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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 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 (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) Order, 2004 (the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in the Paragraph 4 and 5 of the said order.
4. Further to our comments in the Annexure referred in paragraph 3 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 purposes of our audit;
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 those books;
c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss 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.
e) on the basis of written representations received from the Directors, as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31st March,2012 from being appointed as a Director, in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;
f) in our opinion and to the best of our information and according to explanations given to us, the said Accounts, read together with significant Accounting Policies and the notes thereon appended thereto, 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, 2012;
ii) in the case of the Statement of Profit and Loss, 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.
Annexure referred to in paragraph 3 of the Auditors Report to the members of Munjal Auto Industries Limited for the year ended 31st March, 2012
1) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets;
(b) These fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification;
(c) The Company has not disposed off substantial part of fixed assets.
2) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations given to us, 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) The Company has not either granted or taken any loans to/from companies, firms or other parties covered in the register maintained under section 301 of the Act and therefore, the matters referred in paragraph 4 (iii) of the Companies (Auditors' Report) Order, 2003 are not applicable.
4) In our opinion and according to the information and explanations given to us, there is an 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. During the course of our Audit, we have not observed any continuing failure to correct major weaknesses in internal control system.
5) According to the information and explanations given to us,
(a) The particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section;
(b) In our opinion and according to the information and explanations given to us, the transactions, exceeding the value of five lac rupees in respect of any party during the year, 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.
6) The Company has not accepted deposits from the public. Accordingly, paragraph 4(vi) of the Order is not applicable to the company.
7) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
8) We have broadly reviewed the books of accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained;
9) According to the information and explanations given to us and as shown by our examination of the books of accounts:
(a) The Company is regular in depositing with the appropriate authorities, 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 and other statutory dues applicable to it and no undisputed amounts payable in respect thereof were in arrears, as on the last day of the financial year, for a period of more than six months from the date they became payable.
(b) The Company has not deposited disputed Sales Tax demand of Rs.25.50 lacs pertaining to the Financial Year 2002-03. The company has preferred appeal against the order of the Assessing Officer and the matter is pending before the Joint Commissioner of Sales Tax (Appeals), Vadodara.
There are no dues of Income-tax / Wealth-tax / Service- tax / Custom duty / Excise duty / Cess which have not been deposited on account of any dispute except demand of Rs. 1028890/- under Income-tax Act against which appeal is pending before the Commissioner (Appeals).
10) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses during the financial year and in the immediately preceding financial year.
11) The Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders. The details of claim made but not accepted by the company are as per notes on accounts;
12) The Company has not granted any loans or advances on the basis of any security.
13) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.
14) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.
15) The Company has not given any guarantee for loans taken by others.
16) In our opinion and according to the information and explanations given to us, the new term loans have been applied for the purpose for which they were raised.
17) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment by the Company.
18) The Company has not made any preferential allotment of shares during the year.
19) The Company has not raised funds by way of debentures in respect of which any security was required to be created.
20) The Company has not raised any money by public issue during the year.
21) 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 VAKIL JAIN & HINDOCHA
Firm Registration No.112894W
Place : Vadodara PARTNER
Date : 26-05-2012 Membership No.047966