1. We have audited the attached Balance Sheet of IFB Agro Industries
Limited, as at 31 st March, 2009 and the related Profit and Loss
Account and 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.
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 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 (the
Order) issued by the Central Government of India in terms of Section
227(4A) of the Companies Act, 1956 of India (the Act) and on the
basis of such checks as we considered appropriate and according to the
information and explanations given to us, we further report that :-
3.1 (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of
(b) The fixed assets have been physically verified by the management
during the year at reasonable intervals and as informed, no material
discrepancies were noticed on such verification.
(c) There was no substantial disposal of fixed assets during the year.
3.2 (a) The management has conducted physical verification of inventory
at reasonable intervals during the year.
(b) In our opinion, 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.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
3.3 a) The Company has taken interest bearing unsecured loan from
associate concern aggregating to Rs. 190000 thousand.
b) In our opinion, the rate of interest and other terms and conditions,
are not prima-facie prejudicial to the interest of the Company.
c) The principal amount including interest has been fully repaid during
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 Act. Accordingly, clauses (iii)
(d) to (iii) (g) of the Order are not applicable to the Company.
3.4 In our opinion and according to the information and explanation
given to us, there are 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. Further, during the course of our audit we have neither come
across nor have we been informed of any instances of major weaknesses
in the internal control system, which would require corrective action,
in respect of these areas.
3.5 (a) On the basis of our examination of the books of account, we are
of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act, and exceeding the
value of five lakh rupees in respect of any party have been entered in
the register required to be maintained under that section.
(b) In our opinion, the transactions made in pursuance of such
contracts or arrangements have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
3.6 In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit from the public
within the purview of Section 58A of the Act and the Companies
(Acceptance of Deposit) Rules, 1975 during the year under review.
3.7 In our opinion, the Companys present internal audit system is
commensurate with its size and nature of its business.
3.8 The Central Government has not prescribed the maintenance of cost
records under clause (d) of sub-section (1) of section 209 of the Act
for any of the products of the Company.
3.9 According to the books and records as produced and examined by us
and also on the basis of management representations: -
(a) The Company is 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, Custom duty, Excise duty, Cess and other statutory dues with the
appropriate authorities and there are no undisputed amounts payable in
respect of above, outstanding at the year end for a period of more than
six months from the date they became payable. We are informed that the
Companys application towards renewal of exemption from the operation
of the Employees State Insurance Act at its factory at Noorpur is still
pending, whereas a writ petition has been filed for Durgapur factory as
indicated in Note No 9 of Schedule 14.
(b) As at 31 st March 2009, there are no dues of Income tax, Sales tax,
Wealth tax, Service tax, Custom duty, Excise duty and Cess, which have
not been deposited on account of any dispute other than as stated
Name of Nature of Amount
Statute Dues (Rs. 000)
West Bengal Demand 114
Sales Tax Act, including
Central Sales Demand 292
Tax Act, 1956 including penalty
The Bengal Duty 1,095
Excise Act, against transit
Period to which the Forum where
amount relates dispute is pending
2003-04 Additional Commissioner,
Commercial Taxes, Government of
2004-05 Additional Commissioner,
Commercial Taxes, Government of
1998-99 Commissioner, Department of
Excise, Government of West Bengal
3.10 As per the books of account, the Company has neither accumulated
loss as at 31 st March 2009 nor it has incurred any cash loss either
during the financial year ended on that date or in the immediately
preceding financial year.
3.11 The Company has not defaulted during the year in repayment of its
dues to any financial institution or bank. The Company does not have
any debentures outstanding as on 31 st March 2009.
3.12 The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
3.13 In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Accordingly, clauses (xiii) (a) to (xiii) (d)
of the Order are not applicable to the Company.
3.14 In our opinion proper records have been maintained of the
transactions and contracts for investments and timely entries have been
made therein. The shares and securities, which are held by the Company
and also pledged to financial institution, are in the Companys name.
3.15 The Company has given corporate guarantees for exposure taken by
associate companies from financial institutions and overseas corporate.
According to the information and explanations given to us, we are of
the opinion that the terms and conditions thereof are not prima facie
prejudicial to the interests of the Company.
3.16 On the basis of review of utilisation of funds pertaining to term
loans on overall basis and related information as made available to us,
the term loans taken by the Company have been applied for the purposes
for which they are obtained.
3.17 On the basis of review of utilisation of funds on overall basis,
related information as made available to us and as represented to us by
the management, the funds raised on short term basis have not been
applied during the year for long term investments.
3.18 The Company has allotted 3,00,000 equity shares with nominal value
of Rs. 10 each to M/s IFB Automotive Private Limited on preferential
basis at a price of Rs 67 per share.
3.19 The Company has not issued any debentures and accordingly the
question of creation of security or charge in this regard does not
3.20 The Company has not raised any money through a public issue during
3.21 During the course of examination of the books of account carried
out in accordance with the generally accepted auditing practices in
India, we have neither come across any instance of fraud on or by the
Company, noticed or reported during the year nor have we been informed
of such case by the management.
4. Further to our comments in the paragraph 3 above, we report that:
4.1 We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
4.2 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
4.3 The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
4.4 In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report have been in compliance with
the applicable accounting standards referred to in Section 211 (3C) of
4.5 On the basis of written representation received from the Directors,
read with No. 17 of Schedule 14 and taken on record by the Board of
Directors, we report that none of the Directors are prima-facie
disqualified as on 31st March 2009 from being appointed as a Director
in terms of clause (g) of sub-section (1) of Section 274 of the Act;
4.6 In our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with the notes
thereon give the information required by the Act, in the manner so
required 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 31 st March 2009,
ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
For Maheshwari & Associates
Date: 20th May, 2009 MembershipNo.55788