1. We have audited the attached Balance Sheet of BEMCO HYDRAULICS LTD
as at 31st March, 2012 and also the annexed Statement of Profit and
Loss and Cash Flow Statement of the Company for the year ended on that
date. 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditors'' Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
Sub-Section (4A) of Section 227 of the Companies Act, 1956 and on the
basis of such checks of books and records we considered necessary and
according to the information and explanations given to us, we give
below our comments on the matters specified in paragraph 4 & 5 of the
said Order as far as applicable:
i. The Company has maintained proper records showing full particulars,
including quantitative details and situation of its Fixed Assets. The
Fixed Assets have been physically verified by the Management during the
year. In our opinion, the frequency of verification is reasonable.
Discrepancies were noticed on such verification as compared to book
records, which were not material, have been adequately dealt with in
the books of accounts. There was no substantial disposal of fixed
assets during the year.
ii. a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
b) In our opinion, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c) The Company is maintaining proper records of inventory.
Discrepancies between book balance and physical records, which were not
material, have been adequately dealt with in the books of accounts.
iii. a) As informed, the company has not granted any loan, secured or
unsecured, to companies, firms or parties covered in the register
maintained under Section 301 of the Companies Act, 1956
b) The Company has taken unsecured loan from five companies covered in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs.64, 127, 286 and
year - end balance of such loan taken was Rs. 24, 624, 391.
c) In our opinion, the rate of interest and other terms and conditions
on which loan has been taken from companies and parties covered in the
Register maintained under Section 301 of the Companies Act, 1956 are
not, prima facie, prejudicial to the interest of the Company.
d) The Company is regular in repaying the principal amount as
stipulated and has been regular in the payment of interest.
iv. In our opinion and according to the information & explanation
given to us, there is an adequate internal control system commensurate
with the size of the Company & nature of its business, for the
purchases of inventory and fixed assets and for sale of goods. During
the course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
v. a) According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into a
register in pursuance of Section 301 of the Companies Act, 1956 have
been so entered.
b) In our opinion and according to the information & explanations given
to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of rupees five lacs in respect of
any party during the year have been made at prices, which are
reasonable, having regard to the prevailing market prices at the
vi. In our opinion & according to the information & explanations given
to us, the Company has not accepted any deposit from public during the
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. We are informed that maintenance of cost records has not been
prescribed by the Central Government under Sec 209(l)(d) of the
Companies Act, 1956.
ix. a) The Company is regular in depositing undisputed statutory dues
with appropriate authorities. There were no undisputed statutory dues
as at the last day of the financial year outstanding for a period of
more than six months from the date they became payable.
b) As informed, there are no disputed dues of sales tax, income tax,
customs duty, wealth tax, service tax, excise duty or cess as at the
year-end except the dues as given below:
Nature of Nature Amount Period Forum where dispute is
Statute of dues (Rs) pending
Value Sales Tax 17,17,545/- 2007-08 Joint Commissioner of
Tax Act, (incl.
penalty) Commercial Taxes,2003 Belgaum Division,
Value Sales Tax 70,832/- 2003-04 High Court, Karnataka
Value Sales Tax 75,062/- 2004-05 High Court, Karnataka
x. The Company does not have accumulated losses at the end of the
financial year. It has not incurred cash losses in the current
financial year and in the immediately preceding financial year.
(a) As per books and records maintained by the Company and according to
the information and explanations given to us, the Company has not
defaulted in repayment of dues to financial institution/ banks except
for the following
Less than 30 days 3,718,499/-
More than 30 days upto 60 days 5,281,883/-
(b) The Company has not issued any debentures.
xii. As informed and explained 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. In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to chit fund nidhi/mutual benefit fund/
xiv. In respect of Investment in Shares, proper records have been
maintained of the transactions and contracts and timely entries have
been made therein. The shares are held in the name of the company or in
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
xvi. In our opinion, the Term Loan were applied for the purpose for
which they were raised.
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used to finance
xviii. The Company has made any preferential allotment of 300,000
preference shares to a company covered in the register maintained under
section 301 of the Companies Act, 1956 during the year. In our
opinion, the prices at which the preference shares have been allotted
are not prima facie prejudicial to the interests of the Company.
xix. During the period covered by our audit report, the Company has not
issued any debentures.
xx. The Company has not raised any money from public issue during the
xxi. 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 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.
Further to above-
4. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
5. 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
6. The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by the report are in agreement with the books of account.
7. In our opinion, the Profit and Loss Account, Balance Sheet and Cash
Flow Statement, comply with the applicable Accounting Standards
referred to in Section 211 (3C) of the Companies Act, 1956.
8. On the basis of written representations 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 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
9. 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 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 accounting principles generally
accepted in India:
a. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
b. In the case of Statement of Profit and Loss, of the Profit for the
year ended on that date.
c. In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
For A.C.BHUTERIA & CO.
Firm Registration No. 303105E
Place: Kolkata Partner
Dated: 28.05.2012 Membership no. 56832