1. I have audited the attached Balance Sheet of NCL Industries
Limited, as at 31st March 2012, and the related Profit and Loss Account
and Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company''s management. My responsibility is to express an opinion on
these financial statements based on my audit.
2. I conducted the audit in accordance with the auditing standards
generally accepted in India. Those Standards require that I 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. I believe that the audit provides a reasonable basis for
3. As required by the Companies (Auditor''s Report) Order, 2003 as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
(the ''Order'') issued by Government of India in terms of sub-section
(4A) of Section 227 of the Companies Act, 1956, I give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the said
4. Further to my comments in the Annexure referred to in paragraph 3
above, I report that:
(a) I have obtained all the information and explanations, which to the
best of my knowledge and belief necessary for the purposes of my audit;
(b) In my opinion, proper books of account as required by law have been
kept by the Company so far as it appears from my examination of those
(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 my opinion, the Balance Sheet, Profit and Loss Account and 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 written representations received from the
directors, as on March 31, 2012 and taken on record by the Board of
Directors, none of the directors is disqualified as on that date 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 my opinion and to the best of my information and according to
the explanations given to me, they said financial statements together
with the notes thereon and attached thereto, give in the prescribed
manner the information required by the Act and give a true and fair
view in conformity with the accounting principles generally accepted in
- in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
- in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
- in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITOR''S REPORT:
[Referred to in paragraph 3 of the Auditor''s Report to the members of
NCL Industries Limited on the financial statements for the year ended
31st March, 2012]
1. (a) The Company has maintained adequate records showing full
particulars including quantitative details and situation of fixed
(b) A substantial portion of the fixed assets of the Company has been
physically verified by the management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed. In my opinion, the frequency of verification is
(c) In my opinion and according to the information and explanations
given to me, fixed assets disposed off by the Company during the year
were not substantial and therefore do not affect the going concern
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In my opinion, the frequency of verification is
(b) In my opinion, 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) On the basis of my examination of the inventory records, in my
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. According to the information and explanations given to
(a) the company has not granted any loans, secured or unsecured , to
companies, firms or other parties covered under the section 301 of the
(b) the company has taken Inter Corporate Deposits aggregating to
Rs.1450 lakhs and repaid Rs. 825 lakhs during the year. The rate of
interest and other terms and conditions are prima facie not prejudicial
to the interest of the company. The repayments are regular.
4. In my opinion and according to the information and explanations
given to me, having regard to the explanation that certain items
purchased are of special nature for which suitable alternative sources
do not exist for obtaining comparative quotations, there are adequate
internal control procedures commensurate with the size of the Company
and the nature of its business for purchase of inventory, fixed assets
and for sale of goods. Further, on the basis of my examination of the
books and records of the Company, and according to the information and
explanations given to me, I have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures.
5. In my opinion and according to the information and explanations
given to me-
(a) the particulars of contracts or arrangement referred in section 301
of Companies Act, 1956 have been entered in the register required to be
maintained under that section; and
(b) the transactions made in pursuance of such contracts or arrangement
have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
6. The Company has accepted deposits from public and directives issued
by the Reserve Bank of India and the provisions of Section 58A, 58AA,
and other relevant provisions of the Companies Act, 1956 and the rules
framed there under, where applicable, have been generally complied
with. Balances maintained in bank accounts, free from charge or lien,
prima facie sufficient, according to the information and explanations
given to me, for payment of interest and refund of deposits falling
due. There is no default in repayment of matured deposits or payment
of interest due. No order has been passed by Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any Tribunal regarding the Deposits.
7. In my opinion, the Company has adequate internal audit system
commensurate to the size and operations of the company.
8. I have broadly reviewed the books of account maintained by the
Company in respect of products, where pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained.
I have not, however, made a detailed examination of the records with a
view to determine whether they are accurate or complete.
9. [a] According to the information and explanations given
to me and the records of the Company examined by me, in my opinion, the
Company is generally 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, customs duty, excise duty, cess and other material
statutory dues as applicable with the appropriate authorities.
[b] The disputed statutory dues not deposited on account of matters
pending before appropriate authorities are as under:
SI. Name of the Nature of Forum Amount
No. statute Dues where (Rs.ln
1. Sales Tax Act Sales Tax Tribunal 9.81
(APGST & VAT)
High Court 21.14
2. Central Excise Disputed Excise Tribunal 744.50
Dues High Court 29.22
3. Nala Tax Non-Agriculture High Court
Tax on Mining
Area A.P. 43.56
4. Service Tax Disputed Ser
vice Tax CEC 2.17
5. Permit Fee Disputed permit High Court 105.39
to Forest permit fee
10. The Company has no accumulated losses as at March 31, 2012 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to any
financial institution or bank as at the balance sheet date. There are
no debenture holders as at the balance sheet date
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund/ societies are not applicable to the
Company as it is not in such business.
14. The Company is not a dealer or trader in shares, securities,
debentures and other investments. Therefore, the provisions of clause 4
(xiv) of the Order are not applicable.
15. According to the information and explanations given to me, no
guarantee is given by the Company, for loans taken by others from banks
or financial institutions during the year.
16. According to the information and explanations given to me, on an
overall basis, the term loans have been applied for the purposes for
which they were obtained.
17. According to the information and explanations given to me, there
are no funds raised on a short-term basis, which have been used for
long-term investment, and vice versa.
18. The Company has not made any preferential allotment of equity
shares during the year.
19. The Company has not issued any debentures during the year.
20. The company has not made any public issue during the year.
21. During the course of my examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to me,
I have neither come across any instance of fraud on or by the Company,
nor have I been informed of such case by the management, during the
P V RATNAM
Hyderabad Chartered Accountant
Dated: 30.05.2012 Membership No. 9281