We have audited the attached Balance Sheet of GANESHA ECOSPHERE LIMITED
as at 31st March, 2012, the Statement of Profit Et Loss for the year
ended on that date annexed thereto 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.
We conducted our audit in accordance with the 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
our opinion.
01. As required by the Companies (Auditor's Report) Order, 2003,
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.
02. Further to our comments in the Annexure referred to in paragraph 1
above, we report that:
(a) We have obtained all the information Et explanations which to the
best of our knowledge and belief, were necessary for the purposes of
our audit;
(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
those books;
(c) The Balance Sheet, Statement of Profit Et Loss and Cash Flow
Statement dealt with by this report, are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss 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, to the extent applicable;
(e) On the basis of written representations received from the Directors
of the Company, 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;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Companies Act, 1956, and give a
true and fair view, in conformity with the accounting principles
generally accepted in India:-
(i) in the case of the Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2012;
(ii) in the case of the Statement of Profit Et Loss, of the Profit for
the Year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the Cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE
MEMBERS OF GANESHA ECOSPHERE LIMITED ON THE FINANCIAL STATEMENTS AS AT
AND FOR THE YEAR ENDED 31ST MARCH 2012.
1) i) The Company has maintained proper records showing full
particulars including quantitative details Et situation, of fixed
assets.
ii) As explained to us, the fixed assets have been physically verified
by the management during the year under regular program of
verification, which in our opinion is reasonable, having regard to the
size of the Company Et nature of its assets. As informed to us, no
material discrepancies were noticed on such physical verification.
iii) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
2) i) As explained to us, inventory has been physically verified by the
management at reasonable intervals during the year.
ii) In our opinion and according to the information and explanations
given to us, 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.
iii) On the basis of our examination of inventory records, we are of
the opinion that the Company is maintaining proper records of
inventory. As explained to us, there were no material discrepancies
noticed on physical verification of inventory as compared to the book
records.
3) i) According to the information and explanations given to us, 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, 1956. Accordingly, paragraphs 4 (iii) (a),
(b), (c) and (d) of the Order, are not applicable to the Company.
ii) According to the information and explanations given to us, the
Company has taken unsecured loans and fixed deposits from a Company,
four directors and seven other parties covered in the register
maintained under section 301 of the Companies Act, 1956. During the
year Rs. 6,89,57,955 were taken as loan and the maximum amount involved
during the year was Rs. 5,03,47,500 and the balance outstanding as on
31st March 2012 isRs. 1,12,26,410.
iii) In our opinion and according to the information and explanations
given to us, the rate of interest Et other terms and conditions of such
loans taken by the company, are not prima facie prejudicial to the
interest of the Company.
iv) In respect of unsecured loans taken by the Company, principal
amount including interest is repayable on demand and there are no
stipulations as to the payment of principal amount Et interest thereon.
In respect of fixed deposits taken by the Company, payment of principal
amount Et interest are regular.
4) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. We have not observed any major weakness in the internal
control systems during the course of the audit.
5) i) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that Section.
ii) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs.5,00,000 in respect
of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A and 58AA or any other relevant provisions of the Companies Act,
1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
to the deposits accepted from the public. No order has been passed by
the Company Law Board or any Court or any other Tribunal.
7) In our opinion, the Company has an internal audit system
commensurate with the size Et 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 Section 209(1 )(d) of the Companies Act, 1956 and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained. We have not, however, made a detailed
examination of such records with a view to determine whether they are
accurate or complete.
9) i) According to the information Et explanations given to us and the
records of the Company examined by us, in our opinion, undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees' State Insurance, Income Tax, Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and
other material statutory dues have been regularly deposited with the
appropriate authorities though there have been a slight delay in a few
cases.
ii) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income tax,
wealth tax, service tax, sales tax, value added tax, custom duty,
excise duty and other undisputed statutory dues were outstanding, as at
31st March, 2012 for a period of more than six months from the date
they became payable.
iii) According to the records of the Company and as per the information
and explanations given to us, the disputed statutory dues as at 31st
March 2012 that have not been deposited on account of matters pending
before appropriate authorities are as under:
Name of the state nature of the dues amount forum where dispute is
pending
U. P. Trade Tax
Act, 1948 EntryTax 234045* Supreme Court
U. P. Trade Tax
Act, 1948 EntryTax 1198910* Supreme Court
U. P. Trade Tax
Act, 1948 EntryTax 914932* Supreme Court
Central Excise
Act, 1944 Cenvat Duty 2421248s CESTAT, New Delhi
Central Excise
Act, 1944 Cenvat Duty 6469879s The Commissioner
(Appeals)
Central Excise,
Kanpur
Income Tax
Act,1961 Penalty 125000* The Commissioner
(Appeals) Kanpur
* Net of amount deposited under dispute.
$ Net of amount deposited under dispute and Cenvat available against
disputed dues.
10) The Company has no accumulated losses at the end of the financial
year ended on 31st March, 2012 and it has not incurred any cash losses
during the financial year ended on 31st March, 2012 and in the
immediately preceding financial year ended on 31st March, 2011.
11) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institution, banks and
debenture holders.
12) In our opinion and according to the information and explanations
given to us the Company has not granted loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
13) In our opinion, the Company is not a Chit fund or nidhi / mutual
benefit fund / society. Therefore clause 4(xiii) of the Companies
(Auditor's Report) Order 2003 is not applicable to the Company.
14) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Therefore clause 4 (xiv)
of the Companies (Auditor's Report) Order 2003 is not applicable to the
Company.
15) In our opinion and according to the information Et explanations
given to us, the Company has not given any guarantee for loans taken by
others from Bank or financial institutions. Therefore clause 4(xv) of
the Companies (Auditor's Report) Order 2003 is not applicable to the
Company.
16) Based on information and explanations given to us by the
management, the term loans were applied for the purpose for which the
loans were obtained.
17) According to the information Et explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that no funds raised on short-term basis have been used for
long-term investments.
18) During the year, the Company has made preferential allotment of
equity shares to the four directors and one other party covered in the
register maintained under section 301 of the Companies Act 1956. In our
opinion, the price at which, equity shares have been issued, is not
prejudicial to the interest of the Company.
19) The Company has not created any security or charge on the assets of
the Company in respect of Unsecured Zero Coupon Optionally Convertible
Debentures issued.
20) The Company has not raised any money by way of public issue during
the year.
21) Based upon the audit procedures performed for the purpose of
reporting true and fair view of the financial statements and according
to the information and explanations given to us by the management, in
our opinion, no fraud on or by the Company has been noticed or reported
during the course of our audit.
FOR MEHROTRA RAKESH KUMAR ft CO.,
Chartered Accoun tan ts,
(Registration No. 002978C)
(Deepak Seth)
Place: Kanpur Partner
Dated: 26th May, 2012 Membership No. 073081
