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ISPL Industries Ltd.

BSE: 513041 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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ISPL Industries Ltd. (ISPLINDS) - Auditors Report

Company auditors report

ISPL INDUSTRIES LIMITED ANNUAL REPORT 2006-2007 AUDITORS' REPORT TO 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 opinion 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 accounts only; 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 that date. For Suren Shah & Co Chattered Accountants 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 updated. 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 the Company. 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 dispute. Name of the Nature of the Dues Amount Period to Forum where dispute Institute Rs. which the is pending amount related Custom Custom Duty, different 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 Assessment State Ex-party Assessment Remanded back by of Gujarat done by dept. 65951672 1995-2001 the appellant authority Rajkot Maharashtra Ex-party Assessment Remanded back by Sales Tax done by dept. 25367026 1997-2001 the appellant authority Mumbai 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 financial institutions. 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 year. 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. Chartered Accountants Suren Shah M.N.: 9295 Place: Mumbai, Dated: 25.08.2007