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ARTECH POWER PRODUCTS LIMITED
ANNUAL REPORT 1998-99
AUDITORS' REPORT
To
THE MEMBERS
ARTECH POWER PRODUCTS LIMITED
"ANITHA", 1ST FLOOR
ELAMKULAM, COCHIN - 20.
We have examined the attached Balance Sheet of -M/S. ARTECH POWER PRODUCTS
LIMITED as at 31st March, 1999 and the Profit and Loss Account for the year
ended on that date annexed thereto and report that:
1. We have obtained all the information and explanations which1 to the best
of our knowledge and belief were necessary for the purpose of our audit,
except the information on dues to small seals Units, the completeness and
accuracy of which could not be verified by us.
2. In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of the books.
3. The Balance Sheet and the Profit and Loss Account dealt with by this
report are in agreement with the books of account.
4. The Profit & Loss Account and the Balance Sheet dealt with by this
report comply with the Accounting Standards referred to in Sub-section (3C)
of Section 211 of the Companies Act, 1956.
5. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts, subject to note No.6 regarding
MODVAT credit claimed by the company amounting to Rs.8,90,778.00, resulting
in the understatement of gross fixed assets to that extent and depreciation
and loss for the year to the extent of Rs.42,3 11.00 and accumulated
depreciation by Rs.84,622.00, non-provision of leave encashment which has
not been quantified, preparation of financial o statements on going concern
basis inspite of substantial losses and institutional overdues and subject
to the information referred to in Note No.2 with respect to receipt of
commission by a relative of I director of the company from an overseas
supplier of components, on account of which fraud involving top management
have not yet been categorically established, give the information required
by the Companies Act, 1956, in the manner so required and give a true and
fair view;
i. in the case of Balance Sheet, of the state of affairs of the company as
at 31st March, 1999 and
ii. in the ease of Profit and Loss Account, of the loss for the year ended
on that date.
In terms of Manufacturing and Other Companies (Auditor's Report) Order
1988, issued by the Company Law Board, Government of India, under section
227 (4A) of the Companies Act, 1956, we further report, on the matters
specified in paragraphs 4 and 5 of the said Order that :-
1. The company has maintained records which requires to be updated, showing
particulars including quantitative details and situation of its fixed
assets. The fixed assets have been physically verified by the management
during the year. We are informed that on serious discrepancies have been
noticed by the management on such verification.
2. None of the fixed assets have been revalued during the year.
3. The management has carried out physical verification in respect of
stocks during the year and in our opinion, the frequency of such
verification is reasonable.
4. In our opinion, the procedure of verification of stocks followed by the
company is reasonable and adequate, having regard to the size of the
company and the nature of its business.
5. In our opinion and According to the explanations given to us, the
discrepancies noticed on verification between the book stocks and physical
stocks were not material.
6. On the basis of our examination of the stock records, we are of the
opinion that the valuation of stocks is fair and proper in accordance with
the normally accepted accounting principles and is on the same basis, as in
the preceding year.
7. According to the records of the Company, the company has taken certain
loans from its directors. In our opinion the terms and conditions of such
loans are not, prima facie prejudicial to the interests of the company.
There are no other companies under the same management
8. As explained to us the Company has not granted any loans to companies,
firms or other parties listed in the register maintained under Section 301
of the Companies Act, 1956. There are no other companies under the same
management.
9. Loans or advances in the nature of loan have not been given by the
Company.
10. 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.
11. As per the information available and explanations given to us, the
company has not made any transactions of purchase and sale goods, materials
and services in pursuance of contracts or arrangements which are to be
entered in the register maintained under section 301 of the Companies Act,
1956 and aggregating to Rs.50,000 or more during the the year in respect of
each party.
12. As explained to us unserviceable or damaged stores, raw materials and
finished goods are determined by the company during the year in a
systematic manner and in our opinion, adequate provision for loss has been
made in the accounts.
13. The company has not fully complied with the provisions of Section 58A
of The Companies Act, 1956 in respect of the public deposits.
14. In our opinion reasonable records have been maintained for recording
the generation and sale of scrap during the year.
15. The company does not have an internal audit system.
16. To the best of our knowledge the Central Government has not prescribed
maintenance of cost records under Section 209(1)(d) of the Companies Act,
1956 for the products of the Company.
17. There has been some delays in remitting the dues under The Employees
Provident Fund Act. The Employees' State Insurance Act does not apply to
the company.
18. According to the information and explanation given to us there are no
undisputed amounts payable on respect of Income Tax, Wealth Tax Sales Tax
Customs Duty and Excise Duty which are outstanding as on 31st March, 1999,
for a period of more than six months from the date they became payable,
except an amount of Rs.43,075.00 being tax deducted at source under The
Income Tax Act, 1961.
19. According to the records of the company and as per the information and
explanation given to us,no personal expenses have been charged to the
Revenue Accounts other than those payable under contractual obligations the
generally accepted business practice.
20 . According to the records of the Company, the Company is not a Sick
Industrial company within the meaning of clauses (o) of sub- section (1) of
Section 3 of the Sick Industrial Companies Special Provisions) Act, 1985.
21. In respect of the trading activities of the company, we are informed
that there were no damaged goods requiring a provision in the accounts,
eventhough there are some non moving items in stock.
For G.JOSEPH & ASSOCIATES
CHARTERED ACCOUNTANTS
Sd/-
Place : COCHIN - 16 GEORGE JOSEPH
Date : 07/08/1999 PARTNER
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