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Pasupati Spinning and Weaving Mills Ltd.

BSE: 503092 | NSE: PASUPATSPG | Series: NA | ISIN: INE909B01020 | SECTOR: Textiles - Spinning - Synthetic Blended

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Jan 24, 16:00
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1,803
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1,374
715
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    26.60

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NSE Live

Dec 27, 11:22
11.00 0.00 (0.00%)
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1,100
  • Prev. Close

    11.00

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    -

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Pasupati Spinning and Weaving Mills is not listed on NSE

Annual Report

For Year :
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Auditor's Report

1. We have audited the attached Balance Sheet of M/s. PASUPATI SPINNING & WEAVING MILLS LIMITED as at 31st March, 2010 and also the Profit and 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 as amended by the Companies (Auditors Report) (Amendment) order, 2004, issued by the Central Government of India in terms of subsection (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 above, we report 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 the said books. iii. The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account. iv. In our opinion the Balance sheet, Profit & Loss Account and cash flow statement dealt with by this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956, subject to our observations in paragraph (vi) below. v As per information and explanations given to us, we report that as on 31.3.2010 none of the directors of the company are disqualified from being appointed as a director of the company under Section 274((1)(g) of the Companies Act, 1956. As the company has not redeemed its debentures on due dates and as the default continues for more than a year, all directors of the company are not qualified for being appointed as directors of any other public company in terms of provision of Section 274(1 )(g) of the Companies Act, 1956 as amended by the Companies Amendment Act, 2000. vi. Reference is drawn to: (a) Note No. 4 on Schedule 21 relating to accounts of the company for the year-ended 31.03.2010 having been prepared on the basis that the company is a going concern. (b) Note No. 5 on Schedule 21 relating to assignment of outstanding dues of IDBI/SASF in favour of JMFARC. As the terms and conditions of dues of JMFARC are yet to be finalized by BIFR, the accounts have been prepared as per terms and conditions agreed to with IDBI/SASF. The effect thereof on the loss for the year cannot be determined. (c) Note No. 6(g) on Schedule 21 relating to non-provision of interest on 14% and 15% redeemable partly convertible debentures amounting to Rs. 20339120 (including Rs. 18338237 for earlier years) resulting in the loss for the year before tax and secured loans to be lower by the said amount. (d) Note No. 9 on Schedule 21 relating to non provision of Debenture Redemption Reserve amounting to Rs. 1674150 which has no effect on the loss for the year before tax. (e) Note No. 23(iii) on Schedule 21 relating to payment of remuneration of Rs. 3090 to Shri S.K. Chhajer, Whole time director, for the period from 29.03.2010 to 31.03.2010 for which approval of Central Government is awaited resulting in the loss before tax for the year to be overstated and Cash & Bank Balance to be understated by the said amount. (f) We further report that had the observations made by us in paragraph vi(c) and vi(e) above been considered, the loss for the year before tax would have been Rs. 62396971 (as against the reported figure of Rs. 42060941), secured loans would have been Rs. 719147328 (as against the reported figure of Rs. 698808208) and cash & bank balance would have been Rs. 29093118 (as against the reported figure of Rs. 29090028). 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 together with other notes appearing in Schedule 21 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, 2010; and 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 cash flow statement, of the cash flow for the year ended on that date. ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE (i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) As explained to us, all the fixed assets have been physically verified by the management according to a regular program which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies with respect to book records were noticed on such verification. (c) In our opinion and according to explanations given to us, fixed assets disposed off during the year were not substantial and as such the disposal has not affected the going concern concept of the company. (ii) (a) As explained to us, physical verification of inventory (except material in transit and lying with third parties) has been conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable. (b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business. (c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. Discrepancies noticed on verification of inventory as compared to book records were not material and these have been properly dealt with in the books of accounts. (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 and hence paragraph (iii)(a) to (iii)(g) of the aforesaid order are not applicable to the company. (iv) 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 with regard to purchase of inventory and fixed assets and for the sale of goods and services. No major weakness in the internal control system was observed during the course of audit. (v) According to the information and explanations given to us, during the year there were no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraphs v (a) and (b) of the aforesaid order are not applicable. (vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from public as pep provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules 1975. No order has been passed by the Company Law Board or National Company law Tribunal or Reserve Bank of India or any court or any other Tribunal. (vii) In our opinion, the company has an internal audit system commensurate with the size and the nature of its business. (viii) We have broadly reviewed the books of account maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of such accounts and records. (ix) (a) According to the records of the company, the company is not regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it. According to information and explanations given to us the undisputed amounts outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable are as under: Name of the Statue Nature of dues Amount Period to which Rs. amount relates Sales Tax Haryana Sales Tax 110525 April 2009 to September 2009 Sales Tax Chennai Sales Tax 120461 March 2008 Sales Tax Haryana Demand 567396 2006-07 Sales Tax Mumbai Sales Tax 198277 August 2009 Central Excise Act Excise Duty 27555087 April 84 to Oct. 93 (b) According to the records of the company, dues in respect of Sales Tax/Income Taxi Customs Duty /Wealth Tax/Service Tax/Excise Duty /Cess which have not been deposited on account of any dispute are as under: Name of Nature of dues Amount Forum where pending the Statue Rs. Haryana Value VAT 4407602 Joint Excise & Taxation Added Tax Act Commissioner (x) As at 31.03.2010 the accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit. Cash loss was not incurred in the immediately preceding financial year. (xi) The company has defaulted in payment of dues to financial institutions, banks and debenture holders. Details as per company s books of accounts are as under: Name of Institu tion / Bank Nature of Dues Due Dates Remarks Principal Interest Rs. Rs. Debentures- 14% 2407547 21.12.1999 2427614 21.12.2000 432054 Since 30.09.1998 6769226 Since 01.04.2000 Not provided in Books of Accoun ts (Refer No te No. 6(g) in Schedule 21) Debentures- 15% 2894911 09.12.2000 2894911 09.12.2001 3256775 09.12.2002 1138090 Since 30.09.1998 13569894 Since 01.04.2000 Not provided in Books of Accou nts (Refer No te No. 6(g) in Schedule 21) Debentures- 19% 1666666 03.01.2000 1666667 03.01.2001 1666666 03.01.2002 48405390 Since 03.01.2000 Note : Does not include amount for which one time settlement (OTS) has been negotiated with the lenders and repayment of dues has been rescheduled and payments are being made as per reschedulement. (Refer Note No. 5(d) and 6 (d) on Schedule 21). The limits with banks were overdrawn for most of the year and were within limits for the remaining part of the year. The overdrawn limits as on 31.03.2010 are as under: Nature of Limit Name of the Bank Limit Balance as Excess Remarks per Banks (Rs. i n Lacs) (Rs. in Lacs) (Rs. in Lacs) Demand Loan Nainital Bank Limited 27.40 27.55 0.15 Borrowings State Bank of Travancore 82.20 83.05 0.85 in excess Canara Bank 98.00 98.04 0.04 of limit Bank of Baroda 136.00 137.39 1.39 Packing Credit Canara Bank 277.00 282.01 5.01 Cash Credit ING Vysya Bank Ltd. 6.05 6.07 0.02 Canara Bank 225.00 226.10 1.10 State Bank of Travancore 375.80 378.25 2.45 Nainital Bank Limited 75.60 75.61 0.01 Nature of Limit Name of the Bank Amount Due Remarks Overdue Date (Rs.) Bill Disc ounted/ State Bank of Patiala 3305946 15.03.2010 Payment pending on due date Purchased Bank of Baroda 952826 19.03.2010 -2180455 12.02.2010 2001527 19.03.2010 3501264 23.03.2010 2343440 23.03.2010 (xii) Based on our examination of documents and records maintained by the company, we are of the opinion that since the company has not granted any loan and advance on the basis of security by way of pledge of shares, debenture and other securities, it is not required to maintain records in respect thereof. (xiii) In our opinion the company is neither a chit fund nor nidhi / mutual benefit fund / society and hence paragraph 4 (xiii) of the aforesaid order is not applicable. (xiv) In our opinion the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly the provisions of paragraph 4(xiv) of the aforesaid order is not applicable. (xv) Based on our examination of the records we are of the opinion that the company has not given any guarantee for loans taken by others from banks or financial institutions. (xvi) In our opinion, term loans received during the year have been applied for the purpose for which they were obtained. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that during the year net long term investments of Rs. 1643370 has been made from funds raised on short term basis. (xviii) During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of Companies Act, 1956. (xix) During the year the company had not issued any debentures. The company has created security or charge in respect of debentures issued in earlier years. (xx) During the year under review no money was raised by public issue. (xxi) During the course of our examination of the books and records of the company, carried out in accordance with auditing standards generally accepted in India, we have not come across any instance of fraud by the company or on the company, noticed or reported during the year. We have also not been informed of any such case by the management. For B.K. SHROFF & CO., Chartered Accountants Firm Registration No. 302166E 3/7-B, Asaf Ali Road, New Delhi-110 002. O.P. SHORFF Dated : SEPTEMBER 04, 2010 Partner Membership No. 06329