1) We have audited the attached Balance Sheet of Kriti Industries
(India) Limited as at 31st March, 2012 and also the Statement of Profit
and Loss and the Cash Flow statement 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.
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 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) Further to our comments in Annexure referred to above, we report
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 law have been
kept by the Company so far as appears from our examination of such
c) The Balance Sheet, 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 Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956.
e) On the basis of the 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.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with significant
accounting policies and other notes thereon, 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) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012. ii) In the case of Statement of Profit
and Loss, of the profit for the year ended on that date, and iii) In
the case of Cash Flow Statement, of the cash flows for the year ended
on that date
4. As required by the Companies (Auditor''s Report) Order, 2003 as
amended by 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 and according to information &
explanation given to us on our enquiries and on the basis of such
checks we considered appropriate, we further state that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. (b) The Company has physically verified certain assets during
the year in accordance with a programme of verification, which in our
opinion provides for physical verification of the fixed assets at
reasonable intervals. According to the information and explanations
given to us no material discrepancies were noticed on such
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the company during the year. (ii) (a) As explained to us,
inventories were physically verified during the year by the management
at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
(iii) (a) Company has granted unsecured loans to 1 party, covered in
the register maintained U/S 301 of the Companies Act, 1956. Outstanding
of loan given at the year end Rs.90 lacs and maximum outstanding during
the year 668.25 lacs.
(b) Rate of interest and other terms and conditions of loan given are
not prima-facie prejudicial to the interest of company.
(c) In our opinion receipt of principal and interest is regular as
(d) In our opinion there is no overdue of interest or principal.
(e) Company has taken unsecured loan from 2 parties covered in the
register maintained U/S 301 of the Companies Act, 1956 amount involved
Nil, maximum Outstanding during the year 941.67 lacs .
(f) Rate of interest and other terms and conditions of loan taken are
not prima-facie prejudicial to the interest of the company.
(g) Payment of principal and interest is regular as stipulated.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 that need to be
entered into the register maintained under that Section, have been so
(b) According to the information and explanations given to us, there
are transaction for purchase of DEPB Licenses etc, in excess of Rs.5
lacs in respect of each party. There is no similar transaction
available for comparison and therefore reasonableness of price/value of
transaction could not be ascertained. However there are no other
transaction for sale/purchase of services etc.
vi) The Company has not accepted any deposits from
the public within the meaning of Sections 58A and 58AA of the
Companies Act, 1956 and the rules framed there under and therefore
clause is not applicable to the company.
vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
viii) The Company is not required to maintain cost records in terms of
Sec 209(1) (d) of the Companies Act, 1956.
ix) (a) According to the information and explanation given to us and
the records of the Company examined by us, in our opinion, the Company
has been generally regular in depositing 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 any other statutory dues as applicable with
the appropriate authorities during the year.
(b) According to the records of the Company, the disputed dues in
respect of Sales Tax, Entry Tax and Central Excise Tax are as under:
S.no. Nature of dues Related Period Amount
1 Central Sales Tax 2004-05 1836995
2 Central Sales Tax 2005-06 7238189
3 Central Sales Tax 2006-07 1335795
4 VAT Tax 2007-08 3947024
5 Entry Tax 2007-08 1808843
6 Entry Tax 2007-08 425618
7 Central Excise Tax 2007-08 947051
8 Central Sales Tax 2008-09 114553
9 Central Excise Tax 2010-11 2662714
10 VAT Tax 2011-12 118750
11 Entry Tax 2011-12 23750
S.no. Forum where dispute is pending
1 High Court
2 High Court
3 High Court
4 Appellate Board BHOPAL
5 Appellate Board BHOPAL
6 Appellate Board BHOPAL
7 Deputy commissioner
8 Appellate Board BHOPAL
9 Comm. Appeal(1), Indore
10 Deputy commissioner
11 Deputy commissioner
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses during the current and the
immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanation given by the management, we are of the
opinion that the company has not defaulted in the repayment of dues to
financial institutions, banks or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not given any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
(xiv) In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
(xv) Company has not given any guarantees for loans taken by others
from banks or institutions, and therefore commenting over terms and
conditions does not arise.
(xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
Company were, prima-facie, applied by the Company for the purposes for
which the loans were obtained.
(xvii) According to the cash flow statement and other records examined
by us and the information and explanations given to us, on an overall
basis, funds raised on short term basis have, prima-facie, not been
used during the year for long term investment.
(xviii) The Company has not made preferential allotment of shares to
the parties and companies covered under section 301 of the Companies
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money by public issue during the
year, and therefore question of end use does not arise. (xxi) To the
best of our knowledge and belief and according to the information and
explanations given to us, no fraud on or by the company was noticed or
detected during the year.
For R.D Asawa & Co.
PLACE : Indore
DATED : 26th May, 2012