1. We have audited the attached Balance Sheet of M/s MAHARASHTRA
POLYBUTENES LIMITED as at 31st March, 2008 and also 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.
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 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 (read
with Companies (Auditors Report)(Amendment) Order, 2004) issued by the
Central Government of India in terms of sub- section (4A) of Section
227 of the Companies Act, 1956 (hereinafter referred to as the Act),
we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order, to the extent applicable.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) Following legal advice, the Company had earlier adjusted the
accumulated losses amounting to Rs.1529.42 lacs against the
Revaluation Reserve arising on the revaluation of certain fixed assets
(Refer Note No. 4(b) in Schedule 17). This treatment is not in
accordance with the views of the Institute of Chartered Accountants of
India on treatment of reserve created on revaluation and also not
strictly in accordance with Accounting Standard - 10 Accounting for
Fixed Assets issued by them.
b) Subject to what is stated in paragraph 4(g) below, we have obtained
all the information and explanations, which to the best of our
knowledge and belief were necessary for the purpose of our audit.
c) The accounts of certain lenders and creditors are subject to
confirmations, reconciliations and consequent adjustments, if any,
which are presently not ascertainable. (Refer Note No. 5 (b) in
d) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account.
e) In our opinion, the Balance Sheet and Profit and Loss Account dealt
with by this report comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Act, to the extent applicable
except for Accounting Standard 10 - Accounting for Fixed Assets, the
details and effect of which have been disclosed in the paragraphs 4(a)
f) On the basis of written representations received from the directors,
as on 31st March, 2008 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2008 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
g) We further report that, without considering items mentioned at
paragraph 4(a), regarding adjustment of accumulated losses against
revaluation reserve based on a legal advice, the effect of the same on
profit of the Company and its assets and liabilities could not be
5. Subject to the above, in our opinion and to the best of our
information and according to the explanations given to us, the said
accounts read together with Notes and Significant Accounting Policies
in Schedule 17 and other notes appearing elsewhere in the accounts give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of Balance Sheet, of the state of affairs of the
Company as at 31st March, 2008 and
(ii) in. the case of Profit and Loss Account of the Profit of the
Company for the year ended on that date; and
(iii) in the case of Cash Flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
1. In respect of its fixed assets:
(a) The Company is in the process of maintainance of proper records
showing full particulars including details and situation of fixed
(b) As explained to us, the Fixed assets have been physically verified
by the management during the year And no material discrepancies were
identified on such verification.
(c) No substantial part of fixed assets have been disposed off during
the year, and it has not affected the going concern.
2. In respect of its inventories:
(a) Physical verification of inventory has been conducted at reasonable
intervals by the management.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) Company is maintaining proper records of inventory. No material
discrepancies were noticed on physical verification.
3. In respect of loans granted and taken to / from parties covered in
the register maintained u/s 301 of the Companies Act, 1956.
(a) The company has not granted any loans, secured or unsecured to
companies, firms or other parlies covered in the register maintained
u/s 301; of the companies Act-1956.
(b) The company has not taken any loans, secured or unsecured from
companies, firms or other parlies covered in the register maintained
u/s 301 of the companies Act-1956.
4. In respect of internal control
In our opinion and according to the information and explanations 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.
During the course of audit, We have not observed continuing failure to
correct major weaknesses in internal control system.
5. In respect of contracts or arrangements need to be entered into a
register maintained u/s 301 of the Companies Act, 1956
(a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be
entered into the register maintained under section 301 have been so
(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 under section 301 of
the companies Act 1956 are made at price which are reasonable having
regard to prevailing market prices at the relevant time.
6. In respect of deposits from public
No deposits within the meaning of Sections 58A and 58AA or any other
relevant provision of the Act and rules farmed thereunder have been
accepted by the Company.
7. In respect of internal audit system
In our opinion, the Company has an internal audit system commensurate
with its size and nature of business.
8. In respect of maintenance of cost records
The Company is not required to maintain cost records pursuant to the
Rules made by the Central Govenment for the maintenance of cost records
under Section 209 (1)(d) of the Act.
9. In respect of statutory dues
(a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance, income tax,
sales tax, wealth tax, service tax, customs duty, excise duty, cess
have not generally been regularly deposited with the appropriate
authorities though the delays in deposit have not been serious.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, investor education and
protection fund, employees state insurance, income tax, sales tax,
wealth tax, service tax, customs duty, excise duty, cess and other
statutory dues which were outstanding at the year end for a period of
more than six months from the date they became payable are as follows:
Sales Tax Payable (including interest thereon) Rs. 85.85 Lacs
Muinicipal Taxes Payable (Property & other cess) Rs. 128.38 Lacs
Service Tax Rs. 13.51 Lacs
TDS Professional Charges Rs. 3.37 Lacs
Vat Payable Rs. 179.93 Lacs
CST Payable Rs. 11.49 Lacs
10. The other Provisions of the said Order are not applicable to the
For B. Maheshwari & Associates
Place : Mumbai Partner
Date : 18 June, 2008 Membership No. 41501