PARASRAMPURIA INDUSTRIES LIMITED
ANNUAL REPORT 2002-2003
THE MEMBERS OF
PARACRAMPURIA INDUSTRIES LIMITED
We have audited the attached Balance Sheet of PAHASHAMPURIA INDUSTRIES
LIMITED as at 31st March, 2003 and also the annexed Profit & Loss Account
for the year ended on that date. 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.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform tree
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 the Management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion. Further we report that
1. 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.
2. 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.
3. The Balance Sheet and Profit and Loss Account dealt with by the report
are in agreement with the Books of Accounts of the Company.
4. On the basis of written representation received from the Directors
except Nominee Director and taken on record by the Board of Directors and
on the basis of legal opinion obtained from Shri. U. P. Mathur, Advocate
and Corporate Law Consultant, of New Delhi, that, under the continuous huge
losses and liquidity crunch. provisions of Section 274 (1) (g) are not
applicable to the reappointment of Directors. On the basis of the legal
opinion and written representations, we report that none of the Directors
is disqualified as on 31st March, 2003 for reappointment as a Director.
5. In our opinion, Balance Sheet and Profit and Loss Account comply with
the Mandatory Accountings Standards referred to in Section 211 (3c) of the
Companies Act, 1956, except as otherwise stated in Notes forming part of
accounts as per Schedule "13".
6. In our opinion, and to the best of our information and according to the
explanations giver to us subject to note
(I) NO.1(H)(I) & (II) REGARDING UNPROVIDED LIABILITY OF GRATUITY AND LEAVE
(II) NO. 1 (J)(III) REGARDING FOREX
(III) NO.II (9) REGARDING DEBTORS. ADVANCES, CREDITORS, ETC.
(IV) NOTE NO.II (10) REGARDING NONPROVISION OF INTEREST ON I.C.D.S AND
(V) NO II (11) REGARDING UNDER PROVISIONS OF PENAL INTEREST ON LOANS AND
NON PROVISION OF INTEREST ON WORKING CAPITAL LOANS.
(VI) NO.II (12) & (16) REGARDING INTEREST ACCRUED IF ANY, ON CURRENT
LIABILITY OF 16% REDEEMABLE CUMULATIVE PREFERENCE SHARES the said accounts
read together with tree significant accounting policies and other Notes
thereon. given 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
A. In the case of the Balance Sheet, of the State of Affairs of the Company
as at 31st March 2003. and
B. In the case of the Profit and Loss Account of the Loss for the year
ended on that date.
For M.L. SHARMA & CO.
Place: Mumbai C.H. BANDI
Date : 28th November, 2003 PARTNER
AS REQUIRED BY THE MANUFACTURING AND OTHER COMPANIES (AUDITORS' REPORT)
ORDER, 1988 ISSUED BY THE COMPANY LAW BOARD, IN TERMS OF SECTION 227(4A) OF
THE COMPANIES ACT, 1956 AND ON THE BASIS OF SUCH CHECKS AS WE CONSIDERED
APPROPRIATE, WE FURTHER REPORT THAT
(i) The Company was maintaining proper records of its Fixed Assets.
However, we have been informed that during the year, the said records have
been damaged at its Registered Office and are under compilation which are
subject to our verification.
(ii) None of the Fixed Assets have been revalued during the year.
(iii) We are informed by the Management that stock of raw-materials,
stores, spare parts, finished goods and construction materials, have been
physically verified at reasonable intervals during the year and/ or at the
close of the year.
(iv) In our opinion and according to the information and explanations given
to us, the procedures of physical verification of the above referred stocks
followed by the Management are reasonable and adequate in relation to the
size of the Company and the nature of its business.
(v) We are informed by the Management that, no material discrepancies have
been noticed on physical verification of stocks of raw materials, stores
and spares and finished goods having regard to the size of the operations
of the company and the same have been properly dealt with in the Books of
Account. However, no detailed working papers were available for our
verification respect of material discrepancies, and comparison thereof with
the Book Balance.
(vi) In our opinion, the valuation of stocks is fair and proper and is in
accordance with the normally accepted accounting principles.
(vii) In our opinion. the rate of interest and the terms and conditions on
which Loans have been taken from Companies, firms or other parties listed
in the Register maintained under Sections 301 and 370 (1-B) of the
Companies Act, 1956 are not prima facie prejudicial to the interest of the
(viii) The Company has granted interest free loans and advances, secured or
unsecured to Companies, Firms or other parties list in the Register
maintained under Section 301 of the Companies Art, 1956 or to companies
under the same management within the meaning of Section 370 (1B) of the
Companies Act, 1953. The other terms and conditions in our opinion are
prima-facie not prejudicial to the interest of the company. However, no
stipulations have been made regarding repayments.
(ix) No Loans and Advances in the nature of loans given to parties except
interest free loans given to the employees, who are generally repaying the
principal amount as stipulated.
(x) In our opinion and according to the information and explanations given
to us, the Company needs to strengthen the internal control procedures and
system commensurating with its size and nature of the business,
(xi) in our opinion and according to the information and explanations given
to us, the transactions of purchase and sale of goods, materials and
services made in pursuance of Contracts of arrangement entered in the
register maintained under Section 301 of the Companies Act, 1956,
aggregating during the year to 85.50,000/- or more in respect of each
party, have been made at prices which are reasonable having regard to
prevailing market prices for such goods, materials and services or the
prices at which transactions for similar goods have been made with other
(xii) As explained to us, the Company did not have any unserviceable or
damaged stores, raw materials or finished goods.
(xiii) According to the information and explanation given to us, the
Company has not accepted deposit from the public during the year. However,
the Company has not complied with the direction issued by RBI and the
provision of Sec 58A of the Companies Act, 1956, and the rules framed
thereunder like non filing of Annual Returns, and non provision of interest
(Refer Note 10 in Notes forming part of Accounts, Schedule-13).
(xiv) In our opinion, reasonable records have been maintained by the
Company for the sale and disposal of waste and scrap.
(xv) The Company has appointed a firm of Chartered Accountants for carrying
out the Internal Audit. In our opinion, the same is required to the
strengthened according to the size and nature of the business of the
(xvi) The Central Government has prescribed the maintenance of cost records
under Section 209 (1) (d) of the Companies Act 1956 in respect of
manufacturing activities of the Company. We have been informed that such
accounts and records have, prima facie. been made and maintained. However,
we have not made a detailed examination the same.
(xvii) According to the records of the Company. Provident Fund dues have
not begin deposited regularly during the year with the appropriate
authorities. The contribution amounting to Rs.48,82,288/- remains unpaid.
(xviii) According to the records of the Company and subject to the method
of accounting consistently followed by it, there are no undisputed amounts
payable in respect of Income-Tax, Excise Duty, Sales-Tax and Customs Duty,
as at the last day of the Financial Year, for a period of more than six
months from the date they became payable, except outstanding of Income Tax
deducted at source Rs.10,56,130/-, Custom Duty of Rs.21,88,638/- in respect
of goods lying in bonded warehouse & Sales Tax Rs.14,59,475/-. subject to
(xix) The Company has a policy of authorizing expenditure based on
reasonable checks and controls. This policy is intended to ensure that
expenses are authorized on the basis of contractual obligations or accepted
business practices having regard to the Company's business needs and
exigencies. In terms of these observations, we have not come across any
expenses charged to revenue account which, in our opinion and judgement,
and to the best of our knowledge and belief could be regarded as personal
(xx) The Company is a Sick Industrial Company within the meaning of Clause
(0) of sub-section (1) of Section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1985 and the reference application to the BIFR /
AAIFR is pending for disposal.
(xxi) In respect of the trading activities, we have been informed that
there are no unserviceable or damaged goods during the year.
For M.L. SHARMA & CO.
Place ; Mumbai C.H. BANDI
Date : 28th November, 2003 PARTNER