We have audited the attached Balance Sheet of MARGO FINANCE LIMITED as
at March 31, 2011, the Profit & Loss Account and the Cash Flow
Statement for the year ended on that date, which we have signed under
reference to this report. These financial statements are the
responsibility of the management of the Company. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. These 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 amount and
disclosure 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
As required by the Companies (Auditors'' Report) Order, 2003 issued by
the Company Law Board in terms of Section 227(4A) of the Companies Act,
1956, we enclose in the annexure a statement on the matters specified
in the said order.
Further to our comments in annexure referred to in paragraph 1 above :
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
the said books.
iii) The Balance Sheet, Cash Flow Statement and the Profit & Loss
Account referred to in this report are in agreement with the books of
iv) In our opinion the Balance Sheet, Cash Flow Statement and the
Profit & Loss Account comply with the Accounting Standards referred to
in sub-section (3C) of Section 211 of the Companies Act, 1956.
v) In our opinion, and based on information and explanations given to
us none of the directors are disqualified as on 31st March, 2011 from
being appointed as director in terms of clause (g) of sub-section (1)
of Section 274 of the Companies Act, 1956.
vi) 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 in Schedule 13, give the information required by the Companies
Act, 1956 in the manner so required and give a true and fair view :
a) In the case of Balance Sheet, of the State of affairs of the Company
as at 31st March, 2011.
b) In the case of Profit & Loss Account, of the profit of the Company
for the year ended on that date.
c) In the case of Cash Flow Statement of cash flows for the year ended
on that date.
Annexure referred to in paragraph 1 of the Auditors'' Report on the
Accounts for the year ended 31st March, 2011.
(i) (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
(b) As explained to us, all the fixed assets have been physically
verified by the management according to a regular program, which, in
our opinion, is reasonable having regard to the size of the company and
the nature of its assets. No material discrepancies with respect to
book records were noticed on such verification.
(ii) There is no inventory except the stocks under finance agreement,
therefore the Clause No. (ii) (a), (b) and (c) of the order are not
applicable to the company.
(iii) The company has not received unsecured loans from companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956, however the company has granted
unsecured loans to companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956,
details of which are furnished hereunder:
a) Following are the particulars of unsecured loans granted by the
S. Name of the Party Amount Year end Maximum Balance
No. (Rs. In Lacs) (Rs. In Lacs) (Rs. In Lacs)
1. Rini Investment
& Finance Pvt. Ltd. 2.30 0.70 1.50
2. Skyrise Properties
Private Limited Nil 127.56* 127.56*
* Including Interest
In our opinion, rate of interest and other terms and conditions on
which the loans have been received and granted are not prima facie
prejudicial to the interest of the company.
Parties to whom loans have been granted have repaid the principal
amount as per stipulation, wherever applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of fixed assets. During the course of
our audit, no major weakness has been noticed in the internal controls.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered in the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 and
exceeding the value of rupees five lacs in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
(vi) In our opinion and according to the information given to us, 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
Companies (Acceptance of Deposit) Rules, 1975.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) The provisions of Section 209(1 )(d) of the Companies Act, 1956
regarding maintenance of cost records are not applicable to the
(ix) (a) According to the records of the company, the company is
regular in depositing with the appropriate authorities undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Wealth Tax and
other statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, were outstanding
as at 31.03.2011 for a period of more than six months from the date
they became payable.
(x) The company does not have accumulated losses at the end of the
financial year. The company has not incurred cash losses during the
current financial year and in the immediately preceding financial year.
(xi) Based on our examination of documents and records maintained by
the Company the Company has not defaulted in payment of dues to Bank.
(xii) Based on our examination of documents and records maintained by
the company, we are of the opinion that since the company has not
granted any loan and advance on the basis of security by way of pledge
of shares, debentures and other securities, it is not required to
maintain records in respect thereof.
(xiii) In our opinion, the company is neither a chit fund nor nidhi /
mutual benefit fund / society and hence clause 4 (xiii) of the order is
not applicable to the company.
(xiv) Based on our examination of records we are of the opinion that
the company has maintained proper records of the transactions and
contracts and timely entries have been made therein. The shares,
securities, debentures and other securities have been held by the
company in it''s own name.
(xv) Based on our examination of the records, we are of the opinion
that the company has not given guarantee for loans taken by others from
banks or financial institutions.
(xvi) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that the no funds raised on short-term basis have been used for
long-term investments. No long-term funds have been used to finance
short-term assets except permanent working capital.
(xvii) 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 Companies Act, 1956.
(xviii) During the year the company had not issued any debentures.
(xix) During the year no money was raised by public issue.
(xx) According to the information and explanations given to us, we
report no fraud on or by the company has been noticed or reported
during the course of our audit.
For AVK & ASSOCIATES
Firm Registration No. 002638N
Place : Mumbai
Dated : 17th May, 2011