options chain Auditors report

WEBEL COMMUNICATION INDUSTRIES LIMITED ANNUAL REPORT 2008-2009 AUDITORS REPORT 1. We have audited the attached Balance Sheet of WEBEL COMMUNICATION INDUSTRIES LIMITED as at 31st March 2009 and also the Profit and Loss Account and the Cash Flow Statement of the said Company for the year ended on that date, both 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 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 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(Amendment) as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: i) We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purposes 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of Account. iv) In our Opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statements except Accounting Standard-2 regarding Valuation for Inventories; Accounting Standard-15 (revised) regarding Employees Benefit; Accounting Standard-22 regarding Accounting for Taxation on Income, Accounting Standard-28 regarding Impairment of Assets & Accounting Standard-29 regarding Provisions, Contingent Liabilities and Contingent Assets comply with the requirements of the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.(as amended). v) On the basis of written representations received from the directors as on 31st March, 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2009 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 with the significant accounting policy and notes on accounts in schedule-17 subject to: i) The Company has incurred substantial losses in the last few years and its net worth has been fully eroded. The accounts of the company has been prepared on going concern assumption considering the Company will get financial support and restructuring of its loan from its existing lender or would be able to make alternative arrangements and would be in a position to meet its financial obligations. However, if the company is unable to continue its operations and loses its going concern assumption, then adjustment may be required to the reported amount of assets and classification of its liabilities. We are however unable to comment on the above. ii) Note No. B-3 in Schedule 17 regarding non-provision of Gratuity and Leave Accrued Liabilities on actuarial basis amounting to Rs. 71.39 Lacs and Rs. 32.15 Lacs including Rs. 5.46 Lacs and Rs. 2.49 Lacs respectively for the year; Hi) Note No. B-9 in Schedule 17 regarding Non Provision of Doubtful Debts amounting Rs. 5.38 Lacs resulting in understatement of Losses and overstatement of Sundry Debtors by equivalent amount. Balances of Sundry Debtors are old debts and in the absence of confirmation we are unable to comment on the recoverability of the same. iv) Note No. B-12 in Schedule 17 regarding Non ascertainment and Provision of Impairment of Assets. v) In the absence of any confirmation we are unable to comment on the unsecured loan of the company at the year end. vi) No interest income has been booked on Fixed Deposit Of Rs.25.56/- lacs kept with an Overseas Bank for the reasons mentioned in the note No. B-19 in Schedule 17. The Fixed deposit balance is also unconfirmed at the year end. vii) Balances of Sundry Creditors as on 31.03.2009 are subject to confirmation. viii) Stock of Inventory has been valued at cost instead of at lower of cost and net realizable value as market value of such stock is not available. We are unable to comment on ultimate realization from such stock. Impact of Paras No. (i), (iv), (v), (vi), (vii) and (viii) are not ascertainable. However, had our observation made in Para No. (ii) and (Hi), been considered the Loss for the year would have been Rs. 150.90 lacs (as against the reported Loss figure of Rs.137.57 lacs) and carried forward losses would have been Rs. 1756.53 lacs (as against the reported figure of Rs.1743.20 lacs), Current Liabilities & Provisions would be Rs. 147.49 lacs (as against the reported figure of Rs. 38.57 lacs) and read with the other notes particularly Note No B-22 in Schedule No 17 give the information required by the Companies Act 1956 in the manner so required and give a true and fair view: (a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2009; (b) In the case of Profit and Loss Account, of the Loss of the Company for the year ended on that date and; (c) In case of Cash Flow Statement of the Cash flows for the year ended on that date. For SINGHI & CO. Chartered Accountants (L.N. DEY) Partner Membership No.F/3569 IB, Old Post Office Street Kolkata - 700 001 Dated the 1st day of September 2009 1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. However company has not updated the same from the last few year. (b) The fixed assets have been physically verified by the management as per programme of verification of its Fixed Assets adopted by the company. In absence of proper details and documents we are not in position to express our opinion whether the frequency of verification is reasonable having regard to the size of the Company and the nature of its Assets. As per the information and explanations given to us, no material discrepancies were noticed on such verification. (c) The Company has not disposed off substantial part of its fixed assets during the year. 2. (a) According to the information and explanations given to us, the inventories have been physically verified at reasonable interval during the year by the management. (b) In our opinion and 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) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and the discrepancies noticed on such physical verification of stocks as compared to book records, which were not materials has been adjusted in the books of Accounts. 3. (a) According to the information and explanations given to us, the Company has not granted/accepted unsecured loan to/from Companies covered in the register maintained under Section 301 of the Companies Act, 1956. Hence, clauses (iii)(b), (c), (d), (f) & (g) are not applicable. 4. 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 for the purchase of inventory and fixed assets and for the sale of goods; 5. (a) As the Company has not taken/accepted any secured/unsecured loans from/to the parties listed in the register maintained u/s 301 of the Companies Act 1956, so the transaction that needs to be entered into the said register does not arise. (b) As per the information and explanations given to us, there are no transactions of purchase of goods, materials and services aggregating during the year to Rs 5.00 lacs or more in respect of each party, made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956. 6. The Company has not accepted any deposit during the year from the public within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules made there under. 7. In our opinion, the company has internal audit system commensurate with the size and nature of its business of the Company. 8. The Central Government has not prescribed maintenance of cost record under section 209(1)(d) of the Companies Act, 1956 for the products of the Company. 9. (a) As per the information and explanation given to us, The Company has been generally regular in depositing undisputed statutory dues, Provident Fund, Employees State Insurance, Income Tax, Service Tax, Cess and any other statutory dues with the appropriate authorities during the year except West Bengal Sales Tax of Rs. 52963/-, Purchase tax of Rs. 4917/- Central Sales Tax of Rs. 6,20,603/; and Surcharge for Sales Rs. 2,81,515/- Which has not been deposit and outstanding as at 31st March, 2009 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no dues of sales tax, Wealth Tax, Service Tax, Income tax, Custom duty, Excise duty and Cess outstanding an account of any dispute other than Sales Tax for the Asst. Year 1988-89 amounting to Rs.139.30 lacs and Rs.10.83 lacs on account of Sales Tax Grant for the Asst. Year 1994-95 which are under appeal before the Commissioner of sales Tax. However there is no deposit under protest against that amount. (Ref. Note No. 8-l(a) and 8-11 of the Schedule 17). 10. The Company has accumulated losses at the end of the year and its net worth is fully eroded and has incurred cash losses during the current financial year and immediately preceding financial year. 11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders. 12. According to the information and explanations given to us, the Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The Company is not a chit fund/nidhi/mutual benefit fund/society. 14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and 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 or financial institutions. 16. According to the information and explanations given to us, the Company has not raised any term loan during the year. 17. According to the information and explanations given to us, on an overall basis, funds raised on short term basis have prima facie, not been used during the year for long term investment and vice versa. 18. The Company has not made any preferential allotment of shares to parties or companies covered in the Register maintained under Section 301 of the Companies Act, 1956, during the year and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise. 19. The Company has not issued any debentures during the year. 20. The Company has not raised monies by public issues during the year. 21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year. For SINGHI & CO. Chartered Accountants (L.N. DEY) Partner Membership No.F/3569 IB, Old Post Office Street Kolkata - 700 001 Dated the 1st day of September 2009