spbl ltdmerged Auditors report

SPBL LIMITED ANNUAL REPORT 2005-2006 AUDITORS REPORT To, The Members of SPBL Limited We have audited the attached Balance Sheet of SPBL Limited as at 31st March, 2006, the Profit & Loss Account and 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. 1. 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 2. As required by the Companies (Auditors Reports) Order, 2003 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 hereto a statement on the matters specified in Paragraph 4 & 5 of the said order. Further to our comments in the Annexure referred to in paragraph 2 above, we report that : (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, the Company has kept proper books of accounts as required by law so far as appears from our examination of those books. (c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with tire books of account; (d) In our opinion the Balance Sheet and Profit & Loss Account dealt with by this report comply with the mandatory accounting standards referred in 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 2006, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31 st March 2006 from being appointed as 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 explanation given to us, the said Financial statements read together with the significant Accounting Policies and other Notes thereon and subject to Note No.7 of Schedule R - Non-provision of debtors under litigation Rs.73,01,143/-. give the information required by the Companies Act, 1956, in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India : i) In so far as it relates to Balance Sheet of the State of affairs of the Company as at 31st March, 2006. ii) In so far as it relates to the profit and loss account of the profit of the Company for the year ended on that date; and iii) In so far as it relates to the cash flow statements of the cash flow of the company for the year ended on that date. For S.S.SURANA & CO., For O.P. DAD & CO., CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS (R.N. GOYAL) (O.P.DAD) PARTNER PARTNER PLACE : BHILWARA DATE : MAY 3, 2006 ANNEXURE TO AUDITORS REPORT Related to in Paragraph 2 of our report of even date I. In respect of its assets : a) The Company has maintained proper records 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 been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification. c) In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected. II. In respect of its inventories : a) As explained to us, inventories have been physically verified by the management at regular intervals during the year. 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 are 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 noticed on physical verification of inventory as compared to the book records. III. In respect of loan, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act 1956. a) As per the information and explanations given to us the company has not granted any loan to the parties covered in the register maintained under section 301 of the Companies Act, according clause (b), (c) & (d) of III of the Order are not applicable to the Company. b) The company has taken loan from four parties aggregating to Rs.316.50 lacs in earlier year, which is interest free. Same has been taken in view of stipulation by Financial Institutions / Banks. The loan so taken is not prime-facie prejudicial to the interest of the company. During the year the Company has borrowed from one party aggregating to Rs.90.43 lacs. The amount borrowed on current account, the rate of interest wherever applicable and other terms and conditions are not prima facie prejudicial to the interest of the Company. IV. 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, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal controls. V. In respect of transactions covered under Section 301 of the companies Act, 1956. a) In our opinion and according to the information and explanations given to us, contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered. b) in our opinion and according to the Information given to us the transactions in pursuance of contract or arrangements entered in the Register maintained under Section 301 of the companies Act, 1956 have been done at prices which are reasonable having regard to the prevailing market prices at the relevant time. VI. The Company has not accepted any deposits from public. VII. In our opinion, the internal audit system of the company is commensurate with its size and nature of its business. VIII. The Central Government has prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company and are of the opinion that prima facie, the prescribed records have been maintained. We have not, however, made a detailed examination of the same. IX. In respect of statutory dues : a) According to the records of the Company, undisputed statutory dues including Provident Fund Investor Education and Protection Fund. Employees State Insurance, Income Tax, Sales tax, Wealth Tax Custom Duty, Excise Duty, Service Tax, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2006 for a period o more than six months from the date of becoming payable. b) The disputed statutory dues aggregating to Rs.3.38 lacs that have not been deposited on account of matters pending before appropriate authorities are as under : Name of the Nature of Forum where Amount Statue dues dispute is (Rs.in lacs) is pending Central Excise Excise Duty & High Court 3.38 Act, 1944 Penalty X. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year. XI. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions banks or debenture holders. XII. In our opinion and according to the information and explanation given to us, no loans advances have been granted by the Company on the basis of security by way of pledge of shares, Debentures and other securities. XIII. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore clause 4 (xiii) of the Companies (Auditors Report) Order 2003 is not applicable to the Company. XIV. As per information and explanations given to us, the company is not trading in shares, securities debentures or other investments. The company held no investments as on 31st March 2006. XV. The company has not given any guarantee for loans taken by other from bank or Financial institutions. XVI. As per information and explanations given to us, the company has utilised term loans for the purpose for which the loan were obtained. XVII. As per information and explanations given to us and over all examination of balance sheet of the company, we are of opinion that the company has not utilized funds raised on short term basis for long term investment. XVIII. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956. XIX. The Company has not raised any amount by issue of debentures. XX. The Company has not raised any money by way of public issue during the year. XXI. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated. For S.S.SURANA & CO., For O.P.DAD & CO., CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS (R.N. GOYAL) (O.P.DAD) PARTNER PARTNER PLACE : BHILWARA DATE : MAY 3, 2006