1. We have audited the attached Balance Sheet of KOKUYO CAMLIN LIMITED
as at 31st March, 2012 and the statement of Profit and Loss and Cash
Flow Statement for the year ended on that date and a summary of
significant accounting policies and other explanatory information.
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 the 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 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, issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, and on the basis of such checks of the books and records of
the Company as we considered appropriate and according to the
information and explanations given to us, we enclose in the Annexure, a
statement on the matters specified in paragraph 4 & 5 of the said
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
(b) In our opinion, proper books of account as required by the law have
been kept by the Company so far as appears from our examination of
these books and proper returns adequate for the purposes of our
audit have been received from branches not visited by us.
(c) The Balance Sheet, the statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
(d) In our opinion, the said Balance Sheet, the statement of Profit
Loss and Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of Section 211 of the Companies Act,
(e) On the basis of written representations received from the directors
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.
(f) In our opinion, and to the best of our information and according to
the explanations given to us, they 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:
(i) i n the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(ii) in the case of the statement of Profit and Loss, of the Profit for
the year ended on that date; and
(iii) i n the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
(i) Fixed Assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management
during the year. No material discrepancies between the book records and
physical inventory are noticed.
(c) The Company has not disposed off substantial part of its fixed
assets during the year.
(a) Physical verification of inventory was conducted by the Management
at reasonable intervals during the year. In respect of materials sent
for job work and finished goods with third parties, certificates of
closing stock have been obtained from third parties in respect of
substantial portion of the stocks held.
(b) I n 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 the nature of its business.
(c) In our opinion, the Company is maintaining proper records of
inventory. Having regard to the size of the operations of the Company
and the nature of stocks held, the discrepancies noticed on
verification between physical stocks and book records were not material
and have been properly dealt with in the books of accounts.
(iii) Loans and Advances granted / taken from certain entities:
Loans, secured or unsecured, granted or taken by the company to/from
companies, firms or other parties are covered in the Register
maintained under Section 301 of the Companies Act, 1956:
The Company has neither granted nor taken any loans, secured or
unsecured, to or from such entities.
(iv) Internal Control System:
In our opinion and according to the information and explanations given
to us, having regard to the explanation that some of the items are of a
special nature and their prices cannot be compared with alternate
quotations, there are adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchases of inventory, fixed asset and with regard to the sale of
goods and services. During the course of our audit, 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 weaknesses in the internal control system.
(v) Contracts or arrangement referred to in this Section 301 of the
(a) Based on audit procedures applied by us, to the best of our
knowledge and belief and according to the information and explanations
given to us, we are of the opinion that the contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, and having regard to the fact that some of the items
purchased are of special nature, and suitable alternative sources do
not exist for obtaining comparative quotations, the transactions for
purchase/ sale of goods and materials, 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 Rs 5,00,000/- in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices as available with
the Company for such goods and materials, or the prices at which such
transactions for similar goods and materials were made with other
(vi) Public Deposits:
Company has complied with the provisions of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the Companies
(Acceptance of Deposit) Rules 1975, with regard to the deposits
accepted from the public. We are further informed that no order has
been passed by the Company Law Board or National Company Law Tribunal
or Reserve Bank of India or any Court or any other Tribunal intimating
the contravention of said provisions.
(vii) Internal Audit System:
I n our opinion, the Company has an internal audit system commensurate
with the size and nature of its business.
(viii) Cost records:
We have broadly reviewed the books of account relating to materials,
labour and other items of cost maintained by the Company pursuant to
the Rules 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.
(ix) Statutory Dues:
(a) Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees State Insurance,
Income tax, VAT, Wealth tax, Service tax, Customs duty, Excise duty,
Cess and other material statutory dues applicable to it.
(b) No undisputed amounts payable in respect of Income Tax, VAT, Wealth
Tax, Service Tax, Customs duty, Excise duty and Cess are in arrears, as
on 31st March 2012 for a period of more than six months from the date
they became payable.
(c) There are no dues of Income Tax, Wealth Tax, Service Tax, Custom
duty, Excise duty and Cess which have not been deposited on account of
dispute except in respect of (i) excise duty of Rs 41.10 lacs under the
Central Excise Act, 1956 out of which dispute in respect of Rs 20.63
lacs is pending before Bombay High Court, Rs 18.14 lacs is pending
before the Central Excise and Service Tax Tribunal and Rs 2.33 lacs with
(ii) dispute in respect of Service Tax of Rs 1.89 lacs under the Finance
Act, 1994 which is pending before the Assistant Commissioner, (iii)
dispute in respect of Income Tax of Rs 112.61 lacs under the Income Tax
Act, 1961 pending before the Commissioner of Income Tax (Appeals),
(iv) dispute in respect of Sales Tax of Rs 105.38 lacs under the State
Sales Tax Laws and Rs 37.03 lacs under the Central Sales Tax Act, of
which the dues involved in the proceedings pending before the Dy.
Commissioner (Appeals) are Rs 142.18 lacs and those before the Central
Sales Tax Tribunal are Rs 0.23 lacs .
(x) Accumulated Losses:
The Company does not have accumulated losses as at the end of the year.
Company has not incurred cash loss during the financial year covered by
our audit and in the immediately preceding financial year.
(xi) Dues to Financial Institutions, Banks and Debenture holders:
Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to Financial
Institutions and Banks.
(xii) Security for Loans & Advances Granted:
Company has not granted any loans or advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) Special Statute:
The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/society are not applicable to the
(xiv) Dealings/Trading in Shares, Securities, Debentures and other
The Company is not dealing in or trading in shares, securities,
debentures and other investments.
(xv) Guarantees given:
According to the information and explanation given to us, the Company
has given a corporate guarantee of Rs 150 lacs in respect of the loan
availed by its associate M/s. ColArt Camlin Canvas Pvt. Ltd. which, in
our opinion, prima facie, is not prejudicial to the interest of the
(xvi) Term Loans:
Term loans availed by the Company have been applied by the Company for
the purposes for which they are obtained.
(xvii) Utilization of Funds:
According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we report that
funds raised on short-term basis have not been used for long-term
(xviii) Preferential Allotment of Shares:
During the year, the Company has not made any preferential allotment of
shares to the parties and companies covered in the register maintained
under Section 301 of the Companies Act, 1956.
(xix) Security for Debentures Issued:
The Company has not issued any Debentures.
(xx) Public Issue of Equity Shares:
During the year, the Company has not raised any money by public issue
of Equity Shares.
(xxi) Frauds Noticed:
During the course of our 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 have we been
informed of such case by the management.
For B. K. KHARE & COMPANY
Firm Registration No 105102W
(M. No. 30388)
Place : Mumbai
Dated : 10th May, 2012