1. We have audited the attached Balance Sheet of Madhusudan Industries
Limited as at 31st March 2012, the Profit and Loss Account 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. As required by the Companies (Auditor''s Report) Order, 2003, issued
by the Central Government of India in terms of section 227 (4A) of the
Companies Act, 1956, we annex hereto a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to 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
(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 with
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
(d) In our opinion, the Balance Sheet, the Profit and Loss Account and
the 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 representation 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 the notes
thereon, give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in the conformity
with the accounting principles generally accepted in India :
(i) in the case of Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(ii) in the case of Profit and Loss Account, of the profit of the
Company for the year on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Annexure 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 its fixed
assets on the basis of available information, other than furniture and
(b) As explained to us, the fixed assets have been physically verified
by the management during the year in a phase periodical Manner, which
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. No material discrepancies between the
book records and the physical inventory have been noticed in respect of
the assets physically verified.
(c) In our opinion, there was no substantial disposal of fixed assets
during the year which would affect the going concern of the company.
ii. In respect of inventories:
(a) As explained to us, inventories have been physically verified by
the management at reasonable regular intervals during the year.
(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 are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on such
iii. In respect of loans, secured or unsecured, granted or taken by the
Company to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies act. 1956:
a. The Company had taken unsecured loan of Rs. 45 lacs from a company
covered in the register maintained under section 301 of the Act. The
maximum amount involved during the year was Rs. 45 lacs and at the year
end balance of loan taken from such a company was Rs. 45 lacs.
b. In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions are
not prima facie prejudicial to the interest of the Company.
c. The payment of principal amounts and interest have been regular as
d. There were no overdue amounts remaining outstanding as at the year
e. The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Act.
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 the nature of its business with regard
to purchase of inventory, Sale of goods, fixed assets and scrap of
fixed assets. During the course of our audit, no major weakness has
been noticed in the internal control system in respect of these areas.
v. (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act transactions that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, there are no transactions of purchase and sale exceeding
the value of Rupees five lacs entered into during the financial year.
vi. In respect of the deposits, in our opinion and accordingly to the
information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the companies Act, 1956 and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any court or any other Tribunal.
vii. In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
viii. According to the information and explanations given to us, The
Central Government has not prescribed the maintenance of cost records
for the Company under section 209(1 )(d) of the Companies Act, 1956, in
respect of business activities of the Company in previous year.
ix. (a) The company has generally been regular in depositing undisputed
dues of Provident Fund, Investors Education and Protection Fund,
Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom
Duty, Excise Duty, Cess and other material statutory dues with the
(b) There are no undisputed amounts outstanding as at 31st March, 2012
for a period of morethan six months from the date of becoming payable.
(c ) Dues relating to items as listed below which have not been
deposited as on 31st March, 2012 on account of disputes with related
Sl. Name of Nature of Forum where Amount
No. the Statute the Dues dispute is (Rs.) In
1. Gujarat Sales Sales-tax Gujarat Sales 139.34
Tax Act Tax Tribunal
2. Central Excise Central CESTAT 97.76
Act Excise Duty
3. Income Tax Income Tax Commissioner 0.45
Act of Appeal
x. The Company has no accumulated losses at the end of the financial
year. The Company had not incurred cash loss in the immediately
preceding financial year.
xi. As per the books and records maintained by the company and
according to the information and explanations given to us, we are of
the opinion that the company has not defaulted in repayment of dues to
xii. According to the information and explanations given to us and
based on the documents and records produced, the Company has not
granted 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
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 (as amended) are not
applicable to the company.
xiv In our opinion, the Company is not dealing or trading in shares,
securities and other investments. Accordingly, the provisions of clause
4 (xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the company.
xv. According to the information and explanations given to us, the
Company has not given guarantee for loans taken by others from banks or
xvi. On the basis of the records examined by us and according to
information and explanations given to us, in our opinion, term loan
availed by the Company was, prima facie, applied by the company during
the year for the purpose for which the loan was obtained.
xvii. According to the information and explanations given to us and on
the basis of an overall examination of the balance sheet of the
company, we report that funds raised 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 to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956.
xix. The company did not have any outstanding debentures at the end of
xx. The Company has not raised any money by way of public issue during
xxi. Based upon the audit procedures performed and on the basis of
information and explanations given by the management, we report that no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For H. V. Vasa & Co.
Firm Registration No. 131054W
(Tushar H. Vasa)
Membership No. 16831
Place : Ahmedabad
Date : 30th May, 2012