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Bombay Paints | Auditor's Report > Paints & Varnishes > Auditor's Report from Bombay Paints - BSE: 509475, NSE: N.A
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Bombay Paints

BSE: 509475|ISIN: INE712D01016|SECTOR: Paints & Varnishes
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Mar 07
Auditor's Report (Bombay Paints) Year End : Mar '08
We have audited the attached Balance Sheet of Bombay Paints Limited, as
 at 31st March 2008, and also he Profit and Loss Account and the Cash
 Flow Statement 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 generally accepted auditing
 standards 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 end significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 As required by the Companies (Auditors Report) Order, 2003 issued by
 the Central Government of India in term: of sub-section (4A) of section
 227 of the Companies Act, 1956, we give below a statement on the
 matters specified in paragraphs 4 and 5 of the said order.
 
 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;
 
 b) As explained to us, the assets have been physically verified by the
 management in accordance with a phased programme of verification, which
 in our opinion is reasonable, considering the size and the nature of
 its business. The frequency of verification is reasonable and no
 material discrepancies have been noticed on such physical verification;
 
 c) The Company has not disposed off any part of the fixed assets during
 the year.  
 
 ii) In respect of its inventories:
 
 a) The inventory has been physically verified by the management during
 the year. In our opinion, the frequency of verification is reasonable.
 As regards materials lying with third parties, confirmations have been
 obtained;
 
 b) The procedures of physical verification of inventory followed by the
 management are, in our opinion, reasonable and adequate in relation to
 the size of the Company and nature of its business;
 
 c) The Company has maintained proper records of inventory. As informed,
 no material discrepancies were noticed on such physical verification.
 
 iii) 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, 1966.  Accordingly the clauses
 4 (iii) (b) to (d) of the Order are not applicable.
 
 b) The Company has taken secured / unsecured loans from five companies
 and a party covered in the register maintained under section 301 of the
 Companies Act, 1956. The maximum amount involved during the year was
 Rs. 2259.23 Lacs and the year-end balance of such loans taken was Rs.
 1978.11 Lacs.
 
 c) The rate of interest, and other terms and conditions of such loans
 taken by the Company, are not prima facie prejudicial to the interest
 of the Company
 
 d) According to the information and explanations given to us, in
 respect of unsecured loans taken by the Company, the principle amount
 is repayable on demand. As explained to us, the Com/zany has not paid
 interest on such loans except in respect of one company. Further, in
 respect of secured loan taken by the Company, the principle amount is
 payable as per stipulation and the Company has paid interest on such
 loan.
 
 iv) In our opinion, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to purchase of inventory, fixed assets and for the
 sale of goods.  During the course of our audit, no major weakness has
 been noticed in the internal control system.
 
 v) a) Based on the audit procedure applied by us and according to the
 information and Explanation- ons given to us, we are of the opinion
 that particulars of contracts or arrangements referred o in section 301
 of the Companies Act, 1956 have been entered in the register maintained
 under that section.
 
 b) According to the information and explanations given to us, where
 each of such transactions is in excess of Rs. 5 lacs in respect of any
 party during the year, the transactions have been made at prices which
 are reasonable having regard to the prevailing market prices at the
 relevant time.
 
 vi) The Company has not accepted any deposits from the public, to which
 the provisions of section 58A and 58 AA of the Companies Act, 1956 and
 the rules framed there under would apply,
 
 vii) The Company does not have a formal internal audit system. However,
 in our opinion, there are adequate internal control procedures
 commensurate with the size and nature of its business.
 
 viii) We have broadly reviewed the books of account maintained by the
 Company, pursuant to the Rules made by the Central Government for the
 maintenance of the cost records, under section 209 (1) (d) of the
 Companies Act, 1956 in regard to Paints manufactured by the Company and
 are of the opinion that, prima facie, the prescribed accounts and
 records have been made and maintained,
 
 ix) a) The Company has been generally regular in depositing 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 with appropriate authorities, where applicable,
 According to the information and explanations given to us, there are no
 undisputed amounts payable in respect of such statutory dues which have
 remained outstanding as at 31st March, 2008 for a period of more than
 six months from the date they became payable.
 
 b) There are no dues of Sales tax, Income tax, Wealth tax, Customs
 duty, Excise duty and Cess that have not been deposited on account of
 any dispute, except for Sales Tax matters pending before Commissioner
 (Appeals) amounting to Rs.l 6.40 Lacs.
 
 x) The Company has accumulated losses exceeding fifty percent of its
 net worth. The Company has not incurred cash losses in the current
 financial year and in the immediately preceding financial year,
 
 xi) As explained to us, the Company has not defaulted in repayment of
 its dues to bank, The Company coes not have any borrowings by way of
 debentures from financial institutions.
 
 xii) As explained to us, the Company has not granted any loans or
 advances on the basis of security by way of pledge of shares,
 debentures or any other securities.
 
 xisi) The provisions of any special statute applicable to Chit Fund,
 Nidhi or Mutual Benefit Fund / Societies are not applicable to the
 Company.
 
 xiv) The Company is not dealing or trading in shares, securities,
 debentures or other investments and hence the requirements of clause 4
 (xiv) of the Order are not applicable to the Company.
 
 xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from any
 bank or financial institution.
 
 xvi) On the basis of the records examined by us, we have to state that,
 the Company has, prima facie, applied the term loans 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 for long-term
 purposes.
 
 xviii) 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.
 
 xix) The Company has not issued any debentures during the year.
 
 xx) The Company has not raised any money by public issue during the
 year.
 
 xxi) On the basis of our examination 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.
 
 Further to our comments referred to above, we report that:
 
 1.  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;
 
 2.  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;
 
 3.  The Balance Sheet, Profit and Loss Account and Cash Flow statement
 dealt with by this report are in agreement with the books of account;
 
 4.  In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C)of Section 211 of the
 Companies Act, 1956;
 
 5.  On the basis of written representations received from the Directors
 as on 31st March 2008 and taken on record by the Board of Directors and
 on the basis of examination and records of the Company, we report and
 certify that none of the Directors is disqualified from being appointed
 as a Director in terms of clause (g) of sub-section (1) of Section 274
 of the Companies Act, 1956 on the said date;
 
 6.  Attention is invited to:
 
 a) Note no, 1 7 relating to non-provision of interest amounting to
 Rs.63.45 Lacs for the year (Rs. U2.76 lacs upto 31st March 2007) on
 short-term loans wherein the company has approached its lenders for
 waiver of interest in line with the rehabilitation proposal submitted
 to BIFR.
 
 b) The Company was declared a sick industrial Company by The Board for
 Industrial and Financial Reconstruction (BIFR) on 19th May 2003.
 Pending finalisation / approval of the scheme of rehabilitation by
 BIFR, the accounts of the Company are prepared on a going concern basis
 (Refer note no 2 in schedule 13).
 
 We further report that had the observations made by us in para a) above
 been considered, tie profit for the year would have been lower by Rs.
 63,45 lacs and the Balance in the Profit and Loss Account would have
 been higher to that extent.
 
 Subject to the above in our opinion and to the best of our information
 and according to the explanations given to us, the said Accounts read
 together with notes thereon give the information required by the
 Companies Act, } 956, in the manner so required and give a true and
 fair view in conformity with the 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 2008;
 
 b) in the case of the Profit and Loss Account, of the Profit for the
 year ended on that date; and
 
 c) in the case of the Cash Flow Statement, of the Cash Flows for the
 year ended on that date.
 
                                              ForM. M. NISSIMANDCO.
                                              Chartered Accountants
 
                                                  N. Kashinath
                                                    (Partner)
                                               Membership No. 36490
 Mumbai, 30th June, 2008
Source : Dion Global Solutions Limited
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