Mar 31, 2015
We have audited the accompanying financial statements of Pasupati
Spinning Weaving Mills Limited ("the Company") which comprise the
Balance Sheet as at 31 March 2015, the Statement of Profit and Loss and
Cash Flow Statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management's responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Basis of Qualified Opinion
The company has claimed additional compensation in respect of part of
factory land acquired. The additional compensation demand is
Rs.61464287 (including amount upto previous year Rs. 61464287), which
according to the management shall be accounted for as and when
received. Had the additional compensation been accounted for the profit
for the year and other current assets would have been higher by the
said amount.(Refer Note no. 12 of the accompanying notes to the
financial statements).
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the basis for qualified opinion paragraph above, the
aforesaid financial statements give the information required by the Act
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India, of the
state of affairs of the Company as at 31st March, 2015, and its profit
and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory requirements
As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Companies Act, 2013, we give in
the Annexure a statement on the matters specified in paragraphs 3 and 4
of the Order, to the extent applicable.
As required by section 143(3) of the Act, we report that:
a) We have sought and 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 it appears from our examination of those
books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e) As per information and explanations given to us, we report that as
on 31.3.2015 none of the directors of the company are disqualified from
being appointed as a director of the company under Section 164((2) of
the Companies Act, 2013 As the company had not redeemed its debentures
on due dates and as the default continued for more than a year,
directors of the company were not qualified for being appointed as
directors of any other public company in terms of provision of Section
164(2) of the Companies Act, 2013 as amended by the companies Amendment
Act, 2000. Board for Industrial and Financial Reconstruction (BIFR) has
sanctioned rehabilitation scheme for the company vide its order dated
17.2.2012. The said scheme has approved payments of the settled amount
to debenture-holders in instalments. The payment as approved by BIFR
has been made and there is no default in such payment. Besides, four of
the directors have been appointed after the scheme has been sanctioned.
They have certified that they are not disqualified from being appointed
as a director in any other company.
f) In our opinion, the internal financial controls over financial
reporting of the Company and the operating effectiveness of such
controls are adequate.
g) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements  Refer Note 21 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure referred to in paragraph (1) under the heading of "Report on
Other Legal and Regulatory requirements" of our report of even date
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management according to a regular program, which, in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies with respect to book records were
noticed on such verification.
(ii) (a) Physical verification of inventory (except material in transit
and lying with third party) has been conducted by the management at
reasonable intervals. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and nature of its business.
(c) The company is maintaining proper records of inventory.
Discrepancies noticed on verification of inventory as compared to book
records were not material.
(iii) The company has not granted any loans, secured or unsecured to
companies firms or other parties covered in the register maintained
under section 189 of the Act and as such clauses (iii) (a) and (b), of
the order are not applicable to 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 and fixed assets and for sale of
goods and services. During the course of our audit, no major weakness
has been noticed in the internal control system.
(v) According to the information and explanation given to us, the
company has not accepted any deposit from the public.
Therefore, the provisions of clause (v) of the order are not applicable
to the company.
(vi) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under section 148(1) of the Act, and we are
of the opinion that prima facie the prescribed accounts and records
have been made and maintained. However, we have not made a detailed
examination of such accounts and records.
(vii) (a) The company is generally regular in depositing with the
appropriate authorities undisputed statutory dues including provident
fund, employees state insurance, income tax, sales tax, wealth tax,
service tax, duty of custom, duty of excise, value added tax, cess and
any other statutory dues applicable to it. According to the information
and explanations given to us, undisputed amounts payable in respect
thereof outstanding as at 31st March,2015 for a period of more than six
months from the date they became payable are as under:-
Name of the
statue Nature of dues Amount
(Rs.) Period to which
amount relates
Income Tax Act Tax deducted at source 555089 31.03.2014
(b) According to the records of the company, dues of income-tax or
Sales tax or wealth-tax or service tax or duty of custom or duty of
excise or value added tax or cess which have not been deposited on
account of any dispute are as under:-
Name of the statue Nature of dues Amount (Rs.) Forum where pending
Central Excise Act Excise Duty 2670382 Hon'ble Supreme
Court
Central Excise Act Excise Duty 2583953 Central Excise &
Service Tax
Tribunal
Haryana Value
Added Tax Act VAT 4222661 Sales Tax Tribunal
Service Tax Act Service Tax 229316 Central Excise &
Service Tax
Tribunal
Income Tax Act, 1961 Income Tax 465270 Income Tax Tribunal
(c) No amount was required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 and rules made there under.
(viii) There were no accumulated losses at the end of the financial
year. The company has not incurred any cash losses during the financial
year and in the immediately proceeding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the delay in repayment of dues to a financial institution
or bank or debenture holders are as under :
Nature of
Limit Name of the
Bank Limit Balance Excess Remarks
(Rs. in
lacs) as per
Bank (Rs. in
lacs)
(Rs. in
lacs)
Cash Credit Canara Bank 457.50 462.40 4.90 Due to interest
charged
State Bank
of Patiala 104.00 104.93 0.93 by bank on
31.03.2015
ING Vysya
Bank Ltd 187.25 191.31 4.06 and paid
subsequently
Packing
Credit State Bank
of Patiala 317.00 319.54 2.54
Nature of Limit Name of the
Bank Amount
overdue
(Rs.) Due Date Remarks
Bill discounted/ Bank of Baroda 2261158 13.03.2015 Realized on
06.04.2015
purchased State Bank of
Patiala 5201022 30.03.2015 Realized on
08.04.2015
(x) In our opinion, the company has not given guarantee for loans taken
by others from banks or financial institutions.
(xi) In our opinion, the term loans have been applied for the purposes
for which they were obtained.
(xii) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For B.K.Shroff & Co.
Chartered Accountants
Reg. No. : 302166E
O.P.Shroff
Partner
Membership No. 06329
Place: New Delhi
Date : May 28, 2015
Mar 31, 2014
We have audited the accompanying financial statements of Pasupati
Spinning & Weaving Mills Limited ("the Company") which comprise the
Balance Sheet as at 31 March 2014, the Statement of Profit and Loss and
Cash Flow Statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Basis of Qualified Opinion
The company has claimed additional compensation in respect of part of
factory land acquired. The additional compensation demand is Rs.
61464287 (including amount upto previous year Rs. 24276787), which
according to the management shall be accounted for as and when
received. Had the additional compensation been accounted for the
profit for the year and other current assets would have been higher by
the said amount. (Refer Note no. 12 of the accompanying notes to the
financial statements).
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the
matters described in the Basis of Qualified Opinion paragraph, the
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2014;
b) In the case of the Statement of Profit and Loss, of the Loss for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(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) 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, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the Act; and
(v) As per information and explanations given to us, we report that as
on 31.3.2014 none of the directors of the company are disqualified from
being appointed as a director of the company under Section 274((1)(g)
of the Companies Act, 1956. As the company had not redeemed its
debentures on due dates and as the default continued for more than a
year, directors of the company were not qualified for being appointed
as directors of any other public company in terms of provision of
Section 274(1)(g) of the Companies Act, 1956 as amended by the
Companies Amendment Act, 2000. Board for Industrial and Financial
Reconstruction (BIFR) has sanctioned rehabilitation scheme for the
company vide its order dated 17.2.2012. The said scheme has approved
payments of the settled amount to debenture-holders in instalments. The
payment as approved by BIFR has been made and there is no default in
such payment. Besides, one of the directors has been appointed after
the scheme has been sanctioned. He has certified that he is not
disqualified from being appointed as a director in any other company.
ANNEXURE REFERRED TO IN PARAGRAPH (1) UNDER THE HEADING OF ''REPORT ON
OTHER LEGAL AND REGULATORY REQUIREMENTS'' OF OUR REPORT OF EVEN DATE
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) As explained to us, all the fixed assets have been physically
verified by the management according to a regular program which in our
opinion is reasonable having regard to the size of the company and the
nature of its assets. No material discrepancies with respect to book
records were noticed on such verification.
(c) In our opinion and according to explanations given to us, fixed
assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the company.
(ii) (a) As explained to us, physical verification of inventory (except
material in transit and lying with third parties) has been conducted by
the management at reasonable intervals. In our opinion, the frequency
of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. Discrepancies noticed on verification of inventory as
compared to book records were not material and these have been properly
dealt with in the books of accounts.
(iii) (a) On the basis of the records of the company, the Company has
not granted any loans, secured or unsecured to companies, firms and
other parties covered in the register maintained under Section 301 of
the Companies Act, 1956 and hence para (iii) (a) to (d) of the order
are not applicable to the company;
(b) On the basis of the records of the company, the following are the
particulars of loans taken by the company from companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act, 1956.
(c) In our opinion the rate of interest and other terms and conditions
on which unsecured loans have been taken from Companies, firms or other
parties listed in the register maintained under Section 301 of the
Companies Act, 1956 are not pirma facie prejudicial to the interest of
the company.
(d) In our opinion, the company is regular in repaying the principal
amount as per stipulations and has been regular in payment of interest
whenever applicable.
(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 with regard to purchase of inventory and fixed assets and for
the sale of goods and services. No major weakness in the internal
control system was observed during the course of audit.
(v) According to the information and explanations given to us, during
the year there were no transactions that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, paragraphs v (a) and (b) of the aforesaid order are not
applicable.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public as
per provisions of Sections 58A, 58AA or any other relevant provisions
of the Companies Act, 1956 and the Companies (Acceptance of Deposit)
Rules 1975. No order has been passed by the Company Law Board or
National Company law Tribunal or Reserve Bank of India or any court or
any other Tribunal.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
(ix) (a) According to the records of the company, the company is not
regular in depositing with the appropriate authorities undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues
applicable to it. According to information and explanations given to us
the undisputed amounts outstanding as at 31st March, 2014 for a period
of more than six months from the date they became payable are as under:
(b) According to the records of the company dues in respect of Sales
Tax / Income Tax / Customs duty / Wealth Tax / Service Tax / Excise
Duty / Cess which have not been deposited on account of any dispute are
as under:
(x) As at 31.03.2014, the accumulated losses of the company are not
more than fifty percent of its net worth. The company has not incurred
cash losses during the financial year covered by our audit or in the
immediately preceding financial year.
(xi) The company has defaulted in payment of dues to financial
institutions, banks and debenture-holders. Details as per company''s
books of accounts are as under:
The limits with banks were overdrawn for most of the year and were
within limits for the remaining part of the year. The overdrawn limits
as on 31.03.2014 are as under:
(xii) Based on our examination of documents and records maintained by
the company, we are of the opinion that since the company has not
granted any loan and advance on the basis of security by way of pledge
of shares, debenture and other securities, it is not required to
maintain records in respect thereof.
(xiii) In our opinion the company is neither a chit fund nor nidhi /
mutual benefit fund/society and hence paragraph 4 (xiii) of the
aforesaid order is not applicable.
(xiv) In our opinion the company is not dealing in or trading in
shares, securities, debentures and other investments and accordingly
the provisions of paragraph 4(xiv) of the aforesaid order is not
applicable.
(xv) Based on our examination of the records we are of the opinion that
the company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) In our opinion, term loans received during the year 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, we report
that funds raised on short term basis have not been used for long term
investments.
(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 Companies Act, 1956.
(xix) During the year the company had not issued any debentures. The
company has created security or charge in respect of debentures issued
in earlier years.
(xx) During the year under review no money was raised by public issue.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with auditing standards
generally accepted in India, we have not come across any instance of
fraud by the company or on the company, noticed or reported during the
year. We have also not been informed of any such case by the
management.
For B. K. SHROFF & CO.,
Chartered Accountants
Firm Registration No. 302166E
3/7-B, Asaf Ali Road,
New Delhi-110 002. O. P. SHORFF
Dated : May 27, 2014 Partner
Membership No. 06329
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Pasupati
Spinning & Weaving Mills Limited ("the Company") which comprise the
Balance Sheet as at 31 March 2013, the Statement of Profit and Loss and
Cash Flow Statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Basis of Qualified Opinion
a. Interest payable on amount of Rs. 600 lacs due to JMFARC, which was
to be converted into OCCD is not determinable as the negotiations are
not yet finalized. In these accounts, the company has paid/provided
interest on the loan amount @ 23% p.a. Difference, if any will be
accounted for after finalisation of negotiations (Refer Note no.
4(v)(c) of the accompanying notes to the financial statements).
b. The company has claimed additional compensation in respect of part
of factory land acquired in earlier years. The additional compensation
of Rs. 24276787 will be accounted for as and when received. Had the
additional compensation been accounted for the profit for the year and
other current assets would have been higher by the said amount. (Refer
Note no. 12 of the accompanying notes to the financial statements).
c. The company has paid remuneration of Rs. 1877359 (including Rs.
1187496 relating to earlier years) to directors for which approval of
Central Government is yet to be received. Had the remuneration not
been paid the profit for the year and cash and cash equivalents would
have been higher by the said amount. (Refer Note no. 37(b) and 37(c) of
the accompanying notes to the financial statements).
d. The company has during the year written back provision of Rs.
27555087 (net of payment of Rs. 3734000) towards excise duty demands on
legal advice. The company has been advised that no liability is likely
to arise against the demands and hence provision is not required. We
are unable to comment as the demands are still contested in appeals
(Refer Note no. 22 of the accompanying notes to the financial
statements).
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the
matters described in the Basis of Qualified Opinion paragraph, the
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India :
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2013;
b) In the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that :
(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) 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, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(iv) Except for the possible effects of the matters described in the
Basis of Qualified Opinion paragraph, in our opinion, the Balance
Sheet, Statement of Profit and Loss, and Cash Flow Statement comply
with the Accounting Standards referred to in sub-section (3C) of
section 211 of the Act; and
(v) As per information and explanations given to us, we report that as
on 31.3.2013 none of the directors of the company are disqualified from
being appointed as a director of the company under Section 274((1)(g)
of the Companies Act, 1956. As the company had not redeemed its
debentures on due dates and as the default continued for more than a
year, directors of the company were not qualified for being appointed
as directors of any other public company in terms of provision of
Section 274(1)(g) of the Companies Act, 1956 as amended by the
Companies Amendment Act, 2000. Board for Industrial and Financial
Reconstruction (BIFR) has sanctioned rehabilitation scheme for the
company vide its order dated 17.2.2012. The said scheme has approved
payments of the settled amount to debenture-holders in instalments. The
payment as approved by BIFR is being made and there is no default in
such payment. Besides, one of the directors has been appointed after
the scheme has been sanctioned. He has certified that he is not
disqualified from being appointed as a director in any other company.
ANNEXURE REFERRED TO IN PARAGRAPH (1) UNDER THE HEADING OF ''REPORT ON
OTHER LEGAL AND REGULATORY REQUIREMENTS'' OF OUR REPORT OF EVEN DATE
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, all the fixed assets have been physically
verified by the management according to a regular program which in our
opinion is reasonable having regard to the size of the company and the
nature of its assets. No material discrepancies with respect to book
records were noticed on such verification.
(c) In our opinion and according to explanations given to us, fixed
assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the company.
(ii) (a) As explained to us, physical verification of inventory (except
material in transit and lying with third parties) has been conducted by
the management at reasonable intervals. In our opinion, the frequency
of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. Discrepancies noticed on verification of inventory as
compared to book records were not material and these have been properly
dealt with in the books of accounts.
(iii) (a) On the basis of the records of the company, the Company has
not granted any loans, secured or unsecured to companies, firms and
other parties covered in the register maintained under section 301 of
the Companies Act, 1956 and hence para (iii) (a) to (d) of the order
are not applicable to the company;
(b) On the basis of the records of the company, the following are the
particulars of loans taken by the company from companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act, 1956.
Name of the Party Relationship Opening Loan
with Balance taken
the company
Rs. Rs.
Sulabh Impex Ltd. Associate 5700000
Pasupati Olefin Ltd. Associate 6800000
Name Loan Year Maximum
repaid end Balance
balance Outstanding
during
the year
Rs. Rs. Rs.
Sulabh Impex Ltd. 5700000 5700000
Pasupati Olefin Ltd. 6800000 6800000
(c) In our opinion the rate of interest and other terms and conditions
on which unsecured loans have been taken from Companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 are not pirma facie prejudicial to the interest of
the company.
(d) In our opinion, the company is regular in repaying the principal
amount as per stipulations and has been regular in payment of interest
whenever applicable.
(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 with regard to purchase of inventory and fixed assets and for
the sale of goods and services. No major weakness in the internal
control system was observed during the course of audit.
(v) According to the information and explanations given to us, during
the year there were no transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956.
Accordingly, paragraphs v (a) and (b) of the aforesaid order are not
applicable.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public as
per provisions of sections 58A, 58AA or any other relevant provisions
of the Companies Act, 1956 and the Companies (Acceptance of Deposit)
Rules, 1975. No order has been passed by the Company Law Board or
National Company law Tribunal or Reserve Bank of India or any court or
any other Tribunal.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
(ix) (a) According to the records of the company, the company is not
regular in depositing with the appropriate authorities undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues
applicable to it. According to information and explanations given to us
the undisputed amounts outstanding as at 31st March, 2013 for a period
of more than six months from the date they became payable are as under
:
Name of the statue Nature of dues Amount Period to which
Rs. amount relates
Sales Tax Haryana Demand 339148 2006-07
Service Tax Act Service Tax 380586 2009-10
Service Tax Act Service Tax 6472 2012-13
(x) As at 31.03.2013, the accumulated losses of the company are not
more than fifty percent of its net worth. The company has not incurred
cash losses during the financial year covered by our audit or in the
immediately preceding financial year.
(xi) The company has defaulted in payment of dues to financial
institutions, banks and debenture-holders. Details as per company''s
books of accounts are as under :
Does not include amount for which one time settlement (OTS) has been
negotiated with the lenders and repayment of dues has been rescheduled
or the dues have been settled / rescheduled by BIFR vide its order
dated 17.2.2012 and payments are being made accordingly.
(xii) Based on our examination of documents and records maintained by
the company, we are of the opinion that since the company has not
granted any loan and advance on the basis of security by way of pledge
of shares, debenture and other securities, it is not required to
maintain records in respect thereof.
(xiii) In our opinion the company is neither a chit fund nor nidhi /
mutual benefit fund / society and hence paragraph 4 (xiii) of the
aforesaid order is not applicable.
(xiv) In our opinion the company is not dealing in or trading in
shares, securities, debentures and other investments and accordingly
the provisions of paragraph 4(xiv) of the aforesaid order is not
applicable.
(xv) Based on our examination of the records we are of the opinion that
the company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) In our opinion, term loans received during the year 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, we report
that funds raised on short term basis have not been used for long term
investments.
(xviii) During the year the company has made preferential allotment of
shares to parties and companies covered in the register maintained
under section 301 of Companies Act, 1956. Since the allotment has been
made in pursuance to the rehabilitation scheme sanctioned by BIFR, in
our opinion, the price at which shares have been issued is not
prejudicial to the interest of the company.
(xix) During the year the company had not issued any debentures. The
company has created security or charge in respect of debentures issued
in earlier years.
(xx) During the year under review no money was raised by public issue.
(xxi During the course of our examination of the books and records of
the company, carried out in accordance with auditing standards
generally accepted in India, we have not come across any instance of
fraud by the company or on the company, noticed or reported during the
year. We have also not been informed of any such case by the
management.
For B. K. SHROFF & CO.,
Chartered Accountants
Firm Registration No. 302166E
3/7-B, Asaf Ali Road,
New Delhi-110 002. O. P. SHORFF
Dated : May 27, 2013 Partner
Membership No. 06329
Mar 31, 2012
1. We have audited the attached Balance Sheet of M/s. PASUPATI
SPINNING & WEAVING MILLS LIMITED as at 31st March, 2012 and also the
Profit and Loss Account and the cash flow statement for the year ended
on that date annexed thereto. These financial statements are the
responsibility of the Company's 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 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.
4. Further to our comments in the annexure referred to above, we
report that :
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. 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
said 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 & Loss Account and cash
flow statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956, subject to our observations in paragraph (vi)
below.
v. As per information and explanations given to us, we report that as
on 31.3.2012 none of the directors of the company are disqualified from
being appointed as a director of the company under Section 274((1)(g)
of the Companies Act, 1956. As the company had not redeemed its
debentures on due dates and as the default continued for more than a
year, directors of the company were not qualified for being appointed
as directors of any other public company in terms of provision of
Section 274(1)(g) of the Companies Act, 1956 as amended by the
Companies Amendment Act, 2000. Board for Industrial and Financial
Reconstruction has sanctioned rehabilitation scheme for the company
vide its order dated 17.2.2012. The said scheme has approved payments
of the settled amount to debenture holders in instalments. The payment
as approved by BIFR is being made and there is no default in such
payment. Besides, one of the directors has been appointed after the
scheme has been sanctioned. He has certified that he is not
disqualified from being appointed as a director in any other company.
vi. Reference is drawn to :
(a) Note No. 32 of accompanying notes to the financial statements
relating to accounts of the company for the year-ended 31.03.2012
having been prepared on the basis that the company is a going concern.
(b) Note No 4(v)(b) of accompanying notes to the financial statements
relating to non- provision of interest amounting to Rs. 59109302
(including Rs. 26614936 for earlier years) on loan of Rs.10 Crores of
JMFARC which is proposed to be converted into Equity / Optionally
Cumulative Convertible Debentures as per the rehabilitation scheme
sanctioned by BIFR resulting in the profit for the year to be higher
and other current liabilities to be lower by the said amount.
(c) Note No. 4(v)(c) of accompanying notes to the financial statements
relating to waiver of loan of Rs. 6.45 Crores of JMFARC not being
written back pending full implementation of rehabilitation scheme
sanctioned by BIFR, resulting in the profit for the year to be lower
and long term borrowings to be higher by the said amount.
(d) Note No. 4(vii)(g) of accompanying notes to the financial
statements relating to non- provision of interest on 14% and 15%
redeemable partly convertible debentures amounting to Rs.
23939987(including Rs. 21944988 for earlier years) resulting in the
profit for the year to be higher and other current liabilities to be
lower by the said amount.
(e) Note No. 3 of accompanying notes to the financial statements
relating to non provision of Debenture Redemption Reserve amounting to
Rs. 18761301 which has no effect on the profit for the year.
(f) Note No. 30(b) of accompanying notes to financial statements
relating to payment of remuneration of Rs.1187496(including Rs. 579606
for previous year) to a director for which approval of Central
Government is to be obtained resulting in the profit for the year and
cash & cash equivalents to be understated by the said amount.
(g) Note No. 11 of the accompanying notes to the financial statements
relating to non provision of additional compensation on acquisition of
part of factory land amounting to Rs. 24276787, demanded by the
company, resulting in the profit for the year and other current assets
to be lower by the said amount.
(h) We further report that had the observations made by us in paragraph
vi(b), vi(c), vi(d), vi(f) and vi(g) above been considered, the profit
for the year would have been Rs. 18987624 (as against the reported
figure of Rs. 12072180), long term borrowings would have been Rs.
47910478 (as against the reported figure of Rs. 112410478), cash & cash
equivalents would have been Rs.30687858 (as against the reported figure
of Rs. 29499912), other current liabilities would have been Rs.
429178322 (against the reported figure of Rs. 346129033) and other
current assets would have been Rs. 34731633 (against the reported
figure of Rs. 10454846).
Subject to the above, 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 accompanying notes give 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012 and
ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date and
iii) in the case of cash flow statement, of the cash flow for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, all the fixed assets have been physically
verified by the management according to a regular program which in our
opinion is reasonable having regard to the size of the company and the
nature of its assets. No material discrepancies with respect to book
records were noticed on such verification.
(c) In our opinion and according to explanations given to us, fixed
assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the company.
(ii) (a) As explained to us, physical verification of inventory (except
material in transit and lying with third parties) has been conducted by
the management at reasonable intervals. In our opinion, the frequency
of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. Discrepancies noticed on verification of inventory as
compared to book records were not material and these have been properly
dealt with in the books of accounts.
(iii) The company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956 and
hence paragraph (iii)(a) to (iii)(g) of the aforesaid order are not
applicable to 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 with regard to purchase of inventory and fixed assets and for
the sale of goods and services. No major weakness in the internal
control system was observed during the course of audit.
(v) According to the information and explanations given to us, during
the year there were no transactions that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, paragraphs v (a) and (b) of the aforesaid order are not
applicable.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public as
per provisions of Sections 58A, 58AA or any other relevant provisions
of the Companies Act, 1956 and the Companies (Acceptance of Deposit)
Rules, 1975. No order has been passed by the Company Law Board or
National Company law Tribunal or Reserve Bank of India or any court or
any other Tribunal.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
(ix) (a) According to the records of the company, the company is not
regular in depositing with the appropriate authorities undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues
applicable to it. According to information and explanations given to
us the undisputed amounts outstanding as at 31st March, 2012 for a
period of more than six months from the date they became payable are as
under :
Name of the Statue Nature of dues Amount Period to which
Rs. amount relates
Sales Tax Haryana Demand 339148 2006-07
Central Excise Act Excise Duty 27555087 April' 84 to Oct.' 93
Service Tax Act Service Tax 380586 2009-10
(b) According to the records of the company, dues in respect of Sales
Tax/Income Tax / Customs Duty/Wealth Tax/Service Tax/Excise Duty/Cess
which have not been deposited on account of any dispute are as under :
Name of Nature of dues Amount Forum where pending
the Statue Rs.
Haryana Value VAT 4407602 Joint Excise & Taxation
Added Tax Act Commissioner
Uttar Pradesh VAT 106000 Joint
VAT Act, 2007 Commissioner (Appeals)
Income Tax Income Tax 16364611 Assessing Authority
Act, 1961
(x) A s at 31.03.2012 the accumulated losses of the company are more
than fifty percent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit or in the
immediately preceding financial year.
(xi) The company has defaulted in payment of dues to financial
institutions, banks and debenture holders. Details as per company's
books of accounts are as under :
The limits with banks were overdrawn for most of the year and were
within limits for the remaining part of the year. The overdrawn limits
as on 31.03.2012 are as under :
Nature of Limit Name of the Bank Limit Balance as
per Banks
(Rs. in
Lacs) (Rs. in Lacs)
Demand Loan Nainital Bank Limited 27.40 27.75
State Bank of Travancore 82.20 82.60
Canara Bank 98.00 99.40
Bank of Baroda 136.00 137.88
Packing Credit State Bank of Patiala 315.50 317.83
ING Vysya Bank Ltd. 114.50 115.61
Bank of Baroda 350.00 368.25
Cash Credit State Bank of Patiala 105.50 105.94
Canara Bank 225.00 230.05
State Bank of Travancore 375.80 378.28
Nature of Limit Excess Remarks
(Rs. in Lacs)
Demand Loan 0.35 Borrowings
0.40 in excess
1.40 of limit
1.88
Packing Credit 2.33
1.11
18.25
Cash Credit 0.44
5.05
2.48
Nature of Limit Name of the Bank Amount Due Remarks
Overdue Date
(Rs.)
Bill Discounted/ Bank of Baroda 290377 11.03.2012 Payment
pending on
due date
Purchased 421413 11.03.2012
Does not include amount for which one time settlement (OTS) has been
negotiated with the lenders and repayment of dues has been rescheduled
or the dues have been settled / rescheduled by BIFR vide its order
dated 17.02.2012 and payments are being made accordingly.
(xii) Based on our examination of documents and records maintained by
the company, we are of the opinion that since the company has not
granted any loan and advance on the basis of security by way of pledge
of shares, debenture and other securities, it is not required to
maintain records in respect thereof.
(xiii) In our opinion the company is neither a chit fund nor nidhi /
mutual benefit fund / society and hence paragraph 4 (xiii) of the
aforesaid order is not applicable.
(xiv) In our opinion the company is not dealing in or trading in
shares, securities, debentures and other investments and accordingly
the provisions of paragraph 4 (xiv) of the aforesaid order is not
applicable.
(xv) Based on our examination of the records we are of the opinion that
the company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) In our opinion, term loans received during the year 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, we report
that funds raised on short term basis have not been used for long term
investments.
(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 Companies Act, 1956.
(xix) During the year the company had not issued any debentures. The
company has created security or charge in respect of debentures issued
in earlier years.
(xx) During the year under review no money was raised by public issue.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with auditing standards
generally accepted in India, we have not come across any instance of
fraud by the company or on the company, noticed or reported during the
year. We have also not been informed of any such case by the
management.
for B.K. SHROFF & CO.,
Chartered Accountants
Firm Registration No. 302166E
3/7-B, Asaf Ali Road,
New Delhi-110 002. O.P. SHORFF
Dated : 30th May, 2012 Partner
Membership No. 06329
Mar 31, 2011
1. We have audited the attached Balance Sheet of M/s. PASUPATI
SPINNING & WEAVING MILLS LIMITED as at 31st March, 2011 and also the
Profit and Loss Account and the cash flow statement for the year ended
on that date annexed thereto. These financial statements are the
responsibility of the CompanyÃs 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 (Auditorsà Report) Order, 2003 as
amended by the Companies (Auditorsà Report) (Amendment) order, 2004,
issued by the Central Government of India in terms of subsection (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.
4. Further to our comments in the annexure referred to above, we
report that :
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. 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
said 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 & Loss Account and cash
flow statement dealt with by this report comply with the Accounting
Standards referred to in subsection (3C) of Section 211 of the
Companies Act, 1956, subject to our observations in paragraph (vi)
below.
v. As per information and explanations given to us, we report that as
on 31.03.2011 none of the directors of the company are disqualified
from being appointed as a director of the company under Section
274((1)(g) of the Companies Act, 1956. As the company has not redeemed
its debentures on due dates and as the default continues for more than
a year, all directors of the company are not qualified for being
appointed as directors of any other public company in terms of
provision of Section 274(1)(g) of the Companies Act, 1956 as amended by
the Companies Amendment Act, 2000.
vi. Reference is drawn to :
(a) Note No. 4 on Schedule 21 relating to accounts of the company for
the year-ended 31.03.2011 having been prepared on the basis that the
company is a going concern.
(b) Note No 5(ii) on Schedule 21 relating to non-provision of interest
amounting to Rs. 26614936 (including Rs. 819178 for earlier years) on
loan of Rs. 10 Crores of JMFARC which is proposed to be converted into
Equity/Optionally Cumulative Convertible Debentures on receipt of
approval from BIFR resulting in the profit for the year to be higher
and secured loans to be lower by the said amount.
(c) Note No. 5(iii) on Schedule 21 relating to waiver of loan of Rs.
6.45 Crores of JMFARC not being written back pending approval from
BIFR, resulting in the profit for the year to be lower and secured
loans to be higher by the said amount.
(d) Note No. 6(g) on Schedule 21 relating to non-provision of interest
on 14% and 15% redeemable partly convertible debentures amounting to
Rs. 22344570 (including Rs. 20313245 for earlier years) resulting in
the profit for the year to be higher and secured loans to be lower by
the said amount.
(e) Note No. 8 on schedule 21 relating to non provision of Debenture
Redemption Reserve amounting to Rs. 6333740 which has no effect on the
profit for the year.
(f) Note No. 22 on Schedule 21 relating to payment of remuneration of
Rs. 770041 to directors for which approval of Central Government is not
available resulting in the profit for the year to be understated by the
said amount and cash & bank balances to be understated by Rs. 682041
and current liabilities to be overstated by Rs. 88000.
(g) We further report that had the observations made by us in paragraph
vi(b), vi(c), vi(d) and vi(f) above been considered, the profit for the
year would have been Rs. 47074001 (as against the reported figure of
Rs. 30763466), secured loans would have been Rs. 684495679(as against
the reported figure of Rs. 700036173), cash & bank balance would have
been Rs. 28234230 (as against the reported figure of Rs. 27552189) and
Current Liabilities would have been Rs. 269499495 (against the reported
figure of Rs. 269587495).
Subject to the above, in our opinion and to the best of our information
and according to the explanations given to us, the said accounts read
together with other notes appearing in Schedule 21 give 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011 and
ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date and
iii) in the case of cash flow statement, of the cash flow for the year
ended on that date.
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, all the fixed assets have been physically
verified by the management according to a regular program which in our
opinion is reasonable having regard to the size of the company and the
nature of its assets. No material discrepancies with respect to book
records were noticed on such verification.
(c) In our opinion and according to explanations given to us, fixed
assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the company.
(ii) (a) As explained to us, physical verification of inventory (except
material in transit and lying with third parties) has been conducted by
the management at reasonable intervals. In our opinion, the frequency
of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. Discrepancies noticed on verification of inventory as
compared to book records were not material and these have been properly
dealt with in the books of accounts.
(iii) The company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act 1956 and
hence paragraph (iii)(a) to (iii)(g) of the aforesaid order are not
applicable to 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 with regard to purchase of inventory and fixed assets and for
the sale of goods and services. No major weakness in the internal
control system was observed during the course of audit.
(v) According to the information and explanations given to us, during
the year there were no transactions that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, paragraphs v (a) and (b) of the aforesaid order are not
applicable.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public as
per provisions of Sections 58A, 58AA or any other relevant provisions
of the Companies Act, 1956 and the Companies (Acceptance of Deposit)
Rules 1975. No order has been passed by the Company Law Board or
National Company law Tribunal or Reserve Bank of India or any court or
any other Tribunal.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
(ix) (a) According to the records of the company, the company is not
regular in depositing with the appropriate authorities undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues
applicable to it. According to information and explanations given to
us the undisputed amounts outstanding as at 31st March, 2011 for a
period of more than six months from the date they became payable are as
under :
Name of the Statue Nature of dues Amount Period to which
Rs. amount relates
Sales Tax Haryana Demand 339148 2006-07
Central Excise Act Excise Duty 27555087 April' 84 to
Oct.' 93
Service Tax Act Service Tax 380586 2009-10
(b) According to the records of the company, dues in respect of Sales
Tax/Income Tax / Customs Duty/Wealth Tax/Service Tax/Excise Duty/Cess
which have not been deposited on account of any dispute are as under :
Name of Nature of dues Amount Forum where pending
the Statue Rs.
Haryana Value VAT 4407602 Joint Excise & Taxation
Added Tax Act Commissioner
Uttar Pradesh VAT 106000 Joint
VAT Act, 2007 Commissioner (Appeals)
(x) A s at 31.03.2011 the accumulated losses of the company are more
than fifty percent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit. Cash loss was
incurred in the immediately preceding financial year.
(xi) The company has defaulted in payment of dues to financial
institutions, banks and debenture holders. Details as per companyÃs
books of accounts are as under :
Name of
Institution/Bank Nature of Dues Due Dates Remarks
Principal Interest
Rs. Rs.
Debentures-14% 2415706 21.12.1999
2415706 21.12.2000
432054 Since
30.09.1998
7440374 Since
01.04.2000 Not provided in
Books of
Accounts
(Refer Note No.
6(g) in Schedule
21)
Debentures-15% 2890511 09.12.2000
2890511 09.12.2001
3251824 09.12.2002
1138090 Since
30.09.1998
14904196 Since
01.04.2000 Not provided in
Books of
Accounts
(Refer Note No.
6(g) in Schedule
21)
Debentures-19% 1666666 03.01.2000
1666667 03.01.2001
1666666 03.01.2002
60535030 Since
03.01.2000
Note : Does not include amount for which one time settlement (OTS) has
been negotiated with the lenders and repayment of dues has been
rescheduled and payments are being made as per reschedulement. (Refer
Note No. 5 and 6 (d) on Schedule 21).
The limits with banks were overdrawn for most of the year and were
within limits for the remaining part of the year. The overdrawn limits
as on 31.03.2011 are as under :
Nature of
Limit Name of the Bank Limit Balance
as Excess Remarks
per
Banks
(Rs.in
Lacs) (Rs.in
Lacs) (Rs.in
Lacs)
Demand
Loan Nainital Bank
Limited 27.40 27.78 0.38 Borrowings
State Bank of
Travancore 82.20 82.95 0.75 in excess
Canara Bank 98.00 99.10 1.10 of limit
Bank of Baroda 136.00 137.87 1.87
Packing
Credit State Bank of
Patiala 311.00 313.70 2.70
Canara Bank 277.00 277.10 0.10
Cash
Credit ING Vysya
Bank Ltd. 146.05 147.87 1.82
Canara Bank 225.00 230.13 5.13
State Bank of
Travancore 375.80 379.87 4.07
Nature of Limit Name of the Bank Amount Due Remarks
Overdue Date
(Rs.)
Bill Discounted/ Bank of Baroda 5399472 18.03.2011 Payment
pending
on due date
Purchased 5394712 27.03.2011
Canara Bank 4080399 15.02.2011
5204262 08.03.2011
5294367 26.03.2011
(xii) Based on our examination of documents and records maintained by
the company, we are of the opinion that since the company has not
granted any loan and advance on the basis of security by way of pledge
of shares, debenture and other securities, it is not required to
maintain records in respect thereof.
(xiii) In our opinion the company is neither a chit fund nor nidhi /
mutual benefit fund / society and hence paragraph 4 (xiii) of the
aforesaid order is not applicable.
(xiv) In our opinion the company is not dealing in or trading in
shares, securities, debentures and other investments and accordingly
the provisions of paragraph 4(xiv) of the aforesaid order is not
applicable.
(xv) Based on our examination of the records we are of the opinion that
the company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) In our opinion, term loans received during the year 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, we report
that funds raised on short term basis have not been used for long term
investments.
(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 Companies Act, 1956.
(xix) During the year the company had not issued any debentures. The
company has created security or charge in respect of debentures issued
in earlier years.
(xx) During the year under review no money was raised by public issue.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with auditing standards
generally accepted in India, we have not come across any instance of
fraud by the company or on the company, noticed or reported during the
year. We have also not been informed of any such case by the
management.
for B.K. SHROFF & CO.,
Chartered Accountants
Firm Registration No. 302166E
3/7-B, Asaf Ali Road,
New Delhi-110 002. O.P. SHORFF
Dated : 2nd September, 2011 Partner
Membership No. 06329
Mar 31, 2010
1. We have audited the attached Balance Sheet of M/s. PASUPATI
SPINNING & WEAVING MILLS LIMITED as at 31st March, 2010 and also the
Profit and Loss Account 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.
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 as
amended by the Companies (Auditors Report) (Amendment) order, 2004,
issued by the Central Government of India in terms of subsection (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.
4. Further to our comments in the annexure referred to above, we
report that:
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. 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
said 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 & Loss Account and cash
flow statement dealt with by this report comply with the Accounting
Standards referred to in subsection (3C) of Section 211 of the
Companies Act, 1956, subject to our observations in paragraph (vi)
below.
v As per information and explanations given to us, we report that as on
31.3.2010 none of the directors of the company are disqualified from
being appointed as a director of the company under Section 274((1)(g)
of the Companies Act, 1956. As the company has not redeemed its
debentures on due dates and as the default continues for more than a
year, all directors of the company are not qualified for being
appointed as directors of any other public company in terms of
provision of Section 274(1 )(g) of the Companies Act, 1956 as amended
by the Companies Amendment Act, 2000.
vi. Reference is drawn to:
(a) Note No. 4 on Schedule 21 relating to accounts of the company for
the year-ended 31.03.2010 having been prepared on the basis that the
company is a going concern.
(b) Note No. 5 on Schedule 21 relating to assignment of outstanding
dues of IDBI/SASF in favour of JMFARC. As the terms and conditions of
dues of JMFARC are yet to be finalized by BIFR, the accounts have been
prepared as per terms and conditions agreed to with IDBI/SASF. The
effect thereof on the loss for the year cannot be determined.
(c) Note No. 6(g) on Schedule 21 relating to non-provision of interest
on 14% and 15% redeemable partly convertible debentures amounting to
Rs. 20339120 (including Rs. 18338237 for earlier years) resulting in
the loss for the year before tax and secured loans to be lower by the
said amount.
(d) Note No. 9 on Schedule 21 relating to non provision of Debenture
Redemption Reserve amounting to Rs. 1674150 which has no effect on the
loss for the year before tax.
(e) Note No. 23(iii) on Schedule 21 relating to payment of remuneration
of Rs. 3090 to Shri S.K. Chhajer, Whole time director, for the period
from 29.03.2010 to 31.03.2010 for which approval of Central Government
is awaited resulting in the loss before tax for the year to be
overstated and Cash & Bank Balance to be understated by the said
amount.
(f) We further report that had the observations made by us in paragraph
vi(c) and vi(e) above been considered, the loss for the year before tax
would have been Rs. 62396971 (as against the reported figure of Rs.
42060941), secured loans would have been Rs. 719147328 (as against the
reported figure of Rs. 698808208) and cash & bank balance would have
been Rs. 29093118 (as against the reported figure of Rs. 29090028).
Subject to the above, in our opinion and to the best of our information
and according to the explanations given to us, the said accounts read
together with other notes appearing in Schedule 21 give 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010; and
ii) in the case of the Profit and Loss Account, of the loss for the
year ended on that date; and
iii) in the case of cash flow statement, of the cash flow for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As explained to us, all the fixed assets have been physically
verified by the management according to a regular program which in our
opinion is reasonable having regard to the size of the company and the
nature of its assets. No material discrepancies with respect to book
records were noticed on such verification.
(c) In our opinion and according to explanations given to us, fixed
assets disposed off during the year were not substantial and as such
the disposal has not affected the going concern concept of the company.
(ii) (a) As explained to us, physical verification of inventory (except
material in transit and lying with third parties) has been conducted by
the management at reasonable intervals. In our opinion, the frequency
of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. Discrepancies noticed on verification of inventory as
compared to book records were not material and these have been properly
dealt with in the books of accounts.
(iii) The company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956 and
hence paragraph (iii)(a) to (iii)(g) of the aforesaid order are not
applicable to 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 with regard to purchase of inventory and fixed assets and for
the sale of goods and services. No major weakness in the internal
control system was observed during the course of audit.
(v) According to the information and explanations given to us, during
the year there were no transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956.
Accordingly, paragraphs v (a) and (b) of the aforesaid order are not
applicable.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public as
pep provisions of sections 58A, 58AA or any other relevant provisions
of the Companies Act, 1956 and the Companies (Acceptance of Deposit)
Rules 1975. No order has been passed by the Company Law Board or
National Company law Tribunal or Reserve Bank of India or any court or
any other Tribunal.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
(ix) (a) According to the records of the company, the company is not
regular in depositing with the appropriate authorities undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues
applicable to it. According to information and explanations given to us
the undisputed amounts outstanding as at 31st March, 2010 for a period
of more than six months from the date they became payable are as under:
Name of the Statue Nature of dues Amount Period to which
Rs. amount relates
Sales Tax Haryana Sales Tax 110525 April 2009
to September 2009
Sales Tax Chennai Sales Tax 120461 March 2008
Sales Tax Haryana Demand 567396 2006-07
Sales Tax Mumbai Sales Tax 198277 August 2009
Central Excise Act Excise Duty 27555087 April 84 to
Oct. 93
(b) According to the records of the company, dues in respect of Sales
Tax/Income Taxi Customs Duty /Wealth Tax/Service Tax/Excise Duty /Cess
which have not been deposited on account of any dispute are as under:
Name of Nature of dues Amount Forum where pending
the Statue Rs.
Haryana Value VAT 4407602 Joint Excise & Taxation
Added Tax Act Commissioner
(x) As at 31.03.2010 the accumulated losses of the company are more
than fifty percent of its net worth. The company has incurred cash
losses during the financial year covered by our audit. Cash loss was
not incurred in the immediately preceding financial year.
(xi) The company has defaulted in payment of dues to financial
institutions, banks and debenture holders. Details as per company s
books of accounts are as under:
Name of Institu
tion / Bank Nature of Dues Due Dates Remarks
Principal Interest
Rs. Rs.
Debentures- 14% 2407547 21.12.1999
2427614 21.12.2000
432054 Since 30.09.1998
6769226 Since 01.04.2000 Not provided in
Books of Accoun
ts (Refer No
te No. 6(g)
in Schedule 21)
Debentures- 15% 2894911 09.12.2000
2894911 09.12.2001
3256775 09.12.2002
1138090 Since 30.09.1998
13569894 Since 01.04.2000 Not provided in
Books of Accou
nts (Refer No
te No. 6(g)
in Schedule 21)
Debentures- 19% 1666666 03.01.2000
1666667 03.01.2001
1666666 03.01.2002
48405390 Since 03.01.2000
Note : Does not include amount for which one time settlement (OTS) has
been negotiated with the lenders and repayment of dues has been
rescheduled and payments are being made as per reschedulement. (Refer
Note No. 5(d) and 6 (d) on Schedule 21).
The limits with banks were overdrawn for most of the year and were
within limits for the remaining part of the year. The overdrawn limits
as on 31.03.2010 are as under:
Nature of
Limit Name of the
Bank Limit Balance as Excess Remarks
per Banks
(Rs. i
n Lacs) (Rs. in
Lacs) (Rs. in
Lacs)
Demand
Loan Nainital Bank
Limited 27.40 27.55 0.15 Borrowings
State Bank of
Travancore 82.20 83.05 0.85 in excess
Canara Bank 98.00 98.04 0.04 of limit
Bank of Baroda 136.00 137.39 1.39
Packing
Credit Canara Bank 277.00 282.01 5.01
Cash Credit ING Vysya Bank
Ltd. 6.05 6.07 0.02
Canara Bank 225.00 226.10 1.10
State Bank of
Travancore 375.80 378.25 2.45
Nainital Bank
Limited 75.60 75.61 0.01
Nature of
Limit Name of the
Bank Amount Due Remarks
Overdue Date
(Rs.)
Bill Disc
ounted/ State Bank of
Patiala 3305946 15.03.2010 Payment pending
on due date
Purchased Bank of Baroda 952826 19.03.2010
-2180455 12.02.2010
2001527 19.03.2010
3501264 23.03.2010
2343440 23.03.2010
(xii) Based on our examination of documents and records maintained by
the company, we are of the opinion that since the company has not
granted any loan and advance on the basis of security by way of pledge
of shares, debenture and other securities, it is not required to
maintain records in respect thereof.
(xiii) In our opinion the company is neither a chit fund nor nidhi /
mutual benefit fund / society and hence paragraph 4 (xiii) of the
aforesaid order is not applicable.
(xiv) In our opinion the company is not dealing in or trading in
shares, securities, debentures and other investments and accordingly
the provisions of paragraph 4(xiv) of the aforesaid order is not
applicable.
(xv) Based on our examination of the records we are of the opinion that
the company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) In our opinion, term loans received during the year 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, we report
that during the year net long term investments of Rs. 1643370 has been
made from funds raised on short term basis.
(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 Companies Act, 1956.
(xix) During the year the company had not issued any debentures. The
company has created security or charge in respect of debentures issued
in earlier years.
(xx) During the year under review no money was raised by public issue.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with auditing standards
generally accepted in India, we have not come across any instance of
fraud by the company or on the company, noticed or reported during the
year. We have also not been informed of any such case by the
management.
For B.K. SHROFF & CO.,
Chartered Accountants
Firm Registration No. 302166E
3/7-B, Asaf Ali Road,
New Delhi-110 002. O.P. SHORFF
Dated : SEPTEMBER 04, 2010 Partner
Membership No. 06329
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article