1. We have audited the attached Balance Sheet of CAMPHOR & ALLIED
PRODUCTS LIMITED as at 31st March, 2012 and also the Statement of
Profit and Loss 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 the 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
3. 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 (hereinafter referred to as the
Act), we annex hereto a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Without qualifying our opinion, attention is invited to Note No
25(b)(iii) in respect of loss of Rs. 598.87 lacs as at 31st March, 2012
arising out of fair value measurement on interest rate Swap derivative
instrument not being recognised by the Company since such losses as
explained by the management would be provided for, as and when they
5. 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 purposes 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 and 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 and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards prescribed by Companies (Accounting Standards)
Rules, 2006, to the extent applicable;
(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 directors is disqualified as on 31st March,
2012 from being appointed as a director of the Company in terms of
clause (g) of subsection (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 read
together with Significant Accounting Policies and accompanying Notes
give the information required by the Act 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
ii) in the case of the Statement Profit & Loss, of the profit of the
Company for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS'' REPORT OF EVEN DATE ON
THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2012 OF CAMPHOR
& ALLIED PRODUCTS LIMITED
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us during the course of
our audit, we state that:
1. a) The Company has maintained proper records showing full
particulars including quantitative
details and situation of fixed assets.
b) As explained to us, the assets have been physically verified by the
management at reasonable intervals in accordance with the phased
programme of verification which, in our opinion, is reasonable
considering the size of the Company and nature of its business.
According to the information and explanations given to us, no material
discrepancies have been noticed on such physical verification.
c) No substantial part of the fixed assets has been disposed off during
2. a) The inventories have been physically verified by the management
at reasonable intervals during the
year. In our opinion, the frequency of verification is reasonable.
b) The procedures for physical verification of the inventories 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. As explained
to us, there were no material discrepancies noticed on physical
verification of inventory as compared to the book records.
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.
b) (i) The Company had taken an unsecured loan from the holding company
aggregating to Rs. 220.00 lacs. The maximum balance due at any time
during the year was Rs. 120.00 lacs. The loan was repaid during the year
itself when demanded.
(ii) In our opinion and according to the information and explanations
given to us, the terms and conditions of the aforesaid loan taken are
prima facie, not prejudicial to the interest of the Company.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanations that purchase of certain
items of inventory and fixed assets and sale of goods are of special
nature for which suitable alternative sources do not exist for
obtaining comparative quotations, there is adequate internal control
system commensurate with the size of the Company and nature of its
business for 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
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. a) According to the information and explanations given to us, we
are of the opinion that 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
b) In our opinion, having regard to our comments in para 4 above and
according to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements
aggregating during the year to Rs. 5,00,000 or more in respect of each
party have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time wherever such market
prices are available.
6. During the year, no deposit within the meaning of directives issued
by RBI (Reserve Bank of India) and Sections 58A and 58AA or any other
relevant provisions of the Act and Rules framed thereunder have been
accepted by the company.
7. The Company has an internal audit system commensurate with the size
of the Company and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Order of the Central Government under Section 209(1)(d)
of the Act and are of the opinion that, prima facie, the prescribed
records have been made and maintained. We are, however, not required to
make a detailed examination of the records with a view to determine
whether they are accurate or complete.
9. a) The Company is generally regular in depositing 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, Cess and other material statutory dues
applicable to the Company with the appropriate authorities. No amounts
payable in respect of the aforesaid statutory dues were outstanding as
at the last day of the financial year for a period of more than six
months from the date they became payable except income tax dues of Rs.
82.89 Lacs (including estimated amount of interest of Rs. 55.74 Lacs).
The same has not been paid pending receipt of the Order giving appeal
effect from the Income Tax Department.
b) According to the information and explanations given to us there are
no disputed dues towards income tax / Sales tax / Wealth tax / Service
tax / Custom duty / Excise duty / cess except for following:
Particulars Year to
which the Forum where the Rs. in Lacs
amount relates dispute is pending
Excise Duty 1981-1983 Assistant
Excise Duty 1996-98 High Court, Lucknow 66.20
Sales Tax 2000-01 Supreme Court, Delhi 12.75
Sales Tax 2004-05
to 2007-08 Commercial Tax Tribunal,
Income Tax A.Y. 1991-92
and 2004-05 ITAT 13.50
Income Tax 2000-01 High Court, Gujarat 2.6
Income Tax A.Y 1998-99,
2004-05, CIT (Appeal), Baroda 51.62
House Tax & 2004-05
to 2011-12 Civil Court, Bareilly 22.02
10. The Company has no accumulated losses as at 31st March, 2012 and
it has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
12. During the year, the Company has not granted loans and advances on
the basis of security by way of pledge of shares, debentures and other
13. The Company is not a chit fund or a nidhi mutual benefit
fund/society. Therefore, the provisions of clause 4(xiii) of the Order
are not applicable to the Company.
14. The Company is not dealing in or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause 4
(xiv) of the Order 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. According to the information and explanations given to us, term
loans were applied for the purpose for which they were obtained.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet and cash flow statements of
the Company, in our opinion, the funds raised on short-term basis by
the Company have not been used for the 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 during the year or in the recent past.
19. The Company has not raised any debentures during the year or in
the recent past.
20. The Company has not raised any money by way of public issue during
the year or in the recent past.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing standards in India and according to the information and
explanations given to us, we have not come across any instance of fraud
on or by the Company, noticed or reported during the year, nor have we
been informed of such case by the management.
For LODHA & CO.
Place : Mumbai Membership No.44101
Date : 30th May, 2012 Firm Registration No. 301051E