We have audited the attached Balance Sheet of OVERSEAS SYNTHETICS
LIMITED, SURAT as at 31st MARCH, 2011, 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
Company''s 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 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 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, as
amended by the Companies (Auditor''s Report) (Amended) Order, 2004
(together the Order), issued by the Department of Company Law Affairs
in terms of sub-section (4A) of section 227 of the Companies Act, , 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 such
(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
(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 fair 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, 2011.
II. In the case of the Profit and Loss account of the Profit 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 31st March, 2011 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.
ANNEXURE ''A'' TO AUDITORS'' REPORT YEAR ENDED: 31-3-2011.
(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 disposed of certain part of fixed assets. However
going concern status has not been affected as in the view of the
management of the company there is no intension to discontinue business
or any substantial activity.
(2) (a) As informed to us, the inventory has been physically verified
during the period by the management at reasonable intervals.
(b) According to the information and explanations given to us, the
procedures of physical verification of the inventories followed by the
management are reasonable and adequate in relation to the size of the
company and nature of the business
(c) The company is compiling proper records of inventory. As informed,
There was no discrepancies noticed on verification between the physical
stock and the book records.
(3) (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 clauses (iii)
(a), (b), (c) and (d) of the Order are not applicable.
(b) The Company has not taken loan from any party covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly clauses (e), (f) & (g) of clause (iii) of the Companies
(Auditors'' Report) Order, 2003 is not applicable to the Company.
(4) In our opinion and according to the information and explanations
given to us,
Internal control procedures requires reinforcement to enable it to be
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 our notice. However some minor
irregularities were noticed.
(5) In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956:
(a) Based on the 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 and
therefore sub-clause (b) of clause (5) of this statement is not
applicable to the company.
(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 to the company.
(7) \n our opinion, the Company does not have an internal audit 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.
Considering the nature of the activities carried out by the company
which is more trading in nature, these maintenance of these records is
required to be reviewed.
(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, 2011.
Name of the Nature of Amount Due Date Date of
Statute Dues Rs payment
Central Excise Central 4,19,426/- 02.02.1998 -
Act, 1944 Excise Duty
(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
(10) The Company has accumulated losses at the end of the financial
year which are exceeding fifty percent of its net worth. The company
has not incurred cash losses during the current year and the
immediately preceding financial year.
(11) According to records of the company, the company has neither
borrowed from financial institutions or banks nor issued debentures.
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 any loans or advances on the basis of
security by way of pledge of shares, debentures or any other
(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 for
financing long term investments.
(16) According to the information and explanations given to us, the
Company is not a dealer or trader in securities, and dealing and
trading thereto is not their principal business. Based on our
examination of records we stated that, proper records have been
maintained of the transactions and contracts and timely entries have
been made therein. All investments in marketable securities and mutual
funds have been held by the Company in its own name.
(17) 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.
(18) No debentures have been issued by the Company.
(19)'' The Company has not raised any money by public issue, during the
(20) 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, Clause
(xx) of paragraph 4 of the Companies (Auditors'' Report) Order, 2003 is
not applicable to the Company.
For Natvarlal Vepari & Co.,
Firm Registration No. 123626W
Date : 24 JUN 2011