We have audited the Balance Sheet of SHABA CHEMICALS LIMITED as at 31st
March 2011 and also the Profit and Loss Account 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.
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 assurances about weather the financial
statement are free of material misstatement. An audit includes
examining, on text basic, 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 our opinion.
As required by the Companies (Auditor''s Report) Order, 2003 (as amended
) issued by the Central Government of India in term of sub-section (4A)
of section 227 of the Companies Act, 1956. We enclosed in the Annexure
a statement on the matter specified in paragraph 4 and 5 of the said
Further to our comments in the Annexure referred to above, we report
1. We have obtained all the information and explanation, which to the
best of our knowledge and belief were necessary for the purpose of our
2. In our opinion, proper books of accounts as required by law have
been kept by the Company so for as appears from our examination of
3. The Balance Sheet and Profit and loss account dealt with by this
report are in agreement with the books of account.
4. In our opinion, the Balance Sheet and Profit and Loss Account dealt
with by this report comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956.
5. On the basis of written representation received from the directors
a on 31st March 2011, and taken on record by the Board of Director, we
report that none of the directors is disqualified as on 31st March
2011, from being appointed as a director in term of clause (g) of
section 274 of the Companies Act, 1956.
6. In our opinion and the best of our information and according to the
explanation given to us, the said Balance Sheet and Profit and Loss
Account, with notes thereon given the information required by the
Companies Act, 1956 in the manner so required, and give a true and fair
In so as it relates to the Balance Sheet of the state of affairs of the
Company at 31st March 2011.
i) In so far it relates to the Profit and Loss Account of the loss for
the year ended on the date, and
ii) In the case of cash flow statement of the cash flows of the Company
for the year ended on that date.
ANNEXURE REFERRED TO THE AUDITORS REPORTS ON THE ACCOUNTS FOR THE YEAR
2010-2011 OF SHABA CHEMICALS LIMITED, INDORE
(1) The Company is not holding any fixed assets on the date of Balance
(2) The Company has ceased to carry on its manufacturing activities and
as such the provisions of clause (ii) (a), (ii)(c) & (vii) par 4 of the
Companies (Auditors Report) order, 2003 in so for as they relate to the
purchase sale and stock of stores, raw material, finished goods and
spare parts are considered not applicable to the Company.
(3) a) The Company has taken unsecured interest free loans from the
parties covered in the register maintained under section 301 of the Act
amounting to Rs. 2,55,082/-. There are no stipulations as to the rate
of interest or terms and conditions of such loans.
b) The company has not given loans secured or unsecured to companies,
firms or other parties listed in the register maintain under section
301 of the Companies Act, 1956.
(4) In our opinion and according to the information and explanation
given to us, there are no transaction for the purchase of inventory and
sale of goods hence the adequacy of the internal control procedures
commensurate wit the size of the Company and the nature of its business
is considered to be not applicable.
(5) Based on the audit procedures applied by us and according the
information and explanation provided by the management, there are no
contract and arrangements, transaction exceeding five lakh rupees with
any party that need to be entered into the register maintained under
(6) The Company had not accepted any deposits from the public to which
the provision of section 58A and 58AA of the Companies Act, 1956 and
any other relevant provision of the Act and the Companies (Acceptance
of Deposits) Rules, 1975 would apply. The Company Law Board or National
Company Law Tribunal or RBI or any Court or Tribunal has passed no
(7) The Company is listed Company, the paid up capital and reserves of
the Company is also exceeding Rs. 50 lakhs and the company have an
internal audit system which is commensurate with the size and nature of
(8) There being no Provident Fund Scheme and ESIC Scheme for the
employee in force, the provisions regarding regular deposit of the same
are considered to be not applicable. Further the company is regularly
in depositing income tax, sales tax, wealth tax, service tax, cess and
any other statutory dues with the appropriate authorities. Accordingly
information and explanation given to us, there are no undisputed
arrears of Statutory dues which have remained outstanding as at
31.03.2011 for the period of more than six months from the date they
(9) The Company has accumulated losses of Rs. 3,07,56,380.18 at and up
to the end of the financial year. The company has incurred no cash
losses during the financial year.
(10) In our opinion and according to the information and explanation
given to us, the company has not defaulted in repayment of due to
banks. The company has not taken any loans from financial institutions
nor has it issued any debentures.
(11) According to the information and explanation given to us, the
company has not granted any loans advances on the basis of security by
way of pledge of shares, debentures and other securities.
(12) The Company is not a chit fund or a nidhi / mutual benefit fund/
society. Therefore the provisions of clause 4(xiii) of the said Order
are not applicable to the Company.
(13) In our opinion and according to the information and explanation
given to us the Company has not given guarantees for loan taken by
others from banks or financial institutions.
(14) In our opinion and according to the information and explanation
given to us, no term loans have been applied for the purpose for which
they were raised.
(15) According to the information and explanation given to us 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. Also no long-term fund has been used to finance short-term
assets except permanent working capital.
(16) The company has not made any preferential allotment of share to
parties and companies covered in the register mentioned under section
301 of the Companies Act, 1956. According, the question of reporting
on whether the prices at which such shares have been issued in
prejudicial to the interest of the Company does not arise.
(17) The Company has not issued any debentures, According, the question
of creating a security of disclosures of end use of such monies does
(18) The company has not arisen any money by public issued during the
year. According, the question of disclosure of end use of such monies
does not arise.
(19) According to the information and explanation given to us, no fraud
on or by the Company has been noticed or reported during the course of
Date: 11.05.2011 For S. N. KABRA & CO.
Place: Indore Chartered Accountants