| We have audited the attached Balance Sheet of Lakhani India Limited as
at March 31, 2011, and the Profit & Loss Account and Cash Flow
Statement for the period 01.04.2010 to 31.03.2011 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.
1. 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 misstatements. 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.
2. As required by the Companies (Auditors' Report) order, 2003, issued
by the Central Government of India in terms in Sub-section (4A) Section
227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 &5 of the said order.
3. Further to our comments in the Annexure referred to above, 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 examinations of these
books.
(iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
(iv) In our opinion, the Balance Sheet, Profit & Loss Account Cash Flow
Statement dealt with by this report comply with Accounting Standards
referred to in sub-section (3C), of Section 211 of the Companies Act,
1956,
(v) On the basis of the written representations received from the
directors, as on 31 March, 2011 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31 March, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statement read with
notes thereon 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 the Balance Sheet, of the State of the affairs of the
Company as at 31st March, 2011.
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 flow for the
year ended on that date.
ANNEXURE TO AUDITORS' REPORT (Referred to in paragraph 2 of our Report
of even date)
1. The nature of Company's activities during the year have been such
that clauses (xii),(xiii),(xiv) of the Companies (Auditor's Report)
Order, 2003 are not applicable to the Company for the year.
2. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation
of fixed assets.
(b) As informed company has programme of physical verification of Fixed
Assets in a phased manner. In accordance with the same, certain plants
& machineries were physically verified during the year. We are informed
that no material discrepancies were noticed by the management on such
verification.
(c) The company has not disposed off a substantial part of fixed assets
during the year.
(3) (a) Physical verification of inventory has been conducted during
the year by the management at reasonable intervals.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and nature of its business.
(c) The company is maintaining proper records of inventory. As per
information and explanations given to us, no material discrepancies has
been noticed on physical verification.
4. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Therefore provisions of
clauses (iii)(b),(iii)(c),(iii)(d) of paragraph 4 of the Order are not
applicable.
The Company has taken unsecured loans from its directors / parties
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs. 1175.78
lacs and the year end balance of loans taken was Rs.1083.53 lacs.
In our opinion and according to the information and explanation given
to us, the rate of interest and other terms and conditions of such
loans are prima-facie not prejudicial to the interest of the Company.
In respect of unsecured loan taken by the Company, the loan amount is
payable on demand and is interest free.
(5) 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 for purchase of inventory, fixed assets and for the sale of
goods. During the course of audit, we have not observed any other
continuing failure to correct major weaknesses in internal controls.
(6) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered into register in
pursuance of Section 301 of the Act, have been so entered and the
transactions have been made at prices, which are reasonable having
regard to prevailing market prices at the relevant time.
(7) The Company has not accepted deposits from the public within the
meaning of Section 58A and 58AA of the Companies Act, 1956 and the
Rules framed there under.
(8) There is no formal Internal Audit System prevalent in the
organization. However we are informed that there are sufficient check
systems commensurate with the size of company and nature of its
business.
(9) We have broadly reviewed the cost records of the Company under
section 209 (1)(d) of the Companies Act, 1956 and are of the opinion
that prime-facie the records prescribed by the Central Government have
been maintained. We have not, however made detailed examination of the
records.
(10) According to the information and explanation given to us in
respect of statutory and other dues:
(a) The Company has been generally regular in depositing with
appropriate authorities (subject to point no. 12 of schedule - 'P')
undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, E.S.I, Sales Tax, Customs Duty, Excise Duty,
Income Tax, Wealth Tax, Cess and any other statutory dues during the
year.
(b) According to the information and explanation given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty, excise duty and cess were in arrears , as at 31st
March 2011 for a period of more than six months from the date they
become payable.
(c ) According to the information and explanations given to us, there
are no cases of non-deposit with the appropriate authorities of
disputed dues of sales tax / income tax / excise duty/ custom duty /
wealth tax and cess except as stated below:-
Nature of dues Period Amount Forum of pending
(in Rs.)
Income Tax AY-2005-06 19,97,420/- Before ITAT
Income Tax AY-2006-07 13,20,595/- Before ITAT
Income Tax AY-2007-08 1,90,938/- Before CIT(A)
Income Tax AY-2008-09 5,36,307/- Before CIT(A)
Sales Tax FY 2006-07 28,65,435 Appeal yet to filed
Sales Tax FY 2006-07 1,06,31,238/- Appeal yet to filed
(11) The Company does not have any accumulated losses as on 31st March,
2011. The Company has incurred cash losses during the financial year
covered by our audit and in the immediately preceding financial year to
the tune of Rs. 16.65 crores.
(12) In our opinion and according to the information and explanation
given to us, the Company has not defaulted in repayments of dues to
financial institution and banks.
(13) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
(14) In our opinion the term loans have been applied for the purpose
for which they were obtained.
(15) According to information and explanation 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.
(16) The Company has not made any preferential allotment of shares
during the year and hence we have no comments to offer in respect of
clause 4(xvii) of the companies (Auditor's Report) Order, 2003.
(17) No debentures have been issued by the company during the year as
such no securities for the purpose has been created.
(18) During the year, the Company has not raised money by public issue.
(19) According to the information and explanation given to us, no fraud
on or by the Company has been noticed or reported during the financial
year.
For RAKESH GUPTA & ASSOCIATES
Chartered Accountants
ICAI- Registration No. - 0571N
Rakesh Gupta
Place : Faridabad (Proprietor)
Dated : 15th November, 2011 M. No. 80126 | 