1. We have audited the attached Balance Sheet of REFNOL RESINS AND
CHEMICALS LIMITED as at March 31, 2012, the statement of Profit and
Loss 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 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 mis-statements. An audit
includes examining on 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
3. As required by the Companies (Auditors' Report) Order, 2003
(the Order) issued by the Central Government in terms of
Sub-section 4A of Section 227 of the Companies Act, 1956, we give in
the Annexure a statement on the matters specified in paragraphs 4 and 5
of the said order.
4. Further to our comments in the Annexure referred to 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
(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
(c) The Balance Sheet, Profit and Loss and Cash Flow Statements dealt
with by this Report are in agreement with the books of account;
(d) In our opinion Balance Sheet, Statement of Profit & 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
and taken on record by the Board of Directors, none of the directors 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
the explanations given to us, the said accounts read together with
significant accounting policies and notes there on 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 Statement of Profit & Loss, of the 'Loss' of the
Company 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.
1. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b. As explained to us, the fixed assets have been physically verified
by the management during the year in a phased periodical manner, 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. No substantial part of Fixed Assets has been disposed off during
the year, which has bearing on the going concern assumption.
2. In respect of its inventories:
a. As explained to us, inventories have been physically verified by
the management at reasonable intervals during the year.
b. In our opinion and according to the information and explanations
given to us, 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 has maintained proper records of inventories. As
explained to us, there was no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. The company has neither granted nor taken any secured or unsecured
loans to and from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, the clauses 4(iii)
(b) to (g) of the Order are not applicable.
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 for the purchase of inventory, fixed assets and also for the
sale of goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls.
5. a. According to the information and explanations given to us, we
are of the opinion that during the year, the particulars
of the contracts / 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. According to the information and explanations 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,
and exceeding the value of rupees five lacs in respect of any party
during the year have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
3. According to information and explanations given to us, the company
has not accepted any deposits from pubic. Therefore, provisions of
clause (iv) of paragraph 4 of the order are not applicable to the
7. In our opinion, the internal audit system of the Company is
commensurate with its size and nature of its business.
3. The Central Government has prescribed maintenance of Cost Records
under Section 209 (1) (d) of the Companies Act, 1956 in respect of
certain manufacturing activities of the Company. We have broadly
reviewed the accounts and records of the Company in this connection and
are of the opinion, that prima facie, the prescribed accounts and
records have been made and maintained. We have not, however, made a
detailed examination of the same.
3. In respect of statutory dues:
a. According to the information and explanations give to us and the
records of the company examined by us, in our opinion, the company is
not regular in depositing the undisputed statutory dues including
Provident Fund, Employees' State Insurance, Income Tax, Sales Tax,
Service Tax, Custom Duty, Excise Duty, Cess and other Material
statutory dues as applicable with the appropriate authorities.
b. The undisputed statutory due of Income Tax remains unpaid for more
than six months as at 31st March 2012 - Rs. 2.30 lac.
c. The disputed statutory dues, that have not been deposited on
account of matters pending before appropriate authorities is as under :
Sr. Name of the
Statute Nature of the
Dues Period to which Forum where
No. amount relates Dispute is
10. The company has accumulated losses at the end of the year are more
than fifty percent of its networth. The company has incurred cash loss
in the current financial year but not in the immediately preceding
11. According to the books of account and records of the company,
there has been no default in repayment of dues to bank.
12. In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions during the year.
16. In our opinion, on the basis of information and explanations given
to us, the term loans have been applied for the purpose for which the
loans were obtained.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, funds
raised on short term basis have, prima facie, not been used during the
year for long term investment.
18. During the year, 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.
19. The Company has not issued any debentures.
20. The Company has not raised any money by way of public issue during
21. In our opinion and according to the information and explanations
given to us, no material frauds on or by the company has been noticed
or reported during the year.
For G. P. Kapadia & Co.
(Registration No. 104768 w)
Uday. R. Parikh
Place : Ahmedabad Partner
Date : May 29th, 2012 Membership No. : 10217