| We have audited the attached Balance Sheet of LORDS CHEMICALS LIMITED
as at 31st March, 2011 and the related Profit & Loss Account 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.
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 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors' 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 as we considered necessary and appropriate and
according to the information and explanations given to us during the
course of the audit, we enclose in the Annexure, a statement on the
matters specified in paragraphs 4 and 5 of the said order.
Further we report that:
1. 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;
2. 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 the
books;
3. The Balance Sheet, Profit and Loss Account and cash flow statement
dealt with by this report are in agreement with the books of account as
submitted to us;
4. In our opinion, the said Balance Sheet, Profit and Loss Account and
Cash Flow Statement comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956 except the
policy of the Company to recognize Gratuity on cash basis which is not
in accordance with provisions of Accounting Standard-15 (Employee
Benefits), issued by the Institute of Chartered Accountants of India,
resulting in non measuring of the obligation and the expense in the
financial statement.
5. 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 director in terms of clause (g) of sub
section(1) of section 274 of Companies Act, 1956.
6. Subject to above in point no. 4 in our opinion and to the best of
our information and according to the explanations given to us, the
said statement of account read with Notes on accounts appearing on
schedule U, give the information required by the Companies Act, 1956 in
the manner so required, gives 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 and
ii) in the case of the Profit & Loss Account, of the profit for the
year ended on that date.
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
The Annexure referred to in the auditors' report to the members of
Lords chemicals limited for the year ended March 31, 2011. We report
that:
1. The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets. As
explained to us, some of the fixed assets have been physically verified
by the management based on a phased programme of verification adopted
by the company. In our opinion, the frequency of verification is
reasonable. To the best of our knowledge, no material discrepancies
have been noticed on such verification. The Company has not disposed of
any substantial part of its fixed asset during the year.
2. As informed to us, physical verification has been conducted at
reasonable intervals in respect of stocks. The discrepancies noticed on
such physical verification between physical stock and book records were
not significant and the same has been properly dealt with in the books
of account.
3. a) As informed to us, the Company has not granted any loan, secured
or unsecured, to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Therefore, the provisions of clauses (iii) (a) to (d) of the order are
not applicable.
b) As informed to us the Company has taken loan, secured or unsecured,
from one other company covered in the register maintained under Section
301 of the companies Act, 1956. The maximum amount involved during the
year was Rs. 1069.20 Lacs and the yearend balance of loan taken from
such company was Rs. NIL. In our opinion the rate of interest and other
terms and conditions on which loan have been taken from such other
company listed in the register maintained under sec. 301 are not, prime
facie, prejudicial to the interest of the company.
4. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and nature of its business, for the
purchase of inventories and fixed assets and for the sale of goods. We
have not observed any major weakness in the internal control system
during the course of the audit.
5. Based on the information and explanations given to us, we are of
the opinion that the particulars of contracts or arrangements that need
to be entered into the register maintained under section 301 have been
so entered. In our opinion and according to the information and
explanations given to us, the transactions made in pursuance of
contacts or arrangements entered in the registers maintained under sec
301 and exceeding the value of five lacs rupees in respect of any party
during the year have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
6. In our opinion and according to the explanation given to us, the
company has not accepted any deposits from the public.
7. In our opinion the Company has internal audit system commensurate
with the size of the company and the nature of its business.
8. As per information by the management, no cost records have been
prescribed under section 209(1) (d) of the companies Act, 1956 in
respect of products manufactured by the company.
9. According to the records of the company, the company is regular in
depositing with appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees state insurance, Income Tax, Sales tax, Wealth tax, Service
tax, Excise duty, Customs duty, Cess and any other statutory dues
applicable to it. According to the information and explanations given,
no undisputed amounts payable in respect of Income Tax, Wealth Tax,
Sales Tax, Customs Duty and Excise Duty were outstanding, as at
31.03.2011 for the period of more than six months from the date they
became payable.
According to the records of the company the disputed statutory dues on
account of Sales tax, Excise Duty and cess that have not been deposited
on account of matters pending before appropriate authorities are as
follows:
Name of the Nature of Amount Period to Forum where
dispute is
pending
Statute dues involved which the
(Rs) amount
relates
The Central
Excise Central 9,03,120/- 2006-07 Central Excise
& service
Act, 1944 Excise Appellate Tribunal.
W.B. Sales
Tax Act, Sales Tax 9,85,224/- 2003-04
1994 to Appellate &
Provisional Board
2004-05
The VAT
Act,2003 Value Added 2,17,459/- 2006-07 Appellate &
Provisional
Board
Tax
The Central
Sales Central
Sales 8,83,415/- 2003-04
Tax Act,
1956 Tax and Appellate &
Provisional Board
2004-05
The Central
Sales Central
Sales
Tax Act,
1956 Tax 2,09,149/- 2006-07 Appellate &
Provisional Board
10. The company has not accumulated losses and has not incurred any
cash losses during the financial year covered by audit or in the
immediately preceding financial year.
11. Based on our audit and according to information and explanation
given to us we are of the opinion the company has not defaulted in
repayment of dues to banks as at the balance sheet date.
12. As informed and explained to us, the company has not granted any
loans and advances on the basis of security by way of pledge of shares
during the year, so the requirement of maintenance of adequate
documents and records is not applicable.
13. In our opinion and to the best of our information and according to
the explanations given to us, the company is not a chit fund / nidhi /
mutual benefit fund / societies.
14. As per records of the company and information and explanations
given to us, the company is not dealing or trading in shares,
securities, debentures and other investments during the year.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by its associates
from bank or financial institutions.
16. The company has not obtained any term loan during the year.
17. In our opinion, and on the basis of our examination and according
to the information and explanations given to us, the Company has not
used the funds borrowed on short-term basis during the year for
long-term investment.
18. The company has not made any preferential allotment of share to
parties/companies covered in the register maintained under section 301
of the Companies Act, 1956.
19. The company has not issued any debentures during the year.
20. The company has not raised any money through public issue during
the year.
21. Based upon the information and explanations furnished by the
management, which have been relied upon by us, there were no frauds on
or by the company noticed or reported during the course of our audit.
For P. D. RUNGTA & CO.
Chartered Accountants
(Registration No. 001150C)
(CA. AMIT KUMAR)
Place : Kolkata Partner
Date : 11th June, 2012 Membership No - 067184 |