Pranavaditya Spinning Mills Ltd has informed that in the limited review report of the Company for the quarter ended September 30, 2007, the Auditors of the Company have made the following observations:
1. As stated in note no 3 to schedule no. 18, the Draft Rehabilitation Scheme (DRS) submitted by the Company to the Honble Board for Industrial and Financial Reconstruction (BIFR) has been approved by the order dtd. July 05, 2007 and the Company is in the process of giving effect to the said scheme. Pending full implementation of such order, the balance sheet under review does not take into account any ramification, financial or otherwise which may arise out of such arrangements and may have bearing on the financial health of the Company.
2. Attention is also invited to:
i. Note no. l(iii) in schedule no.18, relating to provision for depreciation on pro rata basis fair period of six months.
ii. Note no. 5 in schedule no as per which no provision has been made for leave encashment and gratuities payable. Such non-provision is not in conformity with the Accounting Standard - 15 (AS - 15) on Accounting for Retirement Benefits to Employees in the financial statements issued by ICAI. In absence of Actuarial valuation available with the Company, it is not possible to quantify the effect thereof on the loss for the period.
iii. Note no. 6 relating to non provision of impairment loss, if any, in accordance with Accounting Standard 28 (AS - 28) on impairment of Assets; and
iv. Note no. 7 relating to non provision for taxation.
1. As stated in note no 3 to schedule no. 18, the Draft Rehabilitation Scheme (DRS) submitted by the Company to the Honble Board for Industrial and Financial Reconstruction (BIFR) has been approved by the order dtd. July 05, 2007 and the Company is in the process of giving effect to the said scheme. Pending full implementation of such order, the balance sheet under review does not take into account any ramification, financial or otherwise which may arise out of such arrangements and may have bearing on the financial health of the Company.
2. Attention is also invited to:
i. Note no. l(iii) in schedule no.18, relating to provision for depreciation on pro rata basis fair period of six months.
ii. Note no. 5 in schedule no as per which no provision has been made for leave encashment and gratuities payable. Such non-provision is not in conformity with the Accounting Standard - 15 (AS - 15) on Accounting for Retirement Benefits to Employees in the financial statements issued by ICAI. In absence of Actuarial valuation available with the Company, it is not possible to quantify the effect thereof on the loss for the period.
iii. Note no. 6 relating to non provision of impairment loss, if any, in accordance with Accounting Standard 28 (AS - 28) on impairment of Assets; and
iv. Note no. 7 relating to non provision for taxation.
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