We have audited the attached BALANCE SHEET of AUTOLINE INDUSTRIES
LIMITED as at 31st March 2012, the Statement of Profit & Loss Account
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.
1. 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 presentation of the
financial statements presentation. We believe that our audit provides a
reasonable basis for our opinion.
2. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) Amendment order, 2004
(together the Order), issued by the Central Government of India in
terms of section 227 (4A) of Companies Act, 1956 and on the basis of
such checks of the books and records of the company as we considered
appropriate and according to information and explanation given to us,
we enclose in the annexure hereto a statement on the matters specified
in paragraph 4 & 5 of the said order to the extent applicable to
3. Further to our comments in the Annexure referred to in paragraph 2
above we Report that:
a) We have obtained all the information and explanation 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 the
books of accounts of the company.
c) The Balance Sheet, Statement of Profit & Loss Account and the Cash
Flow Statement dealt with by this report are in agreement with the
Books of Accounts.
d) Without qualifying our opinion, we draw attention to -
(i) Sub-note to note no.9 regarding non provision for diminishing in
value of investment in subsidiary Koderat Investments Ltd. (Cyprus).
The note is self explanatory. In the given circumstances we are unable
to give our opinion.
e) In our opinion and subject to Note to Accounts, the Balance Sheet,
Statement of Profit & Loss Account and Cash Flow Statement dealt with
by this report comply with the requirement of the Accounting Standard
referred to in sub section (3C) of section 211 of Companies Act, 1956,
to the extent applicable.
f) On the basis of the written representation received from the
Directors as on 31st March 2012 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March 2012 for being appointed as a Director of the Company in
terms of clause (g) of sub-section (1) of section 274 of the Companies
g) 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 and subject to
our observations in 3(d) above 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
i) In case of the Balance Sheet, of the state of affairs of the Company
as on 31st March, 2012.
ii) In the case of the Statement of Profit & Loss Account of the Profit
for the year ended on that date.
iii) In case of Cash Flow Statement, of the Cash Flows for the year
ended on that date.
ANNEXURE TO AUDITOR'S REPORT
[ Annexure Referred to in paragraph 2 of the Auditors' Report of even
date to the members of AUTOLINE INDUSTRIES LIMITED on the Accounts for
the Year Ended on 31st March, 2012]
1) In respect of Fixed Assets
a) The Company has generally maintained proper records showing
particulars including quantitative details and situation of Fixed
Assets on the basis of information available.
b) According to the information and explanation given to us, the fixed
assets are physically verified by the management according to the
phased programme which in our opinion is reasonable having regard to
the size of the company and the nature of its assets. On physical
verification by the management no major discrepancies between the book
record and physical inventory have been noticed.
c) In our opinion, the company has not disposed off a substantial part
of its Fixed Assets and the going concern status is not affected.
2) In respect of its Inventories: (Excluding material in transit).
a) The inventory of the Company has been physically verified by the
Management during the year at regular interval. In our opinion the
frequency of verification is reasonable.
b) In our opinion, and according to the information and explanations
given to us, the procedures as explained to us and which are followed
by the Management for physical verification of inventory are reasonable
and adequate in relation to the size of the Company and the nature of
c) According to the information and explanations given to us no
material discrepancies were noticed on physical verification of stocks
as compared to book records, discrepancies noticed were properly dealt
with, in the books of accounts, which were not material considering the
size of the Company's operation.
3) a) As per the information and explanation given to us, the company
has granted unsecured loan to companies, firms or other parties covered
in the Register maintained under Section 301 of the Companies Act,
1956. The year end balance is Rs.11,06,00,780/- and has been given to two
b) In our opinion, and according to the information and explanations
given to us, rate of interest in case of one subsidiary company and
interest free loan to wholly own foreign subsidiary company and other
terms and conditions of loan given by the company, secured or
unsecured, to the parties listed in the register maintained under
Section 301 of the Companies Act, 1956 are not prima facie, prejudicial
to the interest of the Company.
c) There is no prescribed stipulation of repayment of principal &
d) In respect of loan granted by company, the same are repayable on
demand and therefore question of overdue amount does not arise.
e) As per the information and explanation given to us, the company has
taken unsecured loan, from wholly owned subsidiary covered in the
Register maintained under Section 301 of the Companies Act 1956. The
year end balance is Rs. 80,18,055/- and is from one party.
f) The advance accepted by the company is from wholly owned subsidiary
company and as such the terms and conditions of this advance are not
prejudicial to the interest of the company.
g) There is no prescribed stipulation of repayment of principal &
4) In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased/ services availed are of special nature for which suitable
alternative sources do not exist for obtaining comparative quotations,
there are adequate internal control system commensurate with the size
of the Company and the nature of its business with regard to purchases
of inventory, fixed assets and with regard to the sale of goods. During
the course of our audit, no major weakness has been noticed in the
internal controls system.
5) In respect of transaction covered under section 301 of the Companies
Act 1956 :
a) Based on the audit procedures applied by us and according to the
information and explanations provided by the Management, we are of the
opinion that the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to
be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transaction made in pursuance of such contracts or
arrangements during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
6) The company has not accepted any deposits under the provisions of
sections 58A and 58AA or any other relevant provisions of the Act and
the Companies (Acceptance of Deposit) Rules, 1975 framed thereunder.
7) The Company has an internal audit system comprising of its own
internal management audit team, and also a firm of chartered
accountants appointed as internal auditor by the management and in our
opinion, company's present internal audit system is commensurate with
the size of the company and the nature of its business.
8) We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of subsection (1) of section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. The same are verified by
external cost auditor appointed by company for carrying cost audit and
has expressed their satisfaction for the cost record. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9) a) According to the information and explanations given to us and
according to the books and records as produced and examined by us,
undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, E.S.I., Income Tax, Sales Tax (VAT), Wealth Tax,
Service Tax, Excise Duty, Customs Duty, Cess and any other material
statutory dues, to the extent applicable, have been generally regularly
deposited with the appropriate authorities. According to the
information and explanations given, except for Income Tax, VAT and TDS
liability which is paid before the signing of report, no undisputed
amounts payable in respect of aforesaid dues were outstanding as at
31st March, 2012, for a period of more than six months from the date
they became payable.
b) As at 31st March 2012, according to the records of the Company and
on the basis of information and explanations given to us, except for
Income Tax & Sales Tax (VAT), there are no disputed dues in respect of
Custom Duty, Wealth Tax, Excise Duty, Service Tax and Cess.
The disputed amount is in respect of liability under Income Tax Act,
1961 for Asst. Year 2008-09 relevant to Financial Year 2007-08 is
aggregating to Rs. 2,92,96,660/- , which has not been deposited as at
31st March. 2012. The appeal in respect of same is pending with The
Commissioner of Income Tax (Appeals) Pune.
The disputed amount is in respect of liability under The Maharashtra
Value Added Tax Act, 2002/ The Central Sales Tax Act, 1956 for
Financial Year 2000-01 is aggregating to Rs.1,10,00,000/- and for
Financial Year 2001- 02 is aggregating to Rs.1,25,00,000/- , which has
not been deposited as at 31st March, 2012. The appeal in respect of
same is pending with The Joint Commissioner of Sales Tax (Appeals)
10) The company has no accumulated losses as at March 31, 2012, and has
not incurred any cash losses during the financial year ended on that
date and in the immediately preceding financial year.
11) Based on our audit procedures and on the information and
explanations given by the Management, in our opinion, the Company has
not defaulted in repayment of its dues to any financial institution or
bank or Debenture holder as at the balance sheet date.
12) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13) In our opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute and
provisions applicable to chit fund / nidhi / mutual benefit fund /
societies are not applicable to the Company.
14) In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in securities.
15) In our opinion, and according to the information and explanations
given to us, the Company has given corporate guarantee for the loans
taken by a subsidiary company from banks or financial institutions. In
our opinion the terms and conditions thereof are not prejudicial to the
interest of the company.
16) According to the information and explanation given to us, company
has raised term loan during the year. On the basis of the information
and explanation given to us and on an overall examination of the
financial statements of the company, we are of the opinion that, prima
facie the term loan is applied for the purposes for which they were
17) According to the information and explanations given to us, and on
an overall examination of the Balance Sheet of the Company, we report
that the funds raised on short term basis have been used for long term
18) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956.
19) No debentures have been issued during the year.
20) During the year the Company has not raised money by public issue.
21) During the course of our examination of the books of account
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 instance of fraud on or by
the Company, noticed or reported during the year, nor have we been
informed of such case by the Management.
FOR GUJAR RAWAT SHETH & ASSOCIATES.
FIRM REGISTRATION NO: 121347W
PLACE : PUNE. (VIJAY B SHETH)
DATE : 28TH APRIL, 2012 PARTNER.
MEM. NO. 037634