1. We have audited the attached Balance Sheet of R.B. GUPTA FINANCIALS
LTD., VADODARA as at 31st March 2010 and also the annexed Profit and
Loss Account of the company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys 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
3. As required by the Companies (Auditors Report) Order 2003 issued
by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure 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
report that :
a. We have obtained all the information and explanation which to the
best of our knowledge and belief were necessary for the purpose of our
b. In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books ;
c. The Companys Balance Sheet and Profit & Loss Account and Cash Flow
Statement dealt with by the report are in agreement with the books of
d. In our opinion, Profit and Loss Account, Cash Flow Statement and
Balance Sheet dealt with by the report comply with mandatory Accounting
Standards as referred to in the sub-section (3C) of section 211 of the
Companies Act, 1956. To the extent applicable except note relating to
the retirement benefits (Accounting Standered-15)
e. In our opinion, and on information and explanations given to us,
none of the directors is disqualified as on 31st March2010 from being
appointed as a director in terms of clause (g) of sub-section(l) of
section 274 of the Companies Act, 1956.
f. As discussed in Note of Schedule to the financial statements no
Provision has been provided in the
financial statements which in our opinion, is in accordance with the
prudential Accounting norms as per Non-Banking Financial Companies
Prudential Norms (Reserve Bank) Directives, 1998. This is the result of
a decision taken by management at the start of the preceding Financial
year and caused us to qualify our audit opinion on the financial
statements relating to the year, with result the profit for the year
ended 31st March2010 should reduced accordingly.
g. Except for Non - Provision of doubtful debt referred to the
preceding paragraph in our opinion, the Balance sheet and profit & loss
accounts and cash flow statement comply with the accounting standard
referred to in sub-section(3c) of section 211 the Companies Act,1956.
h. In our opinion and to the best of our information and according to
the explanation given to us, except for the effect on the financial
statement of Non-Provision of doubtful debts referred to in paragraph
(f) foregoing, the said financial statements read together with the
other note thereon given 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 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 other Notes thereon given the
information required by the Companies Act, 1956 in the manner so
required and present a true and fair view in conformity with the
accounting principles generally accepted in India.
1. in so far as related to Balance Sheet, of the state of affairs of
the Company as at 31st March,2010
2. in so far as it relates to the Profit and Loss Account, of the
Profit of the company for the year ended on that date;
3. in so far as it relates to the Cash Flow Statement of the cash
flows of the Company for the year ended on that date. And subject to-
a. Note No. 2 of Schedule 12 relating to relating to retirement a
benefit which is accounted for on payment basis. The extent of
compliance in value terms is as certain able.
b. Note No. 4 relating to non-provision of declining valuation of
quoted/unquoted investments/inventories (traded securities) including
following the method of valuation of investment laid down in AS-13 and
the RBI Guidelines.
c. The company has complied with the prudential norms on income
recognition, Accounting Standards, assets classification, provisioning
for bad doubtful debts and concentration of credit / investments as
specified in the directions issued by the RBI in terms of the Non
Banking Financial Companies Prudential Norms (Reserve Bank) Directions,
d. Compliance with Capital adequacy ratio with the minimum Capital to
Risk Assets Ratio prescribed by the RBI.
e. The company has complied with the prescribed liquidity requirements
and not kept the approved securities with the designated bank.
Referred to in paragraph 3 of our report of even date :
1. (a) The company has maintained proper records to showing full
particulars including quantitative details and situation of fixed
assets on the basis of available information.
(b) All the assets have been physically verified by the management
during the year in phased periodic manner, which in our opinion is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies were noticed on such physical
(c) There is no substantial sale of Fixed Assets of the company during
2. In respect of its inventories :
a. As explained to us, inventories have been physically verified by
the management at regular intervals 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 records of inventories. As
explained to us, there where no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. In respect of Loans & Advances :
a. The company had not taken loan from companies firm or other parties
listed in the register maintained as per section 301 and 370 (IC) of
the Companies Act, 1956.
b. The company has granted loans to parties listed as per section 301
and 370 (IC) of the Companies Act. 1956. There are three parties
covered in the register maintained under section 301 of the Companies
Act, 1956 to which the company has granted loans. The maximum amount
involved during the year was Rs.12.86 lakhs and the.year end balance of
loans taken to such parties was Rs. 322.75 lakhs.
c. The Company does not charge any interest on these advances given
nor does it pay any interest on the advances taken.
d. The amounts in the balance sheet are overdue since many years.
4. In our opinion and according to the information and explanations
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 the purchases of inventory, fixed assets and
with regard to the sale of goods. During the course of our audit, no
major weakness has been noticed in the internal controls.
5. In respect of transactions covered under Section 301 of the
companies Act, 1956.
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, the needed to be entered in the registers maintained
under section 301 of the Companies Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
give to us, each of these transactions aggregating to Rs. 5,00,000/-
(Rs. Five Lacs Only) or more in respect of any party during the year
have been at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
6. The company is a Non-Banking Financial Company which is an
investment company, not accepting public deposit and which has invested
not less than 90% of its assets in the securities of its group holding
/ subsidiaries companies as long term investments.
(i) In our opinion and according to the information given to us, Board
of Directors has passed a resolution for the non-acceptance of the
(ii) In our opinion and according to the information given to us, the
company has not accepted any public deposits during the year.
(iii) In our opinion and according to the information given to us, the
company has, through a Board resolution, identify the
(iv)ln our opinion and according to the information given to us, the
cost of investments made in the group of holding or subsidiary company
is less than 90% of the cost of the total assets of the company at any
point of time through out the accounting year.
(v) In our opinion and according to the information given to us, the
company has continued to hold the securities of group of holding or
subsidiary companies as long term investments and has not traded in
those investments during the accounting year.
7. In our opinion, the company has an internal audit system
commensurate with size and nature of its business.
8. Maintenance of cost records has not been prescribed by the Central
Government under clause (d) of sub- section (]) of section 209 of the
Companies Act,1956. for the year under review.
9. In respect of statutory dues :
a. According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, Income -tax,
sales tax, custom-duty and Excise-duty, Cess etc., were outstanding as
on 31st March2010 for a period of more than six month from the date
they become payable and the Company is regular in depositing undisputed
statutory dues with the appropriate authorities. The company has paid
Income Tax of Rs. 28.51 lakhs which is shown in Current Assets is
debited to Reserve & Surplus Account.
b. According to the information and explanations given to us, there are
no dues of Sale tax, Income tax, Customs duty, Excise duty, and Cess,
which have not been deposited on account of any dispute.
10. In our opinion, the accumulated losses of the company are not more
than fifty percent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit or 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 any
financial institution, bank or debenture holders.
12. In our opinion, and according to the information and explanation
given to us, no loans and advances have been granted by the company on
the basis of security by way of pledge of shares, debentures and other
13. In our opinion, the company is not a Chit Fund or a Nidhi Mutual
benefit Fund/Society. Therefore, the provisions of clause4 (xiii) of
the companies (Auditors Report) Order, 2003 are not applicable to the
14. In our opinion, the Company has not given Guarantees for loans
taken by other from banks or financial institutions.
15. No term loans have been raised during the year.
16. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment and no long-term funds have been used to finance short term
17. During the year, 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.
18. The Company has not issued any debentures and hence Company has
not created securities.
19. The Company has not raised any money by way of public issue during
20. In our opinion and according to the information and explanations
given to us, no fraud on or by the company has been noticed or reported
during the year that caused the financial statements to be materially
For Amin Parikh & Co
(CA Samir Parikh)
Vadodara : July 15,2010