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ANNUAL REPORT 1998-99
BHARAT BERG LIMITED
AUDITOR'S REPORT
To,
The Shareholders of
BHARAT BERG LIMITED
We have audited the attache Balance Sheet of BHARAT BERG LIMITED for the
fifteen months ended on 30th June, 1999 and also the Annexed Profit & Loss
Account of the Company for the period ended on that date and report that:
1. As required by the manufacturing and other Companies (Auditor's Report)
order, 1988 issued by the Company Law Board in terms of Section 227 (4-A)
of the Companies Act, 1956, we annex hereto a statement on the matters
specified in paragraphs 4 and 5 of the said order.
2. Further to our comments in the Annexure referred to in paragraph (1)
above read with notes on accounts, we report that:
a) We have obtained all the information and explanations which to the best
of our knowledge and for the purposes of our audlt, subject to clause e(i)
and e(ii) below,
b) 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 books,
c) the Balance Sheet and the Profit & Loss Account dealt with by the report
are in agreement in the books of account.
d) in our opinion the Profit & Loss Account and the Balance Sheet when read
alongwith the appropriate disclosure in the notes to the accounts (Refer
Note.2) comply with the mandatory Accounting Standard referred to in sub
section
e) in our opinion and to the best of our information and according to the
explanations given to us, the said Balance Sheet and the the Profit &
Loss Account read together with notes thereon and subject to presentation
of accounts on the principles applicable to a going concern entity despite
erosion of net worth.
(i) Note No. 11 regarding non provision of Doubtful Debts of Rs. 157 lacs
the recoverability of which we are unable to comment upon.
(ii) Note No.9 & Note No. 10 regarding confirmation and reconciliation of
Financial Institution Account and Sundry Creditors, Debtors and claims
recoverable respectively give the information required 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
a 30th June,1999.
(ii) In the case of Profit & Loss A/c of the loss of the Company for the
fifteen months ended on 30 June, 1999.
For GHOSE KHANNA & Co.
Chartered Accountants
Rohit Kohli
partner
Date : 16.9.99
Place: Mumbai
ANNEXURE TO THE AUDITOR'S REPORT (Referred to in Paragraph 1 of Auditors
Report of even date)
1. The Company is maintaining proper records showing full particulars
including quantitative details and situation of fixed assets. All the fixed
assets have not been verified by the management during the period, but
according to the information and explanations given to us, there is a
regular programme of verification which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets. No
material discrepancies between the book records and the physical inventory
have been noticed in respect of the assets physically verified.
2.None of the fixed assets have been revalued during the period. The
realisable value of all Fixed Assets on the date of Balance Sheet in the
opinion of Management will not exceed Rs. 5 Crore. However the same has not
been considered in preparation of Balance Sheet.
3. Physical verification has been conducted by the management at reasonable
intervals in respect of finished goods, stores, spare parts and raw
materials.
4. In our opinion and according to the information and explanations given
to us, the procedures Ot physical verification of stocks followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
5. The discrepancies noticed on verification between the physical stocks
and book records were not material and have been properly dealt with the
books of account.
6. On the basis of our examination of stock records, we are of the opinion
that the valuation of stocks is fair and proper in accordance with normally
accepted accounting priniciples and is on the same basis as in the
preceeding year. Stocks and spares includes spares which are more than one
year old. These have been valued at cost based on assessment of value done
by the Manaement and no provision has been made for obsolete spares.
7. According to the information and explanations given to us, the Company
has not taken any loans from companies, firm or other parties listed in the
register maintained under Section 301 of the Companies Act, 1956. We are
informed that there are no companies under the same management as defined
under Companies Act, 1956.
8. According to the information and explanations given 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. We
are informed that there are no companies under the same Management as
defined under Companies Act, 1956.
9. In respect of loans and advances in the nature of loans given by the
Company, the parties are repaying principal amounts as stipulated and are
also regular in the payment of interest, wherever applicable.
10. In our opinion and according to the 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 purchases of stores,
raw materials including components, plant and machinery, equipment and
other assets and for the sale of goods.
11. In our opinion and according to the information and explanations given
to us, the transaction of purchase of goods and materials and sale of
goods, materials and services made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of the
Companies Act,1956 and aggregating during the year to Rs.50,000 or more in
respect of each party have been made at prices which are reasonable having
regard to prevailing market prices for such goods, materials or services or
the prices at which the transactions for similar goods, materials or
services have been made with other parties.
12. As explained to us, the Company has regular procedure for the
determination of unserviceable or damaged stores, raw materials and
finished goods. Though stocks of spares includes items which are more than
one year old, in the opinion of management these are serviceable and thus
no provision has been made for reduction in value.
13. In our opinion and according to the information and explanations given
to us, the Company has not accepted any deposits from the public as defined
in section 58A of Companies Act .1956 and the Companies (Acceptance of
Deposits) Rules 1975.
14. In our opinion, reasonable records have been maintained by the Company
for the sale and disposal of realisable scrap. The Company's operations do
not generate any by-products.
15.In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
16. We are informed that maintenance of cost records has not been
prescribed by the Central Government under Section 209(1) (d) of the
Companies Act, 1956, in respect of the Company's products.
17. According to the records of the Company, Provident Fund and Employees
State Insurance dues wherever applicable have been regularly deposited with
appropriate authorities except employer contribution for the period
April,1999 to June,1999 which was deposited in the month of September,1999.
18. According to the information and explanations given to us no undisputed
amounts payable in respect of Income Tax, Wealth Tax, Custom Duty and
Excise Duty were outstanding as on 30th June 1999 for a period of more than
six months from the date they became payable except Sales Tax Collection
amounting to Rs.117 lacs on sales effected in Uttar Pradesh. It is
explained by the Company that Sales Tax collection on sales effected in
Uttar Pradesh, has not been deposited in view of the recommendation of the
high power committee set up by Uttar Pradesh Government for further five
years Sales Tax Deferment.
19. According to the information and explanations given to us, no personal
expenses of employees or directors have been charged to revenue account,
other than those payable under contractual obligations or in accordance
with generally accepted business practice.
20. The Company is a Sick Industrial Company within the meaning of Clause
(o) of Section 3 (1) of the Sick Industrial Companies (Special Provisions)
Act,1985.
for GHOSE KHANNA & Co.
Chartered Accountants
(ROHIT KOHLI)
Partner
Place: Mumbai
Date: 16.9.99
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