Punjab Fibres Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2009

We have audited the attached Balance Sheet of PUNJAB FIBRES LIMITED as at 31st March, 2009 and also the Profit & Loss Account & the 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.

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 misstatement. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors' Report) Order, 2003 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in Annexure a statement on the matters specified in paragraph 4 & 5 of the said order.

2. Further to our comments in the Annexure referred to above, we state 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 such books;

iii) The Balance Sheet and the Profit & Loss Account referred to in this report are in agreement with the books of accounts;

iv) In our opinion, the Balance Sheet and the Profit & Loss Account as dealt with by this report, comply with the Accounting Standards referred to in Section 211 (3C) of Companies Act, 1956.

v) On the basis of the written representations from the Directors, taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2009 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, the said accounts read together with Significant Accounting Policies as per Schedule of Notes on Accounts and forming part of Balance Sheet and subject to paras of Annexure to the Auditors' Report and Note No. 2 (v) regarding demand for excise duty, 2 (vi) regarding demand raised by the Regional Provident Fund Commissioner, 2(ix) (a) to (e) regarding demand raised by Sales Tax Department, Noida/Greater Noida, 2(x) regarding Employees' State Insurance dues, 2 (xi) Provident Fund, Noida, 2(xii) (a) regarding demand raised by Punjab State Electricity Board, Ropar of electriicity charges, 2 (xv) (a) to (d) regarding demand of central excise, Note No. 3(iv) (a) to (c), 3 (v) and 3 (vi) (a) and (b) for not providing interest on Term Loans, Cash Credit limits & Interest Free Loans, Unsecure Loans from Promoters, Provident Fund dues and Employees' State Insurance dues, Note No. 4 regarding purchase tax, Note No. 5 regarding Central Excise, Note No. 6 regarding Revaluation of Fixed Assets, Note No. 7(ii) regarding decree granted by the Court against the Company and in favour of Banwari Lal Suresh Kumar, Note No. 8(ii) regarding demand raised by Sales Tax Department remaining unpaid and 8(iv) payment of excise duty under protest and Note No. 9 regarding balance confirmation from suppliers, customers and others and Note No. 16 regarding Non-Disclosure as required under MSMED Act, 2006 as per Schedule 17 of Notes to the Accounts give the information required by the Companies Act, 1956 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, 2009;

b) in the case of Profit and Loss Account of the loss of the Company for the year ended on that date; and

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

Annexure to the Auditors' Report

Referred to in Paragraph 1 of our report of even date:

1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. All the assets have not been verified by the management during the year but there is a regular verification which, in our opinion, is reasonable regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification.

2. Physical verification of stocks has been conducted at reasonable intervals by the management. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business. The company is maintaining proper records of the inventory. No material discrepancies were noticed on physical verification dealt within the books of accounts.

3. According to the information and explanations given to us, no loans have been taken from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and from the companies under the same management. As such provisions of this paragraph are not applicable.

4. There is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

5. There are no transactions that need to be entered into a register in pursuance of section 301 of the Act as per information given to us.

6. The company has not accepted any deposit from the public.

7. The Company has an internal audit system commensurate with its size and nature of its business.

8. The Company has maintained cost records as required to maintain under Section 209(1) (d) of the Companies Act, 1956 as per the order made by the Central Government.

9. The Company is not depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Sales Tax, Excise Duty, Cess and any other statutory dues with the appropriate authorities. The details of the demands/claims disputed by the company at various levels are as per details given below:-

In Respect of Amount (Rs.) Forum

Central Excise 1,1 7,13,520.00 This amount is inclusive Appeal against company pending of penalties. in High Court of Delhi.

Excise Duty 21,53,094.00 This amount is inclusive Appeal of Commissioner Central of penalties. Excise pending in Supreme Court of India.

Excise Duty 6,48,964.80 This amount is inclusive Appeal of Commissioner Central of penalties. Excise pending in Supreme Court of India.

Central Excise 2,87,19,513.12 Demands raised by the Appeals pending before the Central department Excise authorities.

Provident Fund 30,71,259.00 Demand pertains to Case pending in the Allahabad High infancy period. Court.

Provident Fund 76,13,776.00 Employees' & Employer's Cases pending in the Sessions Court share at Nawan Shahar, Punjab.

Sales Tax 1,43,28,817.00 Demands raised by the Appeals pending before the Sales department Tax authorities.

The arrear amount of Employees' State Insurance dues and Provident Fund, Sales Tax, Cess on Sales and Excise Duty which are not in dispute as on 31st March, 2009 are as under:-

Provident Fund & ESI Rs. 158.40 lacs

Excise Duty Rs. 28.97 lacs

Sales Tax Rs. 21.91 lacs

Cess on Sales Rs. 9.64 lacs

10. The company has been registered for a period of more than five years having existing Share Capital of Rs.320.72 lacs and its accumulated losses at the end of the financial year amounted to Rs.4,440.49 lacs. The company has incurred cash losses in the year under review but there were no such losses during the immediate preceding financial year.

11. The company has defaulted in repayment of dues to the Financial Institutions and Banks and there are no debenture holders. The defaulted amount can not be ascertained because the company is not repaying any interest or principal for last number of years. However, the company's proposal for rehabilitation is under consideration. The following are the details of loans of Financial Institutions and Banks:

Institution/Bank Amount (Rs.)

IFCI 8,34,92,506/-

KMBL 38,34,250/-

IDBI 1,31,94,820/-

Interest accrued and due up to 31.12.1998 1,26,85,033/-

(No provision for interest has been made after that)

Cash Credit from Banks 16,11,60,450/-

Interest accrued and due up to 31.03.1999 21,05,599/-

(No provision for interest has been made after that)

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

13. The company is not a Chit Fund company.

14. The company is not running any Nidhi/Mutual Benefit Fund/Society.

15. The company is not a Financing company.

16. The company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

17. The Term Loans were applied for the purpose for which the loans were obtained, as per the information available from the records of the company.

18. The funds raised by the company on short-term basis have not been used for long-term investment nor the funds raised on long term basis have been used for short term investment, as it appears from the examination of the records of the company.

19. The company has not made any Preferential Allotment of shares to the parties and companies covered in the register maintained under Section 301 of the Companies Act.

20. The company has not issued any Debentures to the public.

21. The company has not raised any money by Public Issue during the year.

22. No fraud on or by the company has been noticed or reported during the year.

FOR S.C. DEWAN & CO.,

Chartered Accountants

Sd/-

(S.C. DEWAN)

Partner

M. No.015678

New Delhi

August 22, 2009

---

Mar 31, 2008

We have audited the attached Balance Sheet of PUNJAB FIBRES LIMITED as at 31st March, 2008 and also the Profit & Loss Account & the 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.

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 misstatement. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors' Report) Order, 2003 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in Annexure A, a statement on the matters specified in paragraph 4 & 5 of the said order.

2. Further to our comments in the Annexure referred to above, we state 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 such books;

iii) The Balance Sheet and the Profit & Loss Account referred to in this report are in agreement with the books of accounts;

iv) In our opinion, the Balance Sheet and the Profit & Loss Account as dealt with by this report, comply with the Accounting Standards referred to in Section 211(3C) of Companies Act, 1956.

v) On the basis of the written representations from the Directors as on 31.03.2008, taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2008 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, the said accounts read together with Significant Accounting Policies as per Schedule of Notes on Accounts and forming part of Balance Sheet and subject to paras of Annexure to the Auditors ' Report and Note No. 2 (v) regarding demand for excise duty, 2 (vi) regarding demand raised by the Regional Provident Fund Commissioner, 2(ix) (a) to (e) regarding demand raised by Sales Tax Department, Noida/Greater Noida, 2(x) regarding Employees' State Inusrance dues, 2 (xi) Provident Fund, Noida, 2(xii) (a) regarding demand raised by Punjab State Electricity Board, Ropar of electriicity charges, 2 (xv) (a) to (d) regarding demand of central excise, Note No. 3(iv) (a) to (c), 3 (v) and 3 (vi) (a) and (b) for not providing interest on Term Loans, Cash Credit limits & Interest Free Loans, Unsecure Loans from Promoters, Provident Fund dues and Employees' State Insurance dues, Note No. 4 regarding purchase tax, Note No. 5 regarding Central Excise, Note No. 6 regarding Revaluation of Fixed Assets, Note No. 7(ii) regarding decree granted by the Court against the Company and in favour of Banwari Lal Suresh Kumar, Note No. 8(ii) regarding demand raised by Sales

Tax Department remaining unpaid and 8(iv) payment of excise duty under protest and Note No. 10 regarding balance confirmation from suppliers, customers and others and Note No. 18 regarding Non-Disclosure as required under MSMED Act, 2006 as per Schedule 17 of Notes to the Accounts give the information required by the Companies Act, 1956 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, 2008;

b) in the case of Profit and Loss Account of the loss of the Company for the year ended on that date; and

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

Annexure to the Auditors' Report

Referred to in Paragraph 1 of our report of even date:

1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. All the assets have not been verified by the management during the year but there is a regular verification which, in our opinion, is reasonable regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification.

2. Physical verification of stocks has been conducted at reasonable intervals by the management. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business. The company is maintaining proper records of the inventory. No material discrepancies were noticed on physical verification dealt within the books of accounts.

3. According to the information and explanations given to us, no loans have been taken from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and from the companies under the same management. As such provisions of this paragraph are not applicable.

4. There is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

5. There are no transactions that need to be entered into a register in pursuance of section 301 of the Act as per information given to us.

6. The company has not accepted any deposit from the public.

7. The Company has an internal audit system commensurate with its size and nature of its business.

8. The Company has maintained cost records as required to maintain under Section 209(1)(d) of the Companies Act, 1956 as per the order made by the Central Government.

9. The Company is not depositing undisputed statutory dues including Provident Fund, Employees ' State Insurance, Sales Tax, Excise Duty, Cess and any other statutory dues with the appropriate authorities. The details of the demands/claims disputed by the company at various levels are as per details given below:-

In Respect of Amount (Rs.) Forum

Central Excise 1,17,13,520.00 This amount is inclusive Appeal against company pending of penalties. in High Court of Delhi.

Excise Duty 21,53,094.00 This amount is inclusive Appeal of Commissioner Central of penalties. Excise pending in Supreme Court of India.

Excise Duty 6,48,964.80 This amount is inclusive Appeal of Commissioner Central of penalties. Excise pending in Supreme Court of India.

Central Excise 2,87,19,513.12 Demands raised by the Appeals pending before the Central department Excise authorities.

Provident Fund 30,71,259.00 Demand pertains to Case pending in the Allahabad High infancy period. Court.

Provident Fund 76,13,776.00 Employees' & Employer's Cases pending in the Distt. Courts share at Balachaur, Punjab.

Sales Tax 1,43,28,817.00 Demands raised by the Appeals pending before the Sales department Tax authorities.

The arrear amount of Employees' State Insurance dues and Provident Fund, Sales Tax, Cess on Sales and Excise Duty which are not in dispute as on 31st March, 2008 are as under:-

Provident Fund & ESI Rs.158.40 lacs

Excise Duty Rs. 28.97 lacs

Sales Tax Rs. 21.91 lacs

Cess on Sales Rs. 9.64 lacs

10. The company has been registered for a period of more than five years having existing Share Capital of Rs.320.72 lacs and its accumulated losses at the end of the financial year amounted to Rs.4,353.68 lacs. The company has not incurred cash losses in the year under review as well as during the immediate preceding financial year.

11. The company has defaulted in repayment of dues to the Financial Institutions and Banks and there are no debenture holders. The defaulted amount can not be ascertained because the company is not repaying any interest or principal for last number of years. However, the company's proposal for rehabilitation is under consideration. The following are the details of loans of Financial Institutions and Banks:

Institution/Bank Amount (Rs.)

IFCI 8,34,92,506/-

KMBL 38,34,250/-

IDBI 1,31,94,820/-

Interest accrued and due up to 31.12.1998 1,26,85,033/-

(No provision for interest has been made after that)

Cash Credit from Banks 16,11,60,450/-

Interest accrued and due up to 31.03.1999 21,05,599/-

(No provision for interest has been made after that)

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

13. The company is not a Chit Fund company.

14. The company is not running any Nidhi/Mutual Benefit Fund/Society.

15. The company is not a Financing company.

16. The company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

17. The Term Loans were applied for the purpose for which the loans were obtained, as per the information available from the records of the company.

18. The funds raised by the company on short-term basis have not been used for long-term investment nor the funds raised on long term basis have been used for short term investment, as it appears from the examination of the records of the company.

19. The company has not made any Preferential Allotment of shares to the parties and companies covered in the register maintained under Section 301 of the Companies Act.

20. The company has not issued any Debentures to the public.

21. The company has not raised any money by Public Issue during the year.

22. No fraud on or by the company has been noticed or reported during the year.

FOR S.C. DEWAN & CO.,

Chartered Accountants

(S.C. DEWAN)

Partner

M. No.015678

New Delhi

August 27, 2008