punsumi india ltd Auditors report

PUNSUMI INDIA LIMITED ANNUAL REPORT 2000-2001 AUDITORS REPORT TO THE MEMBERS We have audited the attached Balance Sheet of Punsumi India Limited as at 31 March, 2001 and also the Profit and Loss Account of the company for the period ended on that date annexed thereto and report that: 1. As required by the Manufacturing and other Companies (Auditors Report) order, 1988 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956 and according to the informations and explanations given to us and on the basis of such checks as we considered appropriate, we annex hereto a statement on the matters specified in paragraphs 4 & 5 of the said order. 2. Further to our comments in the annexure to in para 1 above: a) 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; 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 the books; c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account; d) In our opinion the Balance Sheet and the Profit and Loss account complies with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 e) In our opinion and based on information and explanations given to us, none of the Directors are disqualified as on 31 March, 2001 from being appointed as Directors in terms of clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956, except Shri. D.C. Joshi in respect of which, as explained to us, no information was available with the company. f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to the following notes appearing in Schedule 13: i) Note No. 6 regarding non provision of interest and lease rent for the current period pending implementation of the sanctioned Scheme of Board for Industrial and Financial Reconstruction; ii) Note No. 9 regarding non provision of fall in value of investments and advances pending final negotiations with the Financial Institutions of those companies; iii) Note No. 10 regarding Capitalisation of interest on term loans for acquisition of fixed assets for the entire period of term loans, the method being contrary to the views expressed by the Institute of Chartered Accountants of India: iv) Note No 14 regarding pending confirmation of balances of the parties which on final confirmation may effect our disclosures. and Read together with other notes, gives the information required by the Companies Act, 1956 in the manner so required and give a true and fair view: - in the case of Balance Sheet, of the state of affairs of the company as at 31 March 2001 - in case of Profit and Loss Account, of the loss for the period ended on that date. For Doogar & Associates Chartered Accountants Place: Bhiwadi Mukesh Goyal Date : 31 AUG, 2001 Partner ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT ON EVEN DATE i) The company has maintained records showing full particulars including quantitative details and situation of fixed assets. Physical verification for major fixed assets was conducted during the period. No serious discrepancies have been found. ii) The company has not revalued any of its fixed assets during the period. iii) The stocks of finished goods, stores, spare parts and raw materials of the company have been physically verified by the management during the period at reasonable intervals. iv) In our opinion and according to the information and explanation given to us the procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the company and nature of its business. v) The discrepancies noticed on verification of stocks as compared to book records were not material and have been properly dealt in the books of account. vi) In our opinion the valuation of the stocks of finished goods, spare parts and raw materials have been fair and proper in accordance with the normally accepted accounting principles, and is on the same basis as in the preceding years. vii) The company has taken interest free loans in the earlier years from parties listed in the register maintained under Section 301 of the Companies Act, 1956. As explained, there is no company under the same management within the meaning of Section 370(1-B) of the Companies Act, 1956. viii) The company has not granted interest free loans to parties or companies, listed in the register maintained under Section 301 of the Companies Act, 1956 As explained there is no company under the same management within the meaning of Section 370 (1-B ) of the Companies Act, 1956. ix) Interest free advances in the nature of loans have been given by the company to its employees who are repaying the principal amount as per stipulations, wherever such stipulation exists. x) In our opinion and according to the information and explanation given to us, internal control procedures for the purchase of stores, raw materials including components, plant & Machinery, equipments and other assets are commensurate with the size of the company and nature of its business. xi) According to the information & explanations given to us there are no transactions of purchase of goods and materials and sale of goods, materials and service aggregating during the period to Rs.50,000 or mole in respect of each party in pursuance of contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956. xii) As explained to us, the company has a regular procedure for determination of unserviceable or damaged stores, raw materials and finished goods and adequate provision has been made in the accounts for the loss arising on the items so determined. xiii) The company has not accepted deposits within the meaning of Section 58-A of the Companies Act, 1956 from the public. xiv) In our opinion, reasonable records have been maintained by the company for the sale and disposal of realisable scrap. xv) In our opinion, the company has an adequate internal audit system commensurate with the size of the company and the nature of its business. xvi) The central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for the products manufactured by the company. xvii) Provident Fund/Employees State Insurance dues have generally been regularly deposited with the appropriate authorities though there has been delay and the arrears for the accounting period have since been deposited in full subsequently. xviii) There are no undisputed amounts of income-tax, sales-tax, custom duty and excise duty outstanding as on 31 March, 2001 for a period of more than six months from the date they became payable. xix) The company is a sick industrial company within the meaning of Section 3 (1)(0) of the Sick Industrial Companies (Special Provisions) Act, 1965 and a Rehabilitation Scheme has been sanctioned by BIFR vide its order dated 9 DEC. 1999. xx) The company has a policy of authorising expenditure based on reasonable checks and controls. This policy is intended to ensure that expenses are authorised on the basis of contractual obligations or accepted business needs and exigencies. In terms of these observations, we have not come across any expenses charged to revenue account which in our opinion and judgment and to the best of our knowledge and belief, could be regarded as personal expenses. For Doogar & Associates Chartered Accountants Place: Bhiwadi Mukesh Goyal Date : 31 AUG, 2001 Partner