1. We have audited the attached Balance Sheet of MANGALAM DRUGS &
ORGANICS LIMITED as at 31st March, 2011, 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 standard
generally accepted in India. These Standard require that we plan and
perform the audit to obtain reasonable assurance 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 our opinion.
3. The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement comply with the Accounting Standards referred to in Section
211(3C) of the Companies Act, 1956.
4. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
5. In our opinion, proper books of accounts as required by law have
been kept by the company so far as appears from our examination of
books and records.
6. The Company has received written representation from the directors
as on 31st March, 2011 and on the basis of those representation, we
report that none of the director is disqualified from being appointed
as director under Section 274 (1)(g) of the Companies Act, 1956.
7. The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement are in agreement with the books of Account.
8. In our opinion and to the best of our information and according to
the explanations given to us, the Balance Sheet, the Profit and Loss
Account and the Cash Flow Statement read together with notes thereon
give the information required by the Companies Act, 1956 in the manner
so required and give true and fair views :
a) In so far as it relates to the Balance Sheet, of the state of
affairs of the Company as at 31st March, 2011
b) In so far as it relates to the Profit and Loss Account, of the
Profit of the Company for the year ended on that date.
c) In so far as it relates to the cash flow statement, of the cash
flows of the company for the year ended on that date.
Annexure to the Auditors report of the even date to the Members
i) (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) The fixed assets have been physically verified by the management
during the year. In our opinion, the frequency of verification of the
fixed assets by the management is reasonable having regard to the size
of the company and the nature of its asset. The discrepancies noticed
have been properly dealt with in the books of accounts.
(c) The asset disposed off during the year are not significant and
therefore do not affect the going concern assumptions.
ii) (a) The physical verification of inventory has been conducted at
reasonable intervals by management.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion the company has maintained proper records of
inventory. The discrepancies between physical stock and the book stock
were not material and have been properly dealt with in the books of
iii) As informed to us, during the year the company has not granted or
taken any loans, secured or unsecured to or from companies, firms or
other parties covered in the register maintained under section 301 of
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 with regard
to purchase of inventory, fixed assets and for sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control.
v) (a) Based on the audit procedures applied by us and according to the
information and explanation provided by the management, we are of the
opinion that the transaction that need to be entered into the register
maintained under section 301 of the Act have been properly entered in
the said register.
(b) In our opinion and according to the information and explanations
given to us, the transactions entered in the registers maintained under
section 301 and exceeding during the year by Rupees five lakh in
respect of each party have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi) The company has not accepted any deposits from the public.
vii) The internal audit function carried out during the year by a firm
of chartered accountant appointed by the company and the same is in our
opinion, is commensurate with its size and nature of its business.
viii) The Company is maintaining cost records as prescribed by Central
Government under section 209(1)(d) of the Companies Act 1956 for the
ix) a) According to the information and explanation given to us the
company is generally regular in depositing undisputed statutory dues
including Provident Funds, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, cess and any other statutory dues
wherever applicable with appropriate authorities. There is no
outstanding dues for a period of more than six months from the date
they become payable.
b) The following are the disputed dues which have not been deposited :
Nature of Dues Amount Forum where dispute is Pending
(Rs. In Lacs)
1) Excise Duty &
a) 2004 – 05 5.00 CESTAT, Ahmedabad
b) 2005 – 06 30.17 Commissioner (Appeals)
c) 2006 – 07 47.78 Commissioner (Appeals)
d) 2007 – 08 39.79 Commissioner (Appeals)
e) 2008 – 09 17.72 Commissioner (Appeals)
f) 2009 – 10 8.09 Commissioner (Appeals)
g) 2010 – 11 5.78 Commissioner (Appeals)
2) Income Tax
a) 2000 – 01 22.68 Income Tax Appellant Tribunal
b) 2001 – 02 57.94 Income Tax Appellant Tribunal
c) 2002 – 03 00.86 Income Tax Appellant Tribunal
d) 2003 – 04 00.88 Income Tax Appellant Tribunal
e) 2004 – 05 22.09 Income Tax Appellant Tribunal
f) 2005 – 06 1.36 Commissioner of Income
x) The company neither has accumulated losses at the end of the
financial year nor has incurred cash losses during the year and in the
immediately year preceding.
xi) Based on our audit procedures and on the information and
explanation given by the management, the company has not defaulted in
repayment of dues to any financial institution or bank or debenture
xii) Based on our examination and according to the information and
explanations given to us, the company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiii) The company is not a chit/nidhi/mutual benefit fund/society and
therefore clause xiii of the order is not applicable.
xiv) The company is not dealing or trading in shares, securities,
debentures and other investment.
xv) On the basis of the information and explanation given to us the
company has given corporate guarantee for loans taken by others from
banks, the terms and conditions thereof are not prima-facie prejudicial
to the interest of the Company.
xvi) In our opinion, the term loans were applied for the purpose for
which they were raised.
xvii) On the basis of our examination of the books of accounts and the
information and explanation given to us, in our opinion, the funds
raised on short-term basis have not been used for long term investment.
xviii) During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the Register
maintained under section 301 of the Act.
xix) The company did not have any outstanding debentures during the
xx) Based on the audit procedures performed and information and
explanation given to us by the management, we report that no fraud on
or by the Company has been noticed or reported during the course of our
( RAKESH K. MILWANI )
PROPRIETOR: MILWANI ASSOCIATES
Firm Registration No. 106405W
Date : 30.05.2011