| We have audited the attached Balance Sheet of Blue Bird (India)
Limited, as at March 31, 2011 and the Profit and , Loss Account for the
year ended on that date annexed thereto and cash flow statement for the
year ended on the time date. These financial statements are the
responsibility of the Company's Management. Our responsibility express
an opinion on these financial statements based On our audit.
We have conducted our audit in accordance with auditing standards
generally accepted in India. Those standard* require that we plan and
perform the audit to obtain reasonable assurance about whether
financial statements ore free of material misstatement. An audit
includes examining, on a test basis, evidence supporting, the
and disclosures in the financial statements. An audit also includes
assessing the accounting principle used '< significant estimates made
by management, as well as evaluating the overall financial statement
presentation. > < believe that our audit provides a reasonable basis
for our opinion.
1) 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, we annex hereto, a statement on
for matters specified in paragraph 4 of the said order,
2) 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 to belief were necessary for the purposes 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 and Profit & Loss Account dealt with by this
report or* in agreement with the books Of account Of the Company; - .,
d) In our opinion, the Balance Sheet and Profit & Loss Account dealt
with by this report are# in camplianc4 with accounting standards
referred to in section 211(3C) of the Companies Act, 1956;
e) On the basis of written representations received from the directors,
and taken on record by the' Board of Directors, we report that, none of
the directors is disqualified as on March 31st, 2011 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956;.
f) In our opinion and to the best of our information and according to
the explanations given to us,, Subsidiary to Annual for Auditor's Report
a) note ne.2 regarding verification and valuation of inventories,
ordinary. 4regardfag credit assessment of Debtor? and recovery of
deferrer*, - e} note no 7 regarding reasonableness of Internal Audit
system,
d) no. if regarding accounts prepared on going concern bath, since
the company confident of revival after implementation of CDft proposal
despite tosh lose and\: notice*
tecelvedfromalenderandafevrcredltonu/s433and434ofmeCompanlesAct,1936 v)
note no. 16 regarding estimated written off debtors, and f) note no>3
of Significant Accounting Policies regarding Inventories , the said
accounts read with Notes to 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 March 31st, 2011.
(ii) In the case of the Profit & Loss Account, of the loss of the
Company for the year ended on that date.
(iii) In the case of the Cash flow statement of the cash flows of the
company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 1 of our
report of even date on the accounts for the year ended March 31, 2011
of Blue Bird (India) Limited)
1) a) The Company has maintained proper computerized records showing
full particulars, including quantitative details and situation of its
fixed assets.
b) As informed to us, major fixed assets (Land, Buildings and Plant &
Machinery) of the Company have only been physically verified by the
Management during the year. The company has formulated a policy of
verification of land, Buildings and Plant and Machinery once in a year
and of other assets once in two years. No material discrepancies were
reportedly noticed by the management on such verification.
c) The company has not disposed off any part of fixed assets during the
year.
2) a) As informed to us, the inventory of the company has once been
physically verified by the management during the year.
b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventories
followed by the management are not reasonable and adequate in relation
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, the company has maintained proper records of its
inventories and discrepancies noticed on physical verification between
stock and the book records are material/and have been properly dealt with
in the accounts.
3) The Company has taken unsecured interest free loan from directors.
As per information and explanation given to us, the terms and
conditions thereof are prima- facie, not prejudicial to the interests
of the company. Except this, according to the information and
explanations given to us, the company has not granted/ taken any loans
secured or unsecured 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, the company has an material\ control system for the purchase
of inventory and fixed assets and for the sale of goods and services.
However, the same (including for credit assessment of debtors and
recovery from Debtors) needs to be strengthened so as to be
commensurate with the size of the company and nature of its business.
Further, on the basis of our examination and according to the
information and explanations given to us, we have neither come across
nor have we been informed of any other it. since of continuing failure
to correct major weaknesses in internal control.
5) a) In our opinion and to the best of our knowledge and belief, and
according to the information and explanations given to us, the
transactions that needed to be entered in the Register maintained under
Section 301 of the Companies Act, 1956, have been so entered.
b) According to the information and explanation given to us, there are
no transactions made in pursuance of contracts or arrangements entered
in the register maintained under section 301 of the Companies Act,
1956, exceeding the value of Rs. Five Lacs in respect of any party
during the year.
6) As per the information and explanations given to us, there are no
deposits accepted from the public within the meaning of Section 58A and
58AA or any other relevant provisions of the Companies Act, 1956 and
the rules framed there under.
7) In our opinion, the Company's internal audit system needs to be
strengthened commensurate with its size and nature of its business.
8) According to the information and explanations, given to us, the
Central Government has not prescribed maintenance of cost records under
clause (d) of sub-section (1) Section 209 of the Companies Act, 1956
for the industry in which the company operates.
9) a) According to the information and explanations given to us and the
records of the Company examined by us, in our opinion, the company is
irregular in depositing undisputed amounts outstanding including
Provident fund. Employees State Insurance, Sales tax and other material
statutory dues with the appropriate authorities. IDS of Rs. 66.15 Lacs
and Income Tax of Rs. 21.41 lacs was outstanding on 31st March 2011 for
more than six months.
b) Disputed Income Tax & Sales Tax demands have not been deposited with
the respective Tax Authorities.
10) The Company has accumulated losses as at 31.03.2011, & it has
incurred cash losses during the financial year ended on that date,
resulting in to negative net worth.
11) According to the information and explanations given to us, the
company defaulted in the payment of its dues to financial institutions,
banks during the year. As mentioned in Note No. 11, the Company had
submitted a CDR proposal & it has been approved by CDR cell of Reserve
Bank of India.
12) According to the information and explanations given to us, the
company has not granted any loans or advances on the basis of security
byway of pledge of shares, debentures and other securities.
13) The company is not a chit or a nidhi /mutual benefit fund/society,
therefore, the clause 4(xiii) of the Companies (Auditor's Report)
Order, 2003 is not applicable to the Company.
14) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures or other investments and hence, the requirements
of Para 4 (xiv) are not applicable to the company.
15) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks and financial institutions.
16) The Company has not during the year, availed any term loans from
Bank. Term loans availed In earlier years have not been utilized for
the purpose for which they were sanctioned.
17) According to the information and explanations given to lis and on
an overall examination of the Balance Sheet and Cash Flow of the
Company, we report that no funds raised on Short Term Basis have 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 Companies Act, 1956 during the year.
19) During the year, the company has not issued Non Convertible
debentures. As informed to us, no security has been created for the Non
Convertible Debentures issued for the earlier years.
20) The Company has not raised any money by public issue of shares
during the year.
21) According to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the course of
our audit.
For M/s Khandelwal Gandhi & Asso.
Firm Regn. No. 113047W
Chartered Accountants
CA Rajendra P Gujarathi
Partner
Membership No. 048337
Mace: - Pune
Date: June 30, 2011
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