The Company does have an internal audit system commensurate with its
size and nature of its business.
8) The company has not maintained cost records pursuant to the
Companies (Cost Accounting Records) Rules, 2011 prescribed by the
Central Government under Section 209 (1) (d) of the Companies Act,
1956.
9) The company has not been regular in depositing undisputed statutory
dues including Provident Fund, TDS, Employees' State Insurance, Income
Tax, Sales Tax, Excise Duty and cess with the appropriate authorities.
Details of amount due exceeding 6 months
1. Provident Fund - Rs. 23,69,934
2. Tax Deducted at Source - Rs. 49,37,153
3. Fringe Benefit Tax - Rs. 7,08,264
4. Income Tax - Rs. 37,48,830
5. Professional Tax - Rs. 2,69,198
6. Employees' State Insurance- Rs. Rs. 77,055
10) The company has reported accumulated losses to be carried forward
and it has also incurred cash losses in the financial year under
report.
11) The company has defaulted in repayment of dues to financial
institutions and Banks. Details of them are
Short term loan from Axis Bank - Rs. 1,09,46,880/-
Government Soft Loan - Rs. 6,84,92,785/-
12) As explained 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, nidhi or mutual benefit
fund/society.
14) The company is not dealing or trading in shares, securities,
debentures and other investments.
15) The company has given guarantee for loans taken by M/s. Samudra
Biopharma Private Limited from Axis bank and M/s. Shantha Biotechnics
Private Limited for Rs. 1,91,20,000 and Rs. 2,61,03,200 respectively.
16) Term loans are applied for the purpose of which they were obtained.
17) 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 under section
301 of the Act.
19) The company has not issued debentures during the year.
20) The company has not raised any money through a public Issue during
the year.
21) During the checks carried out by us, any fraud on or by the company
has not been noticed
For and on behalf of
PRATAPKARAN PAUL & CO.,
Chartered Accountants,
Firm Registration No. 002777S
Pratapkaran Paul
Partner.
Membership No:023810
Date : 3rd September, 2012
Place : Chennai.
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