We have audited the attached Balance Sheet of GUJCHEM DISTILLERS INDIA
LIMITED as at 31s1 March, 2009, the 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.
i) 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
our opinion.
ii) As required by the Companies (Auditors 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, a
statement on the matters specified in paragraphs 4 and 5 of the said
order.
iii) Further to our comments in the Annexure, referred to 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 audit;
b) In our opinion, proper books of accounts, as required by law, have
been kept by the Company so far as it appears from our examination of
those books;
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 of
the Company;
d) In our opinion the Balance Sheet, Profit & l/t>ss 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.
e) On the basis of the written representations receiver from the
Directors as on 31st March 2009, 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 a Director in terms of clause
(g) of sub section 274 of the Companies Act, 1956.
f) Attention is drawn to
a. Note no. 1 regarding the Company being declared as a sick industrial
undertaking under the provisions of Sick Industrial Companies (Special
Provisions) Act, 1985 and the accounts being drawn on a going concern
basis in spite of the net worth of the company being negative.
Subject to the forgoing, in our opinion and according to the
explanations given to us, the said accounts read with note 2 of
schedule N regarding setting up as recoverable under loans and
advances an amount of Rs.11.30 lacs being excise duty and sales-tax and
other administrative fees of Rs.4.40 Lacs: and read together with the
other notes and the accounting policies appearing in schedule N give
the information required by the Companies Act, 1956 in the manner so
required and give a true and fair view;
I. In the case of Balance Sheet of the state of the companys affairs
as at 31s1 March 2009
II. In the case of the Profit and Loss, of the Profit for the year
ended on that date.
III. In the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
NNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph (2) of our Report of even date)
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of Company and the nature of its assets. No material discrepancies
were notice on such verification.
(c) There has not been any substantial disposal of fixed assets during
the year.
2. (a) As explained to us, the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion, 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) In our opinion, the company is maintaining proper records of
inventory and no material discrepancies were noticed on physical
verification.
3. (a) The company had not taken \ granted any loans, secured or
unsecured from / to the companies and firms
listed in the register maintained under section 301 of the Companies
act, 1956. However, the company had taken interest free Fixed Deposit
from director and the amount outstanding at the year end was Rs.14.52
lacs.
(b) In our opinion, other terms and conditions of such interest free
Fixed Deposit taken from director is not, prima facie, prejudicial to
the interest of the Company.
(c) Pursuant to the order of the BIFR, interest free Fixed Deposits are
not due for repayment during the year.
(d) There is no overdue amount of more than Rupees One Lac in respect
of interest free Fixed Deposit taken from the director.
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 purchase of inventory , fixed assets and with regard to the sale of
goods and services. During the course of audit, we have not observed
any continuing failure to correct major weakness in internal controls.
5. (a) According to the information and explanations given to us, we
are of the opinion that the transaction that need to be entered into
the register maintained under section 301 of Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, there are no transactions made in pursuance of contract or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year.
6. In our opinion and according to the information and explanation
given to us the Company has generally complied with the provisions of
section 58A and 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposit) Rule, 1975, except for delays in filing of
return of deposits, with regard to the deposits accepted from the
public. During the year, no order has been passed by the Company Law
Board, National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal. As regards repayment of fixed deposits,
the company has made repayment of principal amount of outstanding fixed
deposits as per the rehabilitation scheme approved by BIFR vide its
order letter dated 16.9.2003. However, there are outstanding unclaimed
deposits of Rs. 13.88 lacs as at the end of the year.
7. Until the year 1993-94 the company had appointed an independent
firm of Chartered Accountants as internal auditors. Due to stoppage of
the manufacturing activities of the company the internal audit
functions has not been carried out since then.
8. Pursuant to the order made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Companies
Act, 1956 the company is required to maintain cost records in respect
of manufacture of Industrial AlGohol and Chemical. However, in view of
non manufacture of the aforesaid products during the year the
maintenance of such records and review thereof was not necessary.
Further, in view of letters received from Cost Audit Branch, Ministry
of Company Affairs, Government of India dated 22.12.2005 and 27.2.2006
in respect of Industrial Alcohol and Chemicals respectively, the
requirement of conducting cost audit is stands withdrawn w.e.f.
1.4.2004 and 1.4.2005 respectively.
9. (a) The company has been regular in depositing with appropriate
authorities undisputed statutory dues in respect of investor education
and protection fund, wealth tax, service tax, Sales Tax, VAT, Custom
duty, Excise Duty, Cess wherever applicable to it.
Some of the undisputed dues in respect of Provident Fund, Employees
State Insurance and Income Tax have been settled by the company after
the due date.
(b) According to the information and explanations given to us no
undisputed amounts payable in respect of excise duty, income tax,
wealth tax, service tax, customs duty, excise duty and cess were in
arrears, as at 31s March, 2009 for a period of more than six months
from the date they become payable.
(c) According to the information and explanations given to us, the
following disputed dues have not been deposited since the matters are
pending with the relevant forum.
Statement of Disputed Dues
Nature of Statute Nature of the dues Amount Period to
which the Forum
where
(Rs. in lacs ) amount
relates dispute
is
pending
Central Excise & Central Excise 16.62 1985-86
& 86-87 A.O.
Central
Excise
Salt Act Depar
tment
10. The accumulated losses of the company are more then fifty percent
of its net worth. The company has not incurred cash losses during the
financial year covered by our audit and during the immediately
preceding financial year
11. Pursuant to the BIFR order letter date 16.9.2003, in our opinion
and according to the information and explanation given to us, the
company has not defaulted in repayment of dues to financial
institutions, debenture holders and banks.
12. 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 share, debentures and other securities.
13. In our opinion that company is not a chit fund or nidhi / mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
company.
14. According to the information and explanations given to us, the
Company is not dealing in or trading in shares, securities, debentures
and investment. Accordingly, the provisions of clause 4(xiv) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
company.
15. According to the information and explanation given to us, the
company has not given any guarantee for loan taken by others form banks
or financial institution.
16. According to the information and explanation given to us, the
company has not accepted any term loan during the year.
17. According to the information and explanations given to us and on
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
investment.
18. According to the information and explanations given to us, 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. During the year, no debentures have been issued by the Company and
the question of creating securities in respect thereof does not arise.
20. During the year, the Company has not raised money by way of public
issue.
21. According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
SHARP & TANNAN
Chartered Accountants
By the hand of M.P.Phadke
21st August, 2009, Mumbai Partner
Mem.No. 33013
