anand projects ltd Auditors report

ORIGIN AGROSTAR LIMITED ANNUAL REPORT 2003-2004 AUDITORS" REPORT TO THE MEMBERS OF ORIGIN AGROSTAR LIMITED 1. We have audited the attached Balance Sheet of Origin Agrostar Limited as at 31st March, 2004 and also the Profit and Loss Account for the period 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. 2. We conducted our audit in accordance with the 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 the 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 issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956, we close in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in 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 purpose 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 and Profit and Loss Account dealt with by this report are in agreement with the books of accounts; (iv) In our opinion, Balance Sheet and Profit and 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; (v) On the basis of written representations received from the directors, as on 31st March 2004, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2004 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 together with and subject to; (a) Note 1 (L) of Schedule 18, on existence of going concern status of the Company, (b) Note 10 of Schedule 18, on realisability of certain advances given to various companies and the impact of shortfall if any on recovery of these advances (c) Note 7 (b) of Schedule 18, regarding recovery proceedings initiated by the Income Tax Department (d) Note 3(b) of Schedule 18, regarding default in payment of term loans to the financial Institutions (e) Note 4(b) of Schedule 18 regarding default in repayment of working capital loans to the banks, and other notes in Schedule 18 of Significant Accounting Policies and Notes on 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; (f) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2004; and (g) In the case of the Profit and Loss Account, of the Loss of the company for the period ended on that date; For N.K. THARAD & CO. Chartered Accountants Place : Chennai N.K. THARAD Dated : 24th May, 2004 Partner M. No. 51867 ANNEXURE TO THE AUDITOR`S REPORT REFERRED TO PARAGRAPH 3 OF OUR REPORT OF EVEN DATE 1. The Company has maintained proper retards showing full particulars including quantitative details and situation of fixed Assets. 2. The management during the period has physically verified all the fixed assets. No material discrepancies were noticed on such verification. 3. During the period, the company has not disposed off any substantial part of fixed assets. 4. The inventory has been physically verified during the period by the management. In our opinion, the frequency of such verification is reasonable. 5. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. 6. On the basis of our examination of the records of inventory, we are-of the opinion that the company is maintaining proper records of the inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. 7. According to the information and explanation given to us, the company has not granted/taken any loans, secured and unsecured to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. 8. 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 with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weaknesses have been noticed in the internal controls. 9. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered. 10. On the basis of our examination of the books of account, the Company has not entered into any transactions exceeding Rupees Five lakhs in respect of any party during the financial year that need to be entered in the register pursuant to the Section 301 of the Act. 11. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits under the provisions of Sections 58A and 58AA of the Act and the rules framed there under. 12. In our opinion, the company has an internal audit system commensurate with the size and nature of its business. 13. The Central Government of India has not prescribed the maintenance of cost records by the Company under Section 209(1)(d) of the Act for any of its products. 14. According to the records of the company, the company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, wealth-tax, custom duty, excise-duty, cess and other statutory dues with appropriate authorities. However the Company is irregular in the payment of following dues, which are outstanding for a period of more than six months from the date they became payable: A. Income Tax (Asst. Yr. 2000-01) Rs. 1,73,72,678 B. Sales Tax Deferral dues Rs. 37,43,028 C. Investor Protection Fund (Unpaid dividend for the year ended 31.07.1995) Rs. 1,02,993 15. According to the records of the company, there are no dues of sale tax, income-tax, customs tax/wealth-tax, excise duty/cess which have not been deposited on account of any dispute except as stated herein below :- Nature of Dues Amount Rs. Forum where dispute is pending Income Tax (Asst. Yr. 1996-97) 16,35,000 CIT (Appeals) 16. The accumulated losses of the Company as at 31st March 2004, are less than fifty percent of its net worth and the Company has also incurred cash losses during the financial period ending on 31st March, 2004 and in the immediately preceding financial period ending on 31st December, 2002. 17. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has defaulted in repayment of dues to financial institutions & hanks as followings; Nature of Dues Period Amount of default (As per companys books of accounts) DBI - Term Loan 2000-2001 21,89,26,476 Onwards State Bank of India - Working 2001-2002 13,01,80,997 Capital Loan Onwards Above lenders have already initiated recovery proceedings under various acts & regulations and the matters are sub-judice. 18. Based on our examination of documents and records, we are of the opinion that the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 19. Based on our examination of the records and evaluation of the related internal controls, we are of the opinion that proper records have been maintained of the transaction and contracts in respect of shares and securities, and timely entries have been made in those records. We also report that the company has held the shares, securities, debentures and other securities in its own name. 20. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to it. 21. The Company has not given any guarantee for the loans taken by others from banks or financial institutions during the year. 22. The Company has not taken any term loans during the year. 23. The funds raised on short-term basis during the year have not been used for long-term investment and funds raised on long-term basis have not been used for short term investment. 24. The Company has not made any preferential allotment of shares during the year. 25. The company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise. 26. The company has not made any Public issue of any Securities during the year and therefore the question of disclosing the end use of money does not arise. 27. Based upon the audit procedures performed and 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 N.K.THARAD & CO Chartered Accountants N.K. THARAD Place : Chennai Partner Date : 24th May, 2004