India Foils Ltd merged Auditor Reports

INDIA FOILS LIMITED ANNUAL REPORT 2008-2009 AUDITORS REPORT TO THE BOARD OF DIRECTORS OF INDIA FOILS LIMITED 1. We have audited the attached Balance Sheet of India Foils Limited as at 31st March, 2009 and also the relative Profit and Loss Account and Cash Flow Statement for the financial year ended on that date, both of which we have signed under reference to this report. 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 misstatements. 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 indicated in Note 8 on Schedule 17 in respect of the Hoera unit, the operation of which is under suspension since 15th September 2003 till the year end. (i) The Company has neither ascertained nor provided for liability towards salaries and wages, provident fund, employees state insurance and other employee benefits from the aforesaid date of suspension of operation till 31st March, 2009. (ii) Gratuity and leave liability were actuarially ascertained and provided for based on the information available till the aforesaid date of suspension of operation. In view of this we are unable to comment on the extent of compliance of the recognition and measurement requirements of Accounting Standard 15 on Employee Benefits. 4. Subject to our remarks in para 3 above, we report as follows: 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) The Balance Sheet and Profit and Loss Account dealt with in this report are in agreement with the books of account. iii) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and Profit and Loss Account read with notes thereon comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent necessary for the purpose of this engagement, subject to our remark in para 3 above iv) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read with the notes thereon give the information required by the Companies Act, 1956 in the manner so required and subject to our remark in para 3 above the impact of which on the loss for the year and the net assets as at 31st March, 2009 cannot be ascertained, give true and fair view. * in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009 * in the case of the Profit and Loss Account, of the loss for the year ended on that date. * in the case of Cash Flow Statement, of the cash flows for the year ended on that date. For M. P. Chitale & Co. Chartered Accountants Ashutosh Pednekar Partner ICAI M. No. 41037 Place: Mumbai Date : 30th June, 2009 ANNEXURE TO AUDITORS REPORT ANNEXURE REFERRED TO IN PARAGRAPH 4.i OF THE AUDITORS REPORT TO THE MEMBERS OF INDIA FOILS LIMITED. i (a) The Company has maintained unit wise fixed assets registers and / or compiled item wise list showing particulars of all its fixed assets. The aggregate value shown by these records agree with the gross value of fixed assets as per the books of accounts of the company. (b) Based on the information and explanation furnished to us, the Company has physically verified fixed assets during the year as per the cycle of verification and no material discrepancies were noticed. (c) During the year, Company has not disposed of any substantial /major part of fixed assets. ii (a) As explained to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. (b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory 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 and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account. iii (a) According to the information and explanations given to us, the Company has neither granted nor taken any loans to / from parties listed in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, sub- clauses (b), (c) & (d) (e) (f) and (g) of clause (iii) of Para 4 of the Order are not applicable. iv In our opinion and according to the information and explanation given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for purchase of inventory and fixed assets and for sale of goods. Further on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weakness in the aforesaid internal control procedures. v (a) In our opinion, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under Section 301 have been so entered. (b) In our opinion, and to the best of our knowledge and belief and according to the information and explanations given to us, the contracts and arrangements were entered into at prices which are reasonable having regard to the prevailing market prices at the relevant time. vi In our opinion and according to the information and explanations given to us, the directive issued by the Reserve Bank of India, and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act 1956, and the rules framed thereunder with regard to the deposits accepted from the public are not applicable to the company. vii The Company has an internal audit system commensurate with the size and nature of it business. viii We have broadly reviewed the books of account maintained by the Company relating to the manufacture of Aluminium Foils pursuant to the rules made by the Central Government for 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 maintained. We have not, however, made a detailed examination of the records with view to determining whether they are accurate or complete. ix (a) According to the records of the Company and information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Service tax, Customs Duty, Excise Duty and cess with the appropriate authorities. There are no undisputed statutory dues outstanding as of 31st March, 2009 for a period of more than six months. However, the following are not paid: (i) Dues in respect of provident fund and employees state insurance in respect of Hoera unit, the operation of which is under suspension since September 2003 till the end of the year as indicated in Note 8 of Schedule 17 (ii) Other dues of Deferred Sales Tax, aggregating Rs.487.86 lacs, as set out below, which is outstanding as at the end of the year: Period to which the amount relates Due Date Amt. (Rs. in Lacs) Quarter ended 30.09.96 31.10.05 12.98 Quarter ended 31.12.96 31.01.06 25.62 Quarter ended 30.03.97 30.04.06 31.45 Quarter ended 30.06.97 31.07.06 29.76 Quarter ended 30.09.97 31.10.06 42.45 Quarter ended 30.12.97 31.01.07 51.39 Quarter ended 30.03.98 30.04.07 51.58 Quarter ended 30.06.98 31.07.07 33.74 Quarter ended 30.09.98 31.10.07 48.82 Quarter ended 30.12.98 31.01.08 41.61 Quarter ended 30.03.99 30.04.08 53.02 Quarter ended 30.06.99 31.07.08 65.44 Note: Interest due on above Rs. 80.86 lacs (b) As at the year-end according to the records of the Company and information and explanations given to us, there are no disputed dues on account of income tax, sales tax, customs duty, excise duty, cess, wealth tax, service tax which have not been deposited with respective authorities except as under: Name of the Nature of Amount Period to which Forum where the statute dues (Rs. In the amount disputes are lacs) relates pending West Bengal 1982-1984, Sales Tax Act/ 1986-1988, West Bengal 1993-94 to Value Added 1999-2001 & Revision Tax Act/ Sales Tax 1740.60 2003-04 Board (Tribunal) Central Sales Tax Act 444.32 2001-02 to Additional 2002-03 Commissioner of Commercial Taxes (Revision) 101.31 2004-05 to Deputy 2005-06 Commissioner (Appeals) 2286.23 Central Excise Excise Act Duty 915.09 1986 to 2003 Commissioner of Central Excise x The accumulated losses of the Company as at 31st March, 2009 are more than fifty percent of its networth and it has also incurred cash losses during the financial year ended on that date and in the immediately preceeding financial year. xi As at the year end, the Company has not defaulted in repayment of dues to banks. The Company has not issued any debentures. xii According to the information and explanations, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii According to the information and explanations, the Company does not have a chit fund / nidhi /mutual benefit fund / society. Hence, the provisions of any special statute as specified under clause (xiii) of Paragraph 4 of the Order are not applicable to the Company. xiv According to the information and explanations, the Company is not a dealer or trader in securities. xv According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. xvi To the best of our knowledge and belief and according to the information and explanation given to us, term loans have been applied for the purpose for which they were obtained. xvii According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, funds raised on short term basis have, prima facie, not been used for long term investment. xviii Pursuant to the rehabilitation scheme sanctioned by the Honble BIFR, the Company has made preferential allotment of shares to parties/companies covered in the register maintained U/S 301 of the Companies Act, 1956 at a price which is not prejudicial to the interest of the Company. xix The Company has not issued any debentures. xx Based on information and explanations furnished by the management, which have been relied upon by us, there were no frauds on or by the Company noticed or reported during the year. For M. P. Chitale & Co. Chartered Accountants Ashutosh Pednekar Partner ICAI M. No. 41037 Place: Mumbai Date : 30th June, 2009