We have audited the attached Balance Sheet of M/s IDEAL CARPETS
LIMITED, as at 31st March 2012 and also Profit & Loss Account 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 have conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require us to 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 and report that:
1. As required by the Companies (Auditors5 Report) Order 2003 as
amended Companies (Auditors'' Report) (Amendment) Order 2003 by issued
by the Central Government of India, in terms of sub- section (4A) of
section 227 the Companies Act, 1956. We enclose in the annexure a
statement on die matters specified in paragraph 4 & 5 of the said order
and to the extend as applicable on the company.
2. Further to our comments in the Annexure referred to above, We
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) hi our opinion, the company has kept proper books of account as
required by law so far as appears from our examination of those books &
c) The Balance Sheet and the Profit & Loss Account dealt with by this
report are in agreement with the books of account.
d) In our opinion, the Balance Sheet and Profit & Loss Account dealt
with by this report comply with the accounting standards referred to in
sub section (3C) of Section 211 of the Companies Act, 1956 except AS-22
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 in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
3.With out qualifying your opinion, we draw attention to the following:
i) Note No. 2(1)(c) wherein no adjustment has been made in these
financial statement on account of profit or loss or even diminution in
the assets, or increase in liability if any, of the subsidiary company
Subject to Point 2(d) above, In our opinion and to the best of our
information and according to the explanations given to us, the said
accounts 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.
1. in the case of the Balance Sheet, of the state of the company''s
affairs as at 31st March, 2012 and
2. in the case of the Profit & Loss Account, of the PROFIT for the
year ended on that date and
Annexure to the Auditor''s Report to the shareholders of Ideal Carpets
Limited as referred to in paragraph I of our report even date on the
accounts for the year ended on 31st March 2012.
i) a) The Company has maintained proper records to show full
particulars including quantitative details and situation of its fixed
b) The fixed assets of the company have been physically verified during
the year by the management and no material discrepancies between the
book records and the physical verification have been noticed.
c) In our opinion and according to the information & explanations given
to us, substantial part of fixed assets has not been disposed off
during the year.
ii) a) The stock of finished goods, stores, spare parts, raw materials
and shares & stocks of the company at all its location have been
physically verified by the management. In our opinion, the frequency of
verification is reasonable.
b) In our opinion, the procedure of physical verification of stocks
followed by the management is reasonable and adequate in relation to
the size of the company and nature of its business.
c) The discrepancies noticed on verification between the physical
stocks and the book records were not material.
iii) The Company has not taken unsecured loans from companies, firm or
other patties listed in the register maintained under section 301 of
the Companies Act, 1956. The company has not granted unsecured
loans/advances to companies, firms or other parties listed in the
register maintained under section 301.
iv) In our opinion and according to the information and explanations
given to us during the course of audit there are adequate internal
control procedures commensurate with the size of the Company and nature
of its business with regard to purchase of inventory, fixed assets and
with regard to 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, we have neither come across,
nor have been informed of any continuing failure to correct major
weakness in the aforesaid internal control procedures.
v) a) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered into the Register
Maintained under Section 301 of the Companies Act, 1956 have been so
b) In our opinion and according to the information and explanations
given to us, the transaction of purchase of goods and materials and
sale of goods, materials and services made in pursuance of contracts or
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rupees five lakh in
respect of any party, during the year have been made at prices which
are reasonable having regard to the prevailing market prices for such
goods, materials or services or the prices at which the transactions
for similar goods or services have been made with other parties.
vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposit from the public
within the meaning of section 58 A and 58AA of the Companies Act, 1956
and rules framed there under.
vii) As explained to us, the company has an internal audit system,
which in our opinion is adequate.
viii) To the best of our knowledge and as explained, the Central Govt,
has prescribed maintenance of the cost record u/s 209(1)(d) of the
Companies Act, 1956 for the products of the Company and the same is
ix) a) According to the records of the company Investor Education &
Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
dues applicable to it have been in general regularly deposited with the
appropriate authorities. However, there are some delays in depositing
Provident Fund money of employees.
b) According to information and explanations given to us and records of
the Company examined by us these are no dues of Sales Tax, income Tax,
Customs duty and Wealth tax that have not been deposited on account of
x) 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.
xi) According to records of the company examined by us and the
information and explanation given to us, the company not defaulted in
repayment of dues to any bank or financial institution.
xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii) The provisions of any special statue applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
xiv) In our opinion, the company has not entered into any transaction
of sale or, purchase of investments during the year. Further, the
shares, securities, debentures and other securities have been held by
the Company in its own name.
xv) In accordance with the information and explanations given to us,
the Company has not given any guarantees for loans taken toy others
from banks or financial institutions.
xvi) In our opinion, the term loans taken by the Company have been
applied for the, purpose for which they have been obtained.
xvii) On the basis of an overall examination of the balance sheet of
the Company in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term
basis, which have been used for long-term investments, and vice versa.
xviii) 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 during the year.
xix) The Company has not raised any money by issue of debentures during
xx) The Company has not raised any money by way of public issue during
xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For PRAKASH K PRAKASH
Firm Regn No: 000415N
Place: New Delhi Prakash K Gupta
Dated: 03.09.2012 Partner
Membership No: 080320