1 We have audited the attached Balance Sheet of RENCAL CHEMICALS
(INDIA) LIMITED as at 31s1 March 2005 and also the annexed Profit and
Loss Account of the company for the year ended on that date and reports
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 rnisRtatemente 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 the management as well as evaluating the overall financial statement
presentation.. We believe that our audit provides a teasonable basis
for our opinion.
3. Information required to be furnished under the Companies (Auditors
report) ordered 2003 issued by the Central Government of India in terms
of section 227 (4) (A) of the Company Act, 1956, we enclose in the
annexure the statement on the matter specified in paragraphs 4 and 5 of
the said order to the extent applicable to the company.
4. Further to our Comments in the Annexure referred in Paragraph 3
(a) We have obtained all the information and explanations, 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
(c) The Balance Sheet and Profit and Loss Account referred to in this
report are in agreement with the books of accounts submitted to us.
(d) In our opinion and according to the information and explanation
given, the Balance Sheet and Profit and Loss Account comply with the
mandatory accounting standard referred to in Sub-Section 3(C) of
Section 211 of the Companies Act, 1956 read together witli notes and
significant accounting policies and to the extent such starjdards have
been made applicable to the company,
(e) Based on the representation made by the directors of the company
and the information and explanation as made available, none of the
director of the company do not prima- facie, have any disqualification
as referred to in clause (g) in Sub-section (1) of Section 274 of the
companies Act, 1956,
(f) In oui opinion and lo the beat of our infuimation and according io
the explanation given to us, the said accounts read together with
schedules, Significant accounting policies and notes give 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 so far as it
relates to Balance Sheet, of the State of Affairs of the Company as at
31st March 2005.
ii. In the case of Profit and Loss account, neither profit nor loss of
the company for the year ended on that date .
ANNEXURE TO THE AUDITOR S REPORT REFERRED TO TI\ PARAGRAPH (3) OF OUR
REPORT OF EVEN DATE.
(a) The Company has maintained proper records showing full particulars
including Quantitative details and situation of fixed assets on the
basis of information available.
(b) As explained to us the management has verified most of the fixed
assets during the year, and as informed to us no material discrepancies
were noticed on such verifications.
(c) As informed to us, there is no disposal of substantial part of
fixed assets during the year.
a. As explained to us, the physical verification has been conducted by
the management at the year-end in respect of inventory including stock
lying with third parties.
b. In our opinion and according to the information and explanation
given to us, the procedure of physical verification of inventory
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 principal items of
inventories and as explained to us there were no material discrepancies
noticed on such verifications.
3. According to the information and explanation given to us, the
Company has not taken or granted secured or unsecured loans from
Companies, firms or other narties lister! in the renister maintained
under Section 301 nf the Companies Act, 195G
4. in our opinion and according to the information and explanations
given to us during the course of the audit, there are in general,
adequate internal control procedures commensurate with the size of the
Company and nature ot its business with regard to purchases ot
inventory plant and machinery, equipment and other assets, and with
regards to the sale of goods during the course of audit we have not
come across any major weakness in internal control
5. According to the information and explanation given to us, we are of
the opinion that there are no transactions that need to be entered into
the register under section 301 of the Companies Act 1956.
6. The Company has not invited deposit from the public within the
meaning of section 58A and 58 AA of the Companies Act 1956 and the
rules made there under. Therefore the provisions of clause (vl) of
paragraph 4 of the companies (Auditors Report) order, 2003 is not
applicable to the company.
7 According to the information and explanation given to us; there is no
internal audit system in existence.
8 As explained to us, the Central Government has not prescribed
maintenance of cost records under section 209 (1) (d) of the Companies
a. According to the records of the Company apart from certain
instances of delays the company is regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Investor education fund, Employees State Insurance, Income Tax,
Sales Tax, Customs Duty, Excise duty cess and material statutory dues
applicable to it.
b. According to information and explanation given to us, no undisputed
amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs
Duty, Excise duty and Cess were in arrears as at 31-03-2005, for a
period of more than 6 months from the date they became payable.
c. There are no disputed statutory dues.
10. The company does not have any accumulated losses at the end of the
financial year and hence clause(x) of paragraph 4 of the order is not
11. As per the information and explanation given to us, the company
has not defaulted in respect of repayment of dues to financial
institutions, bank or debenture holders except wherever and to the
extent moratorium granted by them.
12. As informed to us, the company has not granted loans and advances
on the basis of security by way of pledge of shares, debentures and
13. According to the information and explanation given to us, the
company has not given any guarantee during the year for the loan taken
by others from banks and financial institutions.
14. The company has not availed any term loan during the year.
15. According to the information and explanation given to us, and on
an overall examination of the balance sheet of the company, the report
that no funds raised on short term basis have been used for long term
investment. No long term funds have been used to finance short term
16. According to the information and explanation given to us, the
company has not made preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the
Companies Act 1956.
17. During the year, the company has not issued any debentures.
18. During.the year, the company has not raised money by public issue
19. No fraud on or by the company has been noticed or reported during
20. Keeping in view of the nature of activities carried by the company
clauses (xii) and (xiv) of paragraph 4 of Companies (Auditors Report)
order, 2003 are not applicable.
PLACE: THANE FOR KRISHNAKUMAR THAKKAR & CO
DATE: 30/08/2005 CHARTERED ACCOUNTANTS