We have audited the attached Balance Sheet of OVERSEAS SYNTHETICS
LIMITED, SURAT as at 31st MARCH, 2007, Profit and Loss Account and the
Cash Flow statement of the Company for the year ended on that date
annexed hereto. 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.
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 materialmisstatement. 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
1. As required by the Companies (Auditors Report) Order, 2003, issued
by the Department of Company Affairs in terms of Section 227 (4A) of
the Companies Act, 1956, we annex hereto Annexure A on the matters
specified in paragraph 4 and 5 of the said order.
2. Further to our remark in 1 above, we report as under:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
(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
(iii) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of accounts;
(iv) In our opinion, the Profit and Loss account and Balance sheet
comply with the Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956, except as stated in Annexure
C (v) In our opinion and to the best of our information and according
to the explanations given to us, the accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and (air view in accordance with accounting principles generally
accepted in India except as stated in Annexure B.
I. In the case of the Balance Sheet of the Company of the state of
affairs of the Company as at 31st MARCH, 2007.
II. In the case of the Profit and Loss account of the loss of the
company for the year ended on that date.
III. In the case of the Cash Flow statement, of the cash flows for the
year ended on that date.
(vi) On the basis of written representation received from the Director
of the company as at 31s March, 2007 and taken on record by the Board
of Directors, we report that no director is disqualified from being
appointed as director of the company under clause (g) of sub- section
(1) of Section 274 of the Companies Act, 1956.
OVERSEAS SYNTHETICS LIMITED, SURAT
ANNEXURE A TO AUDITORS REPORT YEAR ENDED: 31-3-2007.
(1) (a) The Company has maintained records showing particulars
including quantitative details and situation of fixed assets.
(b) As informed to us, the assets have been physically verified by the
management during the period covered by the audit report.
(c) The company has not disposed of substantial part of fixed assets so
as to affect its going concern status.
(2) There are no opening stocks of goods. Further, the company has not
purchased/sold goods during the year, requirement of reporting on
physical verification of stocks or maintenance of inventory records, in
our opinion, does not arise.
(a) The Company has not granted any loans, secured or unsecured, to
companies, firms, or other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956,. Accordingly paragraphs
(iii) (a), (b), (c) and (d) of the Order are not applicable.
(b) The Company has taken unsecured loans from 6 parties covered in the
Register, maintained u/s 301 of the Companies Act, 1956 in respect of
transactions in earlier years. Maximum outstanding balance during the
year was Rs 41.25 lacs. (P.Y. 41.25 lacs)The year end balance of loans
taken from such parties was Rs NIL (P.Y.41.25) lacs.
(c) As we have not been provided with the terms and conditions on which
loans have been accepted, we are unable to comment on whether terms and
conditions of loan are prejudicial to the interest of the Company.
(d) In the absence of stipulations regarding repayment of principal, we
are unable to determine whether the Company is regular in its repayment
(e) On account of our observations in Clause (3) (c) above, we are
unable to state whether there is any overdue amount and therefore
comment on the steps taken for repayment thereof.
(4) 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 the nature of its
business with regard to purchase of inventory and fixed asset and for
sale of goods. During the course of our assessment, no major weakness
in internal control has come to dur notice.
(5) In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956:
(a) Based on he audit procedures applied by us and the information and
explanations provided by the management, we are of the opinion that
there were no transactions, exceeding the value of rupees five lakhs in
respect of any party during the year that need to be entered in the
register maintained under section 301 of the Companies Act,1956.
(6) During the year the Company has not accepted any deposit from the
public within the meaning of the provisions of Section 58A and 58AA of
the Companies Act, 1956 and rules made there under. Hence clause 6 of
the order is not applicable
(7) In our opinion, the Company does not have an internahaudit system
commensurate with its size and nature of the business.
(8) According to information and explanations given to us, the Company
has not made and maintained cost records prescribed by the Central
Government under Section 209 (1) (d) of the Companies Act, 1956.
(9) (a) The Company is generally regular in depositing undisputed
statutory dues including income tax. sales tax, wealth tax, custom
duty, excise duty, cess and any other statutory dues within the
prescribed time limits with the appropriate authorities during the year
except, the following dues which have been outstanding for more than
six months as on 31st March, 2007.
Name of the Nature of
Act, 1956 debenture
Fund Act Fund Act
Employees Employees .
Insurance Act Insurance
Sales Tax Sales Tax
Amount Due Date Date of
250,000/- 30.03.2001 --
310,675/- 31.03.2000 --
200,909/- 31.03.2001 --
142,447/- 31.03.2000 --
61,285/- 31.03.2001 --
8,000/- 31.03.2005 --
94,000/- 31.03.2006 --
(b) According to Information and explanation provided to us, there are
no dues in respect of income tax, sales tax, wealth tax, custom duty,
excise duty, cess which have not been deposited, on account of any
dispute except the following:
Name of the Nature of
Excise Act, Credit
Excise Act, Excise
Amount Period to Forum
Rs. which where
amount dispute is
782,370/- 31.03.2000 CEGAT
339,426/- 02.02.1998 High Court
(10) The Company has accumulated losses at the end of the financial
year which are exceeding fifty percent of its net worth and it has
incurred cash losses during the current financial year and the
immediately preceding financial year.
(11) According to records of the company, the company has not borrowed
from financial institutions or banks or issued debentures during the
year. Hence, in our opinion, the question of reporting on defaults in
repayment of dues to financial institutions or banks or debenture does
(12) The Company has not granted loans and advances on thebasis of
security by way of pledge of shares, debentures and other securities.
(13) According to the information given to us, the Company has not
given any guarantee for loans taken by others from banks or financial
(14) No new term loan has been taken by the Company during the year.
(15) According to the records examined, on an overall basis, funds
raised on short term basis, have prima facie not been used during the
year for long term investment.
(16) The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956.
(17) No debentures have been issued by the Company.
(18) The Company has not raised any money by public issue, during the
(19) According to the information received by us, no fraud on or by the
Company, has been noticed or reported by the Company during the year.
Considering the nature of the present activities carried out, Clauses
(xiii) & (xiv) of paragraph 4 of the Companies (Auditors Report)
Order, 2003 are not applicable to the Company.
For Naivarlal Vepari & Co.,