CUTFAST ABRASIVE TOOLS LIMITED
We have audited the attached Balance Sheet of M/s. CUTFAST ABRASIVE TOOLS
LIMITED, as on 31st March, 1997 and the Profit and Loss Account for the
year ended on that date annexed thereto and report as follows:
In terms of the Manufacturing and other Companies (Auditors Report) Order,
1988 issued by the Company Law board in terms of Section 227 (4A) of the
Companies Act, 1956, we give below a statement of the manners specified in
paragraphs 4 and 5 of the aforesaid order.
i. The Company has maintained proper records to show full particulars
including quantitative details and situation of Fixed Assets. Most of the
Assets have been physically verified by the management during the year and
there is 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 serious discrepancies have been noticed on verification.
ii. None of the Fixed Assets has been revalued during the year.
iii. Physical verification of finished goods, stores, spare parts and raw
materials have been conducted at reasonable intervals during the year.
iv. The procedures of 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.
v. The discrepancies noticed on verification between the physical stocks
and the books records were not significant and the same have been properly
dealt with in the books of accounts.
vi. The valuation of the stocks is fair and proper in accordance with the
normally accepted accounting principles and the basis of valuation is the
same as in earlier years.
vii. In our opinion the rate of interest and the other terms and conditions
on which unsecured loans have been obtained from the persons listed in the
Register maintained under Section 301 of the Companies Act, 1956, are not
prima facie prejudicial to the interest of the Company. There are no loans
obtained from Companies under the same management.
viii. The Company has not granted any loans, secured on unsecured, to
Companies, firms or other parties listed in the Register maintained under
Section 301 of the Companies Act, 1956 and to Companies under the same
ix. In respect of loans and advances in the nature of loans given by the
Company, the parties have been repaying principal amounts and interest
thereon as stipulated.
x. There are adequate internal control procedures commensurate with the
size of the Company and the nature of its business for the purchase of
stores, raw materials including components, plant and machinery, equipment
and other machinery, equipment and other assets and for the sale of goods.
xi. In our opinion and according to information and explanations given to
us, the 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 or prices at which contracts for similar goods
have been made with other parties and also taking into account the nature
of such materials and the terms and availability of suppliers manufacturing
the materials required by the company.
xii. As explained ot us, the Company has a regular procedure for the
determination of unservicable. damaged stores and raw materials. Adequate
provision has been made in the accounts for the loss arising on the items
xiii. In respect of deposits accepted from the public the Company has
complied with the provisions of Section 58A of the Companies Act, 1956 and
the /rules made thereunder.
xiv. The Company has maintained reasonable records for the sale and
disposal of scrap. The Company has no by products.
xv. The Company has an internal audit system commensurate with the size
and the nature of its business.
xvi. Cost records have not been prescribed by the Central Government under
Section 209 (1) (d) of the Companies Act, 1956, in respect of items
manufactured by the Company.
xvii. The Company is regular in depositing Provident Fund and Employees
State Insurance dues with the appropriate authorities.
xviii. There are no undisputed amounts payable in respect of Income tax,
Wealth tax, Sales tax, Customs Duty & Excise Duty outstanding as at the
last day of financial year for a period of more than six months from the
date they become payable.
xix. We have not come across any personal expenses charged to revenue
account nor have we been informed of such cases by the management.
xx. The provisions of the Sick Industrial Companies (Special Provisions)
Act, 1985, are not applicable to the Company.
Further to the foregoing we report that:
i) We have obtained all the information and explanations which to the best
of our knowledge and belief are necessary for the purpose of our audit;
ii) In our opinion, proper books of accounts as required by law have been
kept by the Company in so far as it appears from our examination of such
iii) The Balance sheet and the Profit and Loss Account dealt with by this
Report are in agreement with the books of accounts.
iv) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts together with the Notes
attached thereto give the information required by the Companies, Act, 1956
in the manner so required and give a true and fair view:-
a) in the case of the Balance Sheet of the state of affairs of the Company
as at 31st March, 1997 and
b) in the case of the Profit and Loss Account of the Profit of the Company
for the year ended on that date.
for VIJAYARAGHAVAN & ASSOCIATES
Place : Chennai
Dated : 18th June, 1997.