1. We have audited the attached Balance Sheet of J. R. Foods Ltd., as
at 31st March 2011 and the Profit and Loss Account of the Company for
the year ended on that date, annexed thereto and also the cash flow
statement for the period ended on that date. The financial statements
are the responsibility of the management of the company. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted the audit in accordance with auditing standards
generally accepted in India. These standards required 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 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 our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003 as
amended issued by the Company Law Board in terms of Sub- section (4A)
of Section 227 of the Companies Act, 1956 (the Act), we enclose in the
annexure a statement on the matters specified in paragraph 4 and 5 of
the said order to the extent applicable.
4. Further to our comments in the Annexure referred to above, we state
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
ii. 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
iii. The Balance Sheet, Profit and Loss Account and the cash flow
statement dealt with by this report are in agreement with the books of
iv. In our opinion, the Balance Sheet, Profit & Loss Account and Gash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Sec 211 of the Companies
v. On the basis of written representations received from directors, as
on 31st March, 2011 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March,
2011 from appointed as a director in terms of clause (g) of sub-section
(1) of Section 274 of the Act;
vi. Attention is invited to the note 22 regarding non provision of
deferred tax Liability amounting to Rs.24,29,267/-
i. In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and other notes thereon give that
information required by the Act, 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 Balance Sheet, of the state of affairs of the
Company as at 31st March 2011
(b) In the case of Profit and Loss Account, of the Loss for the year
ending 31st March 2011
(c) ln the case of the Cash Flow Statement, of the Cash flows for the
year ended on that date.
Annexure referred to in para 3 of our report of even date
1. (a) The Company has maintained proper records, showing full
particulars, including quantitative details and situation of fixed
(b) The fixed assets have been physically verified by the management
during the year and we have been informed that no material
discrepancies were found on such verifications.
(c) None of the fixed asset has been revalued during the year.
2. As explained to us, the stocks of stores, spare parts, raw
materials have been physically verified by the management at reasonable
intervals during the year.
(a) In our opinion, the frequency of such verification is reasonable
having regard to the size of the Company and the nature of its
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of stocks followed
by the Management are reasonable and adequate in relation to the size
of the company and the nature of its business.
(c) As explained to us there were no material discrepancies noticed on
physical verification of the stocks of raw materials , stores and
spares having regard to the size of the operations of the company and
the same is properly dealt with in the books of account.
(d) The valuation of stocks is fair and proper and is in accordance
with the normally accepted accounting principles and is on the same
basis as in the preceding year.
3. (a) The company has taken rent deposit from M/s. Mailam India
Limited (Unlisted Public Limited Company) a sum of Rs.
2,73,00,869/-(for the year 31.03.2011) a company listed in the register
maintained under Section 301 of the Companies Act, 1956. This deposit
is interest free. A lease agreement has been executed.
In our opinion the terms and conditions of the aforesaid deposit are
not prima facie prejudicial to the interest of the Company.
(b) The debts due by M/s. Pond/cherry Extract/on Inds. P. Ltd., for a
sum of Rs. 9,51,152/-, a company under the same management listed in
the register maintained under section 301 of the Companies under the
same management as defined under sub-section (1B) of Section 370 of the
Companies Act, 1956.
In our opinion and as per information and representation made to us the
aforesaid debts are not prejudicial to the interest of the Company.
4. 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 stores, raw materials including
components, plant and machinery, equipment and other assets and for the
sale of goods. We have not come across any continuing failure to
correct major weakness in internal control system.
5. According to the information and explanations given to us, the
transaction of purchase of stores, raw materials, sale of goods and
services made in pursuance of contracts or agreements entered in the
Registers maintained under section 301 and aggregating to Rs.5,00,000/-
or more during the year in respect of each party have been made at
prices which are reasonable having regard to prevailing market prices
for stores, raw materials or services or the prices at which
transactions for similar goods or services have been made with other
6. The Company has not accepted deposits from the public. According to
information and explanations given to us, no order under the aforesaid
sections has been passed by the Company law Board.
7. The Company has an Internal Audit system which in our opinion is
commensurate with the size and nature of its business.
8. The company is regular in paying the provident fund dues to the
9. According to information and explanation given to us no undisputed
amounts payable in respect of Income Tax, Wealth Tax, Sales Tax,
Customs Duty and Excise Duty were outstanding as on 31st March,
2011 for a period of more than six months from the date they became
10. The Company has accumulated loss of Rs.606.30 Lakhs and
more than 50% of net worth of the company as at the end of the
financial year. The Company has not incurred any cash loss during
the financial year and there was no cash loss in the immediately
11. According to the records of the Company examined by us and the
information and explanations given to us by the management, the
Company has not defaulted in repayment of dues to any financial
institution or Bank as at the Balance Sheet date.
12. Based on our examination and 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.
13. The Company is not a Chit Fund/Nidhi/Mutual Benefit Fund/ Society.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments.
15. In our opinion and according to the information and explanations given
to us, the term loans have been applied for the purposes for which
they have been obtained.
16. On the basis of our examination of the Balance Sheet of the Company
and according to the explanations given to us, in our opinion, funds
raised on short term basis have not been used for long term
investment and vice versa.
17. The Company has not allotted any shares on preferential basis to
parties and companies covered in the register maintained under
section 301 of the Companies Act, 1956.
18. The Company has not issued any secured debentures during the
19. The Company has not raised any money by issue of shares to the
public during the year.
20. During the course of examination of the books and records of the
Company carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance
of fraud on or by the Company, noticed or reported during the year
nor we have been informed of such case by the management.
For M/S. CNGSN & ASSOCIATES,
Date :30th May, 2011