Mar 31, 2015
We have audited the accompanying Financial Statements of Samtel Color
Limited("the Company") which comprises the Balance Sheet as at 31st
March, 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the 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 judgements 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
misstatements, 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
thereunder.
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 materia! 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 the material misstatement of the financial statements,
whether due to error or fraud. In making those risk assessments, the
auditor considers interna! 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
circumstancesjmt not for the purpose of expressing an
opinion on whether the Company has in place an adequate internal
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and 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 qualified audit opinion on
standalone financial statements.
Basis for Qualified Opinion
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 the material misstatement of the financial statements,
whether due to error or fraud. 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,
but not for the purpose of expressing an opinion on effectiveness of
the entity's internal controls. An audit also includes evaluating the
appropriateness of accounting policies used and 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 qualified audit opinion.
Basis for Qualified Opinion
(A) The financial statements have been prepared by the Company on the
going concern basis as fully elaborated in Note 37 of the financial
statements even though the Board of Industrial and Financial
Reconstruction under section 3(1) of the Sick Industrial
Companies(Speciai Provisions) Act 1985 has declared the Company as a
sick industrial company via order dated 3rd December, 2014 against case
no. 58/2012.
(B) We had reported in our audit report for the year ended 31st March
2012 as under:-
(i) The entire net worth of the Company has eroded completely; (ii) the
Company has initiated the bidding process for the disposal of
production lines 1 and 4(non -core assets) out of 4 production lines at
plant situated at Gautam Budh Nagar(Uttar Pradesh) after obtaining
approval of CDR lenders and consequently impaired those production
lines by Rs. 3,866.91 Lacs and related stores 8i spares by Rs. 512.28
Lacs; (iii) the manufacturing operations at other production lines at
plants situated at Ghaziabad (Uttar Pradesh) & Parwanoo (Himachal
Pradesh) could not be resumed in the financial year due to
non-participation of labour in production process reasoning to their
over-dues; (iv) the Company has defaulted in repayment of loans as per
CDR scheme and borrowings of other lenders, as elaborated in note no.
38 of the financial statements; (v)there is diminution in the value of
long term investments; (vi) reconciliation and confirmations of
balances of certain major creditors and acceptances are pending; (vii)
non- redemption of 969,163, 0% redeemable preference shares of RslOO
each amounting to Rs. 969.16 lacs already due for redemption; and
(viii) non payment of preference dividend for the period from 31st
March 2008 to 31st March 2012 aggregating^ Rs. 773.61 Lacs on
21,10,116 8% Non Convertible Cumulative Redeemable Preference Shares.
(C) We further reported in our audit report for the year ended on 31st
March, 2013 as under:-
(i) In view of the continued failure of the Company to disburse the
legitimate dues of the workmen, Hon'ble High Court of Himachal Pradesh
(Shimla) has settled the dispute by passing an order for the closure of
Deflection Yoke unit at Parwanoo (H.P) and thereby, pay off the
corresponding outstanding dues by selling the industrial
undertaking/Company assets etc., (ii) the operations have been
suspended in all locations by the mid of November 12, S have not been
resumed till date and consequently, management has impaired the
production lines 3 & 5, located at Gautam Buddh Nagar (UP) & Deflection
Yoke unit located at Parwanoo (HP) by Rs.27,977.06 lacs and related
stores & spares by Rs. 410.35 lacs etc.; (Hi) the impairment of assets
of production line 2, located at GautamBuddh Nagar (U.P.), and gun
division at Meerut has not been considered by the management on the
rationale of its revival plan of running the operations by
restructuring them even though in our opinion considering the liquidity
crunch, the probability of running these lines seems remote; (iv) the
balances outstanding as on 31st March, 2013 of receivables & inventory
are subject to confirmation & physical verification respectively due to
temporary suspension of operations & non access to inventories, (v) raw
material & finished goods inventory amounting to Rs. 311.90 lacs and
Rs. 55 lacs respectively have been seized by the excise authorities due
to non-payment of excise dues; (vi) there is nonsubmission of various
statutory returns acknowledged by the respective authorities, non
provision/deposition of various overdue statutory liabilities iike
PF/Service Tax/TDS/Excise/Vat & CST/WCT/TCS/ESi/Gratuity/Bonus/
Preference dividend & related over dues (interest and penalty), non
deduction of TDS on provisional expenses; and as explained by
management exact amount of which could not be ascertained in present
scenario; (viii)there is increase in diminution of investments in
current year of Rs.841.48 lac;, (ix) Assets lying with the Provident
Fund trust have been transferred to Regional Provident Fund
Commissioner and those related to Gratuity Trust have been settled by
adjustment of employees dues. However, as per the management, related
liability has been accounted for completely and there will be no
demand over and above the same; (x) Company has accounted for its
gratuity and leave encashment liability on actual basis rather than on
actuarial valuation method which has been prescribed in Accounting
Standard AS-15, "Employee Benefits".
(D )We further report that during the year ended 31st March, 2014 the
facts and situation mentioned above continues:-
Further the Company has not complied with the provisions of clause 35
of listing agreement (submission of shareholding pattern) and
requirements of SEBI circular no. D & CC/ FITTC/CIR-16/2002 dated
31.12.2002 regarding Reconciliation of Share Capital Audit Report, for
the quarter ended 31st December 2013. This default was made good on 23
June, 2014.However due to delay NSE has imposed a penalty of Rs. 9.32
lacs vide notice no. FINES/2013-14/230721-T dated 17 February, 2014
which is still unpaid.
(E) We further reports that during the year ended 31st March, 2015 the
facts and situation mentioned above continues
Further (i) the Company has not appointed any Chief financial officer as
per the requirement of section 203 of the Companies Act 2013, in respect
of the key managerial personnel; (ii) the balances outstanding in banks
(except one operative bank) are subject to confirmation; (Hi) during the
financial year 2013-14, the Company had provided further diminution in
long term investment in Samtel Glass Limited of Rs. 937.87 lacs,
diminution of investment in current year has not been considered by the
management since, as explained to us, the realisation value of land
during disposal of Samtel Glass Limited will be higher after setting off
all liabilities [refer note no. 37(g)]; (iv) the shares against
subscription money received from Promoters Group Company of Rs. 3000
lacs, in terms of CDR Scheme, could not be issued due to non approval
from Stock Exchange. After the lapse of extended period as provided in
MCA N/N the Company may be in default of provision of section 73 to 76
of the Companies Act, 2013 read with Companies (Acceptance of Deposits)
Rules, 2014 and relevant Amendment Rules 2015
These factors raise substantial doubts as to the Company's ability to
continue as going concern and therefore, the Company may not be able to
realise its assets and discharge its liabilities in the normal course
of business. The financial statements do not include any adjustment
relating to the recoverability and classification of recorded assets
amounts.
Based on the above facts we are of the opinion that going concern
assumption has been affected and the financials should have been stated
at net realisable value.
0pinton
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 regarding
erosion of net-worth coupled with other events and inability in
realization of assets and discharge of liabilities based on going
concern assumptions and clauses (1), (2), (5), (6), (7), (8) and (9) of
annexure to Auditor's Report referred in paragraph 1 of "Report on
Other Legal and Regulatory Requirements" below being non provision of
physical verification due to restricted access of fixed assets and
inventories, unpaid public deposit, maintenance of cost records, unpaid
statutory dues, cash loss in the current financial year and default in
the payment of dues to financial institutions and banks, the financial
statement give the information required by the Act in the manner so
required and gives a true and fair view in conformity with the
accounting principles generally accepted in India of the state of
affairs of the Company as on 31st March, 2015, and its loss and its
cash flow for the year ended on that date.
Other Matter
Without qualifying, we draw attention to note no. 48 of the financial
statement stating the reason for variation in useful life of fixed
assets from those as specified in schedule II of the Companies Act,
2013
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ('the
Order') issued by the Central Government of india in terms of section
143 of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 3 and 4 of the Order;
2. 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
purpose of our audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. 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;
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. On the basis of written representations received from the directors
as on 31 March 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2015, from being
appointed as a director in terms of Section 164(2) of the Act.
f. 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 litigation on its
financial position in its financial statements- Refer Note 27to the
financial statements;
ii) As there is notany material foreseeable losses, on long term
contracts, therefore the Company has not made any provision, required
under the applicable law or accounting standards;
iii) As informed to us, there is no outstanding balance to be
transferred to the Investor Education and Protection Fund, hence this
clause is not applicable.
ANNEXURE TO THE AUDIT REPORT TO THE SAMTEL COLOR LIMITED
Referred to in paragraph 1 of report on other legal and regulatory
requirement's paragraph of our report on the financial statement of
even date,
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) During the year, due to suspension of the operations and non-access
of the fixed assets at all plant locations, the physical status of the
assets as at the reporting date and till the date of signing of this
report could not be confirmed by the management. Consequently, we are
unable to comment on the accounting of any material discrepancy noticed
on physical verification, if any.
(ii) (a)The inventory could not be physically verified by the
management during the year, as the factories at all locations were
closed due to temporary suspension and access to inventories were not
available. Thus the inventories have been taken on the basis of
management certification.
(b) We are unable to comment on the procedures of physical
verification of inventory followed by the management for the reason
2(a) above.
(c) Due to the reasons mentioned in 2(a) above, we are unable to
comment on the inventory records and discrepancies thereto.
(iii) (a) The Company has not given any loan, secured or unsecured to
Companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act, 2013.
(b) Since there are no such loans during the current financial year,
comments on repayment of the principal amount and overdue amount at the
yea rend are not required. However overdue interest of Rs. 77 lacs on
loan given in earlier years is recovered in current year.
(iv) in our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased are of special nature for which suitable alternative sources
does not exist for obtaining comparative quotations, there are an
adequate internal control systems commensurate with the size of the
Company and the nature of its business for the purchase of inventory and
fixed assets and for the sale of goods and services. Further, on the
basis of our examination of the books and records of the Company carried
out in accordance with the generally accepted auditing practices in
India and according to the information and explanations given to us, we
have neither come across nor have been informed of any instance of a
continuing failure to correct major weaknesses in the aforesaid internal
control system.
(v) The Company has fail to repaid or issue the shares against the
subscription money received of Rs. 3,000 lacs and hence the provisions
of provisions of section 73 to 76 of Companies Act 2013 and Companies
(Acceptance of Deposit) Rules 2014, read with Amendment rules 2015 has
not been complied with.
(vi) Pursuant to the rules made by the Central Government of India, the
maintenance of cost records has been prescribed under clause (d) of
sub-section (1) of Section 209 of the Act, we are of the opinion that
the prescribed accounts and records have not been maintained. Therefore
we are unable to comment on the accuracy and completeness of these
records.
(vii) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
had been irregular in depositing undisputed statutory dues in respect
of provident fund, employees' state insurance, income tax, sales tax,
wealth tax, service tax, customs duty, excise duty, value added tax,
cess and other material statutory dues as applicable with the
appropriate authorities. Further, there were no undisputed amounts
outstanding at the year-end for a period of more than six months from
the date they became payable except Rs. 258.74 lacs of Provident Fund,
Rs. 95.13 lacs of ESI, Rs. 141.16 lacs of VAT and CST, Rs. 122.37 lacs
of TDS, Rs. 0.40 lacs of TCS, Rs. 259.93 lacs of Excise, Rs. 0.50 lacs
of WCT and Rs. 481.07 lacs as interest on unpaid / delayed payment of
various statutory dues.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income tax, sales tax, custom duty, wealth tax, excise duty, service
tax, value added tax and cess, which have not been deposited on account
of any dispute, are as follows: -
Rs. In Lacs
Name of Nature of Related Forum where the Amount
the Statute Dues Period dispute is
pending
Central Trade Tax F. Y, 1995-96 Hon'bleSupreme 431.60
Sales Tax to 1998-99 Court
Act, 1956 Trade Tax F. Y. 1995-96 Tribunal, Ghaziabad 1.95
Trade Tax F. Y. 1996-97 Tribunal, Noida 2.10
Trade Tax F. Y. 1996-97 Tribunal, Noida 1.30
Trade Tax F. Y. 1996-97 Hon'ble High Court, 6.00
Allahabad
Trade Tax F. Y. 1997-98 Hon'ble High Court, 201.56
Allahabad
Trade Tax F.Y 1997-98 Hon'ble High Court 120.27
and 1998-
1999
Trade Tax F. Y. 1999-00 Hon'ble High Court, 47.28
Allahabad
Entry Tax F. Y. 2000-01 Hon'ble High Court, 55.92
Allahabad
Entry Tax F. Y. 2002-03 Hon'ble High Court, 21.59
Allahabad
Entry Tax F. Y. 2003-04 Hon'ble High Court, 0.82
Allahabad
Trade Tax F.Y. 2004-05 Hon'ble Tribunal, 1.50
Ghaziabad
Entry Tax F. Y.2008-09 Addl. Commissioner 1.75
Appeals
Sales tax F. Y. 2008-09 Commercial Tax 10.45
officer, Kota
Sales Tax F.Y. 2009-10 Commercial Tax 58.75
officer,Kota
Sales Tax F.Y. 2010-11 Commercial Tax 1810.4
officer,Kota
Sales Tax F.Y. 2009-10 Commercial Tax 6.93
Kota officer,
Central Customs F.Y. 2003-04 Commissioner 7.4
Customs Duty Customs
Act, 1962 Customs F.Y. 2005-06 Customs, Excise & 758.80
Duty to F.Y. 2007- Service Tax
Appellate
08 Tribunal
U.P. VAT Sales Tax F.Y. 2007-08 Hon'ble High 343.33
Act Court, Allahabad
Sales Tax F. Y, 2009-10 Joint commissioner 383.14
of Commercial
Taxes, Noida
Central Excise Duty F. Y. 1994-99 Hon'ble Supreme 109.00
Court
Excise Act, Excise Duty F. Y. 1996-97 Customs, Excise & 1.99
1944 Service Tax
Appellate
Tribunal
Excise Duty F. Y. 1996-97 Hon'ble High Court, 86.50
Allahabad
Excise Duty F. Y. 1997-98 Hon'ble High Court, 66.38
Allahabad
Excise Duty F.Y. 1998-99 Customs, Excise & 0.73
Service Tax Appellate
Tribunal
Excise Duty F. Y. 2000-01 Hon'ble High Court, 64.25
Allahabad
Excise Duty F. Y. 2001-02 Customs, Excise & 1419.97
Service Tax
Appellate
Tribunal
Excise Duty F. Y. 2002-03 Hon'ble High 3.03
Court,Allahabad
Service Tax , F.Y. 2002-07 Customs, Excise & 9.19
Service Tax
Appellate
Tribunal
Excise Duty F. Y. 2003-04 Hon'ble High 8.64
Court, Allahabad
Excise Duty F.Y 2004-05 Commissioner - 6.40
to 2007-08 Excise
Service Tax F.Y. 2004-08 Commissioner - 400.65
Excise
Excise Duty F. Y. 2004-05 Customs, Excise & 10.00
Service Tax
Appellate
Tribunal
Excise Duty F. Y. 2004-05 Dy. Commissioner 1.68
Excise
Excise Duty F. Y. 2005-06 Customs, Excise & 314.32
Service Tax
Appellate
Tribunal
Excise Duty F. Y. 2005-06 Customs, Excise & 81.04
Tribunal
Excise Duty F.Y 2005-06 CESTAT 7.20
Excise Duty F. Y. 2006-07 Jt. Secretary, 27.6
Ministry of
Finance
Excise Duty F.Y. 2006-07 Commissioner 9.0
of Central
Excise
Excise Duty F.Y. 2008-09 Joint 47.94
Commissioner
of Appeal
Commissioner
Excise Duty F.Y. 2008-09 (Appeal) 6.11
Central Excise
Service Tax F.Y. 2009-10 Commissioner 31.26
- Excise
R VAT Sales tax F. Y. 2008-09 Commercial Tax 4.95
Act, 2003 Officer, Kota
Deputy
Commissioner
M VAT Sales Tax F.Y. 2009-10 of Sales Tax 339.02
Act, 2002 -Aurangabad
Income Tax Income Tax A.Y. 2005-06 Commissioner 245.03
Act, 1961 of Income
Tax (Appeal)
Income Tax F.Y. 2006-07 Commissioner of 0.49
(TPS) Income Tax
(Appeal)
Income Tax A.Y. 2008-09 Commissioner of 46.23
Tax (Appeal) Income
Income Tax F.Y. 2008-09 Rectification 134.01
(TPS) application
for amendment of
Income Tax F.Y. 2009-10 assessment order 12.69
(TDS) is being
filed before
the Assessing
Officer.
Income Tax F.Y. 2009-10 Commissioner of 6.68
(TDS) Income Tax
(Appeal)
(c) As informed to us, there has been no outstanding balance to be
transfer to Investor Education and Protection Fund and hence this
clause in not applicable.
(viii) The Company has accumulated losses as at 31st March, 2015 of Rs.
76058.42 lacs. The accumulated losses at the end of the financial year
are not less thanfifty percent of its net- worth. The net-worth of the
Company has eroded completely at the end of the financial year. The
Company has incurred cash losses during the current financial year and
immediately preceding financial year.
^According to the records of the Company examined by us and the
information and explanations given to us, in our opinion, the Company
has defaulted in repayment of its dues to banks/financial institution
as per details given below:-
Nature Of Amount Due Date Payment Amount Delay Days as on
Dues (Rs. m Lacs) Date paid 31st Mar, 30th
(Rs.in 2015 May,
lacs) 2015
93.48 31-Mar-ll 1462 1523
2726.58 30-Jun-ll 1371 1432
2234 15-Aug-ll 1325 1386
2427.28 30-5ep-ll 1279 1340
31-55 31-Oct-ll 1248 1309
17.5 15-Nov-ll 1233 1294
766'39 31-Dec-ll 1187 1248
173 15-Feb-12 1141 1202
860.81 31-Mar-12 1096 1157
17.5 15-May-12 1051 1112
829.26 30-Jun-12 1005 1066
17.5 15-Aug-12 959 1020
829.26 30-Sep-12 913 974
Principal Not
Yet Not
Paid Applicable
17.5 15-Nov-12 867 928
829.27 31-Dec-12 821 882
17.5 15-Feb-13 775 836
829.27 31-Mar-13 731 792
17.5 31-May-13 670 731
552.42 30-Jun-13 640 701
17.5 31-Aug-13 578 639
552.42 30-Sep-13 548 609
17.5 30-Nov-13 487 543
552.42 31-Dec-13 456 517
17.5 28-Feb-14 397 453
554.07 31-Mar-14 366 427
1921,21 31-Mar-15 1 62
15-Apr-ll 15
15-Apr-ll 15
15-Apr-ll 15
1.32 31-Mar-ll
04-May-11 5
04-Jun-ll 6
04-Jul-ll 7
. 0.56 31-May-ll 1401 1462
Interest 1.17 30-Jun-ll 1371 1432
107.21 31-Jul-ll 1340 1401
107-21 31-Aug-ll 1309 1370
134.18 30-Sep-ll Not Not 1279 1340
Yet Appl-
Paid icable
144.18 31-Oct-ll 1248 1309
144.18 30-Nov-ll 1218 1279
144.18 31-Dec-ll 1187 1248
154,21 31-Jan-12 1156 1217
154.21 28-Feb-12 1128 1189
154.21 31-Mar-12 1096 1157
203.61 30-Apr-12 1066 1127
203.61 31-May-12 1035 1096
203-61 30-Jun-12 1005 1066
203.61 31-Jul-12 974 1035
203.61 31-Aug-12 943 1004
203.61 30-Sep-12 913 974
203.61 31-Oct-12 882 943
203.61 30-NOV-12 852 gig
203.61 31-Dec-12 821 882
203.61 31-Jan-13 790 851
203.61 28-Feb-13 762 823
232.22 31-Mar-13 731 792
614.71 30-Jun-13 640 701
629.28 30-Sep-13 548 609
9-09 31-Dec-13 456 517
7.65 31-Mar-14 366 427
39.6 31-Mar-15 1 62
Penal 700.61 upto 31st More than
March 1460 days
Interest 2014 not
on Apil to yet not
Default 17.01 March paid Applicable 0-365
of 2015
Principal
(x) As per the information and explanations given to us and on the
basis of our examination of the records, the Company has not given any
guarantee for loans taken by others from banks or financial
institutions.
(xi}As per the information and explanations given to us and on the
basis of our examination of the records, in our opinion, the term loans
taken by the Company have been applied for the purpose f for which they
were obtained.
(xii) During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company noticed or reported during the year, nor
have we been informed of such case by the management.
For S. S. KOTHARI MEHTA & CO.
Chartered Accountants
Firm Registrationon 000756N
K. K. Tulshan
Partner
Date: 30.05.2015 Membership No.: 85033
Mar 31, 2014
We have audited the accompanying financiai statements of Samtel Color
Limited (''the Company1), which comprise the Balance Sheet as at 31st
March 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and Notes to Financial Statements
comprising of 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 gives a true and fair view of ; the financial position,
financial performa nce 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'') read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013.This
responsibility includes the design, implementation and maintenance of
internal controls relevant to the preparation and presentation of the
financial statements that gives a true and fair view and are free from
material misstatements, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financiai
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 the material misstatement of the financial statements,
whether due to error or fraud. 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,
but not for the purpose of expressing an opinion on effectiveness of
the entity''s internal controls. An audit also includes evaluating the
appropriateness of accounting policies used and 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 qualified audit opinion.
Basis for Qualified Opinion
(A) The financial statements have been prepared by the Company on the
going concern basis os fully elaborated in Note 38 of the financial
statements even though the proceedings are going on before the Board of
Industrial and Financial Reconstruction under the Sick Industrial
Companies(Special Provisions) Act 1985. . . . . - . . .
(B) We had reported in our audit report for the year ended 31s'' March
2012 as under:-
(i) The entire net worth of the Company has eroded completely; (ii) the
Company has initiated the bidding process for the disposal of
production lines 1 and 4(non -core assets) out of 4 production lines at
plant situated at Gautam Budh NagarfUttar Pradesh) after obtaining
approval of CDR lenders and consequently impaired those production
lines by Rs. 3,865.91 Lacs and related stores & spares by Rs. 512.28
Lacs; (Hi) the manufacturing operations at other production lines at
plants situated at Ghaziabad (Uttar Pradesh) & Parwanoo (Himachal
Pradesh) could not be resumed in the financial year due to
non-participation of labour in production process reasoning to their
over-dues; (iv) the Company has defaulted in repayment of loans as per
CDR scheme and borrowings of other lenders, as elaborated in note no.
38 of the financial statements; (v)there is diminution in the value of
long term investments; (vi) reconciliation and confirmations of
balances of certain major creditors and acceptances are pending; (vii)
non- redemption of 969,163, 0% redeemable preference shares of RslOO
each amounting to Rs. 969.16 lacs already due for redemption; and
(viii) non payment of preference dividend for the period from 31st
March 2008 to 31st March 2012 aggregating to Rs. 773.61 Lacs on
21,10,116 8% Non Convertible Cumulative Redeemable Preference Shares.
(C) We further reported in our audit report for the year ended on 31st
March, 2013 as under:- -
(I) In view of the continued failure of the Company to disburse the
legitimate dues of the workmen, Hon''bie High Court of Himachal Pradesh
(Shimla) has settled the dispute by passing an order for the closure of
- Deflection Yoke unit at Parwanoo (H.P) and thereby, pay off the
corresponding outstanding dues by selling the industrial
undertaking/Company assets etc., (ii) the operations have been
suspended in all locations by the mid of November 12, & have not been
resumed till date and consequently, management has impaired the
production lines 3 & 5, located at Gautam Buddh Nagar (UP) & Deflection
Yoke unit located at Parwanoo (HP) by Rs.27,977.06 lacs and related
stores & spares by Rs. 410.35 lacs etc.; (iii) the impairment of assets
of production line 2, located at GautamBuddh Nagar (U.P.), and gun
division at Meerut has not been - considered by the management on the
rationale of its revival plan of running the operations by
restructuring them even though in our opinion considering the liquidity
crunch, the probability of running these lines seems remote;
(iv) the balances outstanding as on 31stMarch, 2013 of receivables &
inventory are subject to confirmation & physical verification
respectively due to temporary suspension of operations & non access
to inventories, (v) raw material & finished goods inventory amounting
to Rs. 311.90 lacs and Rs. 55 lacs respectively have been seized by the
excise authorities due to non-payment of excise dues; (vi) there is non- submission of various statutory returns acknowledged by the respective authorities, non provision/deposition of various overdue statutory
liabilities like PF/Service Tax/TDS/Excise/Vat & CST/WCT/TCS/ESI/
Gratuity/Bonus/ Preference dividend & related over dues (interest
and penalty), non deduction of TDS on provisional expenses; and as
explained by management exact amount of which could not be ascertained
in present scenario;
(viii)there is increase in diminution of investments in current year of Rs.841.48 lac;, (ix) Assets lying with the Provident Fund trust have
been transferred to Regional Provident Fund Commissioner and those
related to Gratuity Trust have been settled by adjustment of employees
dues. However, as per the management, related liability has been
accounted for completely and there will be no demand over and above
the same;
(x) Company has accounted for its gratuity and leave encashment
liability on actual basis rather than on actuarial valuation method
which has been prescribed in Accounting Standard AS-15, "Employee
Benefits".
(D) We further report that during the year ended 31st March, 2014 the
facts and situation mentioned above continues Further the Company has
not complied with the provisions of clause 35 of listing agreement
(submission of shareholding pattern) and requirements ofSEBI circular
no. D & CC/ FITTC/CIR-16/2002 dated 31.12.2002 regarding Reconciliation
of Share Capital Audit Report, for the quarter ended 31s1 December 2013. Default still continues.
These factors raise substantial doubts as to the Company''s ability to
continue as going concern and therefore, the Company may not be able to
realise its assets and discharge its liabilities in the normal course
of business. The financial statements do not include any adjustment
relating to the recoverability and classification of recorded assets
amounts.
Based on the above facts we are of the opinion that going concern
assumption has been affected and the financials should have been stated
at net realisable value.
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 regarding
erosion of net-worth coupled with other events and inability in
realisation of assets and discharge of liabilities based on going
concern assumptions and clauses (1), (2), {3), (7),(8) ,{9),(10j, (11)
& (17) of annexure to Auditor''s Report referred in clause 1 of
paragraph of ''Report on other Legal and Regulatory requirements'' below;
being non- provision of physical verification due to restricted access
of fixed assets & Inventories, irregular in payment or principal and
interest to certain parties, internal audit system, maintenance of cost
records, non payment of outstanding statutory dues, cash loss in the
current financial year,. default in payment of dues to financial
institutions and banks and utilization of short - term funds for long
term purposes, 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
Order1) issued by the Central Government of India in terms 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:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) 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;
d) Except for the effects of the matter described in the Basis for
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 Companies Act, 1956, read with the General circular 15/2013 dated
13th September 2013 of the Ministry of Corporate Affairs in respect of
section 133 of the Companies Act, 1956,
e) On the basis of written representations received from the directors
as on 31st March 2014, and taken on record by the Board of Directors,
none of the directors are disqualified as on 31st March 2014, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956;
Re: Samtel Color Limited
Referred to in clause 1 of paragraph on ''Report on Other Legal and
Regulatory Requirements'' of our report of even date,
1) {a) The Company''is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) During the year, due to suspension of the operations and non-access
of the fixed assets at all plant locations, the physical status of the
assets as at the reporting date and till the date of signing of this
report could not be confirmed by the management. Consequently, we are
unable to comment on the accounting of any material discrepancy noticed
on physical verification, if any.
(c) In our opinion and according to the information and explanations
given to us, substantial part of fixed assets has not been disposed of
by the Company that impacts the going concern. It may be noted that
certain tangible assets of the Company are not in its possession due to
various disputes.
2) (a) The inventory could not be physically verified by the management
during the year, as the factories at all locations were closed due to
temporary suspension and access to inventories were not available. Thus
the inventories have been taken on the basis of management
certification.
(b) We are unable to comment on the procedures of physical verification
of inventory followed by the management for the reason 2(a) above.
(c) Due to the reasons mentioned in 2(a) above, we are unable to
comment on the inventory records and discrepancies thereto.
3) {a)The Company had granted unsecured loan to a Company covered in
the register maintained under Section 301 of the Act. The maximum
amount outstanding at any time during the year and year-end balance
from them is Rs.100 lacs and Rs.Nil lacs respectively.
(b) The rate of interest and other terms and conditions of loans given
by the Company, was not prima facie prejudicial to the interest of the
Company.
(c) This loan was repayable on demand, However the receipt of the
interest on this loan was irregular.
(d) As informed to us, there are no overdue amounts except interest
thereon.
(e) The Company has taken unsecured loans fromjhreejiarties (including
director), covered in the register maintained under Section 301 of
the Act maximum amount outstanding at any time during the year and the
year-end balance from them is Rs.314.78 lacs and 310.78 lacs respectiv
-ely excluding interest thereon {which includes maximum outstanding and
year-end balance of 70.30 lacs and 66.30 lacs respectively from a
director).
(f) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(g) In respect of the aforesaid loans, the Company is irregular in
repayment of principal and interest amount
4) In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased are of special nature for which suitable alternative sources
does not exist for obtaining comparative quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business for the purchase of inventory,
fixed assets and for the sale of goods. Further, on the basis of our
examination of the books and records of the Company and according to
the information and explanations given to us, we have neither come
across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
5) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act,1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lacs or
more in respect of each party, during the year, have been made at
prices which are reasonable having regard to the prevailing market
prices at the relevant time.
6) The Company has not accepted any deposits from the public within the
meaning of Sections 58A and 58AA of the Act and the rules framed there
under.
7) In our opinion, the Company should strengthen interna! audit system
commensurate with its - size and nature of its business.
8) Pursuant to the rules made by the Central Government of India, the
maintenance of cost records has been prescribed under clause (d) of
sub-section (1) of Section 209 of the Act, We are of the opinion that
the prescribed accounts and records have not been maintained.
Therefore we are unable to comment on the accuracy and completeness of
these records.
9) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
had been irregular in depositing undisputed statutory dues including
provident fund, investor education and protection fund, employees''
state insurance, income-tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty and Cess
were in arrears at the year-end for a period of more than six months
from the date they became payable except Rs.122.48 lacs of TDS, Rs.0.40
lacs of TCS, Rs.258.74 lacs of Provident Fund, Rs.100.09 lacs, Rs.7140.50
lacs of Vat & CST, Rs.259.93 lacs of Excise, Rs.10,50 lacs of WCTand Rs.331.74
lacs as in terest on non payment/ delayed payment of various statutory
dues.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth tax, service tax, customs duty, excise
duty and cess as at 31s March, 2014 which have not been deposited on
account of a dispute, are as follows-
(in lacs)
Name of the Nature of Related Period Forum where the Amount
Statute Dues dispute is pending
Central Trade Tax F.Y. 1995-96 to Hon''bleSupreme Court 431,60
Sales 1998-99
Tax Act,
Trade Tax F.Y.1995-96 Tribunal, Ghaziabad 1.95
Trade Tax F.Y. 1996-97 Tribunal, Noida 2.10
Trade Tax F.Y. 1996-97 Tribunal, Noida 1.30
Trade Tax F.Y.1996-97 Hon''ble High Court, 6.00
Allahabad
Trade Tax F.Y, 1997-98 Hon''ble High Court, 201.56
Allahabad
Trade Tax F.Y 1997-98 and Hon''ble High Court 120.27
1998-1999
Trade Tax F.Y.1999-00 Hon''ble High Court, 47.28
Allahabad
Entry Tax F.Y. 2000-01 Hon''ble High Court, 55.92
Allahabad
Entry Tax F.Y. 2002-03 Hon''ble High Court, 21.59
Allahabad
Entry Tax F.Y. 2003-04 Hon''ble High Court, 0.82
Allahabad_
Trade Tax F.Y. 2004-05 Hon''ble Tribunal, 1.50
Ghaziabad
Entry Tax F.Y. 2008-09 Addl. Commissioner 1.75
Appeals
Salestax F.Y. 2008-09 Commercial Taxa 10.45
officer, Kota
Sales Tax F.Y. 2009-10 Commercial Tax 58.75
officer, Kota
Sales Tax F.Y. 2010-11 Commercial Tax 1810.4
officer, Kota
Sales Tax F.Y. 2009-10 Commercial Tax 6.93
officer, Kota
Central Customs F.Y. 2003-04 Commissioner Customs 7.49
Duty
Customs Act, Customs F.Y. 2005-06 to Customs, Excise 758.80
1962 Duty & Service
F.Y, 2007-08 Tax Appellate
Tribunal
U.P. VAT Act Sales Tax F.Y. 2007-08 Hon''ble High Court, 343.33
Allahabad
Sales Tax F.Y. 2009-10 Joint commissioner 383.14
of Commercial
Taxes, Noida
Central Excise F.Y. 1994-99 Hon''ble Supreme 109.00
Excise Act, Duty Court
1.99 Excise F.Y. 1996-97 Customs, Excise
Duty & Service
Tax Appellate
Tribunal
Name of the Nature of Related Period Forum where the Amount
Statute Dues dispute is pending
1944 Excise Duty F. Y. 1996-97 Hon''ble High Court, 86.50
Allahabad
Excise Duty F. Y. 1997-98 Hon''ble High Court, 66.38
Allahabad
Excise Duty F. Y. 1998-99 Customs, Excise 0.73
& Service
Tax Appellate
Tribunal
Excise Duty F. Y. 2000-01 Hon''ble High Court, 64.25
Allahabad
Excise Duty F. Y. 2001-02 Customs, Excise 1419.97
& Service
Tax Appellate
Tribunal
Excise Duty F. Y. 2002-03 Hon''ble High Court, 3.03
Allahabad
Service Tax F. Y. 2002-07 Customs, Excise 9.19
& Service
Tax Appellate
Tribunal
Excise Duty F. Y. 2003-04 Hon''ble High Court, 8.64
Allahabad
Excise Duty F. Y 2004-05 to Commissioner-Excise 6.40
2007-08
Service Tax F. Y, 2004-08 Commissioner-Excise 400.65
Excise Duty F. Y. 2004-05 Customs, Excise 10.00
& Service
Tax Appellate
Tribunal
Excise Duty F. Y. 2004-05 Dy. Commissioner 1.68
Excise
Excise Duty F. Y. 2005-06 Customs, Excise 314.32
& Service
Tax Appellate
Tribunal
Excise Duty F. Y. 2005-06 Customs, Excise 81.04
& Service
Tax Appellate
Tribunal
Excise Duty F. Y 2005-06 CESTAT 7,20
Excise Duty F. Y. 2006-07 Jt. Secretary, 27.66
Ministry of
Financ
Excise Duty F. Y. 2006-07 Commissioner 9.0
of Central
Excise
Excise Duty F. Y. 2008-09 Joint Commiss 47.94
ioner of
Appeal
Excise Duty F. Y. 2008-09 Commissioner 6.11
(Appeal)
Central Excise
Service Tax F. Y. 2009-10 Commissioner 31.26
-Excise
R VAT Act, Sales tax F. Y. 2008-09 Commercial Tax 4.95
2003 Officer, Kota
M VAT Act, Sales Tax F. Y. 2009-10 Deputy Commiss 339.02
2002 ioner of Sales
Tax-Aurangabad
Name of the Nature of Related Period Forum where the Amount
Statute Dues dispute is pending
IncomeTax Income Tax A.Y. 2005-06 Commissioner 245.03
Act, of Income Tax
1961 (Appeal)
Income Tax F.Y. 2006-07 Commissioner 0.49
(TPS) of Income Tax
(Appeal)
Income Tax A.Y. 2008-09 Commissioner 46.23
of Income Tax
(Appeal)
Income Tax F.Y. 2008-09 Rectification 134.01
(TP5) appiication for
amendment of
assessment
Income Tax F.Y. 2009-10 order is being 12.69
(TPS) filed before
the Assessing
Officer.
Income Tax F.Y. 2009-10 Commissioner 6.68
(TPS) of Income Tax
(Appeal)
10) The Company has accumulated losses as at 31s1 March, 2014 of f
72,721.75 lacs. The accumulated losses at the end of the financial year
are not less than fifty percent of its net- worth. The net-worth of the
Company has eroded completely at the end of the financial year. The
Company has incurred cash losses during the current financial year and
immediately preceding financial year.
11) According to the records of the Company examined by us and the
information and explanation given to us, the Company has defaulted in
repayment of dues to financial institutions and banks as per details
below:-
Amount Delay Days as on
Paid(in
Nature Of Dues Amount Due Due Date Payment Lacs) 31st Mar 30th May
in Lacs) Date 2014 2014
93.48 31-Mar-11 1096 1156
2726.58 30-Jun-11 1005 1065
22.34 15-Aug-11 959 1019
2427.28 30-Sep-11 913 973
31.55 31-0ct-11 882 942
17.5 15-Nov-11 867 927
766.39 31-Dec-11 821 881
Principal 17.5 15-feb-12 Not Yet Not 775 835
Paid Appli
Cable
860.81 31-Mar-12 730 790
17.5 15-May-12 685 745
829.26 30-Jun-12 636 699
17.5 l5-Aug-12 593 653
829.26 30-Sep-12 547 607
17.5 15-NOV-12 501 561
829.27 31-Dec-12 455 515
17.5 15-feb-13 409 469
829.27 31-Mar-13 365 425
17.5 31-May-13 304 364
552.42 30-Jun-13 274 334
17.5 31-Aug-13 212 272
552.42 30-sep-13 182 242
17.5 30-NOV-13 90 150
552.42 31-Dec-13 31 91
17.5 28-Feb-14 0 60
554.07 31-Mar-14
l5-Apr-11 15
15-Apr-11 15
15-Apr-11 15
132 31-Mar-11 04-May-11 5
04-Jun-11 6
04-Jul-11 7
0.56 31-May-11 1035 1095
1.17 30-Jun-11 1005 1065
107.21 31-Jul-11 974 1034
107.21 31-Aug-11 943 1003
134.18 30-Sep-11 913 973
144.18 31-0ct-11 882 942
144.18 30-Nov-11 852 912
144.18 31-Dec-11 821 881
154.21 31-Jan-12 790 850
lnterest 154.21 28-Feb-12 762 822
154.21 31-Mar-12 700 729
203.61 30-Apr-12 Not Yet Not 730 790
Paid Appli
cable
203.61 31-May-12 669 729
203.61 30-Jun-12 639 699
203.61 31-Jul-12 608 668
203.61 31-Aug-12 577 637
203.61 30-Sep-12 547 607
203.61 31-Oct-12 516 576
203.61 30-NOV-12 486 546
203.61 31-Dec-12 455 515
203.61 31-Jan-13 424 484
203.61 28-Feb-13 396 456
232.22 31-Mar-13 365 425
614.71 30-Jun-13 274 334
629.28 30-Sep-13 182 242
9.09 31-Dec-13 90 150
7.65 31-Mar-14 0 60
Penal Interest Upto 31"
on Default of 57334 March 2013 Not yet Not More than
Principal paid Appli 730 days
cable
April 2013 365
to
127,27 Mar 2014
12) In our. opinion and according to the information and explanation
given to us, the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debenture and other
securities.
13) . In our opinion, the Company is not a chit fund or a nidhi /mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of the
Order are not applicable to the Company.
14) As per the information and explanations given to us, the Company is
not dealing or trading in shares, securities, debentures and other
investments. Accordingly, the provision of clause 4 (xiv) of the Order
is not applicable to the Company.
15) In our opinion, and according to the information and explanations
given to us, the terms and conditions of a guarantee of ft,651.53 lacs
given by the Company, for a loan taken by Samtel Electron Devices, GmbH
from a bank, are prima facie not prejudicial to the interest of the
Company.
16) In our opinion and according to the information and explanations
given to us, no fresh term loan has been obtained by the Company during
the year under audit. Accordingly, the provision of clause 4 (xvi) of
the Order is not applicable to the Company.
17) On the basis of an overall examination of the balance sheet of
the Company, we report that short term funds of f41,933.35 lacs
generated from reduction in net current assets have been utilized for
long term applications.
18) According to the information and explanation given to us, the
Company has not made preferential allotment of shares to any of the
parties covered in the register maintained under Section 301 of the
Act.
19) The Company has not issued any debentures during the year.
20) The Company has not raised any money by public issues during the
year.
21) During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company noticed or reported during the year, nor
have been informed of such case by the management.
For S. S. Kothari Mehta & Co.
Chartered Accountants
Firm Registration Number: 000756N
(K.K. Tuishan)
Partner
Membership Number: 085033
Place: New Delhi
Date: 30,h May, 2014
Mar 31, 2013
We have audited the accompanying financial statements of Samtel Color
Limited (''the Company''), which comprise the Balance Sheet as at 31st
March 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and Notes to Financial Statements
comprising of 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 controls
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatements, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on thesefinancial
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 the materia! misstatement of the financial statements,
whether due to error or fraud. 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 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 qualified audit opinion.
Basis for Qualified Opinion
The financial statements have been prepared by the Company on the going
concern basis as fully elaborated in Note 38 of the financial
statements as the proceedings are going on before the Board of
Industrial and Financial Reconstruction under the Sick Industrial
Companies(Specia! Provisions) Act 1985.
We had reported in our audit report for the year ended 31st March 2012
as under:- (i) The entire net worth of the Company has eroded
completely; (ii)the Company has initiated the bidding process for the
disposal of production lines 1 and 4(non -core assets) out of 4
production lines at plant situated at Gautam Budh Magar(Uttor Pradesh}
after obtaining approval of CDR lenders and consequently impaired those
production lines by Rs. 3,366.91 Lacs and related stores & spares by
Rs, 512.28 Lacs;(iii} the manufacturing operations at other production
tines at plants situated at Ghaziobad (Uttar Pradesh) & Parwanoo
(Himachai Pradesh) could not be resumed in the financial year due to
non-participation of labour in production process due to their
over-dues; (iv) the Company has defaulted in repayment of loans as per
CDR scheme and borrowings of other lenders; (v)there is diminution in
the value of long term investments; (vi)reconciliation and
confirmations of balances of certain major creditors and acceptances
are pending; (vii) non- redemption of 969,163, 0% redeemable preference
shares of RslOO each amounting to Rs. 969.16 lacs already due for
redemption; and (viii) non payment of preference dividend for the
period from 32sr March 2008 to 31st March 2012 aggregating to Rs.
773.61 Lacs on 2110116 8% Non Convertible Cumulative Redeemable
Preference Shares.
We further report that during the year, in addition to the continuation
of our above observations, as under :-
(i) in view of the continued failure of the Company to disburse the
legitimate dues of the workmen, Hon''ble High Court of Himachai Pradesh
(Shimla) has settled the dispute by passing an order for the closure of
Deflection Yoke unit at Parwanoo (H.P) and thereby, pay off the
corresponding outstanding dues by selling the industrial
undertaking/Company assets etc., (ii)the operations have been suspended
in all locations by the mid of November 12, & have not been resumed
till date and consequently, management has impaired the production
tines 3 & 5, located at Gautam Buddh Nagar (UP) & Deflection Yoke unit
located at Parwanoo (HP) by Rs. 27,977.06 lacs and related stores &
spares by Rs. 410.35 lacs etc.; (Hi) the impairment of assets of
production line 2, located at Gautam Buddh Nagar (U.P.), and gun
division at Meerut has not been considered by the management on the
rationale of its revival plan of running the operations by
restructuring them even though in our opinion considering the liquidity
crunch, the probability of running these lines seems remote; (iv) the
balances outstanding as on 31st March, 2013 of receivables & inventory
are subject to confirmation & physical verification respectively due to
temporary suspension of operations & non access to inventories, (v) raw
material & finished goods inventory amounting to Rs. 311.90 lacs and
Rs. 55 lacs respectively have been seized by the excise authorities due
to non- payment of excise dues; (vi) there is non-submission of various
statutory returns acknowledged by the respective authorities, non
provision/deposition of various overdue statutory liabilities like
PF/Service Tax/TDS/Excise/Vat & CST/WCT/TCS/ESI/Gratuity/Bonus/
Preference dividend & related over dues (interest and penalty), non
deduction of TD5 on provisional expenses; and as explained by
management exact amount of which could not be ascertained in present
scenario; (viii) there is increase in diminution of investments in
current year of Rs. 841.48 lacs, (ix) Assets lying with the Provident
Fund trust have been transferred to Regional Provident Fund
Commissioner and those related to Gratuity Trust have been settled by
adjustment of employees dues. However, as per the management, related
liability has been accounted for completely and there will be no demand
over and above the sum;, (x) Company has accounted for its gratuity and
leave encashment liability on actual basis rather than on actuarial
valuation method which has been prescribed in Accounting StandardAS-15,
"Employee Benefits".
These factors raise substantial doubts as to the Company''s ability to
continue as going concern and therefore, the Company may not be able to
realise its assets and discharge its liabilities in the norma! course
of business. The financial statements do not include any adjustment
relating to the recoverability and classification of recorded assets
ampunps
Based on the above facts we are of the opinion that going concern
assumption has been affected and the financials should have been stated
at net realisable value.
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 regarding
erosion of net-worth coupled with other events and inability in
realisatiqn of assets and discharge of liabilities based on going
concern assumptions and clauses (1), {21(31,(7), (9), (10), (11) & (17)
of annexure to Auditor''s Report referred in clause 1 of paragraph of
''Report on other Legal and Regulatory requirements'' below; being
non-provision of physical verification due to restricted access of
fixed assets & inventories, irregular in payment or principal and
interest to certain parties, internal audit system, non payment of
outstanding statutory dues, cash loss in the current financial year,
default in payment of dues to financial institutions and banks and
utilization of short -term funds for long term purposes, 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 31i{ March 2013;
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 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:
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) (n 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;
c) 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;
d) Except for the effects of the matter described in the Basis for
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 Companies Act, 1956:
e) On the basis of written representations received from the directors
as on 315: March 2013, and taken on record by the Board of Directors,
none of the directors are disqualified as on 31st March 2013, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956;
Re: Samtel Color Limited
Referred to in clause 1 of paragraph on ''Report on Other Legal and
Regulatory Requirements'' of our report of even date,
1) (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) During the year, due to suspension of the operations and non-access
of the fixed assets at all plant locations, the physical status of the
assets as at the reporting date and til! the date of signing of this
report could not be confirmed by the management. Consequently, we are
unable to comment on the accounting of any material discrepancy noticed
on physical verification, if any,
(c) In our opinion and according to the information and explanations
given to us, substantial part of fixed assets has not been disposed of
by the Company. However, during the year, plant & machinery related to
line no 3 & 5, located at Gautam Buddh Nagar plant, and Deflection Yoke
unit, located at Parwanoo (HP),-have been impaired and the book value
have been reduced by f 27,977,06 lacs, [refer note no 38 (b)].
2) (a) The inventory could not be physically verified by the management
during the year, as the factories at all locations were closed due to
temporary suspension and access to Inventories were not available as at
31st March 2013. Thus the inventories have been taken on the basis of
management certification.
(b) We are unable to comment on the procedures of physical verification
of inventory followed by the management for the reason 2(a) above.
c) Due to the reasons mentioned in 2(a) above, we are unable to comment
on the inventory records and discrepancies thereto.
3) (a) The Company has granted unsecured loans to two companies covered
in the register maintained under Section 301 of the Act. The maximum
amount outstanding at anytime during the year and the year-end balance
from them is Rs.277.00 lacs and T 100.00 lacs, respectively.
(b) The rate-of interest and other terms and conditions of loans given
by the Company, are not prima facie prejudicial to the interest of the
Company.
(c) These loans are repayable on demand. However the recsipt of the
interest is irregular.
(d) As informed to us, there are no overdue amounts except interest
thereon.
(e) The Company has taken unsecured loans from three parties (including
director}, covered in the register maintained under Section 301 of the
Act. The maximum amount outstanding at any time during the year and the
year end balance from them is f 314.78 lacs, excluding interest thereon
(which includes maximum outstanding and year end balance of f 70.30
lacs from a director).
(f) in our opinion, the rate of interest and other terms and conditions
of such loans are not prima facte prejudicial to the interest of the
Company.
(g) In respect of the aforesaid loans, the Company is irregular in
repayment of principal and interest amount.
4} In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased are of special nature for which suitable alternative sources
does not exist for obtaining comparative quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business for the purchase of inventory,
fixed assets and for the sale of goods. Further, on the basis of our
examination of the books and records of the Company and according to
the information and explanations given to us, we have neither corne
across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
5) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Companies Act,1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lacs or
more in respect of each party, during the year, have been made at
prices which are reasonable having regard to the prevailing market
prices at the relevant time.
6) The Company has not accepted any deposits from the public within the
meaning of Sections 58A and 5SAA of the Act and the rules framed there
under.
7) in oar opinion, the Company should strengthen internal audit system
commensurate with its size and nature of its business,
8] We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1} of Section 209 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9) (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
had been irregular in depositing undisputed statutory dues including
provident fund, investor education and protection fund, employees''
state insurance, income-tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues, as
applicable, with the appropriate authorities,
(b) According to information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears at
the year-end for a period of more than six months from the date they
became payable except Rs. 110A3:iiaijsi.ps, fO.38 lacs of TC5, f 273.74
lacs of Provident Fund, f 140.62 lacs of Vat&CST, f''244.50 of Excise,
Rs.0.27 lacs of WCT and f 5.13 lacs of Service Tax. (c) According to
the information and explanations given to us and the records of the
Company examined by us, the particulars of dues of income-tax,
sales-tax, wealth tax, service tax, customs duty, excise duty and cess
as at 31" March, 2013 which have not been deposited on account of a
dispute, are as follows-
{Rs. in lacs)
Name of the Nature of Related Period Forum where the
dispute Amount
Statute Dues is pending
Central
Sales Trade Tax F. Y. 1995-96
to Hon''ble Supreme
Court 431.60
Tax Act, 1998-99
1956 Trade Tax F. Y.1995-96 Tribunal,
Ghaziabad 1.95
Trade Tax F. Y. 1996-97 Tribunal, Noida 2.10
Trade Tax F. Y. 1996-97 Tribunal, Noida 1.30
Trade Tax F. Y.1996-97 Hon''ble High Court, 6.00
Allahabad
Trade Tax F. Y. 1997-98 Hon''ble High Court, 201.56
Allahabad
Trade Tax F.Y 1997-98 Hon''ble High Court 120.27
and 1998-1999
Trade Tax F. Y.1999-00 Hon''ble High Court, 47.28
Allahabad
Entry Tax F. Y. 2000-01 Hon''ble High Court, 55.92
Allahabad
Entry Tax F.Y. 2002-03 Hon''ble High Court, 21.59
Allahabad
Entry Tax F. Y. 2OO3-04 Hon''ble High Court, 0,82
Allahabad
Trade Tax F.Y. 2004-05 Hon''ble Tribunal, 1.50
Ghaziabad
Entry Tax F. Y.2008-09 AddL Commissioner 1.75
Appeals
Central Customs
Duty F.Y.2003-04 Commissioner Customs 7,49
Customs Customs
Duty F.Y, 2005-06 to Customs, Excise &
Service 758.80
Act, 1962 F.Y. 2007-08 Tax Appellate
Tribunal
U.P.VAT Act Sales Tax F.Y. 2007-08 Hon''ble High Court, 343.33
Allahabad
Central Excise
Duty F. Y. 1994-99 Hon''ble Supreme Court 109.00
Excise Act, Excise
Duty F. Y. 1996-97 Customs, Excise &
Service 1.99
1944 Tax Appellate Tribunal
Excise
Duty F. Y. 1996-97 Hon''ble High Court 86.50
Allahabad
Excise
Duty F. Y. 1997-98 Hon''ble High Court, 66.38
Allahabad
Excise
Duty F. Y.1998-99 Customs, Excise &
Service 0.73
Tax Appellate
Tribunal
Excise
Duty F. Y. 2000-01 Hon''ble High Court, 64.25
Allahabad
Excise
Duty F. Y. 2001-02 Customs, Excise &
Service 1419.97
Tax appellate
Tribunal
Excise
Duty F. Y. 2002-03 Hon''ble High Court, 3.03
Allahabad
Service
Tax F.Y. 2002-07 Customs, Excise &
Service 9.19
Tax Appellate
Tribunal
Excise
Duty F.Y. 2003-04 Hon''ble High Court, 8.64
Allahabad
Excise
Duty F.Y 2004-05 to Commissioner- Excise 6.40
2007-08
Service
Tax F.Y. 2004-08 Commissioner - Excise 400.65
Excise
Duty F.Y. 2004-05 Customs, Excise &
Service 10.00
Tax Appellate
Tribunal
Excise
Duty F. Y. 2004-05 Dy. Commissioner
Excise 1.68
Excise
Duty F. Y. 2005-06 Customs, Excise &
Service 314.32
Tax Appellate
Tribunal
Excise
Duty F. Y. 2005-06 Customs, Excise &
Service 81.04
Tax Appellate
Tribunal
Excise
Duty F.Y 2005-05 CESTAT 7.20
Excise
Duty F. Y. 2006-07 Jt. Secretary,
Ministry of 27.66
Finance
Excise
Duty F.Y. 2006-07 Commissioner of
Central 9,0
Excise
Excise
Duty F.Y. 2008-09 Joint Commissioner of 47.94
Appeal
Excise
Duty F.Y. 2008-09 Commissioner (Appeal) 6.11
Central Excise
Service
Tax F.Y, 2009-10 Commissioner-Excise 31.26
Income Tax Income Tax A.Y. 2005-06 Commissionerof Income 245,03
Act, 1961 Tax (Appeal)
Income Tax F.Y. 2006-07 Commissioner of Income 0.49
(TDS) Tax (Appeal)
Income Tax A.Y. 2008-09 Commissioner of Income 46.23
Tax (Appeal)
Income Tax F.Y. 2008-09 Rectification
application 134.01
(TDS) for amendment o
Income Tax F.Y. 2009-10 assessment order
is being 12.69
(TDS) filed before the
Assessing Officer.
Income Tax F.Y. 2009-10 Commissioner of Income 6.68
(TDS) Tax (Appeal)
10) The Company has accumulated losses as at 31* March, 2013 of f
72,647.91 lacs. The accumulated losses at the end of the financial year
are not less than fifty percent of its net- vjorth. The net-worth of
the Company has eroded completely at the end of the financial year. The
Company has incurred cash /ojses - during the current financial year
and immediately preceding financial year.
11) According to the records of the Company examined by us and the
information and explanation given to us, the Company has defaulted in
repayment of dues to financial institutions and banks a$ per details
below:-
12) fn our opinion and according to the information and explanation
given to us, the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debenture and other
securities.
13) In our opinion, the Company is not a chit fund or a nidhi /mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii} of
the Order are not applicable to the Company.
14) As per the information and explanations given to us, the Company is
not dealing or trading in shares, securities, debentures and other
investments. Accordingly, the provision of clause 4 (xiv)of the Order
is not applicable to the,C&nnpa;ny.:,.
15) In our opinion, and according to the information and explanations
given to us, the terms and conditions of a guarantee of fl,390.3S lacs
given by the Company, for a loan taken by Samtei Electron Devices, GmbH
from a bank, are prima facie not prejudicial to the interest of the
Company.
16) In our opinion and according to the information and explanations
given to us, no fresh term loan has been obtained by the Company during
the year under audit. Accordingly, the provision of clause 4 (xvi) of
the Order is not applicable to the Company.
17} On the basis of an overall examination of the balance sheet of the
Company, we report that short term funds of Rs.37,027,81 lacs generated
from reduction in net current assets have been utilized for long term
applications.
18) According to the information and explanation given to us, the
Company has not made preferential allotment of shares to any of the
parties covered in the register maintained under Section 301 of the
Act.
19) The Company has not issued any debentures during the year.
20) The Company has not raised any money by public issues during the
year.
21) During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company noticed or reported during the year, nor
have been informed of such case by the management.
For S. S. Kothari Mehta & Co.
Chartered Accountants
Firm Registration No.: 0007S6N
K.K.Tulshan
Partner
Membership No: 085033
Place: New Delhi
Date: 31st May, 2013
Mar 31, 2011
1. We have audited the attached Balance Sheet of Samtel Color Limited,
as at March 31,2011, and the related 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 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.
3. As required by the Companies (Auditor's Report) Order, 2003 {as
amended by the Companies (Auditors Report) (Amendment) Order, 2004}
{hereinafter referred to as 'Order'} 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 in paragraph 3
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 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 appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and 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 Act;
(e) On the basis of written representations received from the
directors, as on March31, 2011 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2011
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
(g) Without qualifying our opinion we draw attention to Note no 1K of
schedule Q, wherein the approval for managerial remuneration amounting
to Rs57.65 lacs for the year 31st March 2010 from Central Government is
pending.
(h) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with Significant Accounting Policies & Notes thereon , give in the
prescribed manner the information required by the Companies Act, 1956
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 March 31, 2011; (ii) in the case of the Profit and Loss
Account, of the Loss for the year ended on that date; and (Hi) in the
case of the Cash Flow Statement, of the cash flows for the year ended
on that date.
ANNEXURE TO AUDITORS' REPORT
[Referred to in paragraph 3 of the Auditors' Report of even date to the
members of Samtel Color Limited on the financial statements for the
year ended March 31, 2011]
1. (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation
of fixed assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, all the fixed assets of the Company have
been physically verified by the management. No material discrepancies
were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year. However, during the year (a) plant
and machinery of the Company has been revalued by an independent
professional valuer leading to a decline of Rs. 1013.91 lacs in its net
book value (refer note 11 of Schedule Q); (b)certain research and
development plant and machinery relating to "Plasma Display Panel
Project" has been impaired by Rs. 1,457.62 lacs (refer note 12 of
Schedule Q);
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. (a) The Company has granted unsecured loans to two companies
covered in the register maintained under Section 301 of the Act.
The maximum amount outstanding at any time during the year and the year
end balance from them is Rs. 277.00 lacs.
(b) The rate of interest and other terms and conditions of loans given
by the company, are not prima facie prejudicial to the interest of the
company.
(c) These loans are repayable on demand and the receipt of the interest
is regular.
(d) As informed to us, there are no overdue amounts;
(e) The Company has taken unsecured loans from 3 parties covered in the
register maintained under Section 301 of the Act. The maximum amount
outstanding at any time during the year and the year end balance from
them is Rs. 286.77 lacs, excluding interest thereon.
(f) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(g) In respect of the aforesaid loans, the Company is regular in
repayment of principal amounts. The interest amount is however not paid
by the Company as there is a delay in repayment of principal amount of
loan installments to CDR lenders .
4. In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased are of special nature for which suitable alternative sources
do not exist for obtaining comparative quotations, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business for the purchase of inventory, fixed assets
and for the sale of goods and services. Further, on the basis of our
examination of the books and records of the Company and according to
the information and explanations given to us, we have neither come
across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
5. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lacs or
more in respect of each party, during the year, have been made at
prices which are reasonable having regard to the prevailing market
prices at the relevant time.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing undisputed statutory dues including
provident fund, investor education and protection fund, employees'
state insurance, income-tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues,
as applicable, with the appropriate authorities.
(b) According to information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears at
the year- end for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth tax, service tax, customs duty, excise
duty and cess as at March 31, 2011 which have not been deposited on
account of a dispute, are as follows-
Name of the Statute Nature of Dues Period to which
the amount relates
Central Sales Tax Trade Tax F. Y. 1995-96
Act, 1956
Trade Tax F. Y. 1999-00
Trade Tax F. Y. 1996-97
Trade Tax F. Y. 1997-98
Trade Tax F. Y. 1995-96
Trade Tax F. Y. 1996-97
The U.P. Tax on Entry Entry Tax F. Y. 2003-04
of Goods Act, 2000
Entry Tax F. Y. 2000-01
Entry Tax F. Y. 2002-03
Entry Tax F. Y. 2008-09
U.P. VAT Act Sales Tax F. Y. 2007-08
Central Customs Customs Duty F. Y. 2006-08
Act, 1962
Customs Duty F. Y. 2003-04
Central Excise Act, Excise Duty F. Y. 1994-99
1944
Excise Duty F. Y. 1992-93
Excise Duty F. Y. 1997-98
Excise Duty F. Y. 2000-01
Excise Duty F. Y. 2003-04
Excise Duty F. Y. 2004-05
Excise Duty F. Y. 2005-06
Excise Duty F. Y. 2001-02
Excise Duty F. Y. 2005-06
Excise Duty F. Y. 1998-99
Excise Duty F. Y. 1996-97
Service Tax F. Y. 2002-07
Excise Duty F. Y. 2006-07
Excise Duty F. Y. 2004-05
Excise Duty F. Y. 2004-05
Income Tax Act, 1961 Income Tax F. Y. 2008-09
Income TaxfFDS) F. Y. 2008-09
Income Tax(TDS) F. Y. 2009-10
Central Sales Tax Trade Tax F. Y. 1995-96
Act, 1956
Trade Tax F. Y. 1999-00
Trade Tax F. Y. 1996-97
Trade Tax F. Y. 1997-98
Trade Tax F. Y. 1995-96
Trade Tax F. Y. 1996-97
The U.P. Tax on Entry Entry Tax F. Y. 2003-04
of Goods Act, 2000
Entry Tax F. Y. 2000-01
Entry Tax F. Y. 2002-03
Entry Tax F. Y. 2008-09
U.P. VAT Act Sales Tax F. Y. 2007-08
Central Customs Customs Duty F. Y. 2006-08
Act, 1962
Customs Duty F. Y. 2003-04
Central Excise Act, Excise Duty F. Y. 1994-99
1944
Excise Duty F. Y. 1992-93
Excise Duty F. Y. 1997-98
Excise Duty F. Y. 2000-01
Excise Duty F. Y. 2003-04
Excise Duty F. Y. 2004-05
Excise Duty F. Y. 2005-06
Excise Duty F. Y. 2001-02
Excise Duty F. Y. 2005-06
Excise Duty F. Y. 1998-99
Excise Duty F. Y. 1996-97
Service Tax F. Y. 2002-07
Excise Duty F. Y. 2006-07
Excise Duty F. Y. 2004-05
Excise Duty F. Y. 2004-05
Income Tax Act, 1961 Income Tax F. Y. 2008-09
Income Tax(TDS) F. Y. 2008-09
Income Tax(TDS) F. Y. 2009-10
Name of the Nature of Forum where the Amount
Statue Dues dispute is pending (Rs. in
lacks)
Central Trade Tax Supreme Court 431.60
Sales Tax
Act, 1956
Trade Tax High Court, Allahabad 47.28
Trade Tax High Court, Allahabad 6.00
Trade Tax High Court, Allahabad 201.56
Trade Tax Tribunal, Ghaziabad 1.95
Trade Tax Tribunal, Ghaziabad 2.10
The U.P. Entry Tax High Court, Allahabad 0.82
Tax on Entry
of Goods Act,
2000
Entry Tax High Court, Allahabad 55.92
Entry Tax High Court, Allahabad 21.59
Entry Tax Addl. Commissioner Appeals 1.75
U.P. VAT Act Sales Tax High Court, Allahabad 343.33
Central Customs Customs, Excise & Service
Customs Duty Tax Appellate Tribunal 758.80
Act, 1962
Customs Commissioner Customs 7.49
Duty
Central Excise Duty Supreme Court 109.00
Excise Act,
1944
Excise Duty High Court, Allahabad 86.50
Excise Duty High Court, Allahabad 66.38
Excise Duty High Court, Allahabad 64.25
Excise Duty High Court, Allahabad 8.64
Excise Duty High Court, Allahabad 3.03
Excise Duty Customs, Excise & Service
Tax Appellate Tribunal 314.32
Excise Duty Customs, Excise & Service
Tax Appellate Tribunal 1469.97
Excise Duty Customs, Excise & Service
Tax Appellate Tribunal 81.04
Excise Duty Customs, Excise & Service
Tax Appellate Tribunal 0.73
Excise Duty Customs, Excise & Service
Tax Appellate Tribunal 1.99
Service Tax Customs, Excise & Service
Tax Appellate Tribunal 32.57
Excise Duty Jt. Secretary, Ministry of
Finance 27.66
Excise Duty Commissioner Appeals 10.00
Excise Duty Dy. Commissioner Excise 1.68
Income Tax Income Tax Commissioner of Income Tax
Act, 1961 (Appeal) 46.23
Income Tax Rectification application for 180.24
(TDS) amendment of assessment order
is being filed before the
Assessing Officer.
Income Tax
(TDS) 12.69
10. The Company has accumulated losses as at 31st March, 2011 of Rs.
2,840.82 lacs (after adjusting General Reserve of Rs 5361.92 lacs) The
Company has not incurred cash losses during the financial year as well
as in the immediately preceding financial year.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has defaulted in
repayment of dues to financial institutions and banks as per details
below:-
Amount in Rs. lacs
Nature of Amount Due date Amount paid/ Date paid Period of
dues Due (unpaid) (Rs. in default
(Rs.) (Rs.) lacs) till the
date of
payment/
as at
28.04.2011
Principal* 834.90 31.12.2010 110.81 12.02.2011 43 days
397.00 23.03.2011 82 days
267.67 25.03.2011 84 days
59.42 28.03.2011 87 days
Principal 18.75 31.03.2011 (18.75) - 28 days
Principal 834.90 31.03.2011 (834.90) - 28 days
* Interest 1.30 12.02.2011 (1.30) - 76 days
thereon 10.70 23.03.2011 (10.70) - 37 days
date of 7.39 25.03.2011 (7.39) - 35 days
repayment 1.71 28.03.2011 (1.71) - 31 days
Interest 154.27 31.03.2011 8.43 06.04.2011 6 days
on various
loans
90.28 07.04.2011 7 days
33.60 15.04.2011 15 days
(21.96) - 18 days
12. In our opinion and according to the information and explanation
given to us, the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debenture and
other.securities.
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the company.
14. As per the information and explanations given to us, the Company
is not dealing or trading in shares, securities, debentures and other
investments. Accordingly, the provision of clause 4 (xiv) of the Order
is not applicable to the Company.
15. In our opinion, and according to the information and explanations
given to us, the terms and conditions of a guarantee of Rs. 1,264.80
lacs given by the Company, for a loan taken by Samtel Electron Devices,
GmbH from a bank, are prima facie not prejudicial to the interest of
the Company.
16. In our opinion, and according to the information and explanations
given to us, no fresh term loan has been obtained by the company during
the year under audit. Accordingly, the provision of clause 4 (xvi) of
the Order is not applicable to the Company.
17. On the basis of an overall examination of the balance sheet of the
Company, we report that short term funds of Rs 5926.89 lacs generated
from reduction in net current assets have been utilized in repayment of
long term loans.
18. According to the information and explanation given to us, the
Company has not made preferential allotment of shares to any of the
parties covered in the register maintained under Section 301 of the
Act.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company noticed or reported during the year, nor
have we been informed of such case by the management.
For S.S.Kothari Mehta & Co.
Chartered Accountants
Firm Reg.No.:000756N
Sd/-
K.K. Tulshan
Partner
Membership No.: 85033
New Delhi
April 28, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Samtel Color Limited,
as at March 31, 2010, and the related 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 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.
3. As required by the Companies (Auditors Report) Order, 2003 {as
amended by the Companies (Auditors Report) (Amendment) Order, 2004}
{hereinafter referred to as Order} 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. As indicated in Note 1K on Schedule Q, managerial remuneration
aggregating Rs. 104.18 lacs is subject to approval by the Central
Government, (including Rs.46.53 lacs relating to the year ended March
31st, 2009).
5. Further to our comments in the Annexure referred to in paragraph 3
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 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 appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and 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 Act;
(e) On the basis of written representations received from the
directors, as on March 31, 2010 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
6. In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Act and subject to paragraph 4
above, 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 March 31, 2010;
(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 the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to Auditors Report
[Referred to in paragraph 3 of the Auditors Report of even date to the
members of Samtel Color Limited on the financial statements for the
year ended March 31, 2010]
1. (a) The Company is maintaining proper records showing full particul
-ars including quantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, all the fixed assets of the Company have
been physically verified by the management. No material discrepancies
were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
Accordingly, paragraphs (iiib), (iiic) and (iiid) of the Order are not
applicable.
(b) The Company has taken unsecured loan in earlier years from 3
parties covered in the register maintained under Section 301 of the
Act. The maximum amount involved during the year as well as the balance
at year end of such loans amounted to Rs. 286.77 lacs, excluding
interest thereon.
(c) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(d) In respect of the aforesaid loans, the Company is regular in
repayment of principal amounts and is also regular in payment of
interest, as stipulated.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased are of special nature for which suitable alternative sources
do not exist for obtaining comparative quotations, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business for the purchase of inventory, fixed assets
and for the sale of goods and services. Further, on the basis of our
examination of the books and records of the Company and according to
the information and explanations given to us, we have neither come
across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
5. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act,1956 and exceeding the value of rupees five lacs or
more in respect of each party, during the year, have been made at
prices which are reasonable having regard to the prevailing market
prices at the relevant time.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing undisputed statutory dues including
provident fund, investor education and protection fund, employees state
insurance, income-tax, sales tax, wealth tax, service tax, customs duty,
excise duty, cess and other material statutory dues, as applicable,
with the appropriate authorities.
(b) According to information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears at
the year-end for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth tax, service tax, customs duty, excise
duty and cess as at March 31, 2010 which have not been deposited on
account of a dispute, are as follows-
Name of the Statute Nature of Dues Period to which
the amount relates
Central Sales Tax Trade Tax F. Y. 1995-96
Act, 1956
Trade Tax F. Y. 1999-00
Trade Tax F. Y. 1996-97
Trade Tax F. Y. 1997-98
Trade Tax F. Y. 1995-96
Trade Tax F. Y. 1996-97
The UP. Tax on Entry Entry Tax F. Y. 2003-04
of Goods Act, 2000
Entry Tax F. Y. 2000-01
Entry Tax F. Y. 2002-03
Entry Tax F. Y.2008-09
U.P. VAT Act Sales Tax F.Y. 2007-08
Central Customs Customs Duty F.Y. 2006-08
Act, 1962
Customs Duty F.Y. 2003-04
Central Excise Excise Duty F. Y. 1994-99
Act, 1944
Excise Duty F. Y. 1992-93
Excise Duty F. Y. 1997-98
Name of the Statute Forum where the Amount
dispute is pending (Rs. in lacs)
Central Sales Tax Supreme Court 431.60
Act, 1956
High Court, Allahabad 47.28
High Court, Allahabad 6.00
High Court, Allahabad 201.56
Tribunal, Ghaziabad 1.95
Tribunal, Noida 2.10
The U.P. Tax on Entry High Court, Allahabad 0.82
of Goods Act, 2000
High Court, Allahabad 55.92
High Court, Allahabad 21.59
Addl. Commissioner Appeals 1.75
U.P. VAT Act High Court, Allahabad 343.33
Central Customs Customs, Excise & Service
Tax Appellate Tribunal 1316.12
Commissioner Customs *7.49
Central Excise Supreme Court 109.00
Act, 1944
High Court, Allahabad 86.50
High Court, Allahabad 66.38
Name of the Statute Nature of Dues Period to which
the amount relates
Excise Duty F. Y. 2000-01
Excise Duty F. Y. 2003-04
Excise Duty F. Y. 2004-05
Excise Duty F. Y. 2005-06
Excise Duty F. Y. 2001-02
Excise Duty F. Y. 2005-06
Central Excise Excise Duty F. Y. 1998-99
Act, 1944
Excise Duty F. Y. 1996-97
Service Tax F. Y. 2002-07
Excise Duty F. Y. 2006-07
Excise Duty F. Y. 2004-05
Excise Duty F. Y. 2004-05
Name of the Statute Forum where the Amount
dispute is pending (Rs. in lacs)
High Court, Allahabad 64.25
High Court, Allahabad 8.64
High Court, Allahabad 3.03
Customs, Excise & Service
Tax 574.37
Appellate Tribunal
Customs, Excise & Service
Tax 1469.97
Appellate Tribunal
Customs, Excise & Service
Tax
Appellate Tribunal 81.04
Central Excise Customs, Excise & Service
Tax
Act,1944
Appellate Tribunal 0.73
Customs, Excise & Service
Tax
Appellate Tribunal 1.99
Customs, Excise & Service
Tax
Appellate Tribunal 32.57
Jt. Secretary, Ministry of
Finance 27.66
Commissioner Appeals 10.00
Dy. Commissioner Excise 1.68
10. The Company does not have any accumulated losses as at 31 st
March, 2010. The Company has not incurred cash losses during the
financial year covered by the audit but incurred cash losses in the
immediately preceding financial year.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to financial institutions and banks.
12. In our opinion and according to the information and explanation
given to us, the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debenture and other
securities.
13. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the company.
14. As per the information and explanations given to us, the Company
is not dealing or trading in shares, securities, debentures and other
investments. Accordingly, the provision of clause 4 (xiv) of the Order
is not applicable to the Company.
15. In our opinion, and according to the information and explanations
given to us, the terms and conditions of a guarantee of Rs. 1211.20
lacs given by the Company, for a loan taken by Samtel Electron Devices,
GmbH from a bank, are prima facie not prejudicial to the interest of
the Company.
16. In our opinion, and according to the information and explanations
given to us, and on an overall basis, no fresh term loan has been
obtained by the company during the year under audit. Accordingly, the
provision of clause 4 (xvi) of the Order is not applicable to the
Company.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, no funds raised on a short-term basis have
been used for long-term investment.
18. According to the information and explanation given to us, The
Company has made preferential allotment of shares to company covered in
the register maintained under Section 301 of the Act. In our opinion,
the price at which shares have been issued is not prejudicial to the
interest of the company.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. We have been informed that an employee of the company has
misappropriated funds. The entire amount has since been recovered and
the employee has been terminated.
For S.S.Kothari Mehta & Co.
Chartered Accountants
Firm Reg.No.:000756N
Sd/-
Yogesh K. Gupta
Partner
Membership No.: 93214
New Delhi, April 24, 2010