ANNUAL REPORT 1998-99 PREMIUM INDUSTRIES INDIA LIMITED AUDITORS' REPORT AUDITORS' REPORT TO THE MEMBERS OF PREMIUM INDUSTRIES INDIA LIMITED We have audit the attached Balance Sheet of PREMIUM INDUSTRIES INDIA LIMITED.,(formerly: Premium Coke Mfg. Co. Pvt. Ltd.) as at 31st March,1999 together with the related Profit & Loss Account for the year ended on that date and report that: 1. In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and Profit Loss Account read together with the notes thereon and attached thereto,given in the prescribed manner, the information required by the Companies Act, 1956 in the manner so required subject to the notes in Schedule 26 of notes to 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,1999 and ii) in the case of the Profit & Loss Account of the profit for the year ended on that date. 2. 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. 3. In our opinion, proper books of accounts as required by the Companies Act,1956 have been kept by the Company so far as appears from our examination of those books. 4. The Balance Sheet and Profit & Loss Account are in agreement with the books of account as submitted to us. 5. In our opinion, the Profit & Loss Account and Balance Sheet comply with the accounting standards recommended by the Institute of Chartered Accountants for India except: (a) Accounting Standard-2 regarding valuation of Work in Progress. (b) Accounting Standard-10 regarding maintenance of Fixed Asset register. (a) Accounting Standard 15 regarding provision in respect of retirement benefits to employees as mentioned in Schedule 26. 6. As required by the Manufacturing and other Companies (Auditors Report) Order,1988 and according to the informations and explanation given to us and on the basis of such checks as were considered appropriate, we further report that: i) The Company has maintained proper record showing full particulars including quantitative details and situation of its fixed asset The fixed assets of the Company have been physically verified by the management during the year, and no discrepancy was noticed on such verification. ii) The fixed assets have not been revalued during the year. iii) In our opinion, the procedure of physical verification of finished goods,raw-materials,stores and spares, followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business. iv) In our opinion. the basis of valuation of stock is fair and proper and in accordance with the normally accepted accounting principal and is on the same basis as in the earlier years. v) The rate of interest and terms and condition on which the loans have been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company. vi) The Company has not granted any loans to the Companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and to the Companies under the same management. vii) The parties to whom loans or advances in the nature of loans have been granted by the Company are regular in repaying the principal amounts as per stipulation and also repaying the interest wherever applicable. No stipulation for repayment have been prescribed the company for interest from advances in the nature of loans given to staff by the Company. viii) On the basis of our evaluation of the internal control procedure and according to the informations and explanations given to us the adequate internal control commensurate with the size of the Company and the nature of its business in relation to the purchase store including components, plant & machinery, equipments and other asset and with regard to sale also. ix) The unserviceable or damaged stores are determined at the time of physical verification of the same. As explained to us there is such unserviceable or damaged stores found on such physical verification. x) The Company has not received any deposits from public within the meaning of Section 58A of the Companies Act, 1956. xi) The Company has got no by-products or scraps generated out of manufacturing process carried out by the Company. xii) Internal audit has been carried out by a Firm of Chartered Accountants during the year under audit. xiii) Central Government has not prescribed maintenance of cost records under Section 209(i)(d) of the Companies Act, 1956. xiv) The Company is generally regular in depositing Provident Fund and Pension Fund dues. xv) No undisputed amounts of Income Tax, Wealth Tax, Sales Tax,Customs Duty were outstanding as on 31.03.99 for more than months from the date they become payable. xvi) No Personal expenses have been charged to revenue except those payable under contractual obligations or in accordance generally accepted business practices. xvii) The Company is not a Sick Industrial Undertaking within the meaning of clause (O) of Sub-Section (i) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. xviii) No provisions of any special statute is applicable to this Company. For J. GUPTA & CO. Chartered Accountants S. P. DUTTA Partner Place: 12, Waterloo Street, Calcutta-700 069. Dated : the 23rd day of August,1999.