ISPL INDUSTRIES LIMITED
ANNUAL REPORT 2006-2007
THE MEMBERS OF
ISPL INDUSTRIES LIMITED
We have audited the attached Balance Sheet of ISPL INDUSTRIES LIMITED as at
31st March 2007 an also the annexed Profit and Loss Account of the company
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.
1. We conducted our audit in accordance with the 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 from any material misstatement. An audit
includes, examining on a test basis, evidence supporting the amounts and
disclosure 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 presentation of the financial
statements. We believe that our audit provides a reasonable basis for our
2. As required by the companies (Auditor's Report) Order, 2003, issued by
the Central Government of India, in terms of Sections 227(4A) of the
Companies Act, 1956, we enclose in the annexure a statement on the matters
specified in the paragraphs 4 and 5 of the said Order.
3. Further our comments in para 1 above, the audit was carried out in the
absence of availability of all particulars and records which could not be
made available to us by the Company due to following constraints and
limitations reported to us by the management as detailed in Note No.2 of
the notes on accounts:
a. Manufacturing operations have been discontinued. The workers of Rajkot
unit prevented the management from entering the factory premises;
b. In the absence of availability of the records and particulars, the
possibility of some of items of losses having been left out for
incorporation in the accounts is not ruled out;
c. Some of the items of losses and expenses have been taken in the
perception and judgment of the management of the company;
d. Balances in the accounts of receivables, Loans and deposits, advances,
pending confirmation and reconciliation to the extent of possible loss on
account of non-recovery is not possible to ascertain at present with
reasonable accuracy, which may affect revenue, have been taken as per the
books of accounts only;
e. Balance in the accounts of sundry creditors, other liabilities, secured
and unsecured lenders, loans and advances, deposits, inventory records,
fixed assets are Subject to confirmation, reconciliation and adjustments,
if any, which may affect revenue, are therefore, as per the books of
4. Note No. 14b relating to non-provision of various expenses aggregating
to Rs. 23195280/- for the year as detailed in the note;
5. Ref. Note No. 11, relating to non-provision for doubtful advances of
Rs.181,72822/- Lacs and sundry debtors Rs. 27269680/-.
6. Non valuation of year end inventories in accordance with the accounting
Standard As-2, in view of what is stated in para 2 above, the impact of
which is not ascertainable;
7. On the date of reporting on the accounts for the year ended 31.3.2007
the company does not have the managing director as required by section 269
of the Company's Act, 1956;
8. On the date of reporting on the accounts for the year ended 31.3.2007
the company does not have Company Secretary as required by Section 383A of
the Company's Act, 1956;
9. The company has covered under Group Gratuity Scheme in respect of
gratuity payable to the employees. The company has made payment of premium
up to 31.03.1998. However due to financial problems and the company has
filed an application with BIFR on 21st August 2000. The company has not
paid premium since 1st April 1998 onwards and estimated liability payable
to the employees is approximately Rs. 2383545/- till 31.03.2007.
10. In view of what is stated in paragraphs referred herein above we are
unable to comment whether the attached Balance Sheet of the Company as at
31st March 2007 and Profit & Loss account for the year ended on that date
comply with the Accounting Standard referred to in Section 211(3) (C) of
the Company's Act, 1956;
11. The Annexed Balance Sheet and Profit & Loss Account dealt with by this
report are in agreement with the books of account prepared in manner stated
in para 4 above:
12. In view of the Rehabilitation Package submitted to the operating
agencies and the same is under consideration, the accounts for the year
ended 31.03.2007 are prepared on the basis of on going concern.
13. On the basis of information and explanations given to us the Directors
of the Company are disqualified on the date of signing of Accounts from
being appointed as Directors in terms of clause (g) of sub section (1) of
section 274 of the Companies Act,1956.
Subject to what is stated in above, (without taking into account para 6,
and as the extent of loss as, at present in respect of which is
unascertainable/not ascertained) the loss for the year would be higher by
Rs. 93515993/- and accumulated losses carried in the Balance Sheet
Rs.295186784/- of the notes to the accounts and 1 to 11 of our audit report
above and uncertainties arising there from, we are unable to express our
opinion about the true and fair view;
(a) In the case of Balance Sheet of the 'State of affairs of the company'
as at 31st March 2007;
(b) In the case of Profit & Loss Account of 'Loss' for the year ended on
For Suren Shah & Co
Place: Mumbai, Suren Shah
Dated: 25.08.2007 M.N.: 9295
ANNEXURE TO THE AUDITORS' REPORT
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF AUDITOR'S REPORT TO THE MEMBERS OF
ISPL INDUSTRIES LIMITED ON THE ACCOUNTS FOR THE TEAR ENDED 31ST MARCH 2007.
1. a. According to the information and explanation given to us, and view
of the facts mentioned in Note No. 2 the fixed Assets register could not be
b. The Fixed assets have not been physically verified by the management
either during the year or at the close of the year therefore the question
of noticing the discrepancy and properly dealing of the same in the books
of account does not arise.
c. Company has not disposed of any substantial part of fixed assets.
2. The fixed assets have not been revalued during the year;
3. (a) According to the information and explanation given to us the Company
has not granted or taken any loans to/from firms or other parties listed in
the register maintained under Section 301 of the Companies Act, 1956.
(b) The company has given interest free loans and advances in the nature of
loans to its employees and these are being repaid as stipulated.
4. The company has not accepted any deposit from the public.
5. The Central Government has not prescribed maintenance of cost records
under section 209 (1) (d) of the Companies Act, 1956 for the products of
6. a) According to the information and explanations given to us except an
amount of Rs. 495702/- in respect of Income tax deducted at source (TDS) on
and sales tax of Rs. 583791/-, there were no undisputed amounts payable in
respect of Income Tax Wealth Tax, Customs Duty and Excise duty which were
outstanding as at 31st March 2007 for a period of more than six months from
the date they may become payable
b) As at march 31, 2007, according to the records of the Company and the
information and explanations given to us, the following are the particulars
of disputed dues (provided / considered contingent liability, as
appropriate) on account of Sales Tax, Income-Tax, Custom duty, wealth tax,
excise duty, and cases matters that have not been deposited on account of
Name of the Nature of the Dues Amount Period to Forum where dispute
Institute Rs. which the is pending
Custom Custom Duty,
classification 2282973 1985 Custom Authority
Excise Duty Excise Duty Commissioner of
demand 2630997 1994-1999 Appeals
I-Tax Dept. Demand as per Comm. of I-Tax
scrutinity 15611094 1997-1998 Appeal-Rajkot
State Ex-party Assessment Remanded back by
of Gujarat done by dept. 65951672 1995-2001 the appellant
Maharashtra Ex-party Assessment Remanded back by
Sales Tax done by dept. 25367026 1997-2001 the appellant
7. In our opinion the net worth of the company is completely eroded the
company registered to BIFR and the reference has been filled on 21st
August 2000. Subsequently BIFR has declare the company as a sick vide their
order dated 07.06.2001. The company has incurred a cash loss of
Rs.1714561/- and has also incurred a cash loss Rs. 1506384/- in the
immediately preceding Financial year.
8. On the basis of our explanations of the books and according to the
information and explanations given to us, the company has defaulted in the
repayment of dues to financial institution or banks aggregating to
Rs.129528612/- to the repayment due between June 2001 to 31st March 2007.
9. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
10. The Provisions of any special statute applicable to Chit Fund, Nidhi or
Mutual Fund Benefit Fund / Societies are not applicable to the Company.
11. The Company is not dealing or trading in shares, securities, debentures
or other investments.
12. According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks and
13. The Company has not obtained any term loan from any bank or financial
Institution during the year.
14. The Company has not made any preferential allotment.
15. The Company has not issued any debentures.
16. The Company has not raised any money by way of public issues during the
17. On the basis of our examination of records and according to the
information and explanation given to us, no fraud, on or by the Company,
has been noticed or reported during the year.
18. In view of what is stated in para 2 of audit report and Note No. 2 and
other notes of the Notes to the Accounts, we are unable to offer our
comment on the items No. 2, 4, 5,and 7 of the Companies (Auditors' Report)
order, 2003, issued by the Central Government of India in terms of section
227 (4a) of the Companies Act 1956.
For Suren Shah & Co.