1. We have audited the attached Balance Sheet of Riverdale Foods
Limited (the Company) as at March 31, 2012, the Statement of Profit and
Loss and 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 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. Without qualifying our opinion, we draw attention to:
Note No. 2(a) to the financial statement. For reasons mentioned
therein, these financial statements have been prepared on a going
concern basis, inspite of the accumulated losses at the year end
equating the shareholders'' funds as in accordance with the
Rehabilitation Scheme, sanctioned by the Hon''ble BIFR on July 02,
2010, the Strategic Investor being the Holding Company is committed to
financially support the operations and the fund requirements of the
Company for refurbishment of existing Plant and Machinery.
4. As required by the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditors'' Report) (Amendment) Order, 2004,
[Order], issued by the Central Government of India in terms of
sub-section (4A) of section 227 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.
5. Further to our comments in Annexure referred to above, we report
(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, proper books of account, as required by law have
been kept by the Company, so far as appears from our examination of
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account maintained by the Company;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss 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;
(e) None of the Directors of the Company who held such office as on
November 30,2007, are qualified to be appointed as Director of the
Company of any other public company, in terms of clause (g) of sub-
section (1) of section 274 of the Companies Act, 1956 as the Company had
failed to file its Annual Accounts and Annual Returns for the financial
years 2004-05, 2005-06 and 2006-07 till November 30, 2007, being the
due date upto which the Annual Accounts and Annual Return for the year
ended March 31,2007 was required to be filed. The aforesaid Annual
Accounts and Annual Returns were filed by the Company on February
The Company has thereafter failed to file its Annual Accounts and
Annual Returns for the financial years 2007-08,2008-09 and 2009-10 and
in terms of the provisions of clause (g) of sub-section (1) of section
274 of the Companies Act, 1956, all the persons who held office as
directors of the Company, in addition to the directors referred to in
the above para, are not qualified from being appointed as director of
any other public company, w.e.f. November 30, 2010, being the due date
upto which Annual Accounts and Annual Return for the year ended March
31,2010 was required to be filed.
During the year, the Company filed the Annual Accounts for the financial
years 2007-08, 2008-09, 2009-10 and 2010-11 with the Registrar of
Companies. However the Annual Returns for these years could not be filed
due to non existence of Director Identification Number (DIN) of two of
its Directors, Mr. Raja Karnam and Mr. Keshav Rao.
The disqualification is continuing on the date of our Report.
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements read
together with significant accounting policies and notes thereon and
attached thereto give in the prescribed manner the information required
by the Companies Act, 1956, 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 31,2012;
b. in the case of the Statement of Profit and Loss, of the loss
incurred by the Company for the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
[Referred to in paragraph 4 of the Auditors'' Report of even date to the
members of Riverdale Foods Limited on the financial statements for the
year ended March 31,2012]
i) In respect of fixed assets:
a) The Company has not maintained proper records showing full
particulars, including quantitative details and situation of fixed
b) None of the fixed assets were physically verified by the management
during the year. In the absence of any physical verification of fixed
assets, we are unable to comment whether there existed any material
discrepancies as compared to book records. Discrepancies arising, if
any, which may have a material impact, have not been considered in the
accounts for the year. Further certain parcels of land on which
factory building and structures are constructed, and payments whereof
were made by the Company, are presently held in the name of some of the
former and present Directors of the Company. Necessary legal formalities
have to be complied for transfer of the said parcels of land in favor
of the Company.
c) As informed and explained to us, the Company has not disposed off a
substantial part of its fixed assets during the year.
ii) The Company is not maintaining any inventory, as the Company is out
of operations since last six years, hence sub-clause (a), (b) and (c)
of clause (ii) of the said Order is not attracted.
iii) a) The Company has not given any trade advance to Companies, firms
or other parties covered in the register maintained under section 301
of the Companies Act, 1956, hence sub-clauses (a),(b),(c) and (d) of
clause (iii) of the said Order are not applicable.
b) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956, hence sub clauses
(e),(f)and (g) of clause (iii) of the said Order are not applicable.
iv) The Company does not have an internal control system commensurate
with its size and the nature of its business for the purchase of
inventory, fixed assets and also for the sale of goods.
v) As the Company has not entered into any contracts or arrangements
referred to in section 301 of the Companies Act, 1956, hence sub clause
(a) and (b) of clause (v) of the said Order are not attracted.
vi) The Company has not accepted any deposits from the public within
the meaning of sections 58A, 58AAorany other relevant provisions of the
Companies Act, 1956and the rules framed there under.
vii) The Company does not have an internal audit system.
viii) According to the information and explanations given to us, the
Central Government has prescribed the maintenance of cost records under
clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.
However the Company has not carried out any prescribed activities during
the year and its operation is closed, the Company has not made and
maintained any cost accounts/records.
ix) a) The Company has undisputed dues outstanding and payable on
account of Provident Fund, Gram Panchayat, Sales tax Deferral dues
aggregating to Rs. 99.93 Lac as detailed hereunder. The same were
outstanding at the year end. for a period of more than six months from
the date they became payable.
Amounts payable to Amount
Provident Fund 16.00
Gram Panchayat 4.00
Sales Tax Deferral 79.93
b) According to the information and explanations given to us, there are
no dues of income tax, wealth tax, custom duty, excise duty, service
tax and cess that have not been deposited with appropriate authorities
on account of any dispute.
x) The accumulated losses of the Company are more than 50% of its net
worth as at March 31,2012. The Company has incurred cash loss in the
financial year ended on that date and also in the immediately preceding
xi) According to the records of the Company examined by us and the
information and explanation given to us, the Company has no loan
outstanding towards financial institutions and banks.
xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
xiii) The provisions of any special statute applicable to chit
fund/nidhi /mutual benefit fund/ societies are not applicable to the
xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments.
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xvi) In our opinion and according to the information and explanations
given to us, the Company has not obtained any term loans during the
xvii) On the basis of an overall examination of the Balance Sheet of
the Company, in our opinion and according to the information,
explanations and representation given to us by the management, we
report that no short term funds have been used for long term
xviii) The Company has not made any preferential allotment of shares
during the year to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
xx) The Company has not raised any money by way of public issue during
xxi) Based upon the audit procedure performed and according to the
information and explanations given to us, no material fraud on or by
the Company has been noticed or reported during the course of our
audit, that causes the financial statement to be materially misstated.
117, New Delhi House, B. Bhushan & Co.
27, Barakhamba Road, Chartered Accountants
New Delhi-110001 Firm Regn. No.-001596N
By the hand of
May 30,2012 Membership no. 505508