We have audited the attached Balance Sheet of CHEVIOT COMPANY LIMITED
as at 31st March, 2012 and the related Statement of Profit and Loss and
the Cash Flow Statement 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.
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 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
1. As required by the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amendment) Order, 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 a
statement on the matters specified in paragraphs 4 and 5 of the said
order to the extent applicable.
2. Further to our comments in the Annexure referred to in Paragraph 1
above, we state 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 such
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement referred to in 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 of the Company comply with the Accounting Standards
referred to in sub-section (3C) of Section 211 of the Companies Act,
e) On the basis of representations received from the directors of the
Company, we report that no director is disqualified from being
appointed as a director of the Company under clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956; and
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read in conjunction
with notes thereon give the information required by the Companies Act,
1956, in the manner so required and give a true and fair view :
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 of Profit and Loss, of the profit of
the Company for the year ended on that date.
iii. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
1. a) The Company has maintained proper records showing full
particulars including quantitative details and location of the fixed
b) There is a regular program of physical verification, which in our
opinion is reasonable, having regard to the size of the Company and the
nature of fixed assets. No material discrepancies have been noticed in
respect of the assets physically verified during the year.
c) The Company has not disposed off substantial part of fixed assets
during the year.
2. a) Inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is
b) The procedures of physical verification of stocks followed by the
management are adequate in relation to the size of the Company and the
nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
book records were not material and have been properly dealt with in the
books of account.
3. The Company has not accepted/granted any loans during the year
from/to the parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly the provisions of clauses
(iii) (b), (c), (d), (f) and (g) are not applicable to the Company.
4. In our opinion, and according to the information and explanations
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 purchase of inventory and fixed assets and for the sale of goods.
During the course of our audit, no major weakness was noticed in the
internal control system.
5. a) According to the information and explanations given to us,
contracts or arrangements that need to be entered into the register
maintained in pursuance of section 301 of the Companies Act, 1956 have
been so entered.
b) The transactions made in pursuance of such contracts or arrangements
have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public during
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. On the basis of records produced, we are of the opinion that, prima
facie, the cost records and accounts prescribed by the Central
Government under Section 209 (1) (d) of the Companies Act, 1956 have
been maintained by the Company. However, we are not required to carry
out and have not carried out any detailed examination of such accounts
9. a) According to the information and explanations given to us and
the records examined by us, 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, Custom Duty, Cess and other statutory dues
with the appropriate authorities and there are no undisputed statutory
dues outstanding as at 31st March, 2012, for a period of more than six
months from the date they became payable.
b) According to the records of the Company, the following dues are not
deposited on account of disputes pending at various forums :
Name of the
Statute Nature of dues Amount Year to Forum where
which amount dispute is
Sales Tax Act Sales Tax 1.05 1984-85 Reference Level
0.22 1993-94 Revision Level
1.12 1997-98 Revision Level
76.77 2005-06 Appeal Level
65.05 2006-07 Appeal Level
2.84 2008-09 Appeal Level
Income Tax Act Income Tax 115.68 2002-03 Assessing Officer
6.63 2007-08 Assessing Officer
24.88 2009-10 Assessing Officer
10. The Company has not incurred cash loss in the current year and in
the immediately preceding financial year and there are no accumulated
losses in the Balance Sheet as on 31st March, 2012.
11. Based on the information and explanations given to us, the Company
has not defaulted during the year in repayment of dues to any financial
institutions or banks.
12. Based on our examination of the records and the information and
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.
13. As the Company is not a chit fund, nidhi, mutual benefit fund or
society the provisions of clause 4(xiii) of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the Company.
14. As the Company is not dealing or trading in shares, securities,
debentures and other investments, the provisions of clause 4(xiv) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
15. According to the information and explanations received, the
Company has not given any guarantees for loans taken by others from
bank or financial institutions.
16. According to the information and explanations received, the term
loan was applied for the purpose for which the loans were obtained.
17. Based on our examination of the records and according to the
information and explanations received, the Company has not applied
short term borrowings for long term use.
18. The Company has not made any preferential allotment of shares
during the year.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by way of public issue during
21. As per the information and explanation given to us, no fraud on or
by the Company has been noticed during the year.
For Jain & Co.
Registration No. 302023E
P-21/22, Radhabazar Street, CA P. K. JAIN
Kolkata - 700 001 Partner
Dated the 30th day of May, 2012 Membership No. 52018