We have audited the attached Balance Sheet of Powerloom Development & Export Promotion Council as at 31 st March, 2003 and also the Income and Expenditure Account for the year ended on that date annexed thereto. These Financial statements are the responsibility of the Council’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

Further we report that :

1. 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;>

2. In our opinion, proper books of account as required by law have been kept by the Council so far as appears from our examination of those books;

3. The Balance Sheet and Income and Expenditure Account dealt with by this report are in agreement with the books of account;

4. In our opinion, the Balance Sheet and Income and Expenditure Account dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except in respect of Accounting Standard AS – 15 ‘Accounting for Retirement Benefits in the Financial Statements of Employer’;

5. On the basis of written representations received from the members of the Committee of the Administration and taken on record by the Members of Committee of Administration and the information and explanations given to us, we report that the said Members of the Committee of Administration are not disqualified as at 31 st March, 2003 from being appointed as members of the Committee of Administration in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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6. This report has to be read with the Principal Accounting Policies and Notes to Accounts mentioned in Schedule ‘E’;

7. Attention is invited to the following;

   1. Note No.4, Schedule ‘E’ regarding non-provision for leave encashment;

   2. Note No.5, Schedule ‘E’ regarding payment towards Prime Minister’s National Relief Fund prohibited by the Memorandum of Association and Articles of Association of the Council;

   3. Note No.8, Schedule ‘E’ regarding payment of lease rentals made without renewal of agreements; and

   4. Note No.9, Schedule ‘E’ regarding management’s opinion on non-provision for deferred tax liability.

8. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to clause (iv) and (vii) hereabove, give the infor mation 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;

   1. In the case of the Balance Sheet, of the state of affairs of the Council as at 31 st March, 2003; and

   2. In the case of the Income and Expenditure Account, of the surplus for the year ended on that date.

The Manufacturing and other Companies (Auditors’ Report ) order, 1988 is not applicable to the Council, as it is licensed to operate under Section 25 of the Companies Act, 1956.

For J. K. DOSHI & CO.
Chartered Accountants.

( C. C. SAMPAT )
Par tner F6111