| A. We have audited the attached Balance Sheet of M/S. CORE HEALTHCARE
LIMITED, as at
31st March, 2007, Profit & Loss Account and the Cash Flow statement of
the company for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
B. We have 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 presentation of the
financial statement. We believe that our audit provides a reasonable
basis for our opinion.
C. As required by the; Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of section 227(4A) of the
Companies Act, 1956, we give in the Annexure, a statement on the
matters specified in paragraphs 4 of the said order.
D. Further to our comments in the Annexure referred to in paragraph C
above, 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, subject to Note No.8 regarding non provision of
interest and Note No: 7 regarding non provision of sales tax liability,
proper books of accounts as required by law have been kept by the
company so far as appears from our examination of those books.
3. The Balance sheet and Profit & Loss Account dealt with by this
report are in agreement with the books of account.
4. Except for non compliance of Accounting Standard 28 for Impairment
of Assets ( refer note no. 6 ), and Accounting Standard 29 for
Provisions, Contingent Liabilities and Contingent Assets (refer note
no. 7 & 8 ), in our opinion, the Balance Sheet and Profit & Loss
Account dealt with by this report comply with the accounting standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956
5. The company has defaulted in repayment of fixed deposits and
interest thereon as well as has defaulted in redemption of partly
convertible & non convertible debentures. Except as above and based on
the representations made by Directors of the company and the
Information and explanations us made available, directors, other than
Nominee Director of the company do not prima facie have any
disqualification as referred to in clause (g) of sub section (1) of
section 274 of the Companies Act,1956.
6. Attention Is invited to the following notes in Schedule-21:
(i) Note no. 3 regarding accounts of the company prepared on going
concern basis.
(ii) Note No. 6 regarding non provision of loss on Impairment of
assets.
(ill) Note No. 7 regarding non provision of Sales tax liability
amounting to Rs. 556.91 lacs.
(iv) Note No. 8 regarding non provision of Interest of Rs. 2401.60 lacs
up to 31s March, 2007 including Rs.1200.80 lacs for year under report.
(v) Note No. 21 regarding non provision for doubtful loan and advances
amounting to Rs. 54.01 lacs.
(vi) Liability of sales tax pertaining to Rajpur unit ( Pharma plant)
aggregating to Rs. 480.84 lacs has .been transferred pursuant to
demerger under Composite Scheme of Compromise and Arrangement and
therefore this liability Is not outstanding in the books of accounts of
the company as at 31st march, 2007.
We further report that without considering items (i) and (ii), the
effects of which could not be determined, the observations made by us
In items (iii),(lv) & , (v) being considered , the loss for the year
would have been Rs. 3996.23 lacs (as against the reported figure of Rs.
983.71 lacs), the accumulated losses would have been Rs. 20746.43 lacs
(as against the reported figure of Rs. 17733.91 lacs), net current
liabilities would have been Rs. 3542.79 lacs (as against the reported
figure of net current liabilities of Rs. 530.27 lacs).
Subject to above, in our opinion and to the best of our information and
according to the explanations given to us, the said accounts read with
the significant accounting policies and other 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 Balance Sheet, of the state of affairs of the
Company as at 31st March,2007,
(b) In the case of Profit & Loss Account, of the loss for the year
ended on that date;
and
(c) in the case of the Cash Flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to In paragraph : Company of our report of even date )
1. (a) The company has generally maintained proper records showing
full particulars including quantitative details and situation of fixed
assets.
(b) According to the information given to us, fixed assets have not
been physically verified during the year by the management.
(c) On account of demerger of Sachana undertaking as mentioned in
note-1 of Schedule-21, substantial part of fixed assets has been
disposed off by way of transfer to Nirma Ltd. Attention is also invited
to note-3 of schedule-21 regarding assumption of going concern.
2. The company has no inventories and therefore clause 4(ii) of CARO,
2003 is not applicable.
3. (a) The company has granted unsecured interest free loan to a
subsidiary company covered by section 301 of the Companies Act, 1956.
The maximum amount involved during the year and the year-end balance
was Rs. 4976.11 lacs and Rs. 52.01 lacs respectively.
(b) In our opinion and according to the information and explanations
given to us, the loan given to a subsidiary company being unsecured and
interest free and in absence of any terms and conditions upon which
this loan has been granted, we are not able to express*our opinion as
to whether these are prima facie prejudicial to the interest of the
company.
(c.) No repayment schedule of principal amount of loan has been fixed
for loans granted by the company.
(d) No recovery steps are taken by the company in respect of loans
granted by the company.
(e) The company has not taken any loans from companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are internal controi procedures which are required
to be strengthened to make them commensurate with the size of the
company and the nature of its business with regard to purchase of
inventory and fixed assets and for sale of goods and services. In our
opinion, there is no continuing failure to correct major weakness in
internal control.
5. To the best our knowledge and belief, and according to the
information and explanations given to us, we are of the opinion that
there are no contracts and arrangements, the particulars of which need
to be entered into the register maintained under Section 301 of the
Companies Act, 1956.
6. During the year, the company has not accepted deposits from the
public. In respect of deposits accepted from public in earlieFyears.the
company has defaulted in repayment of entire deposits and interest
thereon in our opinion and according to the information and
explanations given to us, subject to above the Company has complied
with the provisions of Section 58-A and section 58AA (no deposit has
been accepted by the company after insertion of section 58AA ) or any
other relevant provisions of the Companies Act, 1956 and rules framed
there under except that the company has not maintained liquid assets
as; required under the said rules, the outstanding amount of deposits
exceeds limits prescribed and the company has not filed the return of
deposits. We are informed that Company Lav/ Board or National Company
Law Tribunal or Reserve Bank Of India or any court or any other
Tribunal has not passed any order.
7. The company does not have a formal internal audit system.
8. In absence of any manufacturing activity during the year under
report, in our opinion, clause 4(viii) of CARO, 2003 is not applicable.
9. (a). According to the books of accounts examined by us and also
based on representations received from the management, the company has
not been regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees
State Insurance, Income tax and Sales tax, excise duty and the company
is generally regular in depositing undisputed statutory dues by way of
wealth tax, custom duty, cess and other material applicable statutory
dues. Undisputed amounts payable in arrears in respect of statutory
dues as at 31/03/2007 for a period of six months from the date they
become payable are as under:
Particulars of Amount in arrears as at 31.03
Statutory Dues 2007 for a period of six months
(Rupees in lacs)
Sales tax (including interest) 556.91 lacs
Investor Education and Protection Fund
(matured and unclaimed fixed deposits
and interest thereon) 13.35 lacs
(b) According to the information and explanations given to us, there
are no dues of sales tax, wealth tax, excise duty, service tax and cess
which have not been deposited on account of dispute.
10. The companys accumulated losses at the end of the financial year
are more than fifty percent of its net worth and the company has
incurred cash losses in such financial year and in the immediately
preceding financial year also.
11. The company has defaulted in repayment of dues to financial
institutions, banks and debenture holders. According to the information
and explanations given to us and also based en representations received
from the management, the period (considering varying period of default
in respect of varying amounts of loans from various lenders, average
period has been reported) and amount of default are as per Schedule-1
attached.
12. According to the information and 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.
13. 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.
14. In our opinion and according to the information and explanations
given to us, the company is not dealing in shares securities and
debentures; therefore, the provisions of clause 4 (xiv) of the Order
are not aplicable to the company.
15 In our opinion and according to the information and explanations
given to us, there is no any guarantee given by the company outstanding
as on 31-03-2007 for loan taken by others from bank or financial
institutions.
16. The company has not obtained any term loan during the year.
Accordingly, the provisions of clause (xvi) of the Order are not
applicable to the company.
17. 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 to finance
long-term investments. However, amounts raised on short-term basis have
been used to finance accumulated losses.
18. According to the information and explanations given to us, during
the year covered by our report, the company has not made any
preferential allotment of shares to the parties and companies covered
in the register maintained under section 301 of the Companies Act,
1956. Accordingly, the provisions of clause (xviii) of the Order are
not applicable to the company
19. According to the information and explanations given to us, the
company has not issued any secured debentures during the period covered
by our report. Accordingly, the provisions of clause (xix) of the Order
are not applicable to the company.
20. During the period covered by our audit report, the company has not
raised any money by way of a public issue.
21. 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
was noticed or reported during the year.
For Padamchand Chand Jain & Associates,
Chartered Accountants.
Place: Ahmedabad Padamchand Jain
Partner
Date : 31-08-2007 Membership No. 34966 |