1. We have audited the attached Balance Sheet of Lanco Industries
Limited (the Company”) as at 31st March, 2011 and also the Proft and
Loss Account and the Cash Flow Statement for the year ended on that
date annexed thereto. 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.
2. We have 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 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 the management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (CARO)
(as amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956 and on the
basis of such examination of the books and records of the Company as we
considered appropriate and the information and explanations given to us
during the course of the audit, we enclose in the Annexure a statement
on the matters specifed in the paragraphs 4 and 5 of the said order.
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 purpose of our
audit;
b) in our opinion, proper books of accounts as required by law have
been kept by the Company so far as it appears from our examination of
those books;
c) the Balance Sheet, the Proft and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, the Proft and Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred in sub-section (3C) of Section 211 of the
Companies Act, 1956;
e) on the basis of written representations received from the Directors
of the Company as on 31st March, 2011 taken on record by the Board of
Directors, none of the Directors is disqualifed as on 31st March, 2011
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 together with the
Notes as per Schedule 17, 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, 2011;
ii) in the case of the Proft and Loss Account, of the proft of the
Company for the year ended on that date;
and iii) in the case of the Cash Flow Statement, of the cash fows of
the Company for the year ended on that date.
annexure to auditors report re: Lanco industries Limited
(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 fxed
assets.
b) As explained to us, the fxed assets have been physically verifed by
the management during the year as per a detailed program drawn for the
said purpose, which in our opinion is reasonable having regard to the
size of the Company and nature of its assets. No material discrepancies
were noticed on such physical verifcation.
c) The fxed assets disposed off during the year, in our opinion, do not
constitute as substantial part of the fxed assets of the Company and
such disposal, in our opinion, has not affected the going concern
status of the Company.
ii) a) As explained to us, the management has conducted physical
verifcation of inventories during the year, except the materials in
transit and the materials lying with third parties. In our opinion, the
frequency of the said verifcation is reasonable.
b) The procedures of physical verifcation of inventories followed by
the management were reasonable and adequate in relation to the size of
the Company and 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
verifcation.
iii) According to the information and explanations given to us, the
company has neither granted nor taken any loans, secured or unsecured
to / from companies, frms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
clauses (iii)(a) to (iii)(g) of paragraph 4 of CARO are not applicable.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventory, fxed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of the said areas.
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 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, there were no transactions made in pursuance of contracts
or arrangements referred to in v(a) above and exceeding the value of
Rupees fve lakhs with any such party.
vi) The company has not accepted any deposits from public covered under
Sections 58A, 58AA or any other relevant provisions of the Companies
Act, 1956 and Rules framed there under.
vii) In our opinion, the Companys internal audit system is
commensurate with its size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company relating to the products, where, pursuant to the Rules made by
the Central Government of India, the maintenance of cost records has
been prescribed under Section 209(1)(d) of the Companies Act, 1956 and
are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determining whether
they are accurate or complete.
ix) a) According to the information and explanations given to us and
the records of the Company examined by us, the Company is generally
regular in depositing the undisputed statutory dues including provident
fund, investor education and protection fund, employees state
insurance, income-tax, sales-tax, wealth-tax, service-tax, customs
duty, excise duty, cess and other material statutory dues as applicable
with the appropriate authorities and there were no undisputed dues
outstanding as at 31st March, 2011 for a period exceeding six months
from the date they became payable.
b) According to the information and explanations given to us, the
disputed dues of sales tax, income-tax, customs duty, wealth-tax,
excise duty, service-tax and cess, if any, that have not been deposited
on account of disputed matters pending before appropriate authorities
as at 31st March, 2011 are as follows:
amount
Sl. nature of period to which it forum where
the
name of the
Statute (rs. in
no. dues relates dispute is
pending
lakhs)
1. Central Sales
Tax Sales tax 308.85 2000-01 A.P. Sales Tax
Appellate Tribunal
Act, 1956 47.70 2005-06
2. APGST Act,
1957 -do- 67.52 2002-03 Sales Tax Appellate
Tribunal
3. Income tax
Act 1961 Income-tax 56.11 2003-04 A.P. High Court
3.65 2004-05 -do-
0.14 2006-07 Commissioner of
Income tax
(Appeals)
4. Central
Excise Act, Central
Excise 17.38 2005-06 Commissioner
(Appeals) 1944
Duty/
Interest
8.26 2007-08 CESTAT
x) The Company has no accumulated losses as at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institutions and banks or debenture holders.
xii) 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.
xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
beneft fund/society. Therefore, the provisions of clause (xiii) of
paragraph 4 of CARO are not applicable.
xiv) In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in shares,
securities, debentures and other investments. Therefore, the provisions
of clause (xiv) of paragraph 4 of the CARO are not applicable.
xv) According to the information and explanations given to us, the
Company has not given guarantees for loans taken by others from Banks
or Financial Institutions.
xvi) In our opinion and according to the information and explanations
given to us, on overall basis, the term loans have been applied for the
purposes for which they were obtained.
xvii) Based on the information and explanations given to us and on an
overall examination of the cash fow statement and the Balance Sheet of
the Company, in our opinion, the funds raised by the Company on short
term basis have prima facie not been used for long term investment.
xviii) The Company has not made any preferential allotment of shares
during the year.
xix) During the year, the Company has not made fresh issue of
debentures. Accordingly, clause (xix) of paragraph 4 of CARO is not
applicable.
xx) The Company has not raised any money through a public issue during
the year. Accordingly, the provisions of clause (xx) of paragraph 4 of
the CARO are not applicable.
xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no fraud on the
Company has been noticed or reported during the year.
For K.r. Bapuji & co.
Chartered Accountants
Firm Registration No. 000395S
Dheeraj agarwal
Place: Chennai Partner
Date: 7th May, 2011 Membership No. 219788
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