| 1. We have audited the attached Balance Sheet of Gujarat Perstorp
Electronics Limited as at 31st March, 2004, the Profit & Loss Account
and the Cash Flow Statement for the year ended on that date 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 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 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 issued
by the Central Government of India in terms of sub section (4A) of
Section 227 of the Companies Act, 1956, we enclose 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 & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, the Profit & Loss Account and
the Cash Flow Statement dealt with by this report, comply with the
Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956;
e. On the basis of written representations received from the directors
as on 31SI March 2004 and taken on record by the Board of Directors, we
report that none of the directors. is disqualified as on 31st March,
2004 from being appointed as a director in terms of clause (g) of
Sub-section (1) of Section 274 of the Companies Act, 1956. As regards
Government Nominee Directors, they are exempt from the provisions of
Section 274(1)(g) in view of the general circular issued by the
Department of Company Affairs.
f. Attention is invited to Note No. 1 in Schedule 18B regarding
accounts of the Company prepared on going concern basis.
Subject to the above, in our opinion and to the best of our information
and according to the explanations given to us, the said accounts read
with significant accounting policies and notes thereon 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:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2004;
(ii) in the case of the Profit & 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.
For C. C. Chokshi & Co.
Chartered Accountants
Gaurav. J. Shah
Place: Ahmedabad Partner
Date: May 22, 2004 Membership No. 35701
ANNEXURE TO THE AUDITORS REPORT
Referred to in paragraph 3 of our report of even date on the accounts
of Gujarat Perstorp Electronics Limited as at 31st March, 2004).
1 The nature of the Companys activities during the year is such that
the requirements of clause (viii), (xii), (xiii) and (xiv) of paragraph
4 of the Companies (Auditors Report) Order, 2003 are not applicable to
the Company.
2 (a) The Company has maintained proper records showing full
particulars including quantitative details and situations of fixed
assets.
(b) According to the information and explanations given to us, the
Company has a programme of physical verification of major fixed assets
which, in our opinion is reasonable having regard to the size of the
Company and the nature of its assets. We were informed that no material
discrepancies were noticed on such verification.
(c) The Company has not disposed off a substantial part of the fixed
assets during the year.
3 (a) The inventories have been physically verified during the year by
the management except for the stock seized by the Excise Authorities
and lying at the bonded warehouse. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of, physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of inventories
and no material discrepancies were noticed on physical verification
between the physical stocks and the book records.
4 (a) The Company has not granted any loans to companies, firms or
other parties covered in the Register maintained under section 301 of
the Companies Act, 1956. The Company had taken loan of Rs.3269.65 lacs
from a company covered in the register maintained under section 301 of
the Companies Act, 1956. There has not been any loan transaction with
the Company during the year and the outstanding balance as at the
beginning of the year has continued to be the same as at the end of the
year.
(b) In our opinion, the terms and conditions of the interest free loan
stated in 4(a) above are not, prima facie, prejudicial to the interest
of the Company.
(c) As per the directives of the BIFR, the Company is not required to
repay the above stated loan till net worth of the Company turns
positive.
(d) There is no overdue amount in respect of the above stated loan.
5 In our opinion, and according to the information and explanations
given to us, there are adequate internal control procedures
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. During the course of audit, we have not observed that
there are no material weaknesses hence, question of continuing failure
does not arise.
6 (a) According to the information and explanations given to us, there
are no transaction that need to be entered into the register maintained
under section 301 of the Companies Act, 1956.
(b) According to the information and explanations given to us, and as
stated in 6(a) above, there is no transaction that need to be entered
into the register maintained under section 301 of the Companies Act,
1956, and hence the question of reasonable prices in respect of such
transactions as regards to the prevailing market prices does not arise.
7 The Company has not accepted any deposits from the public.
8 In our opinion, internal audit carried out during the year by a firm
of Chartered Accountants appointed by the management, has been
commensurate with the size of the Company and the nature of its
business.
9 (a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance, income
tax, sales tax, wealth tax, custom duty, excise duty, cess and other
material statutory dues applicable to it.
(b) According to information and explanations given to us, there are no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty, excise duty and cess which were in arrears as at
31st March, 2004 for a period of more than six months from the date
they became payable.
(c) According to the information and explanations given to us, there is
a disputed demand of custom duty of Rs.555.85lacs, the matters is
pending with CEGAT.
10 The accumulated losses of the Company have exceeded fifty percent of
its net worth as at the end of the year. The Company has incurred cash
losses during the year and during the immediately preceding financial
year.
11 The Company has defaulted in repayment of installments of dues to
banks amounting to Rs.110.30 lacs for 31 months and debenture holders
amounting to Rs. 415.04 lacs for 31 months. The period of. default has
been calculated effective from the date on which the Rehabilitation
Scheme was approved by Gujarat High Court/BIFR.
12 According to the information and explanations given to us, the
Company has n6t given any guarantee for loans taken by others from
banks or financial institutions.
13 In our opinion and according to the information and explanations
given to us, term loans availed by the Company were applied by the
Company for the purposes for which the loans were obtained.
14 According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that
no funds raised on short-term basis have been used for long-term
investments. No long-term funds have been used to finance short-term
assets except permanent working capital.
15 During the year, the Company has not made any preferential allotment
of shares to parties and companies covered in register maintained under
Section 301 of the Companies Act, 1956.
16 According to the information and explanations given to us and the
records examined by us, securities have been created in respect of the
debentures issued.
17 During the year, the Company has not raised money by way of Public
Issue.
18 To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
For C. C. Chokshi & Co.
Chartered Accountants
Gaurav. J.Shah
Place: Ahmedabad Partner
Date: May 22, 2004 Membership No. 37501 |