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Sandur Laminates Ltd.

BSE: 531316 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Sandur Laminates Ltd. (SANDURLAMINATES) - Auditors Report

Company auditors report

SANDUR LAMINATES LIMITED ANNUAL REPORT 2006-2007 AUDITORS' REPORT TO THE MEMBERS OF SANDUR LAMINATES LIMTED 1. We have audited the attached balance sheet of SANDUR LAMINATES LIMITED as at 31st March, 2007, and also the profit and loss account and the cash flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with 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 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto, 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) Subject to our comments in paragraph 4(f) and 5 below, 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 Companies Act, 1956; e) On the basis of written representations received from the directors, as on 31st March, 2007 and taken on record by the Board of directors, we report that none of the directors is disqualified as on 31st March, 2007, from being appointed as a director In terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; f) (i) As stated in Note 1 of Schedule 11, the accounts have been prepared on a going concern basis. The Company has been declared a sick Company by the Board for industrial and Financial Reconstruction (BIFR). Although, the High Court of Karnataka to which reference was made by the BIFR for winding up of the Company has referred the matter back to the MFR for arriving at a rehabilitation package for revival of the Company, the revival process has not yet been substantially completed. As at 31st March, 2007, the Company's current liabilities exceeded its current assets by Rs.1,558.37 lakhs. In view of the above, we are unable to form an opinion whether the going concern basis is an appropriate basis for the presentation of the amounts, of the Company. Consequently, we are unable to express an opinion on the adjustments required to the recoverability and classification of recorded asset amounts, and to amounts and classification of liabilities, the impact of which is not ascertained. (ii) As stated in note 8 of Schedule 11, no provision has been made for interest claim of Rs.2,145,15 lakh, including Rs 359.94 lakhs for the current year, on advances from certain companies as a result of which the current liabilities is understated and the profit for the year is overstated to that extent; and (iii) As stated in note 15 of schedule 11, the Company has not provided for impairment loss as required under Accounting Standard 28 on 'Impairment of Assets.' 5. We further report that without considering items mentioned at 4 (f)(i) and 4(f)(iii) above, the effect of which on the financial statements could not be determined, had the observation made by us in 4(f)(ii) above been considered, the profit for the year could have been Rs.3,395.96 lakhs (as against the reported figure of Rs. 32,955.90 lakhs), debit balance in the profit and loss account would have been Rs 4,525.97 lakhs (as against the reported figure of Rs.2,380.82 lakhs), and current liabilities would have been Rs. 5000.46 lakhs (as against the reported figure of Rs. 2,85531 lakhs). 6.In our opinion and to the best of our information and according to the explanations given to us,the accounts give the Information required by the Companies Act,1956, in the manner so required, and in view of the significance of the matters referred to in paragraph 4 (f) (i) relating to going concern,4(f)(h) and a (iii) above, we are unable to express an opinion whether the accounts give a true and fair view i. In the case of the balance sheet of the state of affairs of the Company as at 31st March, 2007. 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 the cash flow statements of the cash flows for the year ended on that date. For A.F. Ferguson Associates Chartered Accountants S. Sundaresan Place: Bangalore Partner bate; 5 September 2007 (Membership No. 25776) ANNEXURE REFERRED TO IN OF PARAGRAPH (3) OF THE AUDITORS' REPORT TO THE MEMBERS OF SANDUR LAMINATES LIMITED THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2007. i)(a) The Company has maintained proper records showing fulls particulars including quantitative details and situation of fixed assets. (b) The management has not physically venfied the fixed asset during the year. In our opinion,the physical verifications on of the fixed assets is not conducted at reasonable intervals. (C) During the year the company has not disposed off any of the fixed assets and therefore,paragraph 4 (i)(c) of the Company (Auditor's Report) Order, 2003 (herein after referred to as the Order) is not applicable. ii) The Company does not have any inventory during the year and therefore para (ii) of the Order is not applicable. iii) In our opinion and according to the information and explanations given to us,the Company has not granted/taken any loans, secured or unsecured to/from companies,firms or other parties covered in the register maintained under section 301 of the Companies Act,1956 and therefore, paragraph 4(iii) of the Order is not applicable. iv) In our opinion and according to the information and explanations given to us, there are no purchases of inventory and fixed assets and sale of goods and services during the year and accordingly the reporting, on internal control system in respect of the clause (iv) is not applicable. During the course of our audit, we have not observed any continuing failure to correct major weaknesses, if any, in internal control. v) In our opinion and according to the information and explanations given to us,there are no contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 and therefore, paragraph 4(v) of the Order is not applicable. vi) In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year and therefore, paragraph 4(0) of the Order is not applicable. vii) No internal audit was carried out during the year. viii) According to the information and explanations given to us, maintenace of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for the Company's products and therefore, paragraph 4(viii) of the Order is not applicable. ix)(a)In our opinion and according to the information and explanations given to us,there are no undisputed statutory dues in respect of Provident fund,Investor Education & Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues, if any, applicable to it with appropriate authorities, except for the property tax which are not paid. The arrears as at 31st March, 2007 of such items outstanding for a period of more than six months from the date they became payable are given below; Name of the Nature of Amount Period Subse Statute dues (Rs.) in the quent laks amount payments were due 4.08 1996-02 0.73 2002-03 Sandur Pattana Property 0.73 2003-04 Not paid Panchayat Tax 0.73 2004-O5 0.73 2005-06 0.73 2006-07 (b) According to the records of the Company and information and explanations given to us, there are disputed dues of Excise duty and Entry tax which have not been deposited, the details of which are set out below: Amount Period to Forum where Name of the Nature of (Rs.) which the dispute is Statute the dues lakhs) amount pending relates Entry Tax Act, Entry Tax 66.28 1997-98 Karnataka High 1986 Court The Central Excise duty 72.64 1998-00 Customs, Excise Excise and Service Tax Act, 1944 Appellate Tribunal The Central Central 10.32 1999-00 Karnataka High Excise Act, Excise Duty Court 1944 x) The Company has accumulated losses exceeding fifty percent of its net worth as at the year end and has Incurred cash losses during the financial year and in the immetiatley preceding financial year. xi) As the company has completed its commitments in respect of the Negotiated Settlement with the financial institutions and a bank,there are no defaults in repayment of dues to the financials institutions and bank. xii) The Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures, and other securities and therefore, paragraph 4 (xii) of the Order is not applicable. xiii) The provisions of special statute applicable to chit fund and nidhi / mutual benefit fund / society are not applicable to the Company and therefore, paragraph 4(xiii) of the Order is not applicable. xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments and therefore, paragraph 4 (xiv) of the Order is not applicable. xv) In our opinion and according to the Information and explanations given to us, the Company has not given guarantees during the year for loans taken by others from banks or financial Institutions and therefore, paragraph 4(xv) of the Order is not applicable: xvi) The company has not availed term loans during the year and therefore, paragraph 4(xvi) of the Order is not applicable. xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, funds raised on short term basis have prima facie, not teen used during the year for long term investment. xviii) The Company has not made any preferential allotment of shares during the year and therefore, paragraph 4 (xviii) of the Order is not applicable. xix) The Company has not issued any debentures during the year and therefore, paragraph 4(xix) of the Order is not applicable. xx) The Company has not raised any money by way of public issue during the year and therefore, paragraph 4(xx) of the order is not applicable. xxi) To the best of our knowledge and belief 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. For A.F. Ferguson Associates Chartered Accountants S.Sundaresan Place: Bangalore Partner Date: 5 September 2007 (Membership No. 25776)