We have audited the attached Balance Sheet of M/s. SIV INDUSTRIES
LIMITED, as .at 31st March, 2003 and also the Profit and Loss, Account
for the year ended on that date annexed thereto and the cash flow
statement for the year ended on that date. These financial statements
are the responsibility of the Company's management. Our responsibility
is to express an pinion on those financial statements leased on our
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 lest basis, evidences 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 overall financial statement
presentation. We believe I hat our audit provides a reasonable basis
lor our opinion.
As required by the Manufacturing and other Companies (Auditor's Report)
Order, 1988! issued by the Central Government of India in terms of
sub-'section 4(A) of Section 227 of the Companies Act, we enclose in
the Annexure a statement on the mailers specified in paragraphs 4 of
the said Order.
Further lo our comments in the Annexure referred to above,we' reporl
i) We have obtained all the information and explanation ions, which to
the host of our knowledge and belief were necessary for the purpose of
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
those books and proper returns adequate lor the purpose of our and it
have been received from the branches not visited by us.
iii) The Balance Sheet and Profit and Loss Account dealt willi by this
report are in agreement with the books of account;
iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt
will by this reporl comply with the accounting standards referred to in
sub-section (3c) of section 211 of the Companies Act, 1956
v) On the basis of written rcpresenlalions received from the directors,
as on 31 I st March 2003. and taken on record by the Board of
Directors, we report dial all the directors except the government and
nominee directors are disqualified as on .i 1 st March 2003 from being
appointed as a director in terms of clause(g) of sub-section Dot
section 2 74 of the Companies Act 1956,
vi) In our opinion and the best of our information and according to the
explanations given to us the said accounts give the information
required by the. Companies Act, 1959 in the manner so required and give
a true and lair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the Ba lance Sheet of the state of affairs of the
Company as at31 1st March, 2003; and
b) in the case of the Profit and Loss Account of the LOSS for the year
ended on that date.
c) in the case of cash flow statement, of the flows for the year ended
on that dale.
Without qualifying our opinion, the accounts of the Company as given in
Note No.13 of the Notes to the accounts havebeen prepared on the basis
that the Company is a going concern. However pending finalisation the
rehabilitation scheme to be filed will the Operating Agency and the
relevant directions from BIFR, we are unable to express any opinion
presently in this regard.
ANNEXURE-TO THE AUDITOR'S REPORT
1. The Company has maintained proper records to show full particulars
including quantitative details of its fixed assets. The fixed assets of
the Company have not been physically verified by the management during
the year. In the absence of verification of fixed assets we are unable
to comment on discrepancies or otherwise between the book records and
the physical inventory.
2. None of the fixed assets have been revalued during the year.
3. The stock-in-trade (including Raw-materials) and the stock of
stores and spare parts have not been physically verified by the
management during the year, hence we are unable to comment on
verification and adequacy of the procedures followed by the management.
In the absence of verification of stocks, we arc unable to comment on
discrepancies or otherwise between physical stocks and book stocks. In
our opinion, llio valuation of stock in trade and stores and spares
parts has boon fair and proper in accordance with the normally accepted
accounting principles and is on the same basis as in the earlier years.
4. In our opinion, the rate of interest and terms and conditions on
which loans secured or unsecured have been obtained from companies,
firms or other parties listed in the Register maintained under section
301 of the Companies Act, 1956 and/or the companies under the same
management as defined under section 3 70(1 -B) of the companies Act.
1956. wherever applicable are not prima facie prejudicial to the
interest of the Company.
5. The Company has not given any loans or advances in the nature of
loans to any parties (Including Employees).
6. In view of the suspension of operation during the year, wo are
unable to comment on the adequacy of Internal control procedures
relating to purchase of stores, raw-materials including components,
plant and machinery, equipment and other similar assets and also sale
of goods which commensurate with I he its size and nature of business.
7. In our opinion, the- transaction of purchase of goods and
materials, and sale of goods made in pursuance of contracts or
arrangements entered in the Register maintained under section 301 o(
the Companies Act, 1956, and aggregating during the year to Rs.50,000/-
or more in rcspect of each party were made at price which were
reasonable having regard to prevalent.. market prices for such goods
or materials or the prices at which transactions tor similar goods or
raw materials were made with other parties.
8. In view.of-susponsionofoperationsdurrngt.hc year, we are unable to
comment on the system of determining unserviceable or damaged stores,
raw-materials and finished goods. '
9. In our opinion and'according to the information and,explanation
given to us, the company has complied with) the provision of section
58-A of the Companies Act, 1956 and the rules framed there under.
1O. In view of the suspension of operations during the year, we unable
to comment on the adequacy of the records lor the sale and disposal of
realisable scrap/by - Products have been. maintained by company.
11. In our opinion, the companies internal audit system commensurate
with its size and nature of its business.
12. On the basis of the records produced, we are of the opinion that,
prima facie, the cost Records and accounts prescribed by the Central
government under scction 209(1 )(d) of the Companies Act, 1956 have
beem ,maintained by the Company However, we are not required to carry
out and have not carried out any detailed examination of such accounts
13 During (the year, company has remitted dues relating to Provident
fund and Employees State Insurance with (the appropriate authorities
with delays in respect of all months
14. There was no amounts outstanding as on 31 st March 2003 in respect
of undisputed Income - tax. Sales lax. Customs duty and Excise duty
which were due for more than Six months from the date they become
15. On the basis of examination of books, the vouchers produced to us
for our verification and examined by us on a test chock basis,
explanations given and representations made against oar inquires, and
checks and controls relating to authorizing expenditure re on the
biisis of contractual obligation with the employees/directors and
accepted business practices having regard to the company's need and
exgencies wo have not come across any expenses charged to revenue,
which, in our opinion and judgement and to the best of our knowlcdge
and belief, could be reported as personal expenses.
16. The Company is a Sick Industrial Company wilhin the meaning of
section 3(1) (0) of the Sick Industrial Company (Special Provisions)
Act, 1985 vide Registered No.71/2002.
For M.S JAGANNATHAN & VISVANATHAN,
PLACE : Mumbai Partner
DATE : 25.06.2003 CHARTERED ACCOUNTANTS, AUDITORS