Simplex Castings

We have audited the attached Balance Sheet of SIMPLEX CASTINGS LIMITED
 as at 31st March, 2009 and also the Profit & Loss Account and the Cash
 Flow Statement for the year ended on that date. 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.
 
 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 statements
 presentation. We believe that our audit provides a reasonable basis of
 our opinion.
 
 1.  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 annex hereto a statement on the matters
 specified in paragraphs 4 and 5 of the said order.
 
 2.  Further to our comments in the Annexure referred to in paragraph
 (1) above, we state that :
 
 (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
 audit;
 
 (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
 those books;
 
 (c) The Balance Sheet and the Profit & Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 accounts;
 
 (d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt by this report comply with the Accounting
 Standards referred to in sub-section (3C) of Section 211 of the
 Companies Act, 1956.
 
 (e) On the basis of written representation from the directors as on
 31st March, 2009, and taken on records by the Board of Directors in
 their meeting, we report that, none of the directors is disqualified as
 on 31st March, 2009 from being appointed as director in terms of clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
 
 (f) 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 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 the case of Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2009
 
 (ii) in the case of the Profit & Loss Account, of the profit for the
 year ended on that date and
 
 (iii) in the case of Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 (Referred to in paragraph (1) of our report of even date) i) In respect
 of its Fixed Assets:-
 
 a) The company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets on the
 basis of available information.
 
 b) As explained to us, the fixed assets have been physically verified
 by the management during the year in a phased periodical manner, which
 in our opinion is reasonable having regard to the size of the company
 and nature of its assets. No material discrepancies were noticed on
 such physical verification.
 
 c) In our opinion the company has not disposed of substantial part of
 the fixed assets during the year and the going concern status of the
 company is not affected.
 
 ii) In respect of its Inventories:-
 
 a) As explained by the management, the Inventories have been physically
 verified by the management during the year.
 
 b) In our opinion and according to the information and explanation
 given to us the procedures of physical verification of stocks followed
 by the management were found to be reasonable and adequate in relation
 to the size of the company and nature of business.
 
 c) In our opinion and according to the information and explanations
 given to us the company is maintaining proper records of inventory. The
 discrepancies noticed on verification between physical stock and book
 records were not significant and the same have been properly dealt with
 in the books of account.
 
 iii) In respect of the loans, secured and unsecured, granted or taken
 by the company to/from companies, firms and other parties covered in
 the register maintained u/s 301 of the Companies Act, 1956:-
 
 a) The company has not granted any loans, secured or unsecured loan to
 companies, firms or other parties covered in the register maintained
 u/s 301 of the Companies Act, 1956, and accordingly clause iii(b),
 iii(c) and iii(d) of paragraph 4 of the Order are not applicable to the
 company.
 
 b) The company has taken loan from three companies covered in the
 register maintained u/s 301 of the Companies Act, 1956. The maximum
 amount involved during the year and the year end balance of loan taken
 was the same at Rs. 92.56 lacs. (Clause 4(iii)(e) of the Order)
 
 In our opinion and according to the information and explanations given
 to us, the rate of interest and other terms and conditions on which
 loan has been taken from companies, firms or other parties listed in
 the register maintained u/s 301 of the Companies Act, 1956, were prima
 facie not prejudicial to the interest of the company.(Clause 4(iii)(f)
 of the Order)
 
 According to the information and explanations given to us, there is no
 stipulation as to repayment of principal and interest, eventhough
 interest is credited to the respective partys account at the year end.
 (Clause 4(iii)(g) of the Order)
 
 iv) In our opinion and according to the information and explanation
 given to us during the course of our audit, there are adequate internal
 control system commensurate with the size of the company and the nature
 of its business with regard to the purchases of stores, raw-materials,
 plant & machinery, equipments and other assets and for the sale of
 goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weaknesses in the
 internal control system.
 
 v) In respect of the transaction covered u/s 301 of the Companies Act
 1956:-
 
 a) To the best of our knowledge and belief and according to the
 information and explanations given to us, we are of the opinion that
 the particulars of contracts or arrangements that need to be entered
 into the register maintained u/s 301 of the Companies Act, 1956 have
 been so entered.
 
 b) In our opinion and according to the information given to us the
 transactions made in pursuance of the contracts or arrangements entered
 in the register maintained u/s 301 of the Companies Act,1956
 aggregating during the year to Rs.5,00,000/- or more in respect of any
 party were made at prices which are reasonable having regard to
 prevailing market prices at the relevant time where such market prices
 are available.
 
 vi) The company has not accepted any deposits from the public during
 the year to which the directives issued by the Reserve Bank of India
 and the provisions of section 58A & 58AA or any other relevant
 provisions of the Act and the rules made thereunder are applicable.
 
 vii) In our opinion, the company has an adequate internal audit system
 commensurate with the size and nature of its business.
 
 viii) The Central Government has not prescribed the maintainance of
 cost records under section 209(1 )(d) of the Companies Act, 1956 for
 any of the products manufactured by the company.
 
 ix) In respect of statutory dues:-
 
 a) According to the information and explanations given to us.,
 undisputed statutory dues including Provident Fund, Employees State
 Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
 Duty, Excise Duty, Cess and other dues have generally been regularly
 deposited with the appropriate authorities barring slight delay in few
 cases. According to the information and explanations given to us no
 undisputed amounts payable in respect of the aforesaid dues were
 outstanding as at 31st March 2009 for a period of more than six months
 from the date of becoming payable.
 
 b) The disputed statutory dues that have not been deposited on account
 of matters pending before appropriate authorities are as under:
 
 SI Name of    Nature of      Forum where          Period      Amount
    Statue     Dues           dispute is pending               in lacs
 No
 
 1 Central
   Excise Act  Excise Duty    High Court, Bilaspur  2003-04     1.72
                              Central Excise & 
                              Service Tax           2003-04     0.80
                              Appellate Tribunal 
                             (CESTAT)
                             Commissioner (Appeals) 2005-06     4.75
 
 2.  Central 
     Sales 
     Tax Act    CST Tax                                          6.03 
     Chatisgarh 
     Commercial CGST         Dy. Commissioner 
                             (Appeals)               2004-05     39.97 
     Tax Act                 Entry Tax                            3.78
 
 3.  Income
     Tax Act   Income Tax    Appellate Tribunal      2001-02      3.65
                               - do-                 2004-05      3.62
 
 x) The company does not have accumulated losses and has not incurred
 any cash losses during the financial year and in the immediately
 preceeding financial year.
 
 xi) In our opinion and according to the information and explanations
 given to us and the records examined by us, the Company has not
 defaulted in repayment of dues to financial institutions/banks. The
 Company has not issued any debentures.
 
 xii) In our opinion and according to the information and explanation
 given to us no loans or advances have been granted by the company on
 the basis of security by way of pledge of shares, debentures or other
 securities.
 
 xiii) In our opinion, the company is not a chit fund or a nidhi /
 mutual benefit fund / society. Accordingly, clause 4(xiii) of the
 Companies (Auditors Report) Order 2003 is not applicable to the
 company.
 
 xiiv) In our opinion and according to the information and explanation
 given to us the company is not dealing in or trading in shares,
 securities and other investments. Accordingly the provisions of clause
 4(xiv) of the Companies (Auditors Report) Order 2003 are not
 applicable to the company.
 
 xv) The company has not given guarantee for loans taken by others from
 banks or financial institutions.
 
 xvi) In our opinion and on the basis of information and explanation
 given to us, the term loans were applied for the purpose for which they
 were obtained.
 
 xvii) According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the company, we are of
 the opinion that the company has utilised Rs.151.32 lacs raised from
 short term sources towards long-term investment.
 
 xviii) According to the information and explanations given to us, the
 company has not made any preferential allotment of shares during the
 year to parties and companies covered in the register maintained u/s
 301 of the Companies Act, 1956.
 
 xix) In our opinion and according to the informations and explanations
 given to us the company has not issued any secured debentures during
 the period covered by our report. Accordingly, the provisions of clause
 4(xix) of the Companies (Auditors Report) Order 2003 are not
 applicable to the company.
 
 xx) During the period covered by our audit report, the company has not
 raised any money by way of public issue.
 
 xxi) In our opinion and according to the information and explanation
 given to us, no fraud on or by the company has been noticed or reported
 during the year, that causes the financial statements to be materially
 misstated.
 
 
                                                   For TAUNK & SRIKANTH
 
                                           (Formerly N. K. TAUNK & CO.) 
                                                  Chartered Accountants
 
                                                           (N.K. Taunk)
                                                               Partner
                                                  Membership No. 30421 
 Place : Bhilai 
 Dated : 3rd August, 2009