1. We have audited the attached Balance Sheet of MIRZA INTERNATIONAL
LIMITED as at March 31, 2011 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
Company''s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We have 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 misstatements. 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
3. The company has changed its accounting policy with respect to the
amortization of leasehold lands & charging of lease rent as mentioned
in Accounting Policy no. 3(b) & 5 respectively, in the schedule of the
Significant Accounting Policies to bring the same in the line with the
provisions of Accounting Standard (AS-6), ''Depreciation Accounting''
issued under the Companies (Accounting Standards) Rules 2006.
The change has affected the disclosed profit/loss and assets/
liabilities of the company as under:
As a result of change in the policy, the cumulative amortization
charged with respect to Leasehold lands, lease rent paid for the
earlier years is Rs. 50.76 lacs, Rs. 15.88 lacs respectively & for the
current year is Rs. 17.08 lacs & Rs. 8.39 lacs respectively. As a
result of these changes profit for the year and Fixed Assets of the
Company have been understated by Rs. 92.11 lacs.
4. As required by the Companies (Auditor''s Report) Order, 2003, as
ammended, issued by the Central Government of India in terms of section
227(4A) of the Companies Act, 1956, we annex hereto a statement on the
matters specified in paragraph 4 and 5 of the said Order.
5. Further to our comments in the Annexure referred to in paragraph
(4) 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 purpose of our
(b) In our opinion, proper Books of Accounts as required by law, have
been kept by the Company, so far it appears from the examination of the
(c) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the Books of Accounts.
(d) In our opinion, the Balance Sheet and Profit and Loss Account
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 received from the
directors and taken on record by the Board of Directors, we report that
none of the directors is disqualified from being appointed as a
director in terms of clause (g) of sub- section (1) of Section 274 of
the Companies Act. 1956 as on 31st March 2011.
(f) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts read together with the
significant accounting policies and 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, 2011;
ii) In the case of the Profit and Loss Account of the Company of the
profit of the Company for the year ended on that date; and
iii) In case of Cash Flow statement, of the cash flows for the year
ended on that date.
Annexure to the Auditors'' Report
Referred to in paragraph 3 of our report of even date,
In terms of the information and explanations 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 state that
(i) (a) The Company has maintained proper books/records to show full
particulars including quantitative details and situations of its fixed
(b) As explained to us, all the assets of the company have been
physically verified by the management using a regular program of
verification by rotation, which, in our opinion is reasonable having
regard to the size of the company and nature of its assets. No material
discrepancies were noticed on such physical verification.
(c) Fixed assets disposed off during the year were not substantial and
such sale has not affected the going concern of the company.
(ii) (a) Inventory has been physically verified by the management. In
our opinion, 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. As
explained to us, the discrepancies noticed on verification between the
physical stocks and book records were not material and have been
properly dealt with in the books of account.
(iii) The company has neither granted nor taken any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 301 of the companies Act, 1956. Consequently,
paragraph 4 (iii) (a), (b), (c), (d), (e), (f), (g) of the Companies
(Auditor''s Report) Order 2003 are not applicable.
(iv) In our opinion and according to the information and explanation
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and with regard to the sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weakness in internal
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that section.
(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 prices which are reasonable having
regard to prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanation
given to us, company has not accepted any Public Deposits during the
year. Therefore the provision 5 of Clause (vi) of paragraph 4 of the
Order are not applicable of the company.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts relating to
materials, labour, and other items of cost maintained by the Company
pursuant to the rules made by the Central Government, for the
maintenance of cost records under clause (d) of subsection (1) of
section 209 of the Companies Act,1956 and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained. We have however, not made a detailed examination of the
records with a view to determine whether they are accurate or complete.
(ix) (a) According to information & explanations given to us and the
records of the company examined by us, in our opinion, the company is
generally regular in depositing undisputed statutory dues including
provident fund, investor education protection fund, employees'' state
insurance, income tax, sales tax, wealth tax, Service Tax, custom duty
and cess and other material statutory dues applicable to it with the
(b) According to the information and explanations given to us and the
records of the company examined by us, in our opinion, no undisputed
amounts payable in respect of provident fund, investor education
protection fund, employees'' state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess were in
arrears, as at 31st March 2011 for a period of more than six months
from the date they became payable.
(c) According to the information and explanations given to us and the
records of the company examined by us, in our opinion, there is no
amount in respect of provident fund, investor education protection
fund, employees'' state insurance, income Tax, sales Tax, wealth Tax,
service tax, Custom Duty Excise Duty and cess, which have not been
deposited on account of any dispute. However in case of sales tax and
income tax, demands aggregating Rs. 709.63 lacs have not been deposited
on account of disputes as detailed below:
Related Authority Financial Disputed
to where Case Year Amount
is pending (Rs. in
EntryTax/ Hon''ble Allahabad 1999-00, 2000-01, 40.90
Trade Tax High Court 2003-04, 2004-05
Commercial/ Hon''ble Allahabad 2007-08 24.55
Trade Tax High Court
Income Tax DCIT-6 Kanpur 1997-98 3.50
Income Tax Income Tax Appellate 1998-99 & 209.23
Tribunal, Luacknow 2003-04
Income Tax CIT (Appeals), 2001-02 & 431.45
(x) The company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
(xi) The company has not defaulted in repayment of dues to financial
institution, bank or debenture holders.
(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) In our opinion and according to information and explanations
given to us the company is not a chit fund or a nidhi or mutual benefit
fund/society. Accordingly, the provisions of clause 4 (xiii) of the
Order are not applicable to the company.
(xiv) According to information and explanations given to us the company
is not dealing in or trading in shares, securities, debentures and
other investments. Accordingly, the provisions of clause 4 (xiv) of the
Order are not applicable to the company.
(xv) On the basis of records examined by us and information provided by
the management, we are of the opinion that the company has not given
guarantees for loans taken by others from banks or financial
(xvi) In our opinion, the term loan raised by the company during the
year has been applied for the purpose for which it was raised.
(xvii) According to information and explanation given to us and on
overall examination of Balance Sheet and Cash Flows of the Company, we
are of the opinion that there are not funds raised on short term basis
that have been used for long term basis.
(xviii) The company has not made any preferential allotment of shares
to parties and companies covered in the register maintain under section
301of the Act, during the year.
(xix) The Company has not issued any debentures during the year.
Therefore provisions of Clause 4(xix) of the order are not applicable
to the company.
(xx) The company has not raised any money from the public during the
year under audit.
(xxi) In our opinion and according to the information and explanation
given to us, no material fraud on or by the company has been noticed
are reported during the year.
For Khamesra Bhatia & Mehrotra
(Registration No. 001410C)
Place : Kanpur Partner
Date : May 28th, 2011 M.No. 075801