We have audited the attached Balance Sheet of Artson Engineering
Limited (the Company) as at 31st March 2010, the Profit and Loss
Account and the Cash Flow Statement 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.
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 misstatements. 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 for
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 enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
2. (i) On the basis of written representations received from the
directors, and taken on record by the Board of Directors, we report
that none of the directors is disqualified as on 31st March 2010 from
being appointed as a director in terms of Clause (g) of sub-section (1)
of Section 274 of the Companies Act, 1956.
(ii) In our opinion, proper books of account as required by law have
been kept by the Company, in so far as appears from our examinations of
(iii) The Balance Sheet, Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the Books of
(iv) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
(v) In our opinion, the Profit and Loss Account, the Balance Sheet &
the Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the Companies Act, 1956.
3. As per information and explanations given to us, the Central
Government has, till date, not prescribed any cess payable under
Section 441A of the Companies Act, 1956.
4. In our opinion, and to the best of our information and according to
the explanations given to us. the said accounts read together with
Significant accounting policies and Notes to accounts in Schedule 12
and specially Note No. 20 thereof regarding the pending approval of
Central Government in respect of excess payment of Rs. 492,000/- made
to one of the key managerial personnel than allowable under the
Companies Act, 1956, 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 the Balance sheet, of the state of affairs of the
Company as at 31st March 2010;
ii. in the case of Profit and Loss Account, of the profit for the year
ended 31st March 2010; and
iii. in the case of Cash Flow Statement, of the cash flows for the
year ended as on that date.
ANNEXURE TO AUDITORS REPORT
REFERRED TO IN PARAGRAPH T OF AUDITORS REPORT OF EVEN DATE TO THE
MEMBERS OF ARTSON ENGINEERING LIMITED (THE COMPANY)
1. (a) The Company is maintaining records to show particulars of Fixed
Assets including their quantitative details and location of all the
(b) According to the information and explanations given to us, physical
verification of the fixed assets was carried out by the management in a
phased periodical manner during the year under report, 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
(c) The Company has not disposed off substantial part of fixed assets
during the year under report. However, the Company has discarded some
Plant & Machinery, Computer, Furniture & Fixtures and Office
Equipment/Air Conditioner by writing off which has not affected the
going concern status.
2. (a) According to the information and explanations given to us,
physical verification has been conducted by the management as at the
year end in respect of the finished goods in process, stores, spare
parts and raw materials.
(b) In our opinion and according to the information and explanations
given by the management, the procedure of physical verification of
inventory followed by the management is reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) No material discrepancies have been noticed on verification of
inventory between the physical stock and the book records. The
discrepancies noticed have been properly dealt with in the books of
3. (a) The Company has not granted any Loans, Secured or Unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956; hence Clauses iii(a) to
iii(d) of Paragraph 4 of the Order are not applicable.
(b) In terms of BIFR order, the Company has taken a secured loan as
listed below from a Company listed in the register maintained under
Section 301 of the Companies Act, 1956. The terms and conditions on
which the said loan has been taken are not prima facie prejudicial to
the interest of the Company. The payment of principal in this regard is
not yet due and interest due has been paid thereon.
Maximum outstanding balance during the year was Rs. 2,294.68 Lakh
Name Balance Loan raised
during the Closing Balance
as on Year 2009-10 31st March 2010
1st April 2009
Limited 2,065.68 229.00 2,294.68
4. In our opinion and according to the information and explanations
given to us, there are reasonable internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of inventory, fixed assets and for the sale
of goods and services. Further on the basis of our examination of the
books and records of the Company and according to the information and
explanations given to us, we have neither come across nor have been
informed of any instances of major weakness in the aforesaid internal
control procedures. However, in our opinion having regard to the size
and nature of business and construction sites being spread over
different areas, the internal control needs to be strengthened.
5. Based on the audit procedures applied by us and according to the
information and explanations provided by the management, the
transactions that need to be entered in the register maintained u/s 301
of the Companies Act, 1956 have been entered.
6. (a) In our opinion and according to the information and
explanations given by the management, the Company has not accepted any
deposits during the Year. Accordingly, in our opinion the provisions of
Sections 58A and 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 are not applicable.
(b) There have been no proceedings before the Company Law Board,
National Company Law Tribunal or Reserve Bank of India or any court or
any other tribunal.
7. In our opinion, the internal audit function carried out during the
year by a firm of Chartered Accountants appointed by the Management
have been commensurate with the Companys size and nature of its
8. In our opinion and according to the information and explanations
given by the management, the Central Government has not prescribed for
maintenance of cost records under Section 209(l)(d) of the Companies
Act, 1956 for any of the products of the Company.
9. (a) According to the information & explanations given to us and the
records of the Company examined by us, in our opinion, the Company is
generally regular in depositing Undisputed Statutory dues including
Provident fund, Employees State Insurance, Income Tax, Wealth Tax,
Service Tax, Custom Duty, Excise duty, Education Cess and other
material Statutory dues as applicable with the appropriate authorities.
The amount of outstanding statutory dues exceeding six months from the
date they became payable as at 31stMarch 2010 are NIL.
(b) According to the information and explanations given to us, the
particulars of sales tax dues as at 31st March 2010 which have not been
deposited on account of a dispute pending are as under:
Name of the Nature of the Amount
Statute disputed dues (Rs.)
Commercial Tax Works Contract differences in 12,20,606
Officer (Andhra value of property passing and
Pradesh) sale in transit
Commercial Tax Works Contract value 2,07,981
Commercial Tax Works Contract value 32,79,788
Name of the Period to which Forum where
Statute the amount dispute is
Commercial Tax 1998-1999 Commissioner
Officer (Andhra Appeal
Commercial Tax 1998-1999 Commissioner
Commercial Tax 1997-1998 Commissioner
Officer (Haryana Appeal
10. The accumulated losses of the Company is more than its paid up
capital and free reserves. The Company has not incurred a cash loss
during the year though it incurred cash losses in the preceding
financial years and accounts are continued to be prepared on a going
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institutions, banks and debenture holders.
12. The Company has not granted any Loans and Advances on the basis of
security by way of pledge of shares, debenture and other securities.
Therefore Clause 4(xii) of the said Order is not applicable to the
13. The Company is not a Chit Fund or a Nidhi Mutual Benefit/Society.
Therefore, the provisions of Clause 4(xiii) of the said Order is not
applicable to the Company.
14. The Company has not entered into any trading in shares,
securities, debentures and other investments during the year. Therefore
Clause 4(xiv) of the said Order is not applicable to the Company.
15. According to the information and explanations given to us, and the
representations made by the management, the Company has not given any
guarantee for loans taken by others from any bank or financial
16. In our opinion and according to the information and explanations
given to us, the term loans were applied for the purposes for which the
loans were obtained.
17. Based on the information and explanations given to us, the Company
has not raised any funds for short term basis.
18. The Company has not made any preferential allotment of shares to
any parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
19. The Company has not issued any secured debentures.
20. The Company has not raised any money through a public issue during
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instances of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of such case by the management.
For CHOKSHI & CHOKSHI
Firm Registration No. 101872W
K. S. CHOKSHI
Membership No. 17085
Place : Mumbai
Date : 7th May 2010