We have audited the attached Balance Sheet of M/s POCHIRAJU INDUSTRIES
LIMITED (the Company), as at 31st March, 2012 and also the 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. 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 from 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
1. As required by the companies (Auditor''s Report) Order, 2003(CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act,1956, we enclose in the Annexure hereto a Statement on
the matters specified in paragraphs 4 and 5 of the said order, to the
extent applicable to the Company.
2. Further to our comments in the Annexure referred to in paragraph
(1) above, we state 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
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
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
referred to in this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this Report, complies with the Accounting
Standards referred to in Section 211 (3C) of Companies Act, 1956;
e) On the basis of written representations received from the directors
as on 27th August, 2012 and taken on record by the Board of Directors,
none of the directors of the Company are disqualified as on 31st March,
2012 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 our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with the notes
thereon, 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;
(i) In the case of the Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2012
(ii) In the case of the Profit and Loss Account, of the Profit, of the
Company for the year ended on that date; and
(iii) In the case of the Cash Flow Statement, of the Cash Flow for the
year ended on that date.
ANNEXURE TO AUDITORS'' REPORT
With reference to the annexure referred to in Para No. 3 of the
Auditor''s Report to the members of M/s POCHIRAJU INDUSTRIES LIMITED
(the Company) on the financial statement for the year ended as on
31st March, 2012 we report that:
In respect of its fixed assets:
a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) As explained to us, all the fixed assets have been physical verified
by the management in a phased periodical manner, which in our opinion
is reasonable, having regards to the size of the company and the nature
of its assets. No material discrepancies were noticed on such physical
c) As per information and explanations given to us, during the year,
the company has not disposed off any substantial part of fixed assets
that would affect the going concern.
2) In respect of its inventories:
a) As explained to us, inventories have been physically verified by the
management at reasonable intervals.
b) In our opinion and according to the information and explanations
given to us, the procedure for physical verification of Inventories
followed by the management is reasonable and adequate in relation to
the size of the company and the nature of its business.
c) As explained to us, no material discrepancies have been noticed on
physical verification of inventories as compared to book records.
3) The company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties listed in the
Register maintained under section 301 of the Companies Act,1956. During
the year from the parties mentioned above.
4) According to the information and explanations given to us, there are
adequate internal control procedures commensurate with the size of the
company and nature of its business for the purchase of inventory and
fixed assets, sales of goods and services, we have not observed any
major weakness in such internal control system.
5) (a) According to information and explanations given to us, we are of
the opinion that the transactions, if any, made in pursuance of
contracts or arrangements that needed to be entered in the register
maintained under section 301 of the Companies Act, 1956 have been so
(b) Where each of such transaction is in excess of Rs 5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
(c) According to the information and explanations given to us, the
company has not accepted any deposits from the public during the year.
6) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
7) The Central Government has not prescribed maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 in respect
of activities carried on by the company. Hence the provisions of clause
4 (viii) of the companies (Auditor''s Report) order, 2003 are not
applicable to the company.
8) (a) According to the records of the company, the company has been
regular in depositing with appropriate authorities undisputed statutory
dues including, Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Custom
Duty, Excise Duty and other statutory dues.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of such statutory dues were
outstanding as at 31st March, 2012 for a period of more than six months
from the date they became payable.
9) The Company neither has accumulated losses nor has it incurred any
cash losses during the current financial year and in the immediately
preceding financial year.
10) In our opinion and according to the information and explanation
given to us , the company has not defaulted in repayment of dues to
banks and financial institutions.
11) In our opinion, the company is not a chit fund, a nidhi or a mutual
benefit society. Therefore, the provisions of clause 4 (xiii) of the
Companies (Auditor''s Report) Order, 2003 are not applicable to the
12) Term loans obtained by the company were applied for the purpose for
which the loans were obtained, other than temporary deployment pending
13) According to Cash Flow Statement and other records examined by us
and the information and explanation given to us, on an overall basis,
funds raised on short term basis have not, prima facie, been used
during the year been used for long term investment.
14) According to the information and explanation given to us, the
company is not dealing or trading in shares, securities, debentures and
15) During the year the Company has not made any preferential allotment
of equity shares to a Company, covered in the register maintained under
section 301 of the Companies Act, 1956, at price which is prejudicial
to the interest of the Company.
16) The Company has not issued any debentures during the year ending on
17) The company has not raised any money by public issues during the
18) To the best of our knowledge and belief, and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the year.
For M M REDDY & CO.,
Firm Registration Number : 010371S
Place: Hyderabad Sd/-
Date: 27-08-2012 M. MADHUSUDHANA REDDY
Membership No. 213077