1. We have audited the attached Balance sheet of Celestial Labs
Limited as on 31st March 2009 and the Profit and Loss Account attached
thereto for the period ended 31sl March 2009. 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.
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 the 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, issued
by the Central Government in terms of Sub Section (4A) of Section 227
of the Companies Act, 1956, we enclose in the annexure a statement on
the matters specified therein.
4. Further to our comments in the Annexure referred to above, we
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
ii. 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
iii. The balance sheet and profit and loss account dealt with by this
report are in agreement with the books of account;
iv. In our opinion, the balance sheet and profit and loss account dealt
with by this report comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956;
v. 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 2009 from being
appointed as director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts 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;
a. In the case of the balance sheet, of the state of affairs of the
Company as at 31st March 2009.
b. In the case of the profit and loss account, of the profit for the
period ended on that date;
c. In the case of Cash Flow statement, of the Cash Flow for the said
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT AS REFERRED TO IN PARA 3 OF THE SAID
REPORT OF EVEN DATE
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
The fixed assets have been physically verified by the management at
reasonable intervals. No material discrepancies have been noticed on
Fixed Assets disposed of during the year are not material enough to
affect the going concern of the company.
2. Physical verification has been conducted by the Management at
reasonable intervals in respect of fixed assets and stores & spares.
The procedures followed by the Management for the physical verification
of stocks are, in my opinion, reasonable and adequate in relation to
the size of the Company and the nature of its business.
No material discrepancies were noticed on physical verification of
stores as compared to book balances in so far as appears from my
examination of the books.
The closing stock has been valued in LIFO Method.
The assets have been regrouped wherever felt necessary.
3. The Company has not taken any loans, secured or unsecured from
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act,1956 during the year.
The Company has not granted any loans, secured or unsecured to the
Companies, firms or other parties listed in the Register maintained
under section 301 of the Companies Act, 1956 during the year.
4. There are adequate internal control procedures commensurate with
the size of company and nature of its business for the purchase of
store, raw materials including components, plant and Machinery,
equipment and other assets and for the sale of goods.
5. According to the records of Company, there were no transaction of
purchase of goods, services and sale of goods, services, made in
pursuance of contracts or arrangements entered in the register
maintained under Section 301 of the Companies Act, 1956.
6. In our opinion and according to information and explanations give
to us the company has not accepted any deposit as such the question of
compliances of section 58, 58AA and other relevant provision of
Companies act do not arise. Scrap or by-products are not generated by
7. The Company needs to improve the internal audit system commensurate
with the size of the company and the nature of its business
8. As explained to us, the Central Government has not prescribed the
maintenance of cost records under section 209(l)(d) of the Companies
9. In our opinion and according to the information and explanations
given to us, the provisions of Provident Fund & Family Pension Act,
Employees State Insurance Act are applicable to the company. The
company is generally regular in depositing PF and ESI dues with the
10.. According to the information and explanations given to us and the
books and records examined by us, there are no undisputed amounts,
payable in respect of Income Tax, Sales Tax, Customs Duty and Excise
Duty outstanding six months from the date they become payable except
A) Corporate Divided Tax amounting to Rs. 14,02,532.00 is outstanding
for more than six months.
B) The Company has not paid any advance tax during the Financial Year
2008-09 as against the tax liability of Rs.67,83,427. Interest under
234 B & C is applicable on this amount.
Q As against the provision for FBT amounting to Rs.2,84,765 no advance
tax has been paid during the year.
D) There is an outstanding liability of Rs.13,84,427.00 for the
financial year 2005-06 .
11. The company has no accumulated loss as on 31s1 March 2009 neither
it has sustained any cash loss in current year nor in the previous
12. According to the information and explanations given to us and the
records examined by us and s6 far as we could ascertain, no personal
expenses have been charged to revenue account.
13. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures or other securities.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments.
15. The Company has not furnished any guarantee during the year, for
loans taken by the other firms, banks or financial institutions, terms
and conditions whereof are prima-facie, prejudicial to the interest of
16. In view of the nature of the activities carried out and services
rendered the company does not consider it necessary to allocate man
hours utilised to the related jobs.
17. The Company has not made any preferential allotments of shares to
any party covered in the register maintained under section 301 of the
Companies Act 1956, during the year.
18. The Company has not issued any debentures.
19. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
20. Other clauses of the order are not applicable to the company for
Place: Hyderabad G.V. RAO & CO
Date : 31.07.2009 Chartered Accountants
Membership No. 216153