1. We have audited the attached Balance Sheet of AUTOLITE (INDIA)
LIMITED as at 31st March, 2012 and also the Profit & Loss Account of
the Company for the year ended on that date, annexed thereto and the
Cash Flow Statement for the year ended on that date which we have
signed under reference to this report. 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 mis-statements. 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 management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditors'' Report) Order, 2003
issued by the Central Government of India in terms of Section 227(4-A)
of the Companies Act, 1956, we give in the Annexure a Statement on the
matters specified in paragraphs 4 & 5 of the said order.
4. Further to our comments in the Annexure referred to in paragraph
(1) above :
(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
(b) 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 the
(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts.
(d) In our opinion, the Profit & Loss Account, Balance Sheet and Cash
Flow statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956 except for
AS-9 (Revenue Recognition) and AS-29 (Provisions, Contingent
Liabilities and Contingent Assets) as detailed in Note No.46 & 49 of
Balance Sheet & AS-22 (Accounting for Taxes on Income) as detailed in
Note No. 45 of Balance sheet.
(e) On the basis of written representations received from the Directors
as on 31st March 2012 and taken on record by the Board of Directors, we
report that none of the Director is disqualified from being appointed
as a Director in terms of Clause (g) of Sub-section (1) of Section 274
of the Companies Act, 1956.
(f) (i) As reported in Annexure to the Auditors'' Report para No.
Company is not regular in depositing its statutory dues with
(ii) As detailed in Note No. 45 of Balance Sheet, no impact has been
taken in books for Deferred Tax Assets/ Liabilities.
(iii) As detailed in Note No. 46 of Balance Sheet regarding claim for
Export Incentives on estimated basis for Rs. 365.18 Lacs,
(iv) As detailed in Note No. 49 of Balance Sheet regarding claim
receivable on estimated basis for Rs. 90.00 Lacs,
By which current year Profit, Reserves
& Surplus and Other Non Current Assets are overstated;
We further report that had the observation made by us in item 4(d),
4f(iii) & 4f(iv) above been considered the Loss for the year would have
been Rs. 8.96 Lacs (as against reported figure of profit before tax of
Lacs), the Reserves & Surplus would have been Rs.1700.82 Lacs (as
against reported figure of Rs. 2156.00 Lacs), other non Current Assets
would have been Rs. 311.35 Lacs (as against reported figure of Rs.
(g) Subject to foregoing, in our opinion and to the best of our
information and according to the explanations given to us, the said
accounts read with all the 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:
(i) In the case of Balance Sheet, of the state of affairs of the
Company as at 31st March,2012,
(ii) In the case of Profit & Loss account, of the Profit of the Company
for the year ended on that date; and
(iii) In the case of Cash Flow Statement, of the Cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph 3 of our Report of even
(i) (a) The Company has maintained proper
records showing full particulars, including quantitative details and
situation of fixed assets. No fixed assets register has been maintained
for dies and tools up to 31.3.98.
(b) These fixed assets have been physically verified by the management
at reasonable intervals. No material discrepancies were noticed on such
(c) During the year the Company has disposed off Part of factory land
situated at Sitapura, Jaipur on the basis of unregistered sale
agreement. However such sale of land has not affected going concern
concept of the company.
(ii) (a) Physical verification of inventory has
been conducted at reasonable intervals by the management.
(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 the nature of its business.
(c) The Company has maintained proper records of inventory. No material
discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Act. The number of parties are 6 (Six) and
amount involved in the transaction is Rs.480.15 Lacs.
(b) The rate of interest and other terms and conditions of loans given
by the Company, secured or unsecured, are prima facie prejudicial to
the interest of the Company.
(c) The Company is not regular in recovery of Principal and Interest in
respect of loans given.
(d) Reasonable steps have not been taken by the Company for recovery of
the principal and interest.
(e) The Company has not taken unsecured loans from the companies, firms
or other parties covered in the register maintained under section 301
of the Act. Accordingly clause (iii) (f) and (g) of the Companies
(Auditor''s Report) order 2003 are not applicable.
(iv) In our opinion and according to information and explanations given
to us, there are adequate internal control procedures 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.
Further, there is no continuing failure to correct major weaknesses in
internal control system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into a
register in pursuance of Section 301 of the Act have been entered in
the register required to be maintained under that section.
(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 maintained under
Section 301 of the Companies Act, 1956 and exceeding the value of
rupees five lacs in respect of any party during the period have been
made at prices which are reasonable having regard to prevailing market
prices at the relevant time except in cases where no comparison was
possible in the case of those materials and services where we were
informed, there is no alternative source of supply.
(vi) As informed to us, during the year, the Company has not accepted
deposits from the public. For Deposits accepted in earlier years the
directives issued by the Reserve Bank of India and the provisions of
sections 58A and 58 A A or any other relevant provisions of the Act and
the rules framed there under, have been complied with except for
repayment of deposits on due dates. An order has been passed by the
Company Law Board on 27.4.2011 for repayment of dues along with
interest in phased manner till Financial Year 2012-13.
(vii) In our opinion the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) The Central Government has prescribed maintenance of Cost
records under Section 209(l)(d) of the Companies Act, 1956 in respect
of manufacturing activity of the Company. We have broadly reviewed the
accounts and records of the Company in this connection and are of the
opinion, that prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, carried out a detailed
examination of the same with a view to determine whether they are
accurate or complete.
(ix) (a) According to the books and records as produced and examined by
us in accordance with the generally accepted Auditing practices in
India and also based on management representations, the Company is not
regular in depositing undisputed statutory dues. However, there is no
undisputed statutory dues as at
31.3.2012 outstanding for a period of more than six months from the
date they become payable.
(b) According to the information and explanations given to us and
records of the company examined by us the dues of sales tax/income
tax/custom duty/ wealth tax/ excise duty/cess which are disputed and
the details for which are given as under:
Statute Nature of
Dues Amount Forum where dispute
(Rs. in Lacs)
Tax Laws Sales Tax 1.11 Appellate Authorities
Excise Act Excise Duty 3.53 High Court
242.78 Central Excise &
46.61 Commissioner (Appeal),
Central Excise, Jaipur.
(x) The accumulated losses of the Company as per Balance Sheet as at
31.3.2012 are less than fifty per cent of its net worth. The Company
has neither incurred cash losses in financial year ended on 31.3.2012
nor it has incurred cash losses in immediately preceding financial
(xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to financial
institutions, banks or debenture holders.
(xii) According to information & explanations given to us, the Company
has not granted any loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
(xiii) Considering the nature of activities carried on by the Company
during the year, provisions of any special statute in respect of chit
fund nidhi/mutual benefit fund/ societies are not applicable to it.
(xiv) In our opinion and according to information and explanations
given to us, the Company has not dealt or traded in shares, securities,
debentures or other investments during the year.
(xv) The Company has not given any guarantee for loans taken by others
from bank or
financial institutions during the year.
(xvi) The Company has taken Term Loan for Rs.200 Lacs from Kotak
Mahindra Bank during the year. The said loan was applied for the
purpose for which it was obtained.
(xvii) On the basis of review of utilization of funds which is based on
overall examination of the Balance sheet of the Company, related
information as made available to us and as represented to us by the
management, the funds raised on short term basis have not been used for
long term investments.
(xviii) The Company has not made preferential allotment of shares to
parties covered in the Register maintained under section 301 of the Act
during the year.
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money through public issue during
(xxi) As per the information and explanations given to us, and on the
basis of our examination of books and records carried out in accordance
with generally accepted auditing practices, no fraud on or by the
Company was noticed or reported during the year, nor have we seen and
informed of any such case by the management.
For H.C. GARG & COMPANY
FRN - 000152C
PLACE :Jaipur (MADHUKAR GARG)
DATE : 30.06.2012 M. No. 070162