1. We have audited the attached Balance Sheet of BODAL CHEMICALS
LIMITED (the Company), as at 31st March, 2012 and also the Statement
of Profit and Loss and the Cash Flow Statement of the Company for the
year ended on that date annexed thereto, 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 misstatement. 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 statement
presentation. We believe that our audit provides a reasonable basis for
our opinion subject to following .
We are unable to examine as per the accepted Standards of Auditing
issued by Institute of Chartered Accountants of India, evidence
supporting the amount of Income covered in the Disclosure under the
Income Tax Act and its utilization thereof more particularly described
in Note No. 37 to the Financial Statement and accordingly are unable to
comment on the same.
3. As required by the Companies (Auditors'' Report) Order, 2003 as
amended by The Companies (Auditor''s Report) Amendment Order, 2004
(together the Order) issued by the Central Government of India in
terms of sub-section (4A) of Section Section 227 of ''The Companies Act,
1956'' of India (the ''Act'') and on the basis of such checks of the books
and records of the Company as we considered appropriate and according
to the information and explanations given to us, we give in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of
the said order.
4. Further to our comments in the annexure referred to in paragraph 3
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 our
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
C. The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
D. In our opinion, the Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-section 3 (c) of section 211 of
the Act ;
E. On the basis of written representations received from the
directors, as on 31st March 2012 and taken on record by Board of
Directors, none of the directors is disqualified as on 31st March, 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act ;
F. In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner, the information required by the Act and subject to disclosure
of Income of Rs. 1081.23 Lacs Under Section 132(4) of the Income Tax
Act, 1961 more particularly described in Note No. 37 give a true and
fair view in conformity with the accounting principles generally
accepted in India.
(i) In case of Balance Sheet, of the state of affairs of the Company as
at 31st March, 2012
(ii) In case of the Statement of Profit & Loss, of the loss for the
year ended on that date; and
(iii) In case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Referred to in paragraph 3 of our Auditors'' Report of even date to the
members of Bodal Chemicals Limited on the financial statements as of
and for the year ended 31st March 2012)
1 a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
b) According to the information and explanation given to us, the
Company has formulated a regular program of verification by which all
the assets of the company shall be verified in a phased manner, which
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. Pursuant to the program, portion of fixed
assets have been physically verified by the management during the year
and no material discrepancies between the book records and physical
inventory have been noticed.
c) In our opinion, and according to information and explanations given
to us, a substantial part of its fixed assets has not been disposed off
by the company during the year.
2 a) The inventory has been physically verified by the Management
during the year. In our opinion the frequency of verification is
b) In our opinion, the procedures of physical verification of
inventories followed by the Management were reasonable and adequate in
relation to the size of the company and the nature of the business.
c) On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material and have been properly dealt with in
the books of account.
3 a) 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 Act, and therefore, clause of rates of interest
and other terms & conditions and repayment is not applicable to the
b) The Company had taken unsecured loan from the 3 (Three) parties
listed in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs. 508.21
lacs & the year end balance of loans was Rs. Nil.
c) According to the information and explanation given to us, repayment
of the principal amount is as stipulated and payments of interest,
wherever applicable, have been regular.
d) In our opinion the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
4 In our opinion and according to the information and explanation given
to us, there is an adequate internal control system commensurate with
the size of the Company and the nature of its business with regard to
the purchase of inventory and fixed assets and for the sale of goods.
Further, on the basis of our examination of the books and records of
the Company, and according to the information and explanation given to
us, no major weakness have been noticed or reported.
5 a) In our opinion and according to the information given to us, the
particulars of contracts or arrangements referred to in 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 such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6 In our opinion and according to the information and explanation given
to us, the Company has complied with the provisions of Sections 58A and
58AA or any other relevant provisions of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rues, 1975 with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or the National Company Law Tribunal or the Reserve Bank of India
or any Court or any other Tribunal on the Company.
7 The internal audit function is carried out by outside agency
appointed by the management, the scope and coverage of which, in our
opinion requires to be enlarged to be commensurate with the size and
nature of its business.
8 We have broadly reviewed the books of accounts and records maintained
by the company relating to the manufacturing of Chemical products
comprising Dyes, Dyes Intermediates and Basic Chemicals where, pursuant
to the Rules made by the Central Government of India, the maintenance
of cost records has been prescribed under clause (d) of sub-section (1)
of Section 209 of the Act, and are of the opinion that, prima facie,
the prescribed accounts and records have been made & maintained. We
have not, however, made a detailed examination of the records with a
view to determining whether they are accurate or complete.
9 a) According to the information and explanations given to us and
records of the company examined by us, in our opinion, the company is
regular in depositing undisputed statutory dues including provident
fund, investor education and protection fund, employees state
insurance, income tax, sales tax, wealth tax, service tax, customs
duty, excise duty and other material statutory dues as applicable, with
the appropriate authorities.
b) According to the information and explanation given to us and the
records of the Company examined by us, there are no dues of Wealth tax
and Sales Tax which have not been deposited on account of any dispute
and the particulars of dues of Income Tax, Services Tax, Customs Duty
and Excise Duty as at 31st March 2012 which has not been deposited on
account of a dispute, are as follows :
Statement of Disputed Dues
Name of the
Statute Nature of Amount Period to which Forum where
the Dues (Rs. in
lacs) amount relates pending
Income Tax 0.19 A.Y. 1999-2000 Income Tax
Income Tax 61.57 A.Y. 2007-2008 Income Tax
Income Tax Act,
1961. Income Tax 29.65 A.Y. 2008-2009 Commissioner
Income Tax 87.91 A.Y. 2007-2008 Commissioner
Penalty 0.59 A.Y. 2006-2007 Commissioner
Income Tax 68.13 A.Y. 2007-2008 Commissioner
Excise Duty 1.18 2010-2011 CESTAT,
Excise Duty 1.58 2011-2012 Commr.C.Ex.
Act, 1944. Excise Duty 1.65 2011-2012 Commr.C.Ex.
Excise Duty 15.80 2011-2012 Commr.
& Penalty Surat-II
Service Tax 12.08 2006-2007 The
2010-2011 Excise -
Service Tax 1.35 2011-2012 CESTAT,
Service Tax 59.18 2005-2006 CESTAT,
and Penalty to
Service Tax Service Tax 23.21 2005-2006 The
2007-2008 Excise -
Service Tax 0.23 2010-2011 Commi.S.Tax
Service Tax 0.62 2011-2012 Commi.S.Tax
& Penalty Ahmedabad-I
Penalty, 10.11 2007-2008 CESTAT,
Interest & Zonal Bench,
10. The company''s accumulated losses at the end of the financial year
are less than fifty per cent of its net worth. it has incurred cash
losses in current financial year however it has not incurred cash
losses during immediately preceding financial year.
11. According to records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to banks and financial institutions as at Balance
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 and other securities.
13. The provisions of any special statue applicable to chit fund,
nidhi, or any mutual fund / societies are not applicable to the
14. In our opinion and according to the information and explanation
given to us, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. According to the information and explanation given to us the
Company has not given guarantee for loans taken by others from banks or
16. To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, the term
loans raised during the year were prima facie been utilized for the
purposes for which they were obtained.
17. According to the information and explanations given to us and on
overall examination of the balance sheet and cash flow statement of the
Company, we report that Company has used funds raised on short term
basis for long term investments.
18. According to the information and explanations given to us, during
the period covered by our audit report, the Company has made
preferential allotment of equity shares to parties and companies
covered in the register maintained under Section 301 of the Companies
Act, 1956.In Our opinion the price at which shares have been issued is
not prejudicial to the interest of the company.
19. According to the information and explanations given to us, during
the year covered by our report, the Company has not issued any secured
20. The Company has not raised any money by way of a public issue
during the year.
21. During the course of our examination of the books of account and
records of the company carried out in accordance with the generally
accepted auditing practices in India, and according to the information
and explanation given to us, we have neither come across any instance
of material fraud on or by the Company, noticed or reported during the
year, nor we have been informed of such case by the management.
For Mayank Shah & Associates
(Firm Registration No. 106109W)
Place : Ahmedabad Partner
Date : 31/08/2012 Mem. No. 44093