1. We have audited the attached Balance Sheet of Indo Count Industries
Limited as at 31st March, 2012 and the Profit & Loss Account for the
year ended on that date annexed thereto and the cash flow statement for
the year ended on that date. 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 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 accounts
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 and 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.
4. Further to our comments in the Annexure referred to above, we
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
ii) In our opinion, proper bocks of account as required by law have
been kept by the company so far as appears from our examination of
iii) The Balance Sheet, the Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
iv) In our opinion, subject to our observation in para v) below the
Balance Sheet, the Profit & Loss Account and the Cash Flow Statement
comply with the accounting standards referred to in sub- section (3C)
of section 211 of the Companies Act, 1956.
v) Attention is drawn to Note No.29(a) to the accounts regarding the
non provision of MTM loss in the financial statements as AS 30 is not
vi) On the basis of written representations received from the directors
and taken on record by the board of directors, we report that as on
31st March, 2012 none of the directors is disqualified from being
appointed as a director in terms of clause (g) of sub section (1) of
section 274 of the Companies Act, 1956.
Subject to the 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:
a. in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2012;
b. in the case of the Profit & Loss Account, of the profit for the
year ended on that date; and
c. in the case of cash flow statement of the cash flows for the year
ended on that date.
Referred to in paragraph 3 of our report of even date
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) All the fixed assets have been physically verified by the
management according to a regular program, which, in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies with respect to book records were
noticed on such verification.
(c) During the year, the company has not disposed off any substantial
part of its fixed assets. Therefore, it has not affected the going
concern concept of the company.
(ii) (a) Physical verification of inventory (except material in
transit) has been conducted by the management at reasonable intervals.
In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and nature of its business.
(c) The company is maintaining proper records of inventory.
Discrepancies noticed on verification of inventory as compared to book
records were not material.
(iii) The company has neither granted nor taken loans, secured or
unsecured to / from companies firms or other parties covered in the
register maintained under section 301 of the Act and as such clauses
(iii) (b), (iii) (c) and (iii) (d) of the Order are not applicable to
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory and fixed assets and for sale of
goods and services. During the course of our audit, no major weakness
has been noticed in the internal control system.
(v) Transactions that need to be entered in the register maintained
under section 301 of the Companies Act, 1956.
(a) Based upon the audit procedures applied by us and 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, have been entered in the register required
to be maintained under the section.
(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 and exceeding the value of Rs. 5.00 lac in
respect of any party during the year, have been made at prices which
are reasonable, having regard to prevailing market prices at the
(vi) According to the information and explanation given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of clause 4 (vi) of the Order are not applicable to the
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
(ix) (a) The company is generally regular in depositing with the
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees state
insurance, income tax, wealth tax, sales tax, service tax, custom duty,
excise duty, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, service tax, customs duty, excise duty and cess were outstanding
as at 31st March,2012 for a period of more than six months from the
date they became payable.
(x) The accumulated losses of the company as at 31st March, 2012 do not
exceed fifty percent of its net worth at the end of the said financial
year. The company has not incurred cash losses during the financial
(xi) The company has defaulted in repayment of dues to banks as under-
Nature of Loan Delay in Amount
number of days (Rs. in Lac)
1. Late Payments:
Rupee Term loans
-Principal 0-30 days 631.09
Working Capital Term loans
-Principal 0-30 days 45.90
Demand term Loan
-Principal 60-90 days 55.92
Demand Term Loan
-Principal 0-30 days 98.18
61-90 days 42.26
-Interest 0-30 days 26.73
31-60 days 25.42
61-90 days 26.23
91-120 days 10.95
(xii) According to the information and explanations given to us, the
company has not granted any loan and advance on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the company is neither a chit fund nor nidhi /
mutual benefit fund / society and hence clause 4 (xiii) of the Order is
not applicable to the company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments and accordingly,
the provisions of clause 4 (xiv) of the Order is not applicable to the
(xv) In our opinion, the company has not given guarantee for loans
taken by others from banks or financial institutions.
(xvi) In our opinion, the term loans have been applied for the purposes
for which they were obtained.
(xvii) According to the information and explanation given to us and on
overall examination of the Balance Sheet of the company, we are of the
opinion that the company has utilized Rs. 1,727.12 lac during the year
raised on short term basis for long term purposes.
(xviii) During the year the company has made a preferential allotment
of shares to parties and companies covered in the register maintained
under section 301 of the Act.
(xix) According to the information and explanations given to us, the
company has not issued debentures during the year.
(xx) According to the information and explanations given to us, during
the year the company has not raised any money by public issue.
(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 B. K. Shroff & Co.,
Reg. No. 302166E
O. P. Shroff
Place : Mumbai Partner
Date : 25th May, 2012 Membership No. 6329