We have audited the attached Balance Sheet of M/S MILK SPECIALITIES
LIMITED, as at 31st March, 2012 and the Profit & Loss Account for the
year ended on that date annexed. 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.
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 our opinion.
As required by the Companies (Auditor''s Report) Orefer. 2003, issued by
the 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 matter specified in paragraph 4 and 5 of the said Order.
Further to our comments on the annexure referred to above, we report
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 accounts required by law have been
kept by the Company so far as appears from our examinations of those
books (and proper returns adequate for the purpose of our audit have
;been received from the branches not visited us. The Branch Auditors
Report have been forwarded to us and have been appropriately dealt with
c) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account, (and with the
audited returns from the branches N.A.) ''
d) In our opinion the Balance Sheet and the Profit and Loss Account
dealt with by this report comply with the Accounting Standards referred
to in Section 211 (3C) of the Companies Act, 1956,
e) On the basis of written representations received from the Directors
as on 31March, 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 director under 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
explanations given to us, the said accounts 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;
1) In the case of Balance Sheet, of the state of Affairs of the Company
as at 31st March, 2012; and
2) In the case of the Profit and Loss Account, of the loss for the year
ended on that date;
3) In the case of cash flow statement of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDIT REPORT
Referred to in paragraph 3 of our report of even date
1. a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed assets. .
b) The fixed assets have been physically verified by the management at
reasonable intervakno. material discrepancies were noticed on such
c) No substantial part of the fixed assets have been disposed off
during the year. That is why it has not affected the going concern.
2. a) The inventory has been physical verified durintj the year by the
management. In our opinion, the frequency of verification is
b) The procedure of physical verification of inventories followed by
the management reasonable and adequate in relation to size of the
Company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies notified on physical verification between the physical
stocks and the books records were not material.
3. The Company has granted and also have taken loans secured or
unsecured to/from companies firms or other parties covered in the
register maintained u''s 301 of the Act.
a) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from/granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956 are not prima facie, prejudicial to the
interest of the Company.
b) The Company is regular in repaying the Principal amounts as
stipulated and has been regular in the paymentof interest. The parties
have repaid the principal amounts as stipulated and have been regularin
the paymentof interest.
c) There is no overdue amount of loans taken from or granted to
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business with regard to the purchases of inventory, fixed assets and
with regard to the saie of goods. During the course of our audit, we
have not observed any continuing failure to correct major weakness in
5. a) According to the information and explanations given to us, the
transaction that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered.
b) In ouropinion and according to the information and explanations
given to us, the transactions made
under section 301 of the Companies Act. 1956 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.
6. The Company has not accepted deposits from the public for which the
directives issued by the Reserve Bank of India and the provisions of
sections 58Aand 58AAof the Act and the rules framed there under are
7. The Company has an internal audit system commensurate with its size
and nature of its business.
8. Maintenance of cost records has not been prescribed by the Centra!
Govt, under clause (d) of sub-section (1) of section 209 of the Act.
9. a) The Company is regular in depositing undisputed statutory dues
including provident Fund, Income Tax and any other statutory dues with
the appropriate authorities.
b) The disputed statutory dues pending before appropriate authorities
are as under:
S.No. Name of Statute Nature of the Amount
dues (Rs.. in Lacs)
1 Income Tax Act 1961 Income Tax 63.62 (addition)
2 Punjab VAT Act,2005 VAT 132.53
Period to which Forum where
the amountrelates dispute pending
UptoAY - 2008 -09 Commissioner (Appeal)
Upto FY - 2007 - 08 Dy. Commissioner Appeal
10. The Company has not any accumulated losses at the end of the
Financial year and no cash losses have been incurred in the Financial
year covered by our audit and the immediately preceding Financial year.
11. In our opinion and accordingly to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
Financial institution or Bank.
12. The Company has not granted loans and advances on tKe basis of
security by way of 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
provisionsofclause4(VIII)oftheCompanies(Auditor,sReport)Order, 2003 are
not applicable to the Company.
14. The Company is not dealing or trading in shares securities,
debentures and other investments,
15. The Company has not given any guarantee for loans taken by others
from bank or Financial institutions, the terms and conditions whereof
are prejudicial to the interest of the Company.
16. In our opinion the terms loans have been applied for the purpose
for which they were raised.
17. Accordingly to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that the funds raised on short-term basis have not been used for long-
term investment. No long-term funds have been used to finance
short-term assets except permanent working capital.
18. The Company has not made preferential allotment of shares to
parties and companies covered in the Register maintained under section
19. No debenture has been issued by the Company.
20. We have verified the end use of money raised by public issues as
disclosed in the notes to the Financial statements. Further no Public
issue was raised during the Financial year concerned by the Company.
21. According to the information and explanations given to us, nofraud
on or by the Company has been noticed or reported during the course of
For S. Kumar Gupta & Associates
(CA. Sunil Gupta)
Date : 03-09-2012 FCA, Partner
Place: CHANDIGARH M. No. 085624