LUMAX INDUSTRIES LIMITED
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
To
The Members of
Lumax Industries Limited
1. We have audited the attached Balance Sheet of Lumax Industries Limited
(`the Company`) as at March 31, 2012 and also the Statement of profit and
loss 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.
2. 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 tree 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.
3. As required by the Companies (Auditor`s Report) Order, 2003 (as amended)
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.
4. Without qualifying our opinion, we draw attention to note 45 of the
financial statements. The Company has paid managerial remuneration of
Rs.17,079,085 during the year, which is in excess of the limits specified
by the relevant provisions of the Companies Act, 1956, by Rs 2,679,085. As
represented to us by the management , the Company has made an application
to the appropriate regulatory authorities in this regard, for regularizing
the payment of such excess remuneration to managerial personnel. Pending
the final outcome of the Company`s application, no adjustments have been
made to the accompanying financial statements in this regard.
5. Further to our comments in the Annexure referred to above, we report
that:
i. 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;
ii. 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;
iii. The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, statement of profit and loss and
cash flow statement dealt with by this report comply with the accounting
standards referred to in subsection (3C) of section 211 of the Companies
Act, 1956.
v. On the basis of the written representations received from the directors,
as on March 31, 2012, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2012 from
being appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts 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 March 31, 2012;
b) in the case of the statement of profit and loss, of the profit for the
year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year ended
on that date.
For S.R. BATLIBOI & ASSOCIATES
Firm registration number: 101049W
Chartered Accountants
per Sanjay Vij
Place: Gurgaon Partner
Date : May 30, 2012 Membership No.: 95169
Annexure referred to in paragraph [3] of our report of even date
Re: Lumax Industries Limited (`the Company`)
(i)(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management
during the year but there is a regular programme of verification which, in
our opinion, is reasonable having regard to the size of the Company and the
nature of its assets. No material discrepancies were noticed on such
verification.
(c) There was no disposal of a substantial part of fixed assets during the
year.
(ii)(a) The management has conducted physical verification of inventory at
reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no material
discrepancies were noticed on physical verification.
(iii)(a) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies, firms
or other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Accordingly, the provisions of clauses 4(iii) (a)
to (d) of the Companies (Auditor`s Report) Order, 2003 (as amended) are not
applicable to the Company.
(b) According to the information and explanations given to us, the Company
has not taken any loans, secured or unsecured from companies, firms or
other parties covered in the register maintained under section 301 of the
Companies Act, 1956. Accordingly, the provisions of clauses 4(iii) (e) to
(g) of the Companies (Auditor`s Report) Order, 2003 (as amended) are not
applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given
to us and having regard to the explanation that purchases of items of
inventories and certain fixed assets are of proprietary nature and
alternative sources are not available to obtain comparable quotations,
there is an adequate internal control system commensurate with the size of
the Company and the nature of its business, for the purchase of inventory
and fixed assets and for the sale of goods and services. During the course
of our audit, we have not observed any major weakness or continuing failure
to correct any major weakness in the internal control system of the Company
in respect of these areas.
(v)(a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be entered
into the register maintained under section 301 have been so entered.
(b) In respect of transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs entered into
during the financial year, because of the unique and specialized nature of
the items involved and absence of any comparable prices, we are unable to
comment whether the transactions were made at prevailing market prices at
the relevant time.
(vi) The Company has not accepted any deposits from the public.
(Vii) In our opinion, the Company has an internal audit system commensurate
with the size of the Company and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules 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 accounts and
records have been made and maintained.
(ix)(a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees` state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
other material statutory dues have generally been regularly deposited with
the appropriate authorities though there has been a slight delay in a few
cases.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor education
and protection fund, employees` state insurance, income-tax, wealth-tax,
service tax, sales-tax, customs duty, excise duty, cess and other material
statutory dues were outstanding, at the year end, for a period of more than
six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty
and cess on account of any dispute, are as follows:
Name of Nature of Amount Period Forum where
the statute dues (Rs.) to which dispute is
the amount pending
relates
The Central Excise duty demand 7,255,448 July 1994 to High Court,
Excise Act, against rejected February 1999 Chandigarh
1944 goods sent on
57(f)(4) challans
The Central Excise duty demand 2,026,701 1999-2000 Joint
Excise Act, against excess to 2001-02 Commissioner
1944 credit taken against of Central
the materrial Excise-Gurgaon
procured from
100% EOU
Local Area Demand of tax on 84,185 2000-01 Joint Excise
Development certain fixed assets and Taxation
Tax Act, 2005 including interest Commissioner
(Appeals),
Faridabad
Service Tax, Demand for dis- 763,450 2006-07 Commissioner
Finance Act, allowance of Cenvat Appeals
1994 credit in respect of (Gurgaon)
service tax paid on
certain services.
The Central Demand against non 6,964,753 1997-98 Joint Sales
Sales Tax submission of to 2007-08 Tax
Act, 1956 C Forms Commissioner
and Sales Tax
Appellate
Tribunal
Income Tax Income tax demand 38,855,315 Assessment Dispute
Act, 1961 on various Year 2008-09 Resolution
disallowances Panel
(x) The Company has no accumulated losses at the end of the financial year
and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial institution
or bank. The Company has not issued any debenture during the year.
(xii) According to the information and explanations given to us and based
on the documents and records produced before 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, 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 (as amended) are not applicable to
the Company.
(xiv) In our opinion, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the provisions
of clause 4(xiv) of the Companies (Auditor`s Report) Order, 2003 (as
amended) are not applicable to the Company.
(xv) 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.
(xvi) Based on information and explanations given to us by the management,
term loans were applied for the purpose for which the loans were obtained,
though idle/surplus funds which were not required for immediate utilization
have been gainfully invested in liquid investments payable on demand. The
maximum amount of idle/surplus funds invested during the year was
Rs.489,100,000 of which Rs. 147,450,000 was outstanding at the end of the
year.
(xvii) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that no
funds raised on short-term basis have been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section 301
of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money through a public issue during the
year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per the
information and explanations given by the management, we report that no
fraud on or by the Company has been noticed or reported during the year.
For S.R. BATLIBOI & ASSOCIATES
Firm registration number: 101049W
Chartered Accountants
per Sanjay Vij
Place: Gurgaon Partner
Date : May 30, 2012 Membership No.: 95169 |