| We have audited the attached Balance Sheet of the Punjab Woolcombers
Limited as at 31st March, 2004 and also the Profit & Loss Account of
the Company for the year ended on that date and annexed thereto. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statement 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 supoorting the amounts and
disclosures in the financial statements. An Audit also includes
assesing 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.
1. As required by the Companies (Audits Report) Order, 2003 issued by
the Central Government in terms of section 227 (4A) of the Companies
Act, 1956 we enclose in the annexure a statement as the matters
specified
1 paragraph 4&5 of the said Order.
2 Further to our comments in the annexures referred to in paragraph (1)
above
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief where necessary for the purpose of our
audit.
b) In our opinion, proper books of accounts, as required by law, have
been kept by the Company so far as it appears from our examination of
the books.
c) The Balance Sheet and Profit & Loss Account debit with by this
Report are in agreement with the books of account.
i) In our opinion, the Profit & Loss Account and the Balance Sheet
complies with the mandatory Accounting Standard referred to in Section
211 (3C) of the Companies Act, 1956 subject to Note No. B regarding
non-charging of interest on Cash Credit Limit amounting to Rs. 78.80
lacs due to which current financial year loss has been understated by
78.80 lacs, Note No. 9 regarding balance confirmation of Debtors and
Creditors.
a) i) We report that all the directors of the Company as on 31.03.2004
are disqualified from being reappointed as director as the Company has
defaulted in the terms of clause (g) of the sub-section (1) of the
Companies Act.
ii) The written representation (in term of section 274 (i) (g) of the
Companies Act from all the directors are disqualified from being
appointed as director as mentioned in e(i) above.
b) In our opinion and to the best of our information and according to
the explanation given to us, the said statement of accounts, read with
notes thereon (Schedule XXII give the information required by the
Companies Act, 1956 in the manner Note No. 8 regarding non-charging of
interest on Cash Credit limit amounting to Rs. 78.80 lacs due to which
current Financial Year loss has been understated by Rs. 78.80 lacs.
Note No. 9 regarding balance confirmation of Debtors and Creditors.
j) In our opinion and to the best of our information and according to
the explacnalions given to us, the Balance Sheet and Profit and Loss
Account together with the notes thereon and attached thereto give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view
i) In the case of Balance Sheet of the State of affairs of the Company
as at 31st March, 2004 and
ii) In the case of Profit & Loss Account of the profit/loss for the
year ended on that date.
for S. TANDON & ASSOCIATES
Chartered Accountants
Sd/-
Placi : Ludhiana (AMARPREET SINGH)
Date : 31.08.2004 Partner
ANNEXURE TO THE AUDITORS REPORT
Annexure referred to in paragraph `3 of the auditors report to the
members of punjab woolcombers ltd. on the accounts tor the year ending
31.03.2004.
1 (a) The company has maintained proper records showing full
particulars including quantitative details and situation of the fixed
assets.
b) As explained to us, the Company has the system for the verification
of the fixed assets, which is designed to cover all assets over a
period of three years, which in our opinion is reasonable having regard
to the size of the company. The Fixed Assets have been physically
verified by the management during the year and no maternal
discrepancies were observed.
2. (a) According to the information and explanations given to us, the
procedures of physical verification of stock followed by the management
are reasonable and adequate in relation to the size of the company and
the nature of its business.
b) On the basis of our examination of the records of inventories as
compared to the book records were not material and have been properly
dealt with in the books of accounts.
3. According to the information and explanations given to us the
company has not provided any interest on the loans which have been
granted to the parties listed in the register maintained under section
301 of the Companies Act, 1956 during the year because the companies to
which the loans had been granted have been teferred to BIFR.
4. according to the information and explanations given to us, the
company has not taken any loans from companies, firms or other parties
listed in the register maintained under section 301 of the Companies
Act, 1956.
5. in our opinion and according to the informations and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of inventories, fixed assets and for
the sale of goods. During the course of our audit, no major weakness
has been noticed in the underlying internal controls.
6. a) Based on the audit procedures applied by us and according to the
informations given to us, the transactions that needs to be entered in
the register maintained under section 301 of the Companies Act. 1956
have been entered so far.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of the contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 exceeding the value of Rs. 500 lacs in respect
of any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time except for the items stated to be of proprietary nature
where the question of comparison does not arise.
7. according to the information and explanations given to us, the
Company has not accepted any deposit from the public, paragraph 4(vi)
of the order not applicable.
8. in our opinion, the company has the adequate internal Audit system
commensurate with the size and nature of business.
9. We have broadly reviewed the books of accounts maintained by the
company pursuant to the Rules made by Central Government of 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 & maintained.
10. a) According to the records of the Company, information and
explanation given to us, the undisputed statutory dues including
Provident Fund Employee State Insurance, Income Tax, Sales Tax, Wealth
Tax, Custom Duty, Excise Duty, R&D Cess and other matrial statutory
dues applicable to the Company have not been regularly deposited with
the appropriate authority. As detailed below :-
Particulars Amount Payable
Sales Tax Payable Rs. 13.35 lacs
Surcharge on Sales Tax Rs. 1.25 lacs
E.S.I. Payable Rs. 40.43 lacs
P.F. Payable Rs. 139.25 lacs
T.D.S. Payable Rs. 7.14 lacs
Central Sales Tax Payable Rs. 15.30 lacs
Surcharge on CST Rs. 0.76 lacs
(b) According to the information and explanations given to us there are
no undisputed amount payable in respect of Sales Tax, Income Tax,
Wealth Tax, Excise Duty, Custom Duty were in arrear fo a period of more
than six months from the date they become payable.
11. The accumulated losses at the end of the financial year ending
31.03.2004 are Rs. 83.76 Crore. Further the company has incurred cash
losses during the financial year ending 31.03.2004. The Company is Sick
Industrial Company within the meaning of Section 3 of the Sick
Industrial Companies (Special Provisions) Act, 1956.
12. In our opinion and according to the information and explanations
given to us, the company has defaulted in repayment of dues (Principal
& Interest) to the financial institutions (IFCI), Banks (S.B.O.P.) and
to debenture holders (Principal & Interest).
13. As the Company has not granted any loans and advances on the basis
of security by way of pledge of shares debentures and other securities,
paragraph 4 (xiii) of the order is not applicable.
14. As the company is not achit fund/nidhi/mutual benefit fund/society
to which the provisions of special statute relating to chit fund are
applicable. Paragraph 4(xii) of the Order is not applicable.
15. According to information and explanations given to us, the Company
has not dealt or traded in shares, securities, debentures and other
investments. Therefore the provisions of clause 4 (xiv) of the
Companies (Auditors Report) order, 2003 are not applicable to Company.
16. According to the information and explanations given to us, the
Company has not given any guarantees for loans taen by other form banks
of financial insitutions during the year.
17. According to the information and explanations given to us, the term
loans taken during the year have been applied for the purpose for which
they were raised.
18. According to the information and explanations given by the
management 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. Also no long term funds have been
used to finance short term assets except permanent working capital.
19. As the Company has not made Preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, paragraph 4(xviii) of the order is not
applicable.
20. As me Company has not issued any debentures during the year,
paragraph 4(xix) of the order is not applicable
21. During the year, since the company has not raised money by way of
public issue, paragraph 4(xx) of the order is not applicable.
For S. TANDON & ASSOCIATES
CHARTERED ACCOUNTANTS
Sd/-
PLACE : UDHIANA (AMARPREET SINGH)
DATED : 31.08.2004 PARTNER |