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AUTO TENSION LIMITED
ANNUAL REPORT 2004-2005
AUDITORS' REPORT
To
The shareholders of
Auto Tension Limited
Delhi.
1. We have audited the attached balance sheet of Auto Tension Limited as at
31st March, 2005 and the related Profit and Loss Account and 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 auditing standards generally
accepted in India. These standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosure in 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 (Auditors Report) Order, 2003 as amended by
the Companies (Auditors Report) (Amendment) Order,2004 issued by the
Central Government of India in terms of sub-section (4A) of Section 227 of
the Companies Act,1956 and on the basis of such checks as we considered
appropriate and according to the information and explanations given to us,
we set out in and annexure a statement on the matters specified in
paragraph 4 and 5 of the said order.
Further to our comments in the Annexure referred to in Paragraph 2 above,
we report that :
i) 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.
ii) 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.
iii) The Balance Sheet Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
iv) In our opinion the balance sheet and profit and loss account dealt with
by this report comply with the accounting standards referred to in sub-
section (3C) of section 211 of the Companies Act 1956 with the exception
of 'Accounting Standard 2'- Accounting for valuation of stock as closing
stock are not valued at lower of cost or market value and difference has
not been determined as cost of production has not been worked out,
'Accounting Standard 10' - to the extent that the company has not prepared
fixed assets register as required under the Companies Act, 1956,
'Accounting Standard 13'- Accounting for investment as no provision of
diminution in value of unquoted investment have been made, 'Accounting
standards 15'- Accounting for retirement benefit as the company accounts
for liability for Leave encashment on payment basis.
v) On the basis of written representation received from the directors as on
31st March 2005 and taken on record by the board of directors. we report
that none of the director is disqualified as on 31st March, 2005 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to the
explanations given to us, Subject to Note No. C-2: Relating to reliance on
Book balances pending reconciliation of recoverable and payables with
respective parties, Note No.C-3: Relating to non-making of provision for
doubtful debts and advances aggregating to Rs. 37,21,681.13/-, Note No.C-5:
Relating to non-reconciliation of raw materials and stores consumption with
excise records relating to earlier years, Note No.C-6 & C-7: Relating to
non-availability of details of calls in arrear and Application money for
Rs. 1,06,000/- and Rs. 2,74,407/- respectively, Statement of Account from
Allahabad Bank in this respect has not been obtained, Note No. C-9:
Relating to confirmation of Interest and Principal payables to Financial
Institutions and State Bank of India at the close of the year is still to
be obtained and we have relied upon the balance appearing in the books of
the company, Note No. C-11: Relating to accounting of consumption of raw
materials, stores and stock on the basis of valuation arrived at by the
management and no physical verification could be done due to the company
premises being sealed by Government Authorities, Note No. C-12: Relating to
non-providing of Service Tax on payment to transporters relating to earlier
years, Note No. C-13: Relating to reliance on unauthenticated computer
copies of statement of accounts issued by bankers, Note No. C-15:
Relating to certain items of finished goods of earlier years have been
found unmarketable as per technical report and as such valued at estimated
realisable price and Note No. C-16: Relating to non identification of
amount payable to small scale industries as on 31.03.2005 of schedule 12
annexed to the Balance Sheet, the said financial statement read together
with the 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 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, 2005;
b) in the case of Profit and Loss Account the Loss for the year ended on
that; and
c) in case of Cash Flow Statement of the Cash Flow for the year ended on
that date.
For BASANT RAM & SONS
Chartered Accountants
Sd/-
Place : New Delhi (R.K. NAYAR)
Date : 02.09.2005 PARTNER
(Membership No. 87112)
ANNEXURE TO AUDITORS REPORT
Referred to in Paragraph 3 of our report of even date on the accounts for
the year ended 31st March,2005 of Auto Tension Limited.
I)(a) The Company is not maintaining proper records showing full
particulars, including quantitative details and situation of Fixed Assets.
(b) The Fixed Assets have not been physically verified by the management
because the company is under seal by Government Authorities.
(c) According to the information and explanations given to us fixed assets
has not been disposed off by the company during the year.
II) (a) The stock of finished goods, raw material, stores and spare parts
have not been physically verified by the management. We are informed that
the stock in process has been arrived at on estimated basis by the
management as the day to day process records of goods manufactured were not
maintained and the other related records could not be produced to us
because the factory was sealed as stated in Note No. C-11 by Government
Authorities.
(b & c) Not applicable because no physical verification has been carried
out by the management.
III) (a) According to the information and explanations given to us, the
company has not granted any loan, secured or unsecured from companies firms
or other parties listed in the register maintained under section 301 of the
Companies Act, 1956.
(b) According to the information and explanations given to us, the company
has not taken any loan, secured or unsecured from companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act 1956.
IV) During the year no business activity was carried out as such the
applicability of internal control procedures is not relevant
V) (a) According to the explanations given to us, we are of the opinion
that contracts and arrangement that need to be entered into the register
maintained under Section 301 of the Companies Act, 1956 have been so
entered.
b) In our opinion and according to the information and explanations given
to us, during the year there are no transactions in pursuance of contracts
or arrangements entered on the registers maintained under Section 301 of
the Companies Act, 1956 exceeding the value of Rupees Five Lacs in respect
of any party.
VI) The company has not accepted any deposits from the public. As per
information and explanations given to us, no order has been passed on the
company the company Law Board or National Company Law Tribunal or Reserve
Bank of India or any Court or any other Tribunal relevant to section 58A,
58AA or the others relevant provision of the Act.
VII) In our opinion, the company has an internal audit system commensurate
with the size and nature of its business.
VIII) According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
section 209(1)(d) of the Companies Act, 1956
IX) a) According to records of the company statutory undisputed dues
including Provident Fund, Employees State Insurance, Income Tax, Sales Tax,
Excise Duty, Cess have not been regularly deposited with the appropriate
authorities and there have been delays in followings cases :-
Statement of arrears of statutory dues outstanding for more than six
months.
Name of the Statute Name of Dues Amount(Rs.) Period to which
Amount relates
Employees Employers and 2,59,416.70 Jan. 2001 to
State Insurance Employees Aug. 2004
Corporation Contribution
Employees
Provident Fund Employers and 10,99,979.00 Mar. 2001 to
Organisation Employees Aug. 2004
Contribution
Income Tax Act T.D.S. 12,820.00 2001-2002
1,207.00 2002-2003
708.00 2003-2004
2,876.00 2004-2005
Central
Excise Duty Excise Duty 1,97,176.00 2001-2002
Sales Tax Act Sales Tax on 46,846,110 2001-2002
Scrap
Sales Tax Act Sales Tax 17,761.00 1999-2000
Demand
U.P. Pollution
Control Board Water cess 15,750.00 2001 to 2004
U.P. Power
Corporation Ltd. Electricity Charges 14,03,150 2001-2002
Name of the Statute Name of Dues Due Date
Employees Employers and To be
State Insurance Employees deposited by
Corporation Contribution 21st of the
next month
Employees
Provident Fund Employers and To be
Organisation Employees deposited by
Contribution 15th of the next
month
Income Tax Act T.D.S. Different dates
between
2001-2002
Different dates
between
2002-2003
(31.03.2004)
Different dates
between
2004-2005
Central
Excise Duty Excise Duty Since 2002
Sales Tax Act Sales Tax on Since 2002
Scrap
Sales Tax Act Sales Tax 14.08.2003
Demand
U.P. Pollution
Control Board Water cess Different dates
Between 2001
To 2004
U.P. Power
Corporation Ltd. Electricity Charges Since Nov.2001
(b) According to information and explanations given to us, and the records
of the company the following are the particulars of disputed dues on
account of Income Tax and Sales tax matter that have not been deposited by
the company.
Name of
the Statute Nature of Dues Amount Forum where
(Rs.) Dispute Date
is pending
Sales
Tax Laws Year 2000-01 1,07,515.00 Deputy Commissioner 27.02.2004
(Assessment) 4, Trade
Tax, Noida.
X) The Company has accumulated losses at the end of 31st March, 2005
Rs.10407.86 Lacs and it has incurred cash losses Rs. 1945.82 Lacs during
the financial year ended on 31st March,2005 or Rs. 1570.43 Lacs in the
immediately preceding financial year ending on 31.03.2004. The accumulated
losses at the end of the financial year are more than 50% of its net worth.
In our opinion going concern assumption may no longer be appropriate.
XI) The Company has defaulted in repayment of dues to financial
institutions and Bank. The details are as under :-
Name of
Institution / Bank Amount
(Rs. In Lacs) Period of Default
(Principal +
Interest)
I.F.C.I. 3872.13 15.07.1997,15.04.1998
& 15.07.1998
I.D.B.I. 3633.01 15.07.1997, 15.04.1998
& 15.07.1998
I.C.I.C.I 2272.65 15.07.1997, 15.04.1998
& 15.07.1998
PICUP
(Sales Tax Loan) 67.40 Since March 2000
S.B.I. 295.03 30.06.2000
XII) In our opinion and according to the information and explanations given
to us, the Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
XIII) In our opinion, considering the nature of activities carried out on
by the Company during the year the provision of array special statute
applicable to Chit fund / nidhi / mutual benefit fund / societies are not
applicable to the company.
XIV) The Company has maintained proper records of transactions and
contracts in respect of trading in Securities, debentures and other
investments and timely entries have been made therein. All shares.
debentures and other investment have been held by company in its own name
XV) In our opinion and according to the information and explanations given
to us, the company has not given guarantees for loans taken by other from
banks or financial institutions Accordingly the provision of Clause 4 (xv)
of the Order are not applicable to the Company
XVI) According to the information and explanations given to us, no term
loan has been availed during the year by the company.
XVII) According to the information and explanations given to us and based
on an overall examination of the Balance Sheet of the Company, we are of
the opinion that no funds raised on short-term basis have been used for
long term investments (excludes permanent working capital).
XVIII) According to information and explanations given to us, during the
year company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 301 of the
Companies Act,1956. Accordingly the provisions of Clause 4 (XVIII) of the
order are not applicable to the Company.
XIX) According to the information and explanations given to us, the Company
has not issued any debentures during the year and did not have any
outstanding debenture during the year.
XX) According to the information and explanations given to us during the
year covered by our audit report, the company has not raised any money by
way of public issue during the year accordingly the provisions of Clause
4(XX) of the Order are not applicable to the Company.
XXI) During the course of our examination of the books and records of the
Company carried out in accordance with the generally accepted auditing
practice in India and according to the information and explanations given
to us we have neither come across any instance of fraud on or by the
Company noticed or reported during the year, nor have been informed of such
case by the management.
For BASANT RAM & SONS
Chartered Accountants
Sd/-
Place : New Delhi (R.K. NAYAR)
Date : 02.09.2005 PARTNER
(Membership No. 87112)
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