1. We have audited the attached Balance Sheet of TANEJA AEROSPACE AND
AVIATION LIMITED (the Company) as at 31st March 2011, and the related
Profit and Loss Account and Cash Flow Statement of the Company for the
financial year ended as 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 the 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 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 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 paragraphs 4 and 5 of the said
Order to the extent applicable.
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
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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit and Loss Account 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 2011 and taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on 31st March 2011
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 the
schedules thereto and the notes thereon, 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 2011;
ii. In the case of Profit and Loss Account, of the Profit for the year
ended as on that date; and
iii. In the case of Cash Flow Statement, of the cash flows for the year
ended as on that date.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph 3 of our report of even date)
(i) a. The company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. According to the information and explanations given to us, the
physical verification of the fixed assets was undertaken by the
management and the discrepancies noticed, as informed to us were dealt
with in the accounts by making additional provision for impairment out
of the Reserve for Business Restructuring and this is sufficient to
cover such discrepancies.
c. According to the information and explanations given to us, the
company has not disposed off substantial part of fixed assets during
the period under audit, which would affect the going concern of the
company.
(ii) a. The Company has arrived at closing stock based on physical
verification undertaken by the management under supervision of an
independent Chartered Accountants firm.
b. The procedures of physical verification of inventories followed by
the management are generally reasonable and adequate in relation to the
size of the Company and nature of its business.
c. The Company is maintaining records of inventory by way of manual
bin cards which needs to be integrated with financial accounts. No
material discrepancies were noticed on physical verification as
compared to quantity in such bin cards.
(iii) a. During the year under audit, the Company has not granted any
fresh loans, secured or unsecured, to companies, firms or other parties
covered in the register maintained under section 301 of the Companies
Act, 1956. Out of advances granted in earlier years by way of Inter
Corporate Deposit, the maximum amount outstanding during the year was
Rs. 494 lakhs and the balance of such loan as at 31st March, 2011 is
Rs. 494 lacs (Previous Year Rs. 449 lacs).
b. In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions on
which the Inter Corporate Deposit indicated in paragraph (iii) (a)
above was granted is not, prima facie, prejudicial to the interest of
the company.
c. There are no stipulations for the repayment of principal and the
interest thereon. Upto 31st March, 2011, neither the original principal
amount nor the accumulated interest thereon has been received.
d. No loan or interest can be termed as overdue in the absence of time
of repayment and thus the question of taking reasonable steps for
recovery of principal amount and interest there on does not arise.
e. During the year, the Company has taken unsecured loans aggregating
to Rs. 1344 lacs from one of the companies covered in the register
maintained under section 301 of the Companies Act, 1956 (Previous year
Rs. 1149 lakhs). At the year end, the aggregate amount outstanding was
Rs. 1125 lakhs (Previous year Rs. 705 lakhs). The maximum balance
outstanding during the year was Rs. 1692 lakhs (Previous year Rs. 1490
lakhs).
f. As explained to us, the loan (indicated in paragraph (iii) (e)
above) is repayable on demand. In our opinion and according to the
information and explanations given to us, the rate of interest and
other terms and conditions of advance taken by the company, are prima
facie, not prejudicial to the interest of the company.
g. As the advance is repayable on demand, we are unable to comment on
the regularity of repayment of principal amount and the interest
thereon.
(iv) 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 purchase of fixed assets and for the sale of goods and
services. However, the internal control procedure with regard to (a)
review and reconciliation of book balances of customers / vendors, and
(b) procedure for purchase of raw material, stores & components and
consumables, needs to be strengthened considering the increasing volume
of business and transactions.
(v) a) According to the information and explanations given to us and to
the best of our knowledge and belief, we are of the opinion that, the
transactions that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered. b) In our
opinion and according to explanations given to us, transactions (other
than secured/unsecured loans given/taken dealt with in paragraph (iii)
above) 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 Lakhs have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
(vi) As per explanations given to us, the Company has not accepted any
deposits from public to which the provisions of section 58A and 58AA of
the Companies Act, 1956 and the Companies (Acceptance of Deposits)
Rules, 1975 would apply. Therefore, the provisions of clause 4 (vi) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
company.
(vii) The company has appointed firms of Chartered Accountants as their
internal auditors. In our opinion, the extent and areas of internal
audit needs to be further strengthened to bring it in line with the
size and structure of the organization and complexities of its
operations.
(viii) The Central Government has not prescribed the maintenance of
cost records u/s 209(1) (d) of the Companies Act, 1956 and hence the
provisions of clause 4 (viii) of the Companies (Auditor''s Report)
Order, 2003 are not applicable to the company.
(ix) a) According to the information and explanations given to us, the
Company has been generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Income-Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, cess and any other material statutory dues with the appropriate
authorities during the year.
b) According to the information and explanations given to us, no
disputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Custom Duty, Excise Duty, cess and other material statutory dues,
were in arrears, as at 31 March 2011, for a period of more than six
months from the date they became payable, except:
Name Nature Amount Period to Forum where
of of Dues (Rs. In which it the dispute
Statute lacs) relates is pending
Central Excise Duty 4.95 F.Y. 2010-11 Office of
Excise Superintendent
Laws of Central
Excise, Hosur
Division
Customs Custom Duty 622.67 F.Y. 2007-08 CESTAT
Act,1962
(x) The Company does not have any accumulated losses. The company has
not incurred any cash losses during the period covered by our audit and
in the immediately preceding financial year.
(xi) According to the records of the company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank.
(xii) According to the explanations given to us, the company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion and according to the information and explanations
given to us, 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.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing 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.
(xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from bank or financial institutions. Hence, the provisions of
clause 4 (xv) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the company.
(xvi) As per the information and explanations given to us, the Company
has not taken any Term Loan during the period under audit. Also, Term
Loan taken during earlier years have been, on an overall basis, applied
for the purpose for which the said loans were obtained.
(xvii) According to information and explanations given to us, and on an
overall examination of the Balance Sheet of the Company, we report that
no funds (except inter corporate deposit from an associate company)
raised on short-term basis has been used for long-term investment.
(xviii) According to information and explanations given to us, during
the period covered by our audit report, the company has not made
preferential allotment of equity shares to parties and companies
covered in the Register maintained under section 301 of the Companies
Act, 1956.
(xix) In our opinion and according to the information and explanations
given to us, the Company has not issued any secured debentures during
the period of our audit. Therefore, clause 4 (xix) of the Companies
(Auditor''s Report) Order, 2003 is not applicable to the company.
(xx) The company has not raised any funds by way of preferential/
public issue during the year.
(xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For Haresh Upendra & Co,
Chartered Accountants,
Firm Reg. No.: 103513W
Haresh B. Shah
Partner
Membership No. : 32208
Pune June 29,2011
