SANDUR LAMINATES LIMITED
ANNUAL REPORT 2006-2007
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
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
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
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
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
Sandur Pattana Property 0.73 2003-04 Not paid
Panchayat Tax 0.73 2004-O5
(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
Entry Tax Act, Entry Tax 66.28 1997-98 Karnataka High
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
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
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
Place: Bangalore Partner
Date: 5 September 2007 (Membership No. 25776)