Garlon Polyfab Industries Ltd Auditor Reports

GARLON POLYFAB INDUSTRIES LIMITED ANNUAL REPORT 2007-2008 AUDITORS REPORT To The Members M/S GARLON POLYFAB INDUSTRIES LIMITED, Regd.Off.: LGF,15/79-B, Civil Lines, Kanpur. We have audited the attached Balance Sheet of M/S GARLON POLYFAB INDUSTRIES LIMITED., as at 31st March, 2008 and also the Profit & Loss A/c and the Cash Flow Statement 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. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit 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 issued by the Central Government of 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 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 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 31st March 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 to us, the said accounts, read together with the Significant Accounting Policies and notes thereon given 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 Balance Sheet, of the state of affairs of the company as at 31st March 2008; and (ii) In the case of the Profit & Loss Account of the Profit for the year ended on that date. FOR, P.D. AGRAWAL & CO CHARTERED ACCOUNTANTS TARUN GUPTA PARTNER Place: Kanpur Dated: 11-07-2008. 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 to 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 programme of verification till the date of acquisition of factory by UPFC as given in Note No.10 which in our opinion was reasonable having regards 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 of the Company during the period. 2. a. As explained to us, the inventory of the company has been physically verified during the year by the management. b. In our opinion and according to the information and explanations given to us, the procedure 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 were noticed on physical verification of inventory as compared to books records. 3. a. According to the information and explanations given to us by the company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Registers maintained u/s defined under section 301 and/or the Companies under the 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 by the company has not taken any loans, secured or unsecured from the companies, firms or other parties listed in the registers in the maintained under section 301 and/or the Companies under the 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 deferrers and their relatives of directors as unsecured loans. 4. In our opinion and according to the information and explanations given to us, there is adequate internal control procedures commensurate with the size of the Company and nature of its business, with regard to purchase of inventory and 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 of arrangement entered in the register maintained under section 301 of the company Act, 1956 as 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 payment 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 the 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 explanations given to us on the and on the basis of our examination of books of accounts, the company is regularly depositing undisputed statutory dues including providend 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 appropriate authorities, the investor production 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 on the and on the undisputed amounts payable in respect of income tax, wealth tax, sales tax custom duty, excise duty were outstanding, as at last day of from the the financial period concerned for a period of more than six months from the date they become payable. 10. Company accumulated losses of the Company at the end of the financial year are more than of fifty 50% of its net worth and the company has not been in operation since, 1998. 11. According to the information and explanations given to us and on basis of our examination of books of the 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. 588.62 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 loans and advances on the basis of security by way of pledge of shares, debentures and other securities, hence the questions 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, or and come across any instance where funds raised during the year on short-term basis have been used for long-term investments and vise versa. 18. During the year, the company has not made any preferential allotment 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 by the company, has been noticed or reported during the year. FOR, P.D. AGRAWAL & CO CHARTERED ACCOUNTANTS TARUN GUPTA PARTNER Place: Kanpur Dated: 11-07-2008.