1. We have audited the attached Balance Sheet of RAJVIR INDUSTRIES
LTD. as at 31st March 2012 and also the Statement of Profit and Loss
and the 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.
2. 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.
3. As required by the Companies (Auditor''s Report) Order, 2003 (and
amended by The Companies (Auditor''s Report) (Amendment) Order, 2004)
issued by the Central Government of India in terms of sub- section (4A)
of Section 227 of the Companies Act, 1956, we annex hereto a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
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, Statement of Profit and Loss and Cash Flow
Statement referred to in this report are in agreement with the books of
d. in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards as 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 31st March 2012, and taken on record by the Board of
directors, we report that none of the directors of the Company is
disqualified as referred to in terms of clause (g) of sub-section (1)
of Section 274 of the Companies Act, 1956.
5. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Significant Accounting Policies and Notes on accounts gives 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 Statement of Profit and Loss, of the loss of
the Company for the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
1. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
b) As explained to us, the fixed assets have been physically verified
by the management at reasonable intervals, in a phased verification
programme, which, in our opinion, is reasonable having regard to the
size of the Company and the nature of the assets. According to the
information and explanations given to us, discrepancies noticed on
physical verification have been properly dealt with in the books of
c) The Company has not disposed off any substantial fixed assets which
effect the going concern status of the Company.
2. a) As explained to us, inventories have been physically verified by
management at reasonable intervals during the period. In our opinion,
the frequency of such verification is reasonable.
b) As per the information given to us, the procedure of physical
verification of inventories followed by management are, in our opinion,
reasonable and adequate in relation to the size of the Company and
nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. a) The Company had not granted any loans, secured or unsecured to
companies, firms and other parties covered in the register maintained
under Section 301 of the Companies Act, 1956.
b) In view of our comment in paragraph 3(a) above, reporting under
clause 4(iii)(b), (c) & (d) of the aforesaid order are not applicable
to the Company.
c) During the period, the Company has taken unsecured loans from 8
parties covered in the register maintained under section 301 of
Companies Act, 1956 and the maximium amount involved during the period
was Rs.1034.38 Lakhs (Previous year Rs.1055.03 Lakhs) and the year end
balance is Rs.353.50 Lakhs (Previous year Rs.871.53 Lakhs)
d) In our opinion the rate of interest and other terms and conditions
on which loans have been taken from the 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. The Company is generally regular in payment of
principal and interest due thereon as per terms.
4. In our opinion and according to the information and explanation
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 and services. During the course of our audit, we have
not observed any continuing failure to correct major weaknesses in the
internal control system.
5. a) According to the information and explanation given to us, we are
of the opinion that the transactions that need to be entered in the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 in respect of any party during the period, have
been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the provision of Sec 58A and
58AA and other relevant provisions of the Companies Act,1956 and the
Companies(Acceptances of Deposits) Rules,1975 with regard to the
deposits accepted from the public. No order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any court or any other Tribunal.
7. On the basis of internal audit reports broadly reviewed by us, we
are of the opinion that the internal audit work carried out by an
independent Chartered Accountant appointed by management is
commensurate with the size of the Company and nature of business.
8. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act,1956 and we are of the opinion that the prima facie the prescribed
accounts and records have been made and maintained .
9. a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including Provident Fund,
Employee''s State Insurance, Income-tax, Sales-tax, Wealth tax, Service
tax, Custom duty, Excise duty, cess and other material statutory dues
applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income-tax, wealth tax,
service tax, sales tax, custom duty, excise duty and cess were in
arrears, as at 31st March 2012 for a period of more than six months
from the date they became payable.
10. In our opinion, the accumulated losses of the Company are not more
than fifty percent of its net worth. Further the Company has not
incurred cash losses during the current financial year covered by an
audit and the immediately preceeding financial year.
11. The Company has delayed in making payment of dues to banks for a
short period of 2-3 months during the year. The balance overdue to the
banks at the close of the year towards principal of Rs.492.78 lakhs and
interest of Rs.148.54 lakhs, which are since paid by the Company.
12. As per the information and explanation given to us the Company has
not granted loans and advances on the 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 provisions of clause 4(xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
14. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. In our opinion, and according to the information and explanations
given to us, the term loans were applied for the purpose for which the
loans were raised.
17. Based on information and explanations given to us and on an
overall examination of Balance Sheet of the Company, in our opinion,
funds raised on a long term basis have not been used for short term
18. According to the information and explanation given to us, the
Company has made preferential allotment of preference shares to parties
covered in the register maintained under section 301 of the Act. In our
opinion, the price at which preference shares have been issued is not
prejudicial to the interest of the Company.
19. The Company has not issued any fresh Debentures during the year.
The Company has created security in respect of debenture issued.
20. According to the information and explanations given to us, the
Company has not raised money by public issues during the period.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For S.DAGA & CO.
T.V. Subba Rao
Membership No.: 9636
Date : 14.08.2012