(1) We have audited the attached Balance Sheet of Madhucon Projects
Limited (the Company) as at 31st March 2010, the Profit & Loss
Account and also 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.
(2) 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 disclosure 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.
(3) As required by the Companies (Auditors Report) Order, 2003, as
amended by the 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 of
India (the Act) and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanation given to us, we enclose in the Annexure
a Statement on the matters specified in paragraphs 4 and 5 of the said
order.
(4) Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(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
audit;
(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
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) 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;
(v) On the basis of written representations received from the
Directors, as on 31st March 2010 and taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st March 2010
from being appointed as a Director in terms of clause (g) of
Sub-Section (1) of the 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 financial statements 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:
a) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March 2010;
b) in the case of the Profit and Loss Account, of the profit for the
ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the 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 the company
and the nature of its assets. No material discrepancies were noticed on
such verification.
(c) During the year, the company has disposed few items of machinery.
According to the information and explanations given to us we are of the
opinion that the sale of the said part of plant and machinery has not
affected the going concern status of the company.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) 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) The company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(d) The company has a reasonable system of authorization at proper
levels and an adequate system of internal control commensurate with the
size of the company and the nature of its business on issue of stores
and allocation of stores and labour of jobs.
(iii) (a) The company has granted unsecured loans to companies, firms &
other parties covered In the register maintained under Section 301 of
the Act. The number of parties are 3 (Three) and amount involved is Rs.
1735 Lakhs.
(b) The rate of interest and other terms and conditions of the above
loans are not prima facie, prejudicial to the interest of the company.
(c) The company is regularly receiving principal amount and interest.
(d) The company has taken reasonable steps for recovery of principal
and interest wherever applicable.
(iv) 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 nature of its business
with regard to purchase of inventory, fixed assets and with regard to
the sale of goods.
(v) (a) According to information and explanation given to us, we are of
the opinion that the transactions that need to be entered in to the
register maintained u/s 301 of the companies Act, 1956 have been so
entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained u/s 301 of the
Companies Act, 1956 in the receipt 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.
(vi) The Company has not accepted any deposits from the public during
the year.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us the
Central Government has not prescribed the maintenance of cost records
under Section 209(1) (d) of the Companies Act for any of the products
of the company.
(ix) (a) The company has generally deposited with appropriate
authorities undisputed Statutory dues including Provident Fund,
Investor Education Protection Fund, Income Tax, Sales Tax, Wealth Tax,
Custom Duty, Excise Duty, Cess and other material statutory dues
applicable to it.
(b) According to the information and explanation given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax. Customs Duty, Excise Duty and Cess were in arrears, as at
31.03.2010 for a period of more than six months from the date they
became payable.
(c ) According to information and explanation given to us and the
records of the Company examined by us, there are no dues on account of
Income Tax, Sales Tax, Customs Duty, Excise Duty Cess and other
statutory dues as at 31st March 2010, which have not been deposited on
account of dispute except the following:
S.
No. Nature of
due Amount
(in lakhs) Period From where dispute is
pending
1 Entry Tax 36.16 2002-03 STAT Hyderabad
2003-04
2. Sales Tax 974.03 2004-05 STAT Hyderabad
(x) The company does not have any accumulated losses and has not
incurred any cash losses during the current financial year and
immediately preceding financial period.
(xi) Based on the examination of the books of account and related
records and according to the information and explanations provided to
us, the company has not defaulted in repayment of dues to the banks.
(xii) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) According to the information and explanations given to us, the
company has given guarantee for loans taken by others from Bank or
Financial Institutions:
Sl. No. Name of the Company Guarantee Pledge
(Rs. In lakhs) of Shares (nos)
1 Madhucon Sugars & Power
Industries Limited 15145.00
2 PT Madhucon Indonesia 2825.61
3 Nama Hotel Private Limited 25293.00
4 Madhucon Agra Jaipur Expressways Ltd 31744000
5 TN DK Expressways Ltd. 38042000
6 Trichy Tanjavur Expressways Ltd 33000000
7 Madurai Tuticorin Expressways Ltd 73454000
8 Simhapuri Energy Pvt Ltd. 85180600
(xiv) Based on the examination of the books of account and related
records and according to the information and explanations provided to
us, the company has not utilized funds raised on short-term basis for
long term investment and vice versa.
(xv) There are no shares issued during the said period under review.
(xvi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
year.
For KOTA & COMPANY
Chartered Accountants
FRN 011982S
Place: Hyderabad K.S.R.K.Prasad
Date: 21.08.2010 PARTNER
M.No. 022964
