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Marvel Industries | Auditor's Report > Packaging > Auditor's Report from Marvel Industries - BSE: 532073, NSE: N.A
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Marvel Industries
BSE: 532073|ISIN: INE440D01014|SECTOR: Packaging
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Mar 09
Auditor's Report (Marvel Industries) Year End : Mar '10
1.  We have audited the attached Balance Sheet of Marvel Industries
 Limited, (the 'Company') as at March 31, 2010, and also the Profit and
 Loss Account and the Cash Flow Statement for the year ended on that
 date annexed thereto (collectively referred as the financial
 statements'). 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 the 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 our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (the 'Order) (as amended), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the 'Act'), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. We report that

(a) No provision is made for the amount of cumulative dividend of Rs.478.72 Lacs on overdue Preference Share Capital and interest payable on the same, the amount in respect of which is not determinable. Consequently, the Accumulated loss is lower by Rs.478.72 Lacs.

(b) No provision for interest payable aggregating to Rs.4.92 lacs on unsecured loan has been made in the current year and Rs.36.27 Lacs in the earlier years. Consequently, loss for the current year is lower by Rs.4.92 lacs and the balance of the Profit and Loss Account is lower by Rs.41.19 Lacs.

(c) The Company is incurring losses since 1997-98 and its net worth is completely eroded. In our opinion at the present bonqwings the operations of the company are not viable and the company would not be able to pay ail its liabilities. The company's application for revival scheme is pending with Hon. AAIFR for its approval (Refer Note No. B (8) of Schedule R and Company expects sanction of the revival scheme, hence the accounts are prepared on going concern basis.

5. Without qualifying our report, we draw attention to Note No. B (6) of Schedule R regarding revoking of settlement with Asset Reconstruction Company India Limited (ARCIL) and reinstatement of loans and overdue interest payable thereon.

6. Subject to our comments in paragraph 4 above and 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 purposes of our audit;

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 of those books;

c. The financial statements dealt with by this report are in agreement with the books of account;

d. In our opinion the financial statements dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956 and the Rules framed there under except for our comments in paragraph 4 above;

e. On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act;

f. In our opinion and to the best of our information and according to the explanations given to us, said accounts read together with significant accounting policies and other notes to accounts of schedule R 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, in the case of:

i) . the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

ii) the Profit and Loss Account, of the loss for the year ended on that date; and

iii) the Cash Flow Statement, of the cash flows for the year- ended on that date

Annexure to the Auditors' Report of even date to the members of Marvel Industries Limited, on the financial statements for the year ended March 31,2010

Based on the audit procedures performed for the purpose of reporting a true, and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

(i) (a) The Company has updated the record showing full particulars including quantitative details and situation of fixed assets, except for furniture and Fixtures, Electrical Installation and Equipments for which unit wise record of cost and location has not been maintained.

(b) Fixed assets have not been physically verified by the management during the year and we are therefore unable to comment on the discrepancies, if any, which could have arisen on such verification. In our opinion, the frequency of verification of the fixed assets is also not reasonable having regard to the size of the Company and nature of its assets.

(c) In our opinion, a substantial part of fixed assets has not been disposed off during the year.

(ii) (a) The management has not conducted physical verification of inventory during the period under audit.

(b) Since the management has not conducted physical verification of Inventories, we are unable to comment on the reasonableness of the procedures.

(c) Since physical verification of inventory was not carried out during the year, we are unable to comment on the maintenance of proper records and the discrepancies which could have arisen between physical stocka and books records.

(iii) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clauses 4(iii) (b) to (d) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clauses 4(iii) (f) and 4(iii) (g) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services.

(v) The Company has not entered into contracts or arrangements referred to in section 301 of the Act. Accordingly, the provisions of clause 4(v) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(vi) The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(vii) The Company did not have an internal audit system during the year.

(viii) To the best of our knowledge and belief, the Central Government has not prescribed maintenance of cost records under Clause (d) of sub-section (1) of section 209 of the Act, in respect of Company's products. Accordingly, the provisions of clause 4(viii) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(ix) (a) The Company is 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, custom duty, excise duty, cess and other material statutory dues, as applicable, with the appropriate authorities. Further, undisputed amounts payable in respect thereof were outstanding at the year end for a period of more than six months from the date they become payable are as follows.

Undisputed Statutory dues Amount (in lacs)

Professional Tax 0.54

Gram Panchayat Tax 5.03

(b) There are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute.

(x) In our opinion, the Company's accumulated loss at the end of the financial year are more than fifty percent of its net worth and has incurred cash losses during the year as well as preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has been declared a sick industrial undertaking by the Hon'ble Board for Industrial and Financial Reconstruction under section 17 of Sick Industrial Companies (Special Provisions) Act, 1985. The detail of overdue outstanding (including interest) of Banks, Financial Institutions as on March 31,2010 is given here under:

Lender Amount of Default (incl. interest) (Rs. In Lacs)

The State Industrial & Investment Corporation Of Maharashtra Limited 3018.61

Kotak Mahindra Bank Limited * 5465.00

Assets Reconstruction Company India Ltd 5200.85

* The liabilities shown under bank overdraft belong originally to Corporation Bank and The South Indian Bank. The said banks have assigned the debts to Kotak Mahindra Bank. However the Company has not recognized the said assignment and is contesting against the said assignment in various Courts including Honourable Supreme Court of India.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Accordingly, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(xiv) The company is not an investment company/Accordingly, the provisions of clause 4(xv) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(xv) The Company has not given any guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(xvi) According to the information and explanations given to us, the company has not raised any term loans during the year under audit

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx)

of the Companies (Auditor's Report) Order 2003 (as amended) are not applicable. (xxi) No fraud on or by the Company has been noticed or reported during the year covered by our audit.

For NGS & Co.

Chartered Accountants

Firm Registration No. 119850W

Sanjay Dosi

Partner

Membership No.36024

Place : Mumbai Date: 31.05.2010

Source : Dion Global Solutions Limited
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