1. We have audited the attached Balance sheet of CPEC LIMITED, as at
31st March 2012 and also the Profit and Loss account 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 have conducted our audit in accordance with auditing standards
generally accepted in India. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether
financial statements are free of material statements. 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 management, as well as
evaluating the overall presentation of the financial
statements. 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, we enclose in the Annexure a
Statement on the matters specified in paragraph 4 and 5 of the said
4. Further to comments in the Annexure referred to above, we report
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 it appears from our examination of
the books of accounts.
c. The Balance sheet, the Profit & Loss Account and the Cash flow
statement dealt with by this Report are in agreement with the Books of
d. In our opinion, the Balance sheet, the Profit & Loss Account and
Cash-Flow statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
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 of the Company 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
Companies Act, 1956;
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with 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 :
In the case of the Balance sheet of the state of affairs of the company
as at 31stMarch, 2012;
In the case of Profit & Loss account of the loss for the year ended on
that date, and
In the case of cash flow statement of the cash flows for the year ended
on that date.
Annexure referred to in paragraph 3 of our report of even date
(i) (a) The company has only land as fixed assets and required records
of the same are properly maintained.
(ii) (a) There is no opening and closing inventory hence this clause is
(iii) (a) As informed to us, the company has granted advances in the
nature of Loans to Associate Company and to companies in which
Directors are interested as per register maintained under section 301
of the Companies Act, 1956. The maximum amount outstanding is Rs.728.74
lakhs and closing out standing balance is Rs.501.11 lakhs.
(b) As informed to us, the company has not taken any advances in the
nature of Loans from persons in which Directors are interested as per
register maintained under section 301 of the Companies Act, 1956.
(c) There is no stipulation for payment of interest. The other terms
and Conditions of such loans are in our opinion, prima facie not
prejudicial to the interest of the company.
(d) The payment of principal amount is on demand.
(e) There is no stipulation of principal repayment. Hence there is no
overdue Amount. ^
(iv) In our opinion and according to the information and explanation
given to us, there are adequate internal procedures commensurate with
the size of the company and the nature of its business. During the
course of our audit no major weakness has been observed in the internal
(v) (a) the particulars of contracts or arrangements referred to in
section 301 of the Companies Act have been so entered in the register
(b) In our opinion and according to the information and explanation
given to us the company has purchased land from associate company and
paid professional fees to director which exceeds Rs 5 lacs in respect
of each such parties during the year. The same have been made at prices
which are reasonable having regard to prevailing market prices at the
(vi) In our opinion and according to the information and explanation
given to us, the Company has not accepted any public deposits with in
the meaning of sections 58 and 58AA of the Companies Act, 1956 and the
rules framed there under.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with size and nature of its business.
(viii) As informed to us, the maintenance of cost records has not been
prescribed by the Central Government under clause (d) of sub - section
(1) of section 209 of the Act.
(ix) (a) The company is regular in depositing undisputed statutory dues
including Provident Fund, Employees State *^ Insurance, Sales - tax,
Custom Duty, Excise Duty, cess and any other statutory dues with
appropriate authorities during the year except Payment of S.A Income
Tax dues forA. Y.2011-12 provided but unpaid of Rs.3.64 Cr.
(b) According to the information and explanations given to us, there
are no dues payable on account of disputes with regards to sales tax,
income tax, custom tax, wealth tax, excise duty, cess.
(x) The company has no accumulated losses at the end of the financial
year and it has incurred cash losses in this financial year but not
incurred cash loss in the preceding financial year.
(xi) According to the information and explanations given to us the
company has not defaulted in repayment of dues to a financial
institution or bank. Infact the company has no such borrowings.
(xii) According to 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.
(xiii) The company is not Chit fund or a Nidhi or Mutual benefit fund
or society. Therefore the provisions of any special statutes are not
applicable to the company.
(xiv) According to the information and explanations given to us the
company does not deal or trade in shares, securities, debentures and
other investments and hence this clause is not applicable.
(xv) In our opinion, the terms and conditions on which the company has
given guarantee for loan taken by others from bank, are prima facie,
not prejudicial to the interest of the company.
(xvii) In our opinion and overall examination of the Balance Sheet of
the company, we report that no funds raised on Short term basis have
been used for long term investment.
(xviii) The company has not made any preferential allotment of shares
during the Year to parties and companies covered in the Register
maintained under Section 301 of the Act.
(xix) The company has not issued any debentures.
(xx) The company has not raised any money through a public issue during
(xxi) Based on the audit procedures applied 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.
FOR VEDULA VIJAY AND RAMANATHAN
K. BODA PARTNER
Place : Mumbai M''Sh.NO. 106709
Date : 30th May, 2012 Firm no : 106472W.