We have audited the attached Balance Sheet of M/s. Clarus Finance &
Securities Limited as at 31st March, 2008 and also the Profit and loss
Account and the Cash Flow Statement of the Company for the year ended
on that date annexed thereto. 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 or material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in 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 areasonable basis for
2. As required by the Companies (Auditors Report) Order, 2003 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 paragraph 4 and 5 of the said
3. Further to our comments in the Annexure referred to in paragraph 2
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 account, as required by law, have
been kept by the Company, so far as appears from our examination of
c) The Balance Sheet and the Profit and Loss Account dealt with by this
report are in agreement with the books of account;
d) In our opinion the Balance Sheet and Profit and Loss Account dealt
with by this report comply with the mandatory Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956; except for non provision for liability of retirement benefits in
terms of AS-15.
e) On the basis of written representations received from the directors,
and taken on record by the Board of Directors, in our opinion none of
the directors is disqualified as on 31st March, 2008 from being
appointed as directors in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act 1956 as on that date.
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 the
Significant Accounting Policies and other notes thereon give the
information required by the Companies Act, 1958, in the manner so
required and subject to:
Note No. 9 of Schedule 14 relating to change in method of valuation of
closing stock of equity shares as at 31st March, 2008 from Lower of
Cost or Net Realisable value to At Cost.
Present a true and fair view, in conformity with the accounting
principles generally accepted in India:
i. in so far as it relates to Balance Sheet, of the state of affairs
of the Company as at 31st March, 2008;
ii. in so far as it relates to the Profit and Loss Account, of the
loss of the Company for the year ended on that date;
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)
Based upon the information and explanations furnished to us, and the
books and records examined by us in the normal course of our audit, we
report that to the best of our knowledge and belief:
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 at the year end, which in our opinion is reasonable,
having regard to the size of the company and nature of its assets. No
material discrepancies have been reported on such verification.
c) In our opinion, the Company has not disposed of substantial part of
fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) As explained to us, inventories have been physically verified by the
management at regular 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 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. In respect of loans, secured or unsecured, granted or taken by the
Company to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company had not taken any unsecured loans to any companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956.
The Company had granted unsecured loans to companies and other parties
covered in the register maintained u/s 301 of the Companies Act, 1956.
The maximum amount involved during the year aggregate to Rs. 6,50,000/-
and the year-end balance in respect of these loans was Rs. Nil/-.
b) In our opinion and according to the information and explanations
given to us, the terms and conditions on which such loans have been
taken are not, prima facie prejudicial to the interest of the Co.mpany.
c) In respect of above loans given by the Company, these were repayable
on demand and therefore the question of overdue amounts does not arise.
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 inventories, fixed assets and also for the
sale of inventories. During the course of our audit, we have not
observed any weaknesses in internal control.
5. In our opinion, the Company has accepted deposits from the public
within the meaning of section 58A and section 58AA of the Companies
Act, 1956 and the rules framed there under. However, the company has
not complied with provisions of Companies (Acceptance of Deposits)
6. According to the information and explanations given to us, there
have been no transactions that need to be entered into the register
maintained under section 301 of the Companies Act, 1956
7. There is no internal audit system prevalent in the Company.
8. The Central Government has not prescribed maintenance of Cost
Records under Section 209 (1) (d) of the Companies Act, 1956 in respect
of business activities of the Company.
9. In respect of statutory dues:
a) According to the records of the Company, in our opinion, undisputed
statutory dues including Income-Tax, Investor Education & Protection
Fund and other statutory dues applicable to the company have been
generally regularly deposited with the appropriate authorities.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of the aforesaid dues were
outstanding as at 31st March, 2008 for a period of more than six months
from the date of becoming payable.
c) According to the records of the Company, and as per information and
explanations given to us there are no disputed statutory dues
outstanding during the year.
10. In our opinion, the Company has accumulated losses at the end of
the financial year exceeding fifty percent of net worth and company has
incurred cash losses in the current year and in the immediately
preceding financial year.
11. In our opinion the Company has not defaulted in repayment of dues
to banks. The company has not issued any debentures.
12. In our opinion, the company has not granted any loans and advances
on the basis of security by way of pledge of shares, debentures and
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund /society.
14. As per information and explanation given to us and books and
records produced before us, the company is dealing and trading in
shares and securities and proper records have been maintained of
transactions and contracts and timely entries have been made therein.
Also, shares and securities have been held by the company in its own
15. According to the information and explanations given to us, the
Company has not given any guarantees on behalf of others.
16. The Company has not obtained any term loans during the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the Company has not utilised borrowed funds from short
term sources for long term purposes.
18. According to the information and explanations given to us, 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. According to the information and explanations given to us, the
Company has not issued any debentures during the year.
20. According to the information and explanations given to us, the
Company has not raised any money by way of public issue during the year
covered by our audit report.
21. In our opinion and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year that causes the financial statements to be materially
For Tushar Parekh and Associates
CA Tushar Parekh
Place: Mumbai Proprietor
Date : 31st July 2008 Membership No: 103230