We have audited the attached Balance Sheet of Blue Chip Tex Industries
Limited as at 31st March 2011 and the Profit and Loss Account for the
year ended on that date annexed thereto and Cash Flow Statement 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.
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 financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement 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 (Auditors Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the Annexure
hereto a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
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 explanations which to the
best of our knowledge and belief were necessary for the purposes of our
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
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion the Balance Sheet, Profit and Loss Account and the
Cash Flow Statement dealt with by this report comply with the mandatory
Accounting Standards referred in sub-section (3C) of section 211 of the
Companies Act, 1956;
e) In our opinion, and based on information and explanations given to
us, none of the directors are disqualified as on 31st March, 2011 from
being appointed as directors 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 present a true and fair view, in conformity with the
accounting principles generally accepted in India:
(i) in so far as it relates to Balance Sheet, of the state of affairs
of the Company as at 31st March, 2011;
(ii) in so far as it relates to the Profit and Loss Account, of the
Profit of the Company for the year ended on that date; and
(iii) in so far as it relates to the Cash Flow Statement, of the cash
flows of the company for the year ended on that date.
ANNEXURE TO AUDITOR''S REPORT
Referred to in Paragraph 2 of our report of even date
1. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details situation of fixed assets.
b. As explained to us, the fixed assets have been physically verified
by the Management during the year, 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
fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a. As explained to us, inventories have been physically verified by
the management at regular intervals during the year.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The discrepancies noticed on physical verification of stock as
compared to the book records were not material and have been properly
dealt with in the books of accounts.
3. The Company has not granted or taken any loans, secured or
unsecured to/from companies, firms or any other parties covered in the
register maintained under section 301 of the Act. Hence, clause (iii)
of para 4 of the aforesaid Order is not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to the purchase of inventory, fixed assets and
also for the sale of goods. During the course of our audit, we have not
observed any major weaknesses in internal controls.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956;
(a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered in the register maintained
under section 301 of the Companies Act, have been so entered.
(b) In our opinion and according to the information and explanations
given to us, each of the transactions in pursuance of such contracts /
arrangements in excess of Rs. 5 Lakhs in respect of any party during
the year, have been made at prices at prices which are reasonable
having regards to the prevailing market prices at the relevant time,
where such prices are available.
6. The Company has not accepted any deposits from the public.
7. The Company did not have an internal audit system during the year
but its internal control procedures ensure reasonable internal checking
for its financial and other records.
8. The Central Government has not prescribed maintenance of cost
records under Section 209 (1) (d) of the Companies Act, 1956.
9. In respect of statutory dues:
a. According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-Tax, Sales-tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been
generally regularly deposited with the appropriate authorities.
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, 2011 for a period of more than six months
from the date of becoming payable:
b. According to the information and explanations given to us, there are
no disputed statutory dues pending as on 31st March, 2011 except for
disputed income tax liability of Rs. 77,872/- related to Assessment
Year 2005-2006, against which the Company has filed appeal with
10. The Company has no accumulated losses and has not incurred any
cash losses during the financial year covered by our audit or in the
immediately preceding financial year.
11. In our opinion and according to the Information and explanations
given to us, the Company has not defaulted in repayment of dues to
Banks. There are no borrowings from Financial Institutions or by way of
12. In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
13. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/ society. Therefore, clause 4(xiii) of the Companies
(Auditor''s Report) Order 2003 is not applicable to the Company.
14. The Company has maintained proper records of transactions
contracts in respect of dealing in Shares, Securities and other
investments and timely entries have been made therein. All Shares,
securities and other investments have been held by the Company in its
15. According to the information and explanations given to us, the
Company has not given any guarantees for loans taken by others from
banks or financial institutions.
16. The Company has not raised any new term loans during the year.
17. 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 not used funds raised on short- term
basis for long-term investment.
18. During the year, 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. The Company has not issued any debentures during the year.
20. The Company has not raised any money by way of public issue during
21. In our opinion and according to the information and explanations
given to us, no fraud on or by the company has been noticed or reported
during the year.
For Rajendra & Co.
(Registration No. 108355W)
Akshay R. Shah
Membership No.: 103316
Dated : 27th May, 2011