1. We have audited the balance sheet of RAVILEELA DAIRY PRODUCTS
LIMITED as at March 31, 2011 the Profit and Loss Account and also the
related 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. 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 an examination on test basis evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates and
judgments made by the management in the preparation of financial
statements and evaluating the overall financial statement presentation.
3. As required by the Companies (Auditor''s Report) Order, 2003 as
amended by the Companies (Auditor''s Report) order, (Amendment) 2004
issued by the Central Government in terms of Sub Section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matter specified in Paragraphs 4 and 5 of the said
4. Further to the comments in the Annexure referred to in paragraph 3
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes 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, Profit and Loss Accounts and Cash Flow
Statement dealt with by this report are in agreement with the books of
(iv) In our opinion, the Balance Sheet, Profit and Loss Accounts and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
(v) On the basis of written representations received from the
directors, as on March 31, 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 Act.
(vi) 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 Act, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
(b) In the case of Profit and Loss Account, of the loss for the year
ended on that date; and
(c) In the case of the Cash Flow Statement, the cash flows for the year
ended on that date;
ANNEXURE TO AUDITORS'' REPORT
Referred to in Paragraph 3 of our report of even date
1. In respect of its fixed assets
a) The Company has maintained proper records to show full particulars
including quantitative details and situation of its Fixed Assets on the
basis of available information wherein the fixed asset register is in
the process of being updated. .
b) The Fixed Assets of the Company were physically verified by the
management at reasonable intervals and no material discrepancies
between the books/records and the physical inventory were noticed on
c) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) The Inventory of the Company have been physically verified during
the year by the management. In our opinion, the frequency of
verification is reasonable.
b) In our opinion and according to the information and 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) The Company has maintained proper record of inventories. As
explained to us, there were no material discrepancies notices on
physical verification of inventories as compared to the book records.
3. In respect of loans, secured or unsecured, granted or taken by the
Company to/ from Companies, firms or other parties covered in the
register maintained under Section 301 of the Company''s Act, 1956.
a) The Company has not granted any loans during the year to Companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
clauses (iii) (b),(c),(d) of paragraph 4 of the order are not
b) As informed, the Company has taken loans from parties covered in the
register maintained under Section 301 of the Act1956. In our opinion,
the terms and conditions on which deposits have been taken from
companies, firms or 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.
4. In our opinion and according to the information and explanation
given to us, the Company has an adequate internal control procedure
commensurate with the size and nature of business of the company for
the purchase of inventory, fixed assets and 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 control
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956, in our opinion and according to the
information and explanations given to us, there are no transactions
made in pursuance of contracts or arrangements , that need to be
entered in the Register maintained under Section 301 of the Companies
Act, 1956 . Consequently, clause 4(v) of the order is not applicable.
6. According to the information and explanation given to us, the
Company has not accepted any deposits contemplated under Sec. 58A of
the Companies Act, 1956 from the public. Therefore the provisions of
clause 4(vi) of the order are not applicable.
7. In our opinion, the Company has an internal audit system which
needs to be strengthened.
8. We have been informed that the Central Government has not
prescribed maintenance of cost records U/s 209 (I)(d) of the Companies
Act, 1956 (1 of 1956) for the Company''s services.
9. In respect of statutory dues:
(a) According to the records of the company, the company is regular in
depositing undisputed statutory dues including provident fund,
employees'' state insurance, Income Tax, Wealth Tax, Customs Duty,
Excise duty, cess and other material statutory dues applicable at the
end of the year for a period of more than six months from the date they
(b) According to the information and explanation given to us, there are
no dues of income tax, sales tax, wealth tax, service tax, customs
duty, excise duty and cess which have not been deposited on account of
any dispute. There were no dues on account of cess under 441A of the
Companies Act 1956, since the date from which the aforesaid section
comes into force has not yet been notified by the Central Government.
10. The Company having the accumulated losses of Rs.13,78,26,810/- at
the end of the financial year. The Company has not incurred cash losses
during the financial year covered by the audit and in the immediately
preceding financial year.
11. Based on the audit procedures, and according to the information
and explanation given to us, we are of the opinion that, the Company
has during the year delayed on few occasions in repaying term loan
instilments due to the banks and financial institutions.
12. In our opinion and according to the explanation given to us and
based on the information available, the Company has not granted any
loans or advances on the basis of security by way of pledge of shares,
debentures or other securities.
13. In our opinion, the Company is not a Chit Fund, Nidhi or Mutual
Benefit fund / Societies. Therefore the provisions clause (xiii) of
paragraph 4 of the order are not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks and financial institutions.
16. The company has not availed any term loans and working capital
loans from the banks/institutions. Hence the purpose of utilization
will not arise.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet and Cash Flow statement,
the funds raised on short term basis have not been used for long term
18. 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 during the year.
19. The Company has not issued any debentures.
20. The Company has not raised any money by way of public issues
during the year.
21. In our opinion and according to the explanation given to us, no
fraud, on or by the Company, has been noticed or reported during the
For M M REDDY & CO.,
Firm Reg. No.010371S
Place : Shameerpet Mondal (M. Madhusudhana Reddy)
Date : 02.09.2011 Partner