1. We have audited the attached Balance Sheet of J. B. Chemicals &
Pharmaceuticals Ltd. as at 31st March, 2009, the Profit and Loss
account and also 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 the accounting 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 as
amended by Companies (Auditors Report) (Amendment) Order, 2004
(together the Order) issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956,
and on the basis of the information and explanation given to us and the
books and records examined by us in the normal course of audit and to
the best of our knowledge and belief, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
4. Further to our comment in the Annexure referred to above, we report
a. We have obtained all the information and explanation, which to the
best of our knowledge and belief were necessary for the purpose of our
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
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;
d. In our opinion, the balance sheet, profit and 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 to the extent applicable;
e. On the basis of written representation received 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 (1) of section 274 of the Companies Act, 1956;
In our opinion and to the best of our information and according to the
explanation given to us, the said accounts, read together with notes
thereon, 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:
i. In the case of the balance sheet, of the state of affairs of the
company as at 31st 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 cash flow statement, of the cash flow for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(as referred to in paragraph 3 of our report of even date)
1) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b) These fixed assets have been physically verified by the management
at regular interval considering the size of the company and nature of
assets. No material discrepancies have been noticed on such
c) No disposal of a substantial part of fixed assets of the company has
taken place during the year.
2) a) As explained to us, the inventories were physically verified by
the management at reasonable intervals during the year.
b) In our opinion and according to the information and explanation
given to us, 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 and according to the information and explanation
given to us, the company has maintained proper records of its
inventories and the discrepancies noticed on physical verification
between physical stock and the book records were not material and have
been adequately dealt with in the books of account.
3) a) According to information and explanation given to us, the company
has, during the year, not granted any loan secured or unsecured to the
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.
b) According to information and explanation given to us, the company
had taken unsecured loans from eight companies covered in the register
maintained under section 301 of the Companies Act, 1956. The year end
balance is Rs. 1,781.50 lacs and the maximum amount involved at any
time during the year is Rs. 2,486.50 lacs. The rate of interest and
other terms and conditions are not prima-facie prejudicial to the
interest of the company. The payment of principal amount and interest
are also regular.
4) The company has adequate internal control procedure commensurate
with the size of the company and nature of its business with regard to
purchase of inventories and fixed assets and for sale of goods and
services. We have not come across any major weakness in internal
5) a) To the best of our knowledge and belief, and according to
information and explanation given to us, the particulars of contracts
or arrangements referred to in section 301 of the Act have been entered
in the register maintained under that section.
b) The transaction of purchase of goods and material and sale of goods,
material and services, made in pursuance of contracts or arrangements
entered in the Register maintained under section 301 of the Act and
exceeding the value of rupees five lacs in respect of any party during
the year, have been made at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
6) In our opinion and according to the information and explanation
given to us,the company has complied with the directives issued by the
Reserve Bank of India and the provisions of section 58A and 58AA or any
other relevant provisions of the Act and rules framed there under, with
regard to the deposits accepted from the public.
7) The company has appointed a firm of Chartered Accountants to carry
out its internal audit function. In our opinion, the internal audit
system is commensurate with the size of the company and nature of its
8) 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 cost records, under clause (d) of sub-section (1) of
section 209 of the Companies Act, 1956 and are of the opinion that
prima facie the prescribed accounts and records have generally been
maintained. We have not, however, made a detailed examination of the
records with a view to determining whether they are accurate or
9) a) According to the records of the company, 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.
According to the information and explanation given to us, there are no
undisputed amounts payable in respect of such statutory dues which have
remained outstanding as at 31st March, 2009 for a period of more than
six months from the day they became payable.
b) According to information and explanation given to us, details of
disputed Sales Tax demand aggregating that have not been deposited on
account of disputes are given below:
Name of Nature of Amount
Staute Dues (Rs. In
The UP Sales Tax 5.23
the UP Sales Tax 6.25
Central Excise Duty 8.07
Excise Act, Penalty 8.07
Period Forum where
to which dispute
1992-1993 Supreme Court
May 2001- CESTAT
10) The company has no accumulated losses and has not incurred cash
losses in the current financial year and in the immediately preceding
11) The company has not defaulted in repayment of dues to any Banks.
12) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures or other securities.
13) The provisions of any Special Statute applicable to Chit Funds,
Nidhis or Mutual Benefit Funds / Societies are not applicable to the
14) The company is not dealing in or trading in shares, securities,
debentures, or other investments and hence, requirement of paragraph
4(xiv) are not applicable to the company.
15) According to the information and explanation given to us, the
company has given guarantee for loan taken by its subsidiary from a
bank; the terms and conditions whereof, in our opinion, are not
prima-facie prejudicial to the interest of the company.
16) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purpose for which they were obtained.
17) According to the Cash Flow Statement and other records examined by
us and on the basis of information and explanation given to us, on an
overall basis, funds raised on Short Term basis have, prima facie, not
been used during the year for Long Term investment.
18) During the year, the company has not issued and allotted any shares
to parties and companies covered in the register maintained u/s 301 of
the Companies Act, 1956.
19) Since the company does not have any debentures, the question of
creation of securities for debentures does not arise.
20) Since the company has not raised money by Public Issue, clause (xx)
of the Order is not applicable.
21) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the year.
For J. K. Shah & Co.
J. K. Shah
Place : Mumbai Partner
Date : May 12, 2009 Membership No. 3662