Sandur Laminates Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2010

1. We have audited the attached Balance Sheet of SANDUR LAMINATES LIMITED ("the Company") as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. 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.

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

3. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, 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 purposes of our audit;

b) 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 those books;

c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) subject to our comments in paragraph 4(e) and 5 below, in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance

with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956;

e) (i) as stated in Note 1 of Schedule 10, the accounts have been prepared on a going concern basis. As at 31st March 2010, the Companys current liabilites exceeded its current assets by Rs. 2,558.89 lakhs and its accumulated losses net of shareholders fund is Rs. 849.83 lakhs. The Company has also been declared a sick Company by the Board for Industrial and Financial Reconstruction (BIFR). Although, the High Court of Karnataka to which reference was made by the BIFR for winding up of the Company had referred the matter back to the BIFR for arriving at a rehabilitation package for revival of the Company, the revival process has not yet been substantially completed. Under these circumstances, we are unable to form an opinion whether the going concern basis is an appropriate basis for the presentation of the accounts of the Company;

(ii) as stated in note 4 of Schedule 10, no provision has been made for interest of Rs. 3,649.42 lakhs, including Rs. 584.50 lakhs and Rs. 496.97 lakhs for the current year and previous year respectively, on advances from certain companies as a result of which the current liabilities and loss for the year are understated by such amounts respectively and

(iii) as stated in note 10 of schedule 10, the Company has not provided for impairment loss as required under Accounting Standard - 28 on "Impairment of Assets".

5. We further report that, without considering the items mentioned at 4(e)(i) and 4(e)(iii) above, the effect of which on the financial statements could not be determined, had the observation made by us in 4(e)(ii) above been considered, the loss for the year would have been Rs. 948.49 lakhs (as against the reported figure of Rs.363.99 lakhs), debit balance in the Profit and Loss Account would have been Rs. 7,117.98 lakhs (as against the reported figure of Rs.13,468.56 lakhs), and current liabilities would have been Rs. 6,510.19 lakhs (as against the reported figure of Rs. 2,860.77 lakhs).

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required, and in view of the significance of the matters referred to in paragraph 4(e)(i), 4(e)(ii) and 4(e)(iii) above, we are unable to express an opinion whether 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, 2010;

ii in the case of the Profit and Loss Account, of the loss for the year ended on that date; and

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

7. 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 in terms of Section 274 (1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Companys business/activities/result, clauses ii, vi, xi, xii, xiii, xiv, xv, xvi, xviii, xix and xx of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) The management has not physically verified the fixed assets during the year. In our opinion, the physical verification of fixed assets is not conducted at reasonable intervals.

(c) During the year, the Company has not disposed off any of the fixed assets.

(iii) 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.

(iv) In our opinion and according to the information and explanations given to us, there are no purchases of inventory and fixed assets and sale of goods and services during the year and accordingly the reporting on internal control system in respect of the clause (iv) is not applicable. During the course of our audit, we have not observed any continuing failure to correct major weaknesses, if any, in internal control.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us, there are no transactions that need to be entered in the Register.

(vi) No internal audit was carried out during the year.

(vii) To the best of our knowledge and according to the information and explanation given to us, the Central Government has not prescribed the maintenance of cost records for the products of the Company.

(viii)According to the information and explanations given to us in respect of statutory dues:

(a) There are no undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities, except for the property tax which is not paid.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable, except for the property tax which is not paid. The arrears as at 31st March, 2010 of such items outstanding for a period of more than six months from the date they became payable are given below:

Name of the Nature of Amount Period in Statue dues (Rs. Lakhs) which the Subsequent Statute

4.08 1996-02

0.73 2002-03

0.73 2003-04

Sandur Pattana Property 0.73 2004-05 Not Paid

Panchayat Tax 0.73 2005-06

0.73 2006-07

0.73 2007-08

0.73 2008-09

(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been

deposited as on 31st March, 2010 on account of disputes are given below: Period to Name of the Nature of Amount which the Forum where Statute dues (Rs.lakhs) amount dispute is pending relates The Central Excise duty 72.64 1998-00 Customs, Excise Excise and Service Tax Act, 1944 duty Appellate Tribunal

10.32 1999-00 Karnataka High Court

ix) The Company has accumulated losses exceeding fifty percent of its networth as at the year end and has incurred cash losses during the current financial year and has incurred cash losses in the immediately preceding financial year after considering the effect of qualification on the figure of loss for the year.

x) According to the information and explanations given to us and on an overall examination of the Balance Sheet we report that funds raised on short term basis have not been used during the year for long term investment.

xi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.



for A. F. Ferguson Associates Chartered Accountants (Registration No. 102849W)

H. L. Shah Partner (Membership No.33590)

Place: Mumbai Date : 1 September 2010