1. We have audited the attached Balance Sheet of MADHUR INDUSTRIES
LTD., as at 31 March 2012/ and the statement of Profit and Loss Account
and also the cash flow statement for the year ended on the date annexed
thereto, in which are incorporated accounts of the Branch audited by
the Branch Auditor whose reports have been considered in preparing this
report. These financial statements are the I 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. These standards require that we plan and
perform the aiidit to obtain reasonable assurance aboutr whether the
financial statements are free of material misstatements. 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by Companies (Auditor''s Report) Order, 2003 and as
amended by the Companies (Auditor''s Report)(Amendment) Order, 2004
issued by Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of said order,
4. Further to our comments in the Annexure xeferred to above, we report
a. We have obtained all the mformation 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 appearsfrom om examination of those
books and proper returnsadequate for the purposes of our audithavebeen
received fromthe branch not visited by us;
c. The Reports on the accounts of Mumbai Branch audited by the branch
auditor has been forwarded to us & have been appropriately dealt with
while preparing our Report;
d. The Balance Sheet , the Profit and Loss Account and cash flow
statement dealt with by this report are in agreement with the books
e. In our opinion, the Balance Sheet ,Profit & Loss Account and cash
flow statement dealt with by this report comply with the i Accounting
Standards referred to in sub-section 3C of Section 211 of the Companies
Except Accounting Standard -15 on Retirement benefits as no provision
has been made for retkement benefits , The effect of the same can not
be quantified, to that extent loss for the year and balance of Profit &
Loss account and balance of current liabilities is understated.
f. On the basis of written representations received from the directors
as at 31 March, 2012 and taken on record by the Board of Directors and
in accordance with the information and explanations as made available,
the directors of the company do not have prima - facie
have any disqualification as at 31March, 2012 from being appointed
as a director in terms of clause (g) of sub-section (1) of section
274 of the Companies Act, 1956.
g. TheBankaccounts of the Company was frizzed by the CBI BS&FC, Mumbai
in the financial year 2001-02, therefore no provision has been made
for bank balance of Rs. 32,56,783, DD in Transit of Rs.32,372 ,
doubtful sundry debtors of Rs. 34.07 lacs & doubtful advance of Rs.
82J21 lacs exceeding six months . The Consequential effect of
this is not ascertainable.
h. Note in Schedule relating to non provision of interest on fixed
deposit (accepted in previous year u/s 58A) for the year ending on 3lst
March, 2012 and matured/encashed Fixed Deposits for which the* cheques
are issued frorn separate bank account (which is freezedCBI BS &FC,
Mumbai) but not cleared due to suspension of banking operation of
Madhavpura Mercantile Co, Op. Bank Ltd. Consquently the loss
and liability are understated to the extent.
1 Subject to the above ,In our opinion and to the best of our
information and according to the explanations given to us, the said
accounts, read in conjunction with the significant Accounting policies
(Note-25), Notes to Fmancial Statements (Notes 1-24) give the
information required by the Companies Act/1956, in the mariner
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 31 March, 2012.
ii In the case of the Profit and Loss Account, of the profit of the
Company for the period ended on that date.
iii In the case of Cash Flow Statement, of the Cash Flow of the Company
for the year ended on that date.
Date:- 28/05/2012 For Purushottam Khandelwal & Co.
Place: - Ahmedabad Chartered Accountants
ANNEXURE TO THE AUDrrdRS''REPORT
(Referred to in paragraph 3 of our report of even date)
1. (a) As per the information and explanation given to us, the Company
has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) As per the information and explanation given to us, the assets have
been physically verified by the management during the regular interval.
However the details regarding the same are not available for our
(c) The Company has not disposed of any substantial part of its fixed
assets during the year as would affect its going concern status.
2. (a) As per the information and explanations given to us , the
inventories has been psically verified during the year by the
(b) In our opinion and according to the mfprrnation and explanation
given to us, the procedure of physical verification of inventories
followed by the management is reasonable and adequate in relation to me
size of the company and me nature of its business.
(c) The company has maintained proper records of inventories. As
explained to us, there were no material discrepancies that have been
noticed on physical verification of inventories as compared to books
3. (a) As per the information and explanations given to us, the
Company has granted unsecured loans to six parties covered in the
register maintained u/s 301 of the Companies Act, 1956.
The maximum balance outstanding during the year was
(b) In our opinion, the rate of interest and other terms and
conditions of such loan are not, prime facie, prejudicial to the
interest of the Company.
(c): The company is neither regular in making recovery of the
principal amount nor its interest.
(d) There is overdue amount of loans granted exceeding one
lacs in case of three parties and company is in process of
recovery of the amount to the. Partiesi covered in the register
maintamed under section 301 of the Companies Act, 1956.
(e) As per the information and explanations given to us, the Company
has taken unsecured loans from three parties covered in the Register
maintained u/s. 301 of the Companies Act, 1956. The maximum
balance outstanding during the year was Rs. 33,43,494
(f) The terms and conditions of the above loans are prima facie not
prejudicial to me interest of the company.
(g) The company is neither regular in making repayment of the principal
amount nor its interest
4. In our opinion and according to information and explanation given
to us; there is adequate internal control system commensurate with
the size of the Company and the nature of its business, for the
purchase of inventory and f fixed assets, and for the sale of goods and
services. Further on the basis of J our examination of 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.
5. In our opinion and according to the information and explanations
given to us, there is no transaction made m pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the companies act 1956 exceedingthe value ofRupees five lakhs in
respect of any party during the Year.
6. In our opinion and according to the information and explanations
given to us, the company has not accepted/renewed the deposits
falling within preview of Section 58 A / 58 A A of the Companies Act,
1956 during the financial year. However the honorable Company Law
Board (CLB) western region bench fvtfumbai, by its order dated 29th
April,2002 in company petition no 58AA/58A(9)/CLB/WR/2002/494 has
order that there is a default on the part of the company to repay the
small depositors their deposits as per terms and condition of
acceptance of deposits. However considering the submission made by
the company that the company is already having a separate Bank
account for accepting and repaying fixed deposits with Madhavpura
Mercantile Co. Op. Banjk Ltd. thecompany and has tiansferred
fund s to me said amount (Which is frizzed by CBIBS & FC Murhbai)
for repayment of S depositors and since the clearing of the Madhavpura
Mercantile Co. Op. Bank Ltd., the banker of the company has been
suspended w.e.f. 13th March,2001 the company is unable to repay to
depositors whose FD''s stand matured & for repayment of thepremature
FD''s Hon''ble Company Law Board has given directions to the company as
contained in order. One of prime direction of the order is that
The Company shall make repayment of deposits along with interest at the
contracted rate till the date of payment to depositors whose deposits
become matured and also to depositors who have requested the company
for repayment of their premature fixed deposits within 30 days of start
of clearing of Madhavpura Mercantile Co. Op. Bank Ltd. However
clearance of Bank already has been started but the above bank account
has been freezed by CBI BS & FC Mumbaihence company could not paid
7. In our opinion and according to the inforrnation and explanation
given to us, the Company has no internal audit system commensurate with
size and nature of its business.
8. In our opinion and according to the information and explanations
given to us, the central government has not prescribed maintenance of
cost records under section 209(1) (d) of the Companies Act, 1956.
9. (a)According to the information given to us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including income tax, sales tax, excise duty, cess and
other material statutory dues applicable to it. And the Company had no
arrears of such outstanding statutory dues as at 31st March, 2012 for a
period more than six months; from the date they became payable .
, (b) According to the information and explanation given to us, and
details produced for verification, there are dues of Income tax of Rs.
6,74,762which have not been deposited as the said dispute is pending
before CIT (Appeal).
10. In our opinion and according to the information and explanations
given to us, the company has not incurred any cash losses during the
financial year under review. Moreover, the company has accumulated
losses of Rs. 3,18,41,232 at the end of the financial year.
11. According to the records of the company examined by us and on the
basis of information and explanations given to us, the company has
issued cheques of Rs. 2,10,07,851/- from its current account for
repayment of Term Loaii to Madhavpura Mercantile Co. Op. Bank Ltd by
way of transfer of funds. We are unable to express our opinion because
necessary documents are not available by bank to us whether same have
been credited or not.
12. The company has not granted any loans and advances on the basis of
securities by way pledge of shares, debentures and other securities.
13. In our opinion, the company is not a chit fund or a nidhi mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii)
of the Cornpanies (Auditor''s Report) Order, 2003 are not
applicable to the company.
14. According to the informationand explanation given to us, the
company is I not dealing or trading in shares, securities, Debentures
and other Securities.
15. In our opinion and according to the information and explanation
given to us, the company has not given any guarantee for loans taken
by others from banks and financial institutions during the year.
16. As per the Information made available to us, there are no Term
Loans taken by the Company.
17. In our opinion and according to the information and explanations
given to j I us, the Company has not used any funds raised on short
term basis for long term mveslment.
18. The Conipany has not made any preferential allotment during the
19. During the period covered by our audit report, the company has not
issued any debentures.
20. As the company has not raised money by making Public issue during
the Financial year.
21. As represented to us by the Management and based on our
examination of the books and records of the Company in accordance
with the generally accepted auditing practices in India, we have
neither come across any material fraud in or by the company noticed
or reported during the year nor we have been informed of any such
case by the management that causes the financial statements to be
For, Purushottam Khandelwal & Co.
Date : 28/05/2012