1 We have audited the attached balance sheet of CHEMOPHARMA LABORATORIES
LTD., as at31stMarch 2012, and the Statement of profit and loss of the
company 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 of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and ,j:sdosures 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 (Amendment)
2004 issued by the Central Government of India in terms of sub-section
(4A) of section 227 of the Companies Act, 1956, we enclose in
The Annexure hereto 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:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
(ii) 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
(iii) The balance sheet, Statement of profit and loss dealt with by
this report are in agreement with the books of account;
(iv) In our opinion, the balance sheet and Statement of profit and loss
dealt with by this report comply with the accounting standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956.
(v) On the basis of written representations received from the directors
of the company 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 in terms of
clause (g) of sub-section (I) of section 274 of the Companies Act,
(vi) We draw attention to note number 13 in respect of preparation of
accounts on Going Concern basis even though the business is suspended,
note number 14 in respect of diminution in value of investments and
note number 15 in respect of non-provision of inter corporate deposit
vii) Subject to our comments in (vi) above, in our opinion and to the
best of our information and according to the explanations given to us,
the said accounts read together with the significant accounting
policies and other 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
(a) In the case of the balance sheet, of the state of affairs of the
company as at 31st March 2012 and;
(b) In the case of the Statement of profit and loss of the Profit for
the year ended on that date.
(c) In the case of the cash flow statement of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITOR''S REPORT.
Annexure referred to in paragraph 4 of our report of even date
1. The Company has maintained proper records of fixed assets showing
full particulars including quantitative details and situation of fixed
assets. The management during the year has not carried out the physical
verification of fixed assets. As per the explanations given to us a
substantial portion of fixed assets were not disposed of during the
2. In our opinion and as per the explanation given to us there is no
inventory at close of the year so sub-clause (a), (b) and (c) of clause
ii is not applicable.
3. (a) The company has granted interest free loan to one party covered
in the register maintained under section 301 of the Companies Act, 1956.
The yearend balance of loans granted was Rs. 31,40,000/- and the maximum
amount involved during the year was Rs. 31,40,000/-
(b) Since the loan given was interest free without repayment
stipulation, we cannot comment about the regularity of repayment of
principal, interest, overdue amount and whether the other terms and
conditions of the loan given is prejudicial to the interest of the
(c) According to the information and explanations given to us the
Company has not taken any loans from companies listed in the Register
maintained under section 301 of the Act.
4. As the company has discontinued its operations so the clause in
respect of Internal Control System for the purchase of inventory, fixed
assets and for the sale of goods and services is not applicable.
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 Companies Act, 1956 that need to be
entered into the register maintained under Section 301 of the Companies
Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 exceeding Rs. 5,00,000/- have been made at
prices which are reasonable having regard to prevailing market prices
at the relevant time. As explained to us, the Company has not entered
in to any transactions for sale of goods, materials and services in
pursuance to contracts or arrangements as aforesaid.
6. In our opinion and according to the information and explanations
given to us, no fixed deposits were accepted during the period to which
the provisions of Sections 58Aand 58AAor any other relevant provisions
of the Act apply.
7. As company''s operations are suspended the internal audit is not
8. To the best of our knowledge and as explained, the Central
Government has not prescribed maintenance of cost records under clause
(d) of sub-section (1) of section 209 of the Companies Act, 1956 for the
products of the Company.
9. (a) The Company is regular in depositing with appropriate
authorities 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, cess and other material statutory dues applicable to it.
(b) According to the information & explanations given to us, the dues
in respect of sales tax, income tax, custom duties, wealth tax, excise
duty, and cess that have been deposited with the appropriate
authorities on account of dispute and the forum whether the disputes
are pending are given below:
Name of the Nature of the dues Amount Forum where dispute
Tax Central sales tax 18,05,093 Appeal before
Income Tax Act Income tax 31,77,291 Appeal before ITAT
Income Tax Act Penalty Tax 60,47,659 Appeal before ITAT
10. There are accumulated losses at the end of the financial year
which are not more than 50% of its net worth. The Company has not
incurred cash loss during the year and in the immediately preceding
11. Based on our audit procedure and according to the information and
explanations given to us by the management the company has defaulted in
repayment of loan to SICOM - Deferred Sales Tax payable to the extent
of Rs 11,96,976 for more than 5 years.
12. The Company has not granted loans and advances on the basis of
security byway of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi / mutual benefit fund /
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor''s Report) Order, 2003 (as amended) are not applicable to the
14.. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
15. In our opinion and according to the information and explanations
given to us, the Company has not given guarantee for loans taken by
others from banks or financial institutions during the period.
16. In our opinion and according to the information and explanations
given to us, the Company has not raised any term loans.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company, the Company
has not raised funds on short-term basis.
18. During the year, 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.
19. The company has not issued any debentures during the year.
20. The Company has not raised any money by public issue during the
21. Based on the audit procedures performed and information and
explanations given to us, we report that no fraud on or by the company
has been noticed or reported during the course of our audit.
Place : MUMBAI For Batliboi & Purohit,
Date : 29th June, 2012 Chartered Accountants
Firm Reg.No. 101048W
Membership No. 111749