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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 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 management, as well as evaluating the overall financial presentation. We believe that our audit provides a reasonable basis for our opinion.
1. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us during the course of audit, we enclose in the Annexure, a statement on the matters specified in the paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph 1 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, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;
d) In our opinion and to the best of our information, Statement of Profit and Loss, Balance Sheet and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956, to the extent applicable.
e) On the basis of written representations received from the directors, as on 30th September, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th September, 2012 from being re-appointed as a director of the company in terms of the clause (g) of sub- (1) of section 274 of the Companies Act, 1956. However all the directors of the company except Mr. S.K.Kinra, special director appointed by Hon'bie BIFR & Mr. Ganpat Singh, appointed as Additional Director on November 1, 2012 are disqualified to be appointed/re- appointed as directors in any other public company;
f) Attention is invited to:
(i) Note No. 26 of Notes to Accounts regarding non-provision against loans and advances amounting to Rs. 471:84 lacs.
(ii) Note No. 26 of Notes to Accounts regarding pending reconciliation/ confirmation of balances of debtors and loans and advances considered to the extent identified by the management and our inability to comment thereon.
We further report that the loss for the period, balance in profit & loss account, assets and liabilities as stated are without considering the impact of items mentioned in para (f) (i) to (ii) above. Had the observation made in para (f) (i) above been considered, loss for the period would have been Rs. 1,734.16 lacs (as against reported figure of loss for the period of Rs 1262.32 lacs), loans & advances would have been Rs. 128.62 lacs fas against reported figure of Rs. 600.46 lacs).
Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement read together with 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:
a) In the case of the Balance sheet, of the state of affairs of the Company as at 30th September, 2012;
b) In the case of Statement of Profit and Loss, of the loss for the period ended on that date; and
c) In the case of Cash Flow Statement, of the cash flows for the period ended on that date.
ANNEXURE TO THE AUDITOR'S
[Referred to in Paragraph (1) of the Auditors' Report of even date to the members of Udaipur Cement Works Limited for the year ended 30.09.2012]
i) a) Records showing full particulars including quantitative details and situation of fixed assets have been maintained by the company.
b) Physical verification of fixed assets has been conducted by the management according to the programme of physical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and nature of Fixed Assets during the period. The discrepancies noticed on such physical verification were not material.
c) As per information and explanations provided by the management and records made available to us, fixed assets disposed off during the period were not substantial.
ii) a) Physical verification of inventories has not been conducted by the Management during the period as stated in note no. 19 of Notes to Accounts.
b) In our opinion and having regard to our comments in Para (ii)(a) above, the procedures of physical verification of inventory needs to be made adequate in relation to the size of the company and nature of its business.
c) On the basis of information and records made available, inventory records are maintained (subject to note no. 19 of Notes to Accounts) but in the absence of physical verification report, it is not possible to ascertain and comment on discrepancy between book records and physical inventory and adjustments, if any and ascertainment of amount thereof read together with note no. 19 of Notes to Accounts.
iii) The company has neither granted nor taken any loans, secured or unsecured ' to and from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii) (b) to (d), (f) & (g) of the order are not applicable.
iv) Internal control system require to be strengthened to be made commensurate with the size of the company and the nature of its business for the sale of fixed assets and services and read with our comments elsewhere and note no 19 & 26 of Notes to Accounts.
v) According to the information and explanations provided by the management and based upon audit procedure performed, we are of the opinion that there are no particulars of contracts or arrangements referred to in section 301 of the Act to be entered in the register required to be maintained under that section, accordingly, the provisions of clause 4 (v) (b) of the order are not applicable.
vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of the directives issued by Reserve Bank of India and the provision of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under. As informed to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.
vii) No Internal Audit has been carried out during the period as stated in note no. 28 of Notes to Accounts.
viii) We have broadly reviewed the books of account maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed records have been made and maintained read with Note no. 1.3. We have not, however, made a detailed examination of the said records with a view to determine whether they are accurate.
ix) a) According to the records of the Company and information and explanations given to us, the company is generally regular in depositing undisputed statutory dues, Wealth Tax, Service Tax, Custom Duty, Cess and other material Statutory dues with the appropriate authorities to the extent applicable. There are no material statutory dues payable for a period of more than six months from the date they became payable as at 30th September, 2012.
b) According to the records and information and explanations given to us,, there are no dues in respect of Wealth Tax, Custom Duty and Cess that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of Income Tax, Excise Duty, Service Tax and Sales Tax that have not been deposited on account of dispute and the forum where the dispute is pending are given below:-
Name of the Nature of The Dues Period Statute
Central Excise Act Excise Duty 1995-96
Excise Duty (Interest) 2000-01
Service Tax Act Service Tax 1997-98
Sales Tax Act Sales Tax 1999-2000
Sales Tax (Interest) 1996-97,1997-98 & 1998-99
Sales Tax 1996-97
Land Tax Act Land Tax 2006-07 to 2011-12
Above is to be read with note no. 20 of Notes to accounts.
Name of the Statute Forum where dispute Amount (In Rs.) is pending
Central Excise Act High Court 4,40,017
Assistant 2,81,325 Commissioner Central Excise, Udaipur
Service Tax Act Assistant 66,05,892 Commissioner of Excise (ST.)
Sales Tax Act Assistant 8,14,000 Commissioner (Comm, Tax)
Assistant 9,11,000 Commissioner (Comm. Tax)
Assistant 25,04,900 Commissioner (Comm. Tax) Circle 'B' Jammu
Land Tax Act Sub-Registrar, Mavli 23,88,69,766 & Vallabhnagar
x) The company's accumulated losses at the end of the period are more than fifty percent of its net worth and it has also incurred cash losses in the current period and also in the immediately preceding financial year.
xi) On the basis of records made available and information and explanations given to us, the company has not defaulted in repayment of dues, considering the sanction of scheme, to financial institutions, banks and debenture holders.
xii) According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
xiii) The company is not a chit fund or a nidhi/mutual benefit fund/society; therefore the provisions of clause 4 (xiii) of the Order are not applicable to the company.
xiv) According to the information and explanations provided by the management, the company is not dealing in or trading in shares, securities, debentures and other investments.
xv) 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.
xvi) In our opinion and according to the records, information and explanations given to us, the Company has not availed any fresh term loan during the period.
xvii) Based on the examination of the documents and records made available and on the basis of information and explanations given to us and on an overall examination of financial statements, we are of the opinion that the company has not used funds raised on short-term basis for long-term investment.
xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the period to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.
xix) According to information & explanations provided by the management no debentures have been issued during the period.
xx) The company has not raised any money through a public issue during the period.
xxi) Based on the audit procedures performed and on the basis of information and explanations provided by the management which have been relied upon by us, no fraud on or by the company has been noticed or reported during the course of our audit or have been informed by the management.
For OM PRAKASH S CHAPLOT & CO.
Place: Udaipur Partner
Date : 28.12.2012 M.No. 10184