We have audited the attached Balance Sheet of Raunaq Automotive
Components Limited as at 31st March, 2011 and also the Profit & Loss
Account and the Cash Flow statement for the Financial 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. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material mis-statement. 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, as
amended by Companies (Auditor''s Report) Amendment Order 2004 (together
the ''Order'') issued by the Central Government of India in terms of
section. 227 (4A) of the Companies Act, 1956, we annex hereto a
Statement on the matters specified in paragraphs 4 & 5 of the said
Order to the extent applicable and based on such checks we considered
2. Further to our comments in the Annexure referred to in paragraph 1
above, we report 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, the Company has kept proper books of accounts as
required by law, so far, as appears from our examination of those
c) The Balance Sheet, Profit & Loss Account and Cash Flow statement
dealt with by this report are in agreement with the books of account.
d) On the fem. if of the written representation / information received
from the Director* »- on 31st March 2011, and taken on record by the
Board of Directors, we report that none of the Directors is
disqualified as on 31st March, 2011 from being appointed as a Director
in terms of Clause (g) of sub-section (1) of Section 274 of the
Companies Act, 1956.
e) In our 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.
f) 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
Notes thereon give the information required by the Companies Act, 1956
in the manner so required, and give a true & fair view in conformity
with the accounting principle generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2011;
ii) in the case of the Profit & Loss Account, of the profit of the
Company for the Financial 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.
ANNEXURE TO THE AUDITORS'' REPORT
Referred to in paragraph 1 of our report of even date.
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and location, of fixed
b) According to the information & explanations given to us, the fixed
assets of the Company have been physically verified by the management
as at the end of the financial year and no serious discrepancy has been
found on such verification. In our opinion, having regard to the size
of the company and the nature of its assets the system of verification
of the Fixed Assets of the company is reasonable.
c) Since there is no disposal of substantial part of the Fixed Assets
during the Year, paragraph 4(i)( c) of the Companies (Auditor''s Report)
Order 2003 (hereinafter referred to as the order) is not applicable.
2. a) The inventories, except for stocks lying with third parties
where certificates confirming stocks have been received in respect of
most of the stocks held, have been physically verified by the
management during the year at reasonable interval.
b) In our opinion and according to information & explanations given to
us, 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.
c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
Inventory. According to information & explanations given to us, the
discrepancies noticed on verification between the physical stock and
books record, which in our opinion were not material, have been
properly dealt with in the Books of Accounts.
3. a) According to the information & explanations given to us, the
company has not granted any loans secured or unsecured to companies,
firm or other parties listed in the registers maintained under Section
301 of the Companies Act, 1956; and
b) Since the company has not granted any loans secured or unsecured
during the period covered under audit, Paragraph No.4(iii) (b)of the
order is not applicable.
c) The company has been pursuing civil suit against Mr. JPS Kanwar for
the recovery of Rs.488.88 lacs outstanding against him.
d) The company has not taken any loan during the period covered under
Audit from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. However, the
company had taken Interest Free Secured Deferred Sales Tax Loan of
Rs.732.02 lacs from PICUP, during previous years, (please refer to Note
No.6(b) of schedule 17 Part B also). -
e) In our opinion, the terms & conditions on which Loans referred to
above had been taken are prima facie not prejudicial to the interest of
the company; and
f) The loan is interest free deferred sales tax loan and as per the
terms and conditions of the loan, the repayment of the Principal amount
has been started as per repayment schedule.
4. In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for sale of goods and
services. During the course of our Audit, we have not observed any
continuing failure to correct major weaknesses in internal control
5. a) According to the information and explanations given to us we are
of the opinion that the particulars of contracts or arrangements that
need to be entered into the register maintained under section 301 of
the Companies Act 1956 have been so inserted. b) In our opinion and
according to the information and explanations given to us, the
transactions made in pursuance of contracts and arrangements entered in
the register maintained under section 301 of the Companies Act 1956 and
exceeding the value of Rs. 5 lacs during the year for each party 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 not accepted any deposits from the public
during the year under consideration.
7. In our opinion, the company has an adequate Internal Audit system
commensurate with the size and the nature of its business.''
8. We have generally reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of the cost records under section 209(1)(d) of the
Companies Act, 1956. We are of the opinion that prima facie the
prescribed accounts and records are being maintained. We are not
required for detailed examinations of the records maintained &
accordingly, we have not examined the same in details.
9. According to the information and explanations given to us, and
according to the records of the Company, the company is regular in
depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund,
employees state Insurance, Income Tax, Tax Deducted at source,
professional tax, sales tax, wealth tax, service tax, custom duty,
excise duty, octroi charges, property tax, water tax, license fees,
works contract tax, cess and other material statutory dues applicable
10 In our opinion, the company does not have accumulated losses at the
end of Financial year 31st March, 2011. The company has not incurred
any cash losses during the financial year covered by our audit and in
the immediately preceding Financial year.
11 In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to the
Financial Institutions / Banks.
12 Since the company has not granted any loans or advances on the basis
of security by way of pledge of shares, debentures and other
securities, paragraph 4(xii) of the order is not applicable.
13 As the Company is not a nidhi / mutual benefit fund / society,
paragraph 4(xiii) of the order is not applicable.
14 Since the company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4(xiv) of the order is not
15 Since the company has not given any guarantee for loans taken by
others from bank / Financial Institutions, paragraph 4(xv) of the order
is not applicable.
16 As per records of the Company the Term Loans / Corporate Loans
obtained by it during the period covered under audit have been applied
for the purpose for which they were obtained.
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
the company has not used any funds raised on short-term basis for
18 According to the records of the company and the information and
explanations provided by the management, the company has not made any
preferential allotment of shares to parties and companies covered in
the register maintained under section 301 of the Companies Act, 1956.
19 Since the company has neither issued any debentures nor has created
any securities during the year, Paragraph 4 (xix) of the order is not
20 . The company has not raised any money by Public issues during the
period covered under audit.
21 Based upon the audit procedures performed and the 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 A SACHDEV & Co.
Firm Registration No. 001307C
Place : Noida (B K AGARWAL)
Date : 31st May, 2011 PARTNER