We have audited the attached Balance Sheet of RANJEEV ALLOYS
LIMITED,MANDI GOBIIMDGARH as at 31st, March,2011 and also the Profit &
Loss also 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 statement 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
statement are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
discioures 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
As required by the Companies (Auditor''s 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 report a statement on the matters
specified in paragraphs ''4'' and ''5'' of the said order :
1 . a) The company has maintained proper records showing full
Particulars including quantitative details and situation of fixed
b) The Management has certified that it has conducted a physical
verification of the fixed assets at reasonable intervals, which in our
opinion is reasonable, having regard to the size of the company &
nature of its assets. No material discrepancies have been noticed on
c) During the year, the company has not disposed off substantial part
of fixed assest and the going concern status of the company is not
2 . a) As explained to us, inventories have been physically verified
during the year by the management. In our opinion, the frequency of
verfication is reasonable.
b) The procedures of physical verification of Inventories followed by
the management is reasonable and adequate in relation to the size of
the company and nature of its business.
c) The company has maintained proper records of invntories. The
discrepancies noticed on physical verification of inventory as compared
to the book records, which in our opinion,were not material, have been
properly dealt within the books of accounts.
3 . a) There are four persons covered in the register maintained under
section 301 of the Compenies Act, 1956 to which the company has granted
the loans/advances.The maximum amount involved during the year was
Rs.33,10 lacs & the year-end balance of such loans/advances granted
stands at Rs. 17.80 lacs.
b) In our opinion and according to the information and explanation
given to us, the rate of interset and terms & conditions of such loans
granted are not prime facie, prejudicial to the interest of the
Company, however, no interest has been charged on the advances given to
persons,except Ranjeev Steels Pvt.Ltd.,M.Gvg.
c) The company is regularly receving the principal amount and interest
thereon except as stated in (b) above.
d) Overdue amount of loan granted to companies, firm or other parties
listed in the register maintained under section 301 of Companies Act,
1956 stands at Rs.17.80 lacs which is stil! standing to be received. ''
e) The company has taken loans from one company & two persons during
the year covered in the register maintained under section 301 of the
The maximum amount involved during the year was Rs.9.91 crores and the
year-end balance of loans taken including already standing in the
opening was Rs,2.48 Lacs and this deposit pertains to directors &
f) In our opinion and according to the information and explanation give
to us, the rate of interest and terms & condition of such loans taken
are not prime facie, prejudical to the interest of the Company. .
g).The company is regular in repaying the principal amount as
stipulated and have been regular in payment of interest wherever
interest has been allowed on these loans.
4 . In our opinion and according to the information and explanation
given to us, there are adequate internal control system commensurate
with the size of the company and nature of business with regard to
purchase of inventory, fixed assets and with regard to the sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
5 . a) According to the information and explanation give to us, we are
of the opinion that particular of contracts or arrangement refferred to
in section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that section,
b) In our opinion and according to the information and explanation
given to us, the transaction made in pursuance of contracts or
arrangements entered in the register maintained 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 the prevailing market prices at the
6 . In our opinion & according to the information and explanation given
to us, the company has complied with the provision of section 58A and
58A4of the companies Act, 1956 and the companies (Acceptance of
Deposits) Rules, 1975 with regards to the deposits accepted from the
public, however, no deposits have been, accepted from the public except
unsecured demand loans from associate firms, friends'' firm & relatives
of director have been accepted & repaid in ordinary course of business.
No order has been passed by the Oompay Law Board or National Company
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
7 . In our opinion, the company has an adequate Internal Audit System
commensurate with the size and the nature of the company''s business.
8 . We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the company
pusuant to the Rules made by the Central Government for the maintenance
of cost records under section 207(l)(b) of the companies Act, 1956 and
we are of the opinion that the prime 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,
Employees'' State Insurance, Family Pension, Adminstrative Charges &
Linked Insurance Fund, Income Tax, Sales Tax, Central Sales Tax, Wealth
Tax, Service Tax Custom Duty, Excise Duty, Cess and other '' material
statutory dues applicable to it except VAT.
b) According to the information and explanation given to us, no
undisputed amount payable in respect of aforesaid dues were in arrears,
as at 31st March, 2011, for a period of more than six months from the
date they became payable.
c) According to the information and explanations given to us, there are
no dues of Sale Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty
and Cess which have not been depoisted on account of any dispute,
except Income Tax for Rs. 1,377,218/- for A.Y.2008-09 & Excise Duty for
Rs. 1,079,720/- wherein the disputes are pending with appellate
10. In our opinion, the accumulated losses of the company are not more
than fifty percent of its net worth. The company has incurred cash
losses for Rs.93.26 lacs during the financial year covered by our
audit, however, there was no cash losses in the immediately preceding
11. According to the information and explanations given to us, we are
of the opinion that the company has not defaulted in repayment of dues
to a financial institution, Bank or Debenture holders except that the
company has defaulted in making repayment of C/c & LC development loan
pertaining to IDBI.
12. In our opinion and according to the information and explanations
given to us, no loans and advances have been granted by the company on
the basis of security by way of pledge of shares,deberttures and other
13 In our opinion, the company is not a chit fund or a Nidhi/Mutual
benefit fund/society. Therefore, clause 4(xiii) of the companies
(Auditor''s Report) Order, 2003 is not applicable to the company.
14 The company is not dealing in or trading in shares, securities,
debentures and other investments and therefore the question of
mamtenaces or records in respectthese does not arise.
15 The company has not given any guarantee for loan taken by others
form Bank or financial institutions.
16 In our opinion, no term loan has been raised during the year and as
such its applicability is inapplicable as per information & explanation
given by the management.
17 According to the information and explanation given to us and on an
overall examination of the balance sheet of the company, we report that
no funds raised on short-terms basis has been used from long-term
18 Based on our examination of record and the information provided to
us by management we report that the company has not made preferantial
allotment of shares of parties and companies covered in the register
maintained under section 301 of the companies Act, 1956.
19 During the period covered by our audit report, the companies has not
issued debentures and therefore the question of creation of any
security/charge in respect of these debentures does not arise.
20 The company has not raised arty money by way of public issue during
21 Based on 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 course of our
Further to our comments referred to above, we report that :
i) We have obtained all the information and explanations, which to the
best of our information and belief were very necessary for the purpose
of our audit;
ii) In our opinion, proper books of accounts as required by law have
been kept by the company so far as appear from our examination of those
iii) The Balance sheet & Profit &. Loss Account dealt with by this
report are in agreement with the book of accounts.
iv) In our opinion, the Balance Sheet & Profit & Loss Account dealt
with by this report comply with the accounting standards referred to in
Sub-Section (3C) of the Section 211 of the companies Act, 1956.
v) On the basis of written representation recevied from the Directors,
as on 31st March, 2011 and taken on records by the Board of Directors,
we report that none of the directors is disqualified as on 31st
Mar,2011 from being appointed as a director in terma of Clause (g) of
sub-section (1) of section 274 of companies Act,1956.
vi) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts give the information
required by the companies Act, 1956, in the manner so required and
gives a true & fair view in conformity with accounting principals
generally accepted in India :
a) In the case of Balance Sheet, of the state of affairs of the company
as at 31st March, 2011 and
b) In the case of the Profit & Loss Account, of the profit for the year
ended on that date; and
c) In the case of Cash Flow Statement, of cash flows for the year ended
to that date.
For M/S S. K. BHALLA & CO.
PLACE : KHANNA
DATED : 03.09.11