1. We have audited the attached Balance Sheet of Origin Agrostar
Limited as at 31st March, 2004 and also the Profit and Loss Account for
the period ended on that date, annexed thereto. These financial
statements are the responsibility of the Companys 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 the 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 (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we close in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
4. Further to our comments in Annexure referred to above, we report
(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 appears from our examination of
(iii) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of accounts;
(iv) In our opinion, Balance Sheet and Profit and Loss Account dealt
with by this report comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March 2004, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March 2004 from being appointed as a 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 together with and
(a) Note 1 (L) of Schedule 1 8, on existence of going concern status of
(b) Note 10 of Schedule 18, on realisability of certain advances given
to various companies and the impact of shortfall if any on recovery of
(c) Note 7 (b) of Schedule 18, regarding recovery proceedings initiated
by the Income Tax Department
(d) Note 3(b) of Schedule 18, regarding default in payment of term
loans to the financial Institutions
(e) Note 4(b) of Schedule 18 regarding default in repayment of working
capital loans to the banks, and other notes in Schedule 18 of
Significant Accounting Policies and Notes on 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;
(f) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2004; and
(g) In the case of the Profit and Loss Account, of the Loss of the
company for the period ended on that date;
For N. K. THARAD & CO.
Place: Chennai N.K.THARAD
Date: 24th May, 2004 Partner
ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR
REPORT OF EVEN DATE
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets.
2. The management during the period has physically verified all the
fixed assets. No material discrepancies were noticed on such
3. During the period, the company has not disposed off any substantial
part of fixed assets.
4. The inventory has been physically verified during the period by the
management. In our opinion, the frequency of such verification is
5. The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
6. On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of the
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
7. According to the information and explanation given to us, the
company has not granted/taken any loans, secured and unsecured to/from
companies, firms or other parties covered in the Register maintained
under Section 301 of the Companies Act, 1956.
8. 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 inventory, fixed assets and for the
sale of goods. During the course of our audit, no major weaknesses have
been noticed in the internal controls.
9. Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the transactions that need to be entered into the register
maintained under section 301 have been so entered.
10. On the basis of our examination of the books of account, the
Company has not entered into any transactions exceeding Rupees Five
lakhs in respect of any party during the financial year that need to be
entered in the register pursuant to the Section 301 of the Act.
11. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits under the
provisions of Sections 58A and 58AA of the Act and the rules framed
12. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
13. The Central Government of India has not prescribed the maintenance
of cost records by the Company under Section 209(1)(d) of the Act for
any of its products.
14. According to the records of the company, the company is generally
regular in depositing undisputed statutory dues including provident
fund, employees state insurance, wealth-tax, custom duty, excise-duty,
cess and other statutory dues with appropriate authorities. However the
Company is irregular in the payment of following dues, which are
outstanding for a period of more than six months from the date they
A. Income Tax (Asst. Yr. 2000-01) Rs, 1,73,72,678
B. Sales Tax Deferral dues. Rs, 37,43,028
C. Investor Protection Fund (Unpaid dividend for the year ended
31.07.1995) Rs, 1,02,993
15. According to the records of the company, there are no dues of sale
tax, income-tax, customs tax/wealth-tax, excise duty/cess which have
not been deposited on account of any dispute except as stated herein
Nature of Dues Amount Rs. Forum where dispute is pending
Income Tax (Asst. Yr. 1996-97) 16,35,000 CIT (Appeals)
16. The accumulated losses of the Company as at 31st March 2004, are
less than fifty percent of its net worth and the Company has also
incurred cash losses during the financial period ending on 31st March,
2004 and in the immediately preceding financial period ending on 31st
17. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has defaulted in repayment of dues to financial institutions &
banks as followings:
Nature of Dues Period Amount of default
(As per companys books of accounts)
IDBI - Term Loan 2000-2001 21,89,26,476
State Bank of India - Working 2001-2002 13,01,80,997
Capital Loan Onwards
Above lenders have already initiated recovery proceedings under various
acts & regulations and the matters are sub-judice.
18. Based on our examination of documents and records, we are of the
opinion that the company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
19. Based on our examination of the records and evaluation of the
related internal controls, we are of the opinion that proper records
have been maintained of the transaction and contracts in respect of
shares and securities, and timely entries have been made in those
records. We also report that the company has held the shares,
securities, debentures and other securities in its own name.
20. In our opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund/nidhi/mutual benefit fund/societies are not
applicable to it.
21. The Company has not given any guarantee for the loans taken by
others from banks or financial institutions during the year.
22. The Company has not taken any term loans during the year.
23. The funds raised on short-term basis during the year have not been
used for long-term investment and funds raised on long-term basis have
not been used for short term investment.
24. The Company has not made any preferential allotment of shares
during the year.
25. The company has not issued any debentures during the year and
therefore the question of creating security in respect thereof does not
26. The company has not made any Public issue of any Securities during
the year and therefore the question of disclosing the end use of money
does not arise.
27. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the year.
For N. K. THARAD & CO
Place: Chennai N.K.THARAD
Date: 24th May, 2004 Partner
M. No. 51867