| 1. We have audited the attached Balance Sheet of M/S GARLON POLYFAB
INDUSTRIE LIMITED as at 31st March, 2008 and also the Profit and Loss
Account for the year ended on that date annexed thereto. These
financial statement are the responsibility of the company management,
our responsibility is to express an opinion on these financial
statements based c our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in lndia 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
disclosure in the financial statements. As 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) Oder, 2003 issued
by the Central Government India in terms of Sub-section (4A) of Section
227 of the Companies Act,1956 and on basis of sub checks of the books
and records of the Company as we considered appropriate, and according
the information given to us during the course of audit, separate
annexure hereto a statement of matters specified in paragraph 4 & 5 of
the said order to the, extent applicable to the company
4. Further to our comments in the Annexure referred to above, We state
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 our
audit.
(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 such
books.
(c) The Balance Sheet and Profit and Loss account referred to in this
report are in agreement with the books of account.
(d) in our opinion the Balance Sheet and Profit and Loss account comply
with the mandatory Accounting Standards referred to sub-section (3C) of
Section 211 of the Companies Act. 1956
(e) On the basis of the written representations received from the
directors as on 31st March, 2008 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2005 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956
(f) In our opinion and to the best of our information and according to
the explanations given us, the said accounts together with significant
accounting policies and 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.
(i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31 March 2008, and
(ii) in the case of Profit & Loss Account, of the loss of the company
for the year ended d that date.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE ON THE
ACCOUNT FOR THE PERIOD ENDED ON 31st MARCH, 2008
1.a. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b. As explained to us, the fixed assets have not been physically
verified by the management during the period but there was regular
program of verification till the date of acquisition of factory by UPFC
as given in Note No. 10 which in our opinion was reasonable having
regard to the size of the company and the nature of its business. No
material discrepancies were noticed on such verification.
c. The company has not been disposed off any fixed assets during the
period.
2.a. As explained to us, the inventory has not been physically verified
during the period by the management.
b. In our opinion 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. The Company has maintained proper records of inventories. As
explained to us there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. a. According to the information and explanations given to us, the
Company has not granted any loans, secured or Unsecured to the
companies, firm or other parties listed in the register in the
maintained under section 301 and/or the companies under same management
as defined under sub-section (1B) of section 370 of the Companies Act,
1956.
b. According to the information and explanations given to us, the
company has not taken any loans, secured or unsecured from the
companies, firm or other parties listed in the register in the
maintained under section 301 and/or the companies under same management
as defined under sub-section (1B) of section 370 of the Companies Act,
1956 except interest free loans of Rs. 1,98,171.24, from five parties,
the directors and their relative of directors as unsecured loans.
c. The company has given advances in the nature of loans to some
parties, However, as explained to us, there is no stipulated as to
payment of interest and repayment of principal.
4. In our opinion and according to the information and explanations
given to us there is adequate internal control procedure commensurate
with the size of the company and the nature of its business with regard
to purchase of inventory, fixed assets and with regard to the sale of
goods. During the course of our audit, we have not observed any major
weaknesses in internal controls.
5. In our opinion and according to the information and explanations
given to us, there were no transactions in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956, aggregating during the period to Rs. 5 lacs
only or more in respect of any parties.
6. The company has not accepted any deposits from the public as
defined under section 58-A of the Companies Act, 1956 and the Companies
(Acceptance of Deposit) Rules, 1975 except Rupees ten lacs from Mr.
Prasant Saraf for repayment of SBI IFB C/C loan in the year 2004-05.
7. The company has not an internal audit system commensurate with the
size and nature of its business.
8. To the best of our knowledge and as explained Central Government has
not prescribed maintenance of cost recordS under clause (d) of
sub-section (1) of section 209 of the companies Act, 1956 for the
products of the company.
9.a. According to the information and explanation given to us and on
the basis of our examination of books of accounts, the company is
regularly depositing undisputed statutory dues including provident
fund, investor education and protection fund, employees state insurance
income tax , wealth tax, sales tax custom duty, excise duty, cess and
other statutory dues wherever applicable during the year with the
appropriate authorities, the investor protection fund, employees state
insurance, wealth tax ,sales tax ,customs duty, excise duty and cess
does not apply to the company during the year.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty and excise duty were outstanding, as at last day of
the financial period concerned for a period of more than six months
from the date they became payable.
10. The accumulated losses of the company at the end of the financial
year are more than 50% of its net worth and the company has not been in
operation since 1998.
11. According to the information and explanation given to us and or;
the basis of our examination of books of accounts, the company has
defaulted in repayment of dues to U.P.F.C. due to non operating of the
business. The outstanding balance at the end of the period is Rs.S88.62
lacs including interest accrued and due. There are no debenture holders
of the company.
12. According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of pledge
of shares, debentures and other securities, hence the question of
maintenance of documents and records does not arise
13. According to the information and explanations given to us , the
company is not a chit fund/nidhi/mutual benefit fund/society
14. The company is not dealing or trading in shares, securities,
debentures or 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 and financial institutions.
16. According to the information and explanations given to us , the
company has not taken any loans during the year.
17. According to the information and explanations given to us and on
and overall examination of the balance sheet of the company ,we have
not come across any instance where funds raised during the year on
short- term basis have been used for long-term investment and vice
versa.
18. During the year, the company has not made any preferential
allotment of shares.
19. The company did not have outstanding debentures during the year.
accordingly, the question of creating any securities for the same does
not arises.
20. The company has not raised any money by way of public issue during
the year.
21. According to the information and explanation given to us, no
fraud, on or by the company, has been noticed or reported during the
year.
FOR P.D. AGRAWAL & CO.
Chartered Accountants
Date : 11/07/2008 (Arun Gupta)
Place : Kanpur Partner | 