We have audited the attached Balance Sheet of Udaipur Cement Works
Limited as at 30th September 2012, Statement of Profit and Loss and
also the cash flow statement for the period 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.
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
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
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
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
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
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
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
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
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
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
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
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 &
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.)
Central Excise Act High Court 4,40,017
Service Tax Act Assistant 66,05,892
Commissioner of Excise (ST.)
Sales Tax Act Assistant 8,14,000
Commissioner (Comm, Tax)
Commissioner (Comm. Tax)
Commissioner (Comm. Tax)
Circle 'B' Jammu
Land Tax Act Sub-Registrar, Mavli 23,88,69,766
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
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
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
For OM PRAKASH S CHAPLOT & CO.
Place: Udaipur Partner
Date : 28.12.2012 M.No. 10184