| 1. We have audited the attached Balance Sheet of WEBEL COMMUNICATION
INDUSTRIES LIMITED as at 31st March 2009 and also the Profit and Loss
Account and the Cash Flow Statement of the said Company for the year
ended on that date, both 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.
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 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.
3. As required by the Companies (Auditors Report) Order,
2003(Amendment) as amended by the Companies (Auditors Report)
(Amendment) Order, 2004 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.
Further to our comments in the Annexure referred to above, we report
that :
i) We have obtained all the information and explanation, 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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of Account.
iv) In our Opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statements except Accounting Standard-2 regarding "Valuation for
Inventories; Accounting Standard-15 (revised) regarding "Employees
Benefit"; Accounting Standard- 22 regarding "Accounting for Taxation on
Income, Accounting Standard-28 regarding "Impairment of Assets" &
Accounting Standard-29 regarding "Provisions, Contingent Liabilities
and Contingent Assets" comply with the requirements of the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.(as amended).
v) On the basis of written representations received from the directors
as on 31st March, 2009 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2009 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 read with the
significant accounting policy and notes on accounts in schedule-17
subject to :
i) The Company has incurred substantial losses in the last few years
and its net worth has been fully eroded. The accounts of the company
has been prepared on going concern assumption considering the Company
will get financial support and restructuring of its loan from its
existing lender or would be able to make alternative arrangements and
would be in a position to meet its financial obligations. However, if
the company is unable to continue its operations and loses its going
concern assumption, then adjustment may be required to the reported
amount of assets and classification of its liabilities. We are however
unable to comment on the above.
ii) Note No. B-3 in Schedule 17 regarding non-provision of Gratuity and
Leave Accrued Liabilities on actuarial basis amounting to Rs. 71.39
Lacs and Rs. 32.15 Lacs including Rs. 5.46 Lacs and Rs. 2.49 Lacs
respectively for the year;
iii) Note No. B - 9 in Schedule 17 regarding Non Provision of Doubtful
Debts amounting Rs. 5.38 Lacs resulting in understatement of Losses and
overstatement of Sundry Debtors by equivalent amount. Balances of
Sundry Debtors are old debts and in the absence of confirmation we are
unable to comment on the recoverability of the same.
iv) Note No. B -12 in Schedule 17 regarding Non ascertainment and
Provision of Impairment of Assets.
v) In the absence of any confirmation we are unable to comment on the
unsecured loan of the company at the year end.
vi) No interest income has been booked on Fixed Deposit Of Rs.25.56/-
lacs kept with an Overseas Bank for the reasons mentioned in the note
No. B-19 in Schedule 17. The Fixed deposit balance is also unconfirmed
at the year end.
vii) Balances of Sundry Creditors as on 31.03.2009 are subject to
confirmation.
viii) Stock of Inventory has been valued at cost instead of at lower of
cost and net realizable value as market value of such stock is not
available. We are unable to comment on ultimate realization from such
stock.
Impact of Paras No. (i), (iv), (v), (vi), (vii) and (viii) are not
ascertainable. However, had our observation made in Para No. (ii) and
(Hi), been considered the Loss for the year would have been Rs. 150.90
lacs (as against the reported Loss figure of Rs.137.57 lacs) and
carried forward losses would have been Rs. 1756.53 lacs (as against the
reported figure of Rs.1743.20 lacs), Current Liabilities & Provisions
would be Rs. 147.49 lacs (as against the reported figure of Rs. 38.57
lacs) and read with the other notes particularly Note No B-22 in
Schedule No "17" give the information required by the Companies Act
1956 in the manner so required and give a true and fair view:
(a) In the case of Balance Sheet, of the state of affairs of the
Company as at 31st March, 2009,
(b) In the case of Profit and Loss Account, of the Loss of the Company
for the year ended on that date and
(c) In case of Cash Flow Statement of the Cash flows for the year ended
on that date.
ANNEXURE
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. However company has not updated the same from the last few
year.
(b) The fixed assets have been physically verified by the management as
per programme of verification of its Fixed Assets adopted by the
company. In absence of proper details and documents we are not in
position to express our opinion whether the frequency of verification
is reasonable having regard to the size of the Company and the nature
of its Assets. As per the information and explanations given to us, no
material discrepancies were noticed on such verification.
(c) The Company has not disposed off substantial part of its fixed
assets during the year.
2. (a) According to the information and explanations given to us, the
inventories have been physically verified at reasonable interval during
the year by the management.
(b) In our opinion and according to the information and explanations
given to us the procedures of physical verification of inventories
followed by the Management is reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and the discrepancies noticed on such physical verification
of stocks as compared to book records, which were not materials has
been adjusted in the books of Accounts.
3. (a) According to the information and explanations given to us, the
Company has not granted/accepted unsecured loan to/ from Companies
covered in the register maintained under Section 301 of the Companies
Act, 1956. Hence, clauses (iii)(b),(c),(d),(f) & (g) are not
applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
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;
5. (a) As the Company has not taken/accepted any secured/unsecured
loans from/to the parties listed in the register maintained u/s 301 of
the Companies Act 1956, so the transaction that needs to be entered
into the said register does not arise.
(b) As per the information and explanations given to us, there are no
transactions of purchase of goods, materials and services aggregating
during the year to Rs 5.00 lacs or more in respect of each party, made
in pursuance of contracts or arrangements entered in the register
maintained under section 301 of the Companies Act, 1956.
6. The Company has not accepted any deposit during the year from the
public within the meaning of the provisions of Section 58A and 58AA of
the Companies Act, 1956 and rules made there under.
7. In our opinion, the company has internal audit system commensurate
with the size and nature of its business of the Company.
8. The Central Government has not prescribed maintenance of cost
record under section 209(l)(d) of the Companies Act, 1956 for the
products of the Company.
9. (a) As per the information and explanation given to us, The Company
has been generally regular in depositing undisputed statutory dues,
Provident Fund, Employees State Insurance, Income Tax, Service Tax,
Cess and any other statutory dues with the appropriate authorities
during the year except West Bengal Sales Tax of Rs. 52963/-, Purchase
tax of Rs. 4917/- Central Sales Tax of Rs. 6,20,603/; and Surcharge
for Sales Rs. 2,81,515/-. Which has not been deposit and outstanding
as at 31st March, 2009 for a period of more than six months from the
date they became payable.
(b) According to the information and explanations given to us, there
are no dues of sales tax, Wealth Tax, Service Tax, Income tax, Custom
duty, Excise duty and Cess outstanding an account of any dispute other
than Sales Tax for the Asst. Year 1988- 89 amounting to Rs.139.30 lacs
and Rs.10.83 lacs on account of Sales Tax Grant for the Asst. Year
1994-95 which are under appeal before the Commissioner of sales Tax.
However there is no deposit under protest against that amount. (Ref.
Note No. 8-l(a) and 8-11 of the Schedule 17).
10. The Company has accumulated losses at the end of the year and its
net worth is fully eroded and has incurred cash losses during the
current financial year and immediately preceding financial year.
11. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to financial
institutions, banks and debenture holders.
12. According to the information and explanations given to us, the
Company has not granted loans or advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund/nidhi/mutual benefit fund/society.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15. 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.
16. According to the information and explanations given to us, the
Company has not raised any term loan during the year.
17. According to the information and explanations given to us, on an
overall basis, funds raised on short term basis have prima facie, not
been used during the year for long term investment and vice versa.
18. 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, during the year and hence the question
of whether the price at which shares have been issued is prejudicial to
the interest of the Company does not arise.
19. The Company has not issued any debentures during the year.
20. The Company has not raised monies by public issues during the
year.
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 SINGHI & CO.
Chartered Accountants
(L.N. DEY)
Partner
Membership No.F/3569
IB, Old Post Office Street
Kolkata - 700 001
Dated the 1st day of September 2009
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