We have audited the attached Balance Sheet of M/S INDO VANILLON
CHEMICALS LTD. as at March 31, 2005 and also the Profit and Loss
Account for of the Company 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 Companys
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
1) 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 amounts
and disclosure 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 statements.
We believe that our audit provides a reasonable basis for our opinion.
2) As required by the Companies (Auditors 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 hereto a statement on the matters specified in paragraphs 4
and 5 of the said Order.
3) Further to our comments in the Annexure referred to in paragraph 2
above, we report that:
a) We hive 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 account as required by law have been
kept by the Company so far as appears from our examination of those
c) The Balance Shed, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement w ith the books of account;
d) In our opinion, the Balance Sheet, the Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the mandatory
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,
(except Kamini Khanna, S. K.Jain and V.K. Chadha ) as on 31.03.2005 and
taken on record by the Board of Directors, we report that none of
directors is disqualified as on 31.03.2005 from being appointed as
directors in terms of clause (g) of Sub-section (1) 274 of the
Companies Act, 1956;.
f) The companys operation have remained suspended since January 2001.
The company has suffered continued losses and erosion of equity the
accounts are continued to be prepared on going concern basis in the
absence of adequate data for compilation on and alternative basis.
Consequently, no adjustment are made in the accounts relating to
recoverability of recorded assets amount and in respect of recorded
liabilities and contingent liabilities. In our opinion and to the our
information and according to explanations given to us. the said
accounts which has been prepared on the principal of going concern,
subject to the above and note no. 2 c of Schedule 17 regarding
non-provision against work-in-progress, note no. 12 of Schedule 17
regarding non-provision of depreciation on assets amounting to Rs.24.45
Lacs and note no. 21 & 22 regarding confirmation of debit and credit
balances along with the provision of interest on estimated basis read
together with other notes on accounts and Accounting Policies given in
Schedule II give the information required by the Companies Act, 1956,
in the manner so required and present a true and fair view in
conformity with the accounting principles generally accepted in India :
i. In so far as it relates to Balance Sheet, of the State of Affairs of
Company as at March 31, 2005.
ii. In so far as it relates to Profit and Loss Account, of the Loss of
the Company for the year ended on that date; and
iii. In so far as it relates to the Cash Flow statement, of the cash
flow of the Company for the year ended on that date.
For J P S & COMPANY
PLACE : NEW DELHI J C VERMA
DATED : 01.09.2005 PARTNER
ANNEXURE TO THE REPORT OF THE AUDITORS TO THE MEMBERS OF M/S INDO
VANILLON CHEMICALS LTD. ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH.
2005. (REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE)
1. (a.) The company is not in possession of complete records/register
showing full particulars including quantitative details and situation
of fixed assets.
(b.) The fixed assets have not been physically verified by the
management during the year. Discrepancies, if any, arc not known.
(c.) No such substantial pan of fixed asset have been disposed off
during the year to affect the going concern principle.
2. (a) The inventor) has not been verified by the management during
(b.) In the absence of physical verification, comments on procedure for
physical verification of inventories are not offered.
(c.) The unit is closed and management did not conduct physical
verification of inventory.
3. According to the information and explanations given to us, the
company has not granted any loans, secured or unsecured, to companies,
firms or other parties as listed in the register maintained under
Section 301 or to the Companies under the same management as defined
under sub-section (1-B) of Section 370 of the Companies Act,
1956.Accordingly paragraph of clauses 4(iii)(b).(c) & (d) of the Order
are not applicable to the company.
4. In our opinion and on the basis of the information and explanations
given to us, there are adequate and reasonable systems and procedures
for physical verifications of stocks but they have not been followed by
the management during the period, due to, suspension of manufacturing
activities since January 2001.
5. In our opinion and according to the information and explanation
given to us, the company has not entered into any transactions for the
purchase or sale of goods, materials or services in pursuance of
contracts or arrangements entered in the register maintained u/s 301 of
the Companies Act, 1956 as there is no manufacturing activity.
6. According to the information and explanation given to us, the
company has not taken any deposits from the public during the year.
7. Since companys operations arc suspended since January 2001 the
management does not feel the requirement of internal audit.
8. The Central Government has not prescribed maintenance of cost
records u/s 209 (1) (d) of the Companies Act 1956.
9. (a) The company is regular in depositing appropriate authorities -
undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, Employees State Insurance, Income Tax, sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
dues applicable to it.
(10) According to the information and explanation given to us, the dues
of Sales Tax, Income Tax, Excise Duty, Custom Duty, Wealth Tax and Cess
which have not been deposited on account of any dispute are as under :-
Nature of Dues Amount in Period to which Forum where
Rs. amount due dispute is
Excise Duty 88,31,026 Raid for CEGAT
10. In our opinion, accumulated losses of the company are more than 50
percent of its net worth. The company has incurred cash losses during
the financial year covered by our audit and immediately proceeding
11. In our opinion and according to the information and explanation
given to us the company has defaulted in the repayment of dues to
financial institution, banks or debenture holder and has filed a
reference before the BIFR. The accumulated default including interest
are as under: -
DBI 746,04 Lacs
HFC 487,90 Lacs
OBC C/C 424,36 Lacs
12. The company has not granted Loans and Advances on the basis of
security by way of pledge of shares, debentures and other security.
13. In our opinion the company is not a Chit find Or aNidhi/Mutual
14. In our opinion the company is not dealing in or trading in shares,
securities, debentures and other investments.
15. According to information and explanation given to us, the company
has not given any guarantee for loans taken by others from banks and
16. According to the information and explanation given to us, the
company had not raised any term loan during the year under audit.
17. According to information and explanation given to us and on an
overall examination of balance sheet of the company, we report that no
funds, raised on short term basis, have been used for long term
investments. No long term fund have been used to finance short term
assets except permanent working capital.
18. According to the information and explanation given to us, the
company has not maJe any preferential allotment of shares to parties
and companies covered in register maintained under section 301 of the
Companies Act, 1956.
19. According to the information and explanation given to us, no
debenture have been issued during the year under audit
20. According to the information and explanation given en to us, no
money has been raised by way of public issue during the year under
audit. Therefore, the precisions of paragraph 4(xix)of the said order
is not applicable to the company.
21. According to the information and explanation given to us, no fraud
on or by company has been noticed or reported during the year under
For J P S & COMPANY
PLACE : NEW DELHI J C VERMA
DATED : 01.09.2005 PARTNER