Gem Cables and Conductors Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2013

We have audited the accompanying Financial statements of GEM CABLES & CONDUCTORS LIMITED Hyderabad which comprise the Balance Sheet as at March 31st, 2013, and the statement of Profit and Loss, and a summary of significant accounting policies and other explanatory information contained in the notes to financial statements.

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, and financial performance of the company in accordance with the accounting principles generally accepted in India, including accounting standards referred to in sub section (3C) of section 211 of Companies Act, 1956 ("Act"). This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards on auditing issued by The Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosers in financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of company''s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

1 As required by the Companies (Auditors Reports ) Order, 2003, issued by the Central Government in terms of section 227(4-A) of Companies Act,1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order;

2 Further to our comments in the Annexure referred to in paragraph 1 above, and we express our inability to express an opinion the following, viz.:

a) Sundry Debtors and Sundry Creditors, Loans and advances are subject to confirmation and reconciliation.

b) Though the Depreciation is provided on the cost of equipment procured with IDBI equipment finance, no depreciation is provided on the amounts capitalized after 01-01-1998 and also on the amount of materials utilized for trial / test production of the H.V. Cables and transferred to Capital work - in - progress.

c) The Raw Material is valued at average cost, stores and spares are valued at cost and finished stocks are valued at Company''s list price / purchase order price. The cost formulas used by the company for determining the cost of inventories is in conformity to the norms prescribed under accounting standard-2 issued by the Institute of Chartered Accountants of India.

d) Bank balances and Loan from Industrial Development Bank are subject to reconciliation and confirmation.

e) In the absence of adequate information, the value of raw material and closing stock is considered on the basis of values/ amounts given and certified by the management. The closing stock of Rs. 154.29 Lacs is not physically verified by us.

f) No provision is made for the penal interest, if any payable on the unpaid amounts of PF, to the respective authorities.

g) In the absence of any details, we are unable to express an opinion about the correctness of the Contingent liabilities of Rs 623.27 lakhs, as to the nature and the amount.

h) The capital work in progress under fixed assets deserves suitable adjustment/write off in the books of accouts.

I) The company has become a sick industrial company with in the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 and intimation to that effect was made to BIFR in the year 2003 during which 50% of the net worth of the company was eroded

3. As required by section 227(3) of the Act, 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 purpose of our audit. .

b) In our opinion proper books of accounts as required by Law have been kept by the Company so far as appears from our examinations of those books.

c) The Balance Sheet and statement of Profit & Loss dealt with by this report are in agreement with books of account.

d) In our opinion, the Balance Sheet and Statement of Profit & Loss comply with the accounting standards referred to in Subsection (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representation received from the Directors, os on March 31a, 2013 and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on March 31th, 2013 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

4. Subject to above qualifications and disclaimers. In our opinion and to the best of our information and according to the explanation given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2013.

b. In the case of the statement of Profit & Loss, of the Loss of the Company for the year ended on 31th March,2013

ANNEXURE TO AUDITORS REPORT

(Referred to in Paragraph 1 of our Report of even date)

1. a. The Fixed Assets register is being updated.

b. It is explained to us that the physical verification of most of the fixed assets has been done by the management during the year under audit and no discrepancies were noticed on such verification.

c. As per the information made available for us there are no disposals of fixed assets during the period covered under audit.

2. In respect of inventories:

a. In our opinion and according to the explanations given to us, the physical verification of stores, spares and Raw Materials was conducted by the Management, at reasonable intervals during the year.

b. The Company has a reasonable system of physical verification of inventories which in our opinion is reasonable having regard to the size of the company.

c. The Company has to improve the maintenance of records of inventories. As explained to us there were no material discrepancies noticed on physical verification of inventory as compared to the books of records.

3. The Company has neither granted nor taken any loans, secured or unsecured to I from companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956. Hence the sub-clause (b), (c) and (d) of clause 3 of the Companies (Auditors Report) Order, 2005 are Not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures, commensurate with the size and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods. In our opinion and according to the information and explanations given to us there has been no continuing failure to correct major weaknesses in internal control during the year.

5. The Company has not entered into any transactions exceeding Rs. Five lakhs in respect of any party mentioned in the Register maintained under section 301 of the Companies act, 1956 during the period under audit.

(a) In view of the above, clause V (b) of the paragraph 4 of the Companies (Auditors Report) order 2005 is not applicable to the company for the current year.

6. The Company did not accept any deposits from the public within the meaning of section 58-Aand 58 AA of the Companies Act, 1956.

7. The Company has an internal audit system which is in our opinion is commeasure with the size of the company and nature of its business. During the year no internal audit has been conducted.

8. The Company, according to the information and explanations given to us, is not required to maintain the accounts and records prescribed by the Central Government under section 209(1) (d) of the Companies, Act, 1956.

9. The company is a sick company and has been registered for a period of not less than 5 years. The company''s financial accumulated losses at the end of the financial year exceeds 100% of its net worth and the company has incurred a cash loss during this year.

10. According to the information and explanations given to us, there were no undisputed Income Tax, Custom duty and Excise duty, as at last day of the accounting period. According to the information and explanations given to us there are no disputed statutory dues outstanding as at 31-03-2013.

11 The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The Company is not a chit fund, Nidhi or Mutual benefit fund/society.

13. As per the information and explanations made available to us, the company has not defaulted in repayment of dues to banks or financial institutions.

14. In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. All long-term investments have been held by the company in its own name.

15. In our opinion and according to the information and explanation given to us, the company has not given any guarantee for the loans taken by others from bank or financial institutions. . .

16. The Company has not taken any term loans during the period under audit.

17. According to the information and explanations given to us, during the period under audit, the company has not applied any short term borrowings for long term use and vice versa.

18. No debentures have been issued by the company during the year.

19. The company has not raised money during the year by way of public issue.

20. The Company has not made any preferential allotments of shares during the period.

21. To the best of our knowledge 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 JBRK & CO

Chartered Accountants

Firm Reg, No.05775S

Sd/-

P Jitendra Kumar.

Partner

Membership No: 22109

Place: Hyderabad

Date: 30th August, 2013.

---

Mar 31, 2012

We have audited the accompanying Financial statements of GEM CABLES & CONDUCTORS LIMITED Hyderabad which comprise the Balance Sheet as at March 31,2012, and the statement of Profit and Loss, and a summary of significant accounting policies and other explanatory information contained in the notes to financial statements.

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, and financial performance of the company in accordance with the accounting principles generally accepted in India, including accounting standards referred to in sub section (3C) of section 211 of Companies Act, 1956 ("Act"). This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards on auditing issued by The Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about {he amounts and disclosers in financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of company''s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

1 As required by the Companies (Auditors Reports ) Order, 2003, issued by the Central Government in terms of section 227(4-A) of Companies Act,1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order;

2 Further to our comments in the Annexure referred to in paragraph 1 above, and we express our inability to express an opinion the following, viz.:

a) Sundry Debtors and Sundry Creditors, Loans and advances are subject to confirmation and reconciliation.

b) Though the Depreciation is provided on the cost of equipment procured with IDBI equipment finance, no depreciation is provided on the amounts capitalized after 01-01-1998 and also on the amount of materials utilized for trial / test production of the H.V. Cables and transferred to Capital work - in - progress.

c) The Raw Material is v.aiusd at average cost, stores and spares are valued at cost and finished stocKs are valued at Company''s list price I purchase order price. The cost formulas used by the company for determining the cost of inventories is in conformity to the norms prescribed under accounting standard-2 issued by the Institute of Chartered Accountants of India.

d) Bank balances and Loan from Industrial Development Bank are subject to reconciliation and confirmation.

e) In the absence of adequate information, the value of raw material and closing stock is considered on the basis of values/ amounts given and certified by the management. The closing stock of Rs. 532.69 Lacs is not physically verified by us.

f) No provision is made for the penal interest, if any payable on the unpaid amounts of PF, ESI, Professional tax dues to the respective authorities.

g) In the absence of any details, we are unable to express an opinion about the correctness of the Contingent liabilities of Rs 623.27 lakhs, as to the nature and the amount.

h) The company has become a sick industrial company with in the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 and intimation to that effect was made to BIFR in the year 2003 during which 50% of the net worth of the company was eroded

3. As required by section 227(3) of the Act, 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 purpose of audit.

b) In our opinion proper books of accounts as required by Law have been kept by the Company so far as appears from our examinations of those books.

c) The Balance Sheet and Profit & Loss dealt with by this report are in agreement with books of account.

d) In our opinion, the Balance Sheet and Statement of Profit & Loss comply with the accounting standards referred to in Subsection (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representation received from the Directors, os on March 31, 2012 and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on March 31,2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

4. In our opinion and to the best of our information and according to the explanation given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

b. In the case of Profit & Loss Account, of the Loss of the Company for the period ended on 31 stMarch, 2012

ANNEXURE TO AUDITORS REPORT

(Referred to in Paragraph 1 of our Report of even date)

1. a. The FixedAssets register is being updated.

b. It is explained to us that the physical verification of most of the fixed assets has been done by the management during the year under audit and no discrepancies were noticed on such verification.

c. As per the information made available for us there are no disposals of fixed assets during the period covered under audit.

2. In respect of inventories;

a. In our opinion and according to the explanations given to us, the physical verification of stores, spares and Raw Materials was conducted by the Management, at reasonable intervals during the year.

b. The Company has a reasonable system of physical verification of inventories which in our opinion is reasonable having regard to the size of the company.

c. The Company has to improve the maintenance of records of inventories. As explained to us there were no material discrepancies noticed on physical verification of inventory as compared to the books of records.

3. The Company has neither granted nor taken any loans, secured or unsecured to I from companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956. Hence the sub-clause (b), (c) and (d) of clause 3 of the Companies (Auditors Report) Order, 2005 are Not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures, commensurate with the size and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods. In our opinion and according to the information and explanations given to us there has been no continuing failure to correct major weaknesses in internal control during the year.

5. The Company has not entered into any transactions exceeding Rs.Five lakhs in respect of any party mentioned in the Register maintained under section 301 of the Companies act, 1956 during the period under audit.

(a) In view of the above, clause 5 (b) of the paragraph 4 of the Companies (Auditors Report) order 2005 is not applicable to the company for the current year.

6. The Company did not accept any deposits from the public within the meaning of section 58-Aand 58 AAof the Companies Act, 1956.

7. The Company has an internal audit system which is in our opinion is commensure with the size of the company and nature of its business. During the year no internal audit has been conducted.

8. The Company, according to the information and explanations given to us, is not required to maintain the accounts and records prescribed by the Central Government under section 209(1) (d) of the Companies, Act, 1956.

9. The company is a sick company and has been registered for a period of not less than 5 years. The company''s financial accumulated losses at the end of the financial year exceeds 100% of its net worth and the company has incurred a cash loss during this year.

10. According to the information and explanations given to us, there were no undisputed Income Tax, Custom duty and Excise duty, as at last day of the accounting period. According to the information and explanations given to us there are no disputed statutory dues outstanding as at 31 -03-2012.

11 The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The Company is not a chit fund, Nidhi or Mutual benefit fund/society.

13. As per the information and explanations made available to us, the company has not defaulted in repayment of dues to banks or financial institutions.

14. In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. All long-term investments have been held by the company in its own name.

15. In our opinion and according to the information and explanation given to us, the company has not given any guarantee for the loans taken by others from bank or financial institutions.

16. The Company has not taken any term loans during the period under audit.

17. According to the information and explanations given to us, during the period under audit, the company has not applied any short term borrowings for long term use and vice versa.

18. No debentures have been issued by the company during the year.

19. The company has not raised money during the year byway of public issue.

20. The Company has not made any preferential allotments of shares during the period.

21. To the best of our knowledge 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 JBRK & CO

Chartered Accountants

Firm Reg, No.05775S

Sd/-

P Jitendra Kumar.

Partner

Membership No: 22109

Place: Hyderabad

Date: 25th August, 2012.

---

Mar 31, 2011

We have audited the Balance sheet of Gem Cables & Conductors Limited as at 31.03.2011 and also the annexed the Profit & Loss Account and the Cash flow statement for the year ended on the 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.

We conducted our audit in accordance with 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 misstatements. 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

1 As required by the Companies ( Auditors Reports ) Order, 2003, issued by the Central Government in terms of section 227(4-A) of Companies Act,1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order;

2 Further to our comments in the Annexure referred to in paragraph 1 above, and the following, viz.:

a) Sundry Debtors and Sundry Creditors, Loans and advances are subject to confirmation and reconciliation.

b) Though the Depreciation is provided on the cost of equipment procured with IDBI equipment finance, no depreciation is provided on the amounts capitalized after 01-01-1998 and also on the amount of materials utilized for trial / test production of the H.V. Cables and transferred to Capital work – in – progress.

c) The Raw Material is valued at average cost, stores and spares are valued at cost and finished stocks are valued at Company's list price / purchase order price. The cost formulas used by the company for determining the cost of inventories is in conformity to the norms prescribed under accounting standard-2 issued by the Institute of Chartered Accountants of India.

d) Bank balances and Loan from Industrial Development Bank are subject to reconciliation and confirmation.

e) In the absence of adequate information, the value of raw material and closing stock is considered on the basis of values/ amounts given and certified by the management. The closing stock of Rs. 156.56 Lacs is not physically verified by us.

f). No provision is made for the penal interest, if any payable on the unpaid amounts of PF, ESI, Professional tax dues to the respective authorities.

g). In the absence of any details, we are unable to express an opinion about the correctness of the Contingent liabilities of Rs 623.27 lakhs, as to the nature and the amount.

h). The company has become a sick industrial company with in the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 and intimation to that effect was made to BIFR in the year 2003 during which 50% of the net worth of the company was eroded

i). Company's management decided to treat items dealt under schedule Q of Financial Statements (Extraordinary and prior year Items) on which, no evidence other than management opinion is available.

3. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of audit.

4. On the basis of written representations received from the Directors as on 31st March 2011, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms of Clause (g) of sub section (I) of Sec.274 of the Companies Act, 1956.

5. In our opinion proper books of accounts as required by Law have been kept by the Company in so far as appears from our examinations of such books.

6. The Balance Sheet and Profit & Loss Account as required by Law have been kept by the Company in so far as appears from our examination of such books.

7. Save otherwise stated hereinabove, in our opinion, these accounts comply with the Mandatory Accounting Standards issued by the ICAI and as referred to in Section 211(3C) of the Companies Act,1956.

8. Subject to observations in para 2, In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & Loss account read together with the notes thereon give the information required by the Companies Act, 1956, in the manner so required by the Companies Act,1956 and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

b. In the case of Profit & Loss Account, of the Loss of the Company for the period ended 31st March, 2011; and

c. In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

(Referred to in Paragraph 1 of our Report of even date)

1. a. The Fixed Assets register is being updated.

b. It is explained to us that the physical verification of most of the fixed assets has been done by the management during the year under audit and no discrepancies were noticed on such verification.

c. As per the information made available for us there are no disposals of fixed assets during the period covered under audit.

2. In respect of inventories:

d. In our opinion and according to the explanations given to us, the physical verification of stores, spares and Raw Materials was conducted by the Management, at reasonable intervals during the year.

e. The Company has a reasonable system of physical verification of inventories which in our opinion is reasonable having regard to the size of the company.

f. The Company has to improve the maintenance of records of inventories. As explained to us there were no material discrepancies noticed on physical verification of inventory as compared to the books of records.

3. The Company has neither granted nor 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. Hence the sub-clause (b), (c) and (d) of clause 3 of the Companies (Auditors Report) Order, 2005 are Not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures, commensurate with the size and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods. In our opinion and according to the information and explanations given to us there has been no continuing failure to correct major weaknesses in internal control during the year.

5. The Company has not entered into any transactions exceeding Rs .Five lakhs in respect of any party mentioned in the Register maintained under section 301 of the Companies act, 1956 during the period under audit.

(b) In view of the above, clause 5 (b) of the paragraph 4 of the Companies (Auditors Report) order 2005 is not applicable to the company for the current year.

6. The Company did not accept any deposits from the public within the meaning of section 58-A and 58 AA of the Companies Act, 1956.

7. The Company has an internal audit system which is in our opinion is commeasure with the size of the company and nature of its business. During the year no internal audit has been conducted.

8. The Company, according to the information and explanations given to us, is not required to maintain the accounts and records prescribed by the Central Government under section 209(1) (d) of the Companies, Act, 1956.

9. The company is a sick company and has been registered for a period of not less than 5 years. The company's financial accumulated losses at the end of the financial year exceeds 100% of its net worth and the company has incurred a cash loss during this year.

10. According to the information and explanations given to us, there were no undisputed Income Tax, Custom duty and Excise duty, as at last day of the accounting period. According to the information and explanations given to us there are no disputed statutory dues outstanding as at 31-03-2011.

11 The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The Company is not a chit fund, Nidhi or Mutual benefit fund/society.

13. As per the information and explanations made available to us, the company has not defaulted in repayment of dues to banks or financial institutions.

14. In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. All long-term investments have been held by the company in its own name.

15. In our opinion and according to the information and explanation given to us, the company has not given any guarantee for the loans taken by others from bank or financial institutions.

16. The Company has not taken any term loans during the period under audit.

17. According to the information and explanations given to us, during the period under audit, the company has not applied any short term borrowings for long term use and vice versa.

18. No debentures have been issued by the company during the year.

19. The company has not raised money during the year by way of public issue.

20. The Company has not made any preferential allotments of shares during the period.

21. To the best of our knowledge 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 JBRK & CO Chartered Accountants

Firm Reg, No.05775S

P Jitendra Kumar. Partner Place: Hyderabad Membership No: 22109

Date: 25th August, 2011.

---

Mar 31, 2010

We have audited the Balance sheet of Gem Cables & Conductors Limited as at 31.03.2010 and also the annexed Profit & Loss Account forthe period ended on the date. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 misstatements. 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

1 As required by the Companies (Auditors Reports ) Order, 2003, issued by the Central Government in terms of section 227(4-A) of Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order;

2 Further to our comments in the Annexure referred to in paragraph 1 above, and the following, viz.:

a) Sundry Debtors and Sundry Creditors, Loans and advances are subject to confirmation and reconciliation.

b) Though the Depreciation is provided on the cost of equipment procured with IDBI equipment finance, no depreciation is provided on the amounts capitalized after 01-01-1998 and also on the amount of materials utilized for trial / test production of the H. V. Cables and transferred to Capital work - in - progress.

c) The Raw Material is valued at average cost, stores and spares are valued at cost and finished stocks are valued at Companys list price / purchase order price. The cost formulas used by the company for determining the cost of inventories is in conformity to the norms prescribed under accounting standard-2 issued by the Institute of Chartered Accountants of India.

d) Bank balances and Loan from Industrial Development Bank are subject to reconciliation and confirmation.

e) In the absence of adequate information, the value of raw material and closing stock is considered on the basis of values/ amounts given and certified by the management. The closing stock of Rs. 7.23 Lacs is not physically verified by us.

f). No provision is made for the penal interest, if any payable on the unpaid amounts of PF, ESI, Professional tax dues to the respective authorities.

g). In the absence of any details, we are unable to express an opinion about the correctness of the Contingent liabilities of Rs 623.27 lakhs, as to the nature and the amount.

h). The company has become a sick industrial company with in the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 and intimation to that effect was made to BIFR in the year 2003 during which 50% of the net worth of the company was eroded

i). Companys management decided to treat items dealt under schedule Q of Financial Statements (Extraordinary and prior year Items) on which, no evidence other than management opinion is available.

3. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of audit.

4. On the basis of written representations received from the Directors as on 31st March 2010, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director interms of Clause (g) of sub section (I) of Sec.274 of the Companies Act, 1956.

5. In our opinion proper books of accounts as required by Law have been kept by the Company in so far as appears from our examinations of such books.

6. The Balance Sheet and Profit & Loss Account as required by Law have been kept by the Company in so far as appears from our examination of such books.

7. Save otherwise stated hereinabove, in our opinion, these accounts comply with the Mandatory Accounting Standards issued by the ICAI and as referred to in Section 211(3C) of the Companies Act; 1956.

8. Subject to observations in para 2, In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & Loss account read together with the notes thereon give the information required by the Companies Act, 1956, in the manner so required by the Companies Act,1956 and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

b. In the case of Profit & Loss Account, of the Loss of the Company for the period ended 31st March, 2010; and

c. In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT (Referred to in Paragraph 1 of our Report of even date)

1. a. The Fixed Assets register is being updated.

b. It is explained to us that the physical verification of most of the fixed assets has been done by the management during the year under audit and no discrepancies were noticed on such verification.

c. As per the information made available for us there are no disposals of fixed assets during the period covered under audit.

2. In respect of inventories:

a. In our opinion and according to the explanations given to us, the physical verification of stores, spares and Raw Materials was conducted by the Management, at reasonable intervals during the year.

b. The Company has a reasonable system of physical verification of inventories which in our opinion is reasonable having regard to the size of the company.

c. The Company has to improve the maintenance of records of inventories. As explained to us there were no material discrepancies noticed on physical verification of inventory as compared to the books of records.

3. The Company has neither granted nor 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. Hence the sub-clause (b), (c) and (d) of clause 3 of the Companies (Auditors Report) Order, 2005 are Not applicable.

4. in our opinion and according to the information and explanations given to us, there are adequate internal control procedures, commensurate with the size and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods. In our opinion and according to the information and explanations given to us there has been no continuing failure to correct major weaknesses in internal control during the year.

5. (a) The Company has not entered into any transactions exceeding Rs.Five lakhs in respect of any party mentioned in the Register maintained under section 301 of the Companies act, 1956 during the period under audit.

(b) In view of the above, clause 5 (b) of the paragraph 4 of the Companies (Auditors Report) order 2005 is not applicable to the company for the current year.

6. The Company did not accept any deposits from the public within the meaning of section 58-Aof the Companies Act, 1956.

7. During the year no internal audit has been conducted.

8. The Company, according to the information and explanations given to us, is not required to maintain the accounts and records prescribed by the Central Government under section 209(1) (d) of the Companies, Act, 1956.

9. The company is a sick company and has been registered for a period of not less than 5 years. The companys financial accumulated losses at the end of the financial year exceeds 100% of its net worth and the company has incurred a cash loss during this year.

10. According to the information and explanations given to us, there were no undisputed Income Tax, Custom duty and Excise duty, as at last day of the accounting period. According to the information and explanations given to us there are no disputed statutory dues outstanding as at 31-03-2010.

11 The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The Company is not a chit fund, Nidhi or Mutual benefit fund/society.

13. In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. All long-term investments have been held by the company in its own name.

14. In our opinion and according to the information and explanation given to us, the company has not given any guarantee for the loans taken by others from bank or financial institutions.

15. The Company has not taken any term loans during the period under audit.

16. According to the information and explanations given to us, during the period under audit, the company has not applied any short term borrowings for long term use and vice versa.

17. The Company has not made any preferential allotments of shares during the period.

18. To the best of our knowledge 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 JBRK & CO

Chartered Accountants

Firm Reg, No.5775S

Sd/-

P Jitendra Kumar.

Place: Hyderabad Partner

Date: 24th August, 2010. Membership No: 22109

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Mar 31, 2009

We have audited the Balance sheet of Gem Cables & Conductors Limited as at 31.03.2009 and also the annexed Profit & Loss Account for the period ended on the date. These financial statements are the responsibility of the companys management Our responsibility is to express an opinion on these financial statements based on our audit

We conducted our audit in accordance with 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 misstatements. 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 statements presentation. We believe that our audit provides a reasonable basis forouropinion.

1. As required by the Companies (Auditors Reports) Order, 2003, issued by the Central Government in terms of section 227(4-A) of Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order,

2 Furtrr to our comrrients in the Annexure referred to paragraph 1 above, and following, viz.:

a) Sundry Debtors and Sundry .Creditors, Loans and advances are subject to confirmation and reconciliation.

b) Though the Depreciation is provided on the cost of equipment procured with IDBI equipment finance, no depreciation is provided on the amounts capitalized after 01 -01 -1998 and also on the amount of materials utilized for trial / test production of the H.V. Cables and transferred to Capital work - in - progress.

c) The Raw Material is valued at average cost, stores and spares are valued at cost and finished stocks are valued at Companys list price / purchase order price. The cost formulas used by the company for determining the cost of inventories is in conformity to the norms prescribed under accounting standard-2 issued by the Institute of CharteredAccountants of India.

d) Bank balances and Loan from Industrial Development Bank are subject to reconciliation and confirmation.

e) In the absence of adequate information, the value of raw material and closing stock is considered on the basis of values/ amounts given and certified by the management. The closing stock of Rs. 6.66 Lacs is not physically verified by us.

f) No provision is made for the penal interest, if any payable on the unpaid amounts of PF, ESI, Professional tax dues to the respective authorities.

g) In the absence of any details, we are unable to express an opinion about the correctness of the Contingent liabilities of Rs 623.27 lakhs, as to the nature and the amount.

3. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of audit.

4. On the basis of written representations received from the Directors as on 31" March 2009, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31" March, 2009 from being appointed as a Director in terms of Clause (g) of sub section (I) of Sec.274 of the Companies Act, 1956.

5. In our opinion proper books of accounts as required by Law have been kept by the Company in so far as appears from ourexaminations of such books.

6. The Balance Sheet and Profit & Loss Account as required by Law have been kept by the Company in so far as appears from our examination of such books.

7. Save otherwise stated here in above, in our opinion, these accounts comply with the Mandatory Accounting Standards issued by the ICAI and as referred to in Section 211(3C) of the Companies Act,1956.

8. Subject to observations in para 2, In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit & Loss account read together with the notes thereon give the information required by the Companies Act, 1956, in the manner so required by the Companies Act, 1956 and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of Balance Sheet, of the state of affairs of the Company as at 31 "March, 2009;

b. In the case of Profit & Loss Account, of the Loss of the Company forlhe period ended 31" March, 2009; and

c. In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT (Referred to in Paragraph 1 of our Report of even date)

1. a. The Fixed Assets register is being updated.

b. It is explained to us that the physical verification of most of the fixed assets has been done by the management during the year under audit and no discrepancies were noticed on such verification.

c. As per the information made available for us there are some disposals of fixed assets during the period covered under audit.

2. In respect of inventories:

a. In our opinion and according to the explanations given to us, the physical verification of stores, spares and Raw Materials was conducted by the Management, at reasonable intervals during the year.

b. The Company has a reasonable system of physical verification of inventories which in our opinion is reasonable having regard to the size of the company.

c. The Company has to improve the maintenance of records of inventories. As explained to us there were no material discrepancies noticed on physical verification of inventory as compared to the books of records.

3. The Company has neither granted nor 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. Hence the sub-clause (b), (c) and (d) of clause 3 of the Companies (Auditors Report) Order, 2005 are Not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures, commensurate with the size and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods. In our opinion and according to the information and explanations given to us there has been no continuing failure to correct major weaknesses in internal control during the year.

5. (a) The Company has not entered into any transactions exceeding Rs.Five lakhs in respect of any party mentioned in the Register maintained under section 301 of the Companies act, 1956 during the period under audit.

(b) In view of the above, clause 5 (b) of the paragraph 4 of the Companies (Auditors Report) order, 2005 is not applicable to the company for the current year.

6. The Company did not accept any deposits from the public within the meaning of section 58-A of the CompaniesAct, 1956.

7. During the year no internal audit has been conducted.

8. The Company, according to the information and explanations given to us, is not required to maintain the accounts and records prescribed by the Central Government under section 209(1)(d)oftheCompanies,Act, 1956.

10. According to the information and explanations given to us, there were no undisputed Income Tax, Custom duty and Excise duty, as at last day of the accounting period. According to the information and explanations given to us there are no disputed statutory dues outstanding as at 31-03-2009.

11. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The Company is not a chit fund, Nidhi or Mutual benefit fund/society.

13. In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments. All long-term investments have been held by the company in its own name.

14. In our opinion and according to the information and explanation given to us, the company has notgiven any guaranteeforthe loans taken by others from bankorfinancial institutions.

15. The Company has not taken any term loans during the period under audit.

16. According to the information and explanations given to us, during the period under audit, the company has not applied any short term borrowings for long term use and vice versa.

17. The Company has not made any preferential allotments of shares during the period.

18. To the best of our knowledge 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 JBRK & CO

Chartered Accountants

P Jitendra Kumar

Partner

Date: 28.8.2009. Membership No: 22109

Place: Hyderabad.