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Graintec India Ltd.

BSE: 519158 Sector: Others
NSE: N.A. ISIN Code: N.A.
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Graintec India Ltd. (GRAINTECINDIA) - Auditors Report

Company auditors report

GRAINTEC INDIA LIMITED ANNUAL REPORT 2003-2004 AUDITORS' REPORT The Shareholders, GRAINTEC INDIA LTD. Ludhiana. We have audited the attached Balance Sheet of GRAINTEC INDIA LTD. as at 31st March 2004 and also Profit & Loss Account of the Company 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 . 1. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statement. An audit includes examining , on a test basis, evidence supporting the amounts and disclosures in the financial statements . An audit also includes assessing the accounting principles used and, significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 2. As required by the Manufacturing and Other Companies [Auditor's Report] Order 2003, issued by the Central Govt. of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 , we enclose in the Annexure here to a statement on the matters specified in paragraph 4 and 5 of the said order 3. Further to our comments in the Annexure referred to in paragraph 2 above, we report that a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit, b) In our opinion, proper books of accounts, as required by Law , have been kept by the Company, so far as appears from our examination of such books. c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account of the Company. d) In our opinion , the Balance Sheet , Profit & Loss Account and Cash Flow Statement dealt with by this Report comply with the mandatory accounting standards referred to in sub-section (3C)of Section 211 of the Companies Act, 1956. e) On the basis of the written representations received from all the directors as on 31st March 2004, and taken on record by the Board of Directors; We report that none of the directors is disqualified, as on 31st March, 2004, from being appointed as a director of the Company in terms of clause(g) of sub section(1) of Section 274 of the Companies Act, 1956. f) In our opinion and to the best of our information and according to explanations given to us, the said accounts , read together with significant Accounting Policies and other Notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; i) in the case of Balance Sheet , of the, state of affairs of the Company as at 31st March, 2004 and ; ii) in the case of Profit & Loss Account of Loss of the Company for the year ended on that date. iii) in the case of Cash Flow Statement , of the Cash Flow for the year ended on that date. For & on behalf of MEHROTRA SHARMA & ASSOCIATES Chartered Accountants. Place : Chandigarh (ANIL SHARMA) Date : 31-07-2004 Partner Annexure Referred To In Paragraph 2 Of Our Report Of Even Date In Case Of GRAINTEC INDIA LTD. For The Year Ending 31.03.2004 1. In respect of its fixed assets: a. The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets on the basis of available information. b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No Material discrepancies were noticed on such physical verification. c) In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected. 2. In respect of its inventories: a) As explained to us, inventories have been physically verified by the management at regular intervals during the year. . b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compare to the book records. 3. In respect of loans, secured or unsecured, granted or taken by the Company to / from companies firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. a. The company has neither granted nor taken loans from any party listed under Section 301 of the Companies Act, 1956 b. In the absence of any loan granted or taken during the year, no comment is called for on the terms and conditions of such loans. c. In respect of Inter Corporate Deposit taken from one party listed under Section 301, as on first day of the accounting year, we have been explained that the account has been adjusted for waiver of principle and intent, as per terms mutually agreed between the Company and the said party. 4. In our opinion and according to the information and explanations given to us , there are adequate internal control procedures, commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets, and also for the sale of goods. During the course of our audit, we have not observed any major weakness in internal controls. 5. In respect of transactions covered under Section 301 of the Companies Act, 1956: a. No transactions have been made by the Company during the year, in pursuance of contracts or arrangements, that needed to be entered into the Register, maintained under Section 301 of the Companies Act 1956. b. In our opinion and according to the information and explanations given to us, there are no transitions in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5,00,000/0 (Rupees Five Lacs only) or more in respect of any party. 6. The Company has not accepted any deposits from the public during the year. 7. In our opinion, the internal audit system of the Company is commensurate with size and nature of its business, 8. The Central Government has not prescribed maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 in respect of manufacturing activities of the Company. 9. In respect of statutory dues: a. According to the records of the Company, undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts, payable in respect of the aforesai dues, were outstanding as at 31st March, 2004 for a period of more than six months from the date of becoming payable. b. The disputed statutory dues aggregating to Rs.787.14 Lakhs that have not been deposited on account of matters pending before appropriate authorities are as under:, Sr. Name of the Statute Nature of Dues Forum where Amount No dispute is pending (Rs. in Lakhs) 1. Punjab Sales Tax Assessment DETC Patiala 654.37 Demands for various years 2. Central Sales Tax Assessment DETC Patiala : 132.77 Demands for various years 10. The Company is in existence for more than five year and its accumulated losses are more that 50 0/n of its net worth. The Company has not suffered any cash loss during the year. 11. The Company is registered with BIFR (Board of Industrial Finance & Reconstruction). As explained to us, the repayment of dues Financial Institutions are subjects to MDRS (Modified Draft Rehabilitation Scheme) as per prepared by Monitoring Agency and submitted to BIFR for approval 12. In our opinion and according to the information and explanation given to us, no loans and advance have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund /society. Therefore, clause 4 (xiii) of the Companies (Auditor's Report) order 2003 is not applicable to the Company. 14. According to information and explanations given to us, the Company has not dealt in trading of securities such as shares, debentures or any other investments during the year. 15. The Company has not given any guarantees for loans taken by any third party from Banks or Financial Institutions. 16. The Company has not raised any new term loans during the year. The term loans outstanding at the beginning of the year were applied for the purposes for which they were raised. 17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has utilized Rs.213.32 Lakhs from short term source towards repayment of long -term borrowings and acquisition of fixed assets. 18. The Company has made preferential allotment of 2999632 Equity Shares of Rs. 10 each at par s aggregating to Rs. 29996320 during the year to certain parties listed/covered in the Register maintained under section 301 of the Companies Act, 1956. 19. The Company has not issued any debentures during the year. 20. The Company has not raised any money by way of public issue during the year. 21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated For & on behalf of MEHROTRA SHARMA & ASSOCIATES Chartered Accountants. Place : Chandigarh (ANIL SHARMA) Date : 31-07-2004 Partner