PUNJAB WOOLCOMBERS LIMITED
ANNUAL REPORT 2003-2004
Punjab Woolcombers Limited
Dhandari Kalan, Ludhiana.
We have audited the attached Balance Sheet of the Punjab Woolcombers
Limited as at 31st March, 2004 and also the Profit & Loss Account of the
Company for the year ended on that date and annexed thereto. These
financial statements are the responsibility for the Company's management.
Our responsibility is to express an opinion on these financial statement
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 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.
1. As required by the Companies (Audit's Report) Order, 2003 issued by the
Central Government in terms of section 227 (4A) of the Companies Act, 1956
we enclose in the annexure a statement as the matters specified a paragraph
4&5 of the said Order.
2. Further to our comments in the annexures referred to in paragraph (1)
a) We have obtained all the information and explanations, which to the best
of our knowledge and belief where 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 it appears from our examination of the books.
c) The Balance Sheet and Profit & Loss Account debit with by this Report
are in agreement with the books of account.
d) In our opinion, the Profit & Loss Account and the Balance Sheet complies
with the mandatory Accounting Standard referred to in Section 211(3C) of
the Companies Act, 1956 subject to Note No. B regarding non-charging of
interest on Cash Credit Limit amounting to Rs.78.80 lacs due to which
current financial year loss has been understated by 78.80 lacs, Note No. 9
regarding balance confirmation of Debtors and Creditors.
e) i) We report that all the directors of the Company as on 31.03.2004 are
disqualified from being re-appointed as director as the Company has
defaulted in the terms of clause (g) of the sub-section (1) of the
ii) The written representation (in term of section 274(i)(g) of the
Companies Act from all the directors are disqualified from being appointed
as director as mentioned in e(i) above.
f) In our opinion and to the best of our information and according to the
explanation given to us, the said statement of accounts, read with notes
thereon (Schedule XXII give the information required by the Companies Act,
1956 in the manner Note No.8 regarding non-charging of interest on Cash
Credit limit amounting to Rs.78.80 lacs due to which current Financial Year
loss has been understated by Rs.78.80 lacs. Note No.9 regarding balance
confirmation of Debtors and Creditors.
g) In our opinion and to the best of our information and according to the
explanations given to us, the Balance Sheet and Profit and Loss Account
together with the notes thereon and attached thereto give the Information
required by the Companies Act, 1956, in the manner so required and give a
true, and fair view.
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 the profit/loss for the year
ended on that date.
for S. TANDON & ASSOCIATES
Place : Ludhiana (AMARPREET SINGH)
Dated : 31.08.2004 Partner
ANNEXURE TO THE AUDITOR'S REPORT
Annexure referred to in paragraph '3' of the auditor's report to the
members of punjab woolcombers ltd on the accounts for the year ending
1. (a) The company has maintained proper records showing full particulars
including quantitative details and situation of the fixed assets.
(b) As explained to us, the Company has the system for the verification of
the fixed assets, which is designed to cover all assets over a period of
three years, which in our opinion is reasonable having regard to the size
of the company. The Fixed Assets have been physically verified by the
management during the year and no maternal discrepancies were observed.
2. (a) According to the information and explanations given to us, the
procedures of physical verification of stock followed by the management are
reasonable and adequate in relation to the size of the company and the
nature of its business.
(b) On the basis of our examination of the records of inventories as
compared to the book records were not material and have been property dealt
with in the books of accounts.
3. According to the information and explanations given to us the company
has not provided any interest on the loans which have been granted to the
parties listed in the register maintained under section 301 of the
Companies Act, 1956 during the year because the companies to which the
loans had been granted have been referred to BIFR.
4. According to the information and explanations given to us, the company
has not taken any loans from companies, firms or other parties listed in
the register maintained under section 301 of the Companies Act, 1956.
5. In our opinion and according to the information's and explanations given
to us, there are adequate internal control procedures commensurate with the
size of the company and the nature of its business with regard to purchase
of inventories, fixed assets and for the sale of goods. During the course
of our audit, no major weakness has been noticed in the underlying internal
6. (a) Based on the audit procedures applied by us and according to the
information's given to us, the transactions that needs to be entered in the
register maintained under section 301 of the Companies Act, 1956 have been
entered so far.
(b) In our opinion and according to the information and explanations given
to us, the transactions made in pursuance of the contracts or arrangements
entered in the register maintained under section 301 of the Companies Act,
1956 exceeding the value of Rs. 500 lacs in respect of any party during the
year have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time except for the items stated
to be of proprietary nature where the question of comparison does not
7. According to the information and explanations given to us, the Company
has not accepted any deposit from the public, paragraph 4(vi) of the order
8. In our opinion, the company has the adequate internal Audit system
commensurate with the size and nature of business.
9. We have broadly reviewed the books of accounts maintained by the company
pursuant to the Rules made by Central Government lot the maintenance of
cost records under section 209(1)(d) of the Companies Act, 1956 and are of
the opinion that prima facie, the prescribed accounts and records have been
made & maintained.
10. (a) According to the records of the Company, information and
explanation given to us, the undisputed statutory dues including Provident
Fund Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom
Duty, Excise Duty, R&D Cess and other material statutory dues applicable to
the Company have not been regularly deposited with the appropriate
authority. As detailed below:
Particulars Amount Payable
Sales Tax Payable Rs. 13.35 lacs
Surcharge on Sales Tax Rs. 1.25 lacs
E.S.I. Payable Rs. 40.43 lacs
RE Payable Rs. 139.25 lacs
T.D.S. Payable Rs. 7.14 lacs
Central Sales Tax Payable Rs. 15.30 lacs
Surcharge on CST Rs. 0.76 lacs
(b) According to the information and explanations, given to us there are no
undisputed amount payable in respect of Sales Tax, Income Tax, Wealth Tax,
Excise Duty, Custom Duty were in airier to a period of more than six months
from the date they become payable.
11. The accumulated losses at the end of the financial year ending
31.03.2004 are Rs.83.76 Crore. Further the company has incurred cash tosses
during the financial year ending 31.03.2004. The Company is Sick Industrial
Company within the meaning of Section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1956.
12. In our opinion and according to the information and explanations given
to us, the company has defaulted in repayment of dues (Principal &
Interest) to the financial institutions (IFCI), Banks (S.B.O.P) and to
debenture holders (Principal & Interest).
13. As tile Company has not granted any loans and advances on the basis of
security by way of pledge of shares debentures and other securities,
paragraph 4 (xiii) of the order is not applicable.
14. As the company is not chit fund/nidhi/mutual benefit fund/society to
which the provisions of special statute relating to chit fund are
applicable. Paragraph 4(xii) of the Order is not applicable.
15. According to Information and explanations given to us, the Company has
not dealt or traded in shares, securities, debentures and other
investments. Therefore the provisions of clause 4 (xiv) of the Companies
(Auditor's Report) order, 2003 are not applicable to Company.
16. According to the information and explanations given to us, the Company
has not given any guarantees for loans taken by other form banks of
financial institutions during the year.
17. According to the information and explanations given to us, the term
loans taken during the year have been applied for the purpose for which
they were raised.
18. According to the information and explanations given by the management
to us. and on an overall examination of the Balance Sheet of the Company,
we report that no funds raised on short term basis have been used for long
term investment, Also no long term funds have been used to finance short
term assets except permanent working capital.
19. As the Company has not made Preferential allotment of shares to parties
and companies covered in the register maintained under section 301 of the
Companies Act, paragraph 4(xviii) of the order is not applicable.
20. As the Company has not issued any debentures during the year, paragraph
4(xix) of the order is not applicable.
21. During the year, since the company has not raised money by way of
public issue, paragraph 4(xx) of the order is not applicable.
For S. TANDON & ASSOCIATES
PLACE: LUDHIANA PARTNER