ANNUAL REPORT 1998-99
HINDUSTAN COTEX EXPORTS LIMITED
To The Members,
We have audited the attached Balance Sheet of M/s. HINDUSTAN COTEX EXPORTS
LIMITED as at 31st March,1999 and the Profit & Loss Account for the year
ended on that date annexed thereto 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(4A),of
the Companies act,1956 we enclose in the annexure a statement on the matter
specified in paragraph 4 & 5 of the said order.
2. Further to our comments in the annexure referred to in paragraph (1)
a) we have obtained all the information and explanation which to the best
of our knowledge and belief, were necessary for the purpose of our audit;
b) proper books of account, as required by law,have been kept by the
company, so far as appears from our examination of such books;
c) the Balance Sheet & Profit & Loss account,referred to in this report,are
in agreement with the books of account;
d) in our opinion,the Profit and Loss Account and the Balance Sheet comply
with the Accounting Standards reffered to in sub-section ( 3C ) of Section
211 of- the Companies Act,1956;
e) in our opinion and to the best of our information and according to the
explanations given to us,the said Balance Sheet and Profit &Loss Account
read together with notes thereon give the information required by the
Companies Act,1956 in the manner so required and give a true and fair
i. In so far as it relates to Balance Sheet,of the state of the affairs of
the Company as at 31st March,1999 and;
ii. In so far as it relates to the Profit & Loss Account,of the loss of the
Company for the year ended on that date.
For ARUN KARWA & COMPANY
Camp: AHMEDABAD (ARUN D. KARWA)
Dated: 23rd August,1999 Partner
ANNEXURE TO AUDITORS' REPORT (Referred to in paragraph(1) of our report of
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. The fixed
assets of the Company have been physically verified by the Management
during the year and no material discrepancy between the book records and
the physical verification were noticed.
2. The fixed assets of the Company have not been revalued during the year.
3. The stock of raw materials, stores, spare parts, finished & other goods
of the company have been physically verified by the management at
4. The procedure of physical verification,of stocks followed by the
management are reason- able and adequate in relation to the size of the
Company and the nature of its business.
5. The discrepancies noticed on verification of stocks as compared to books
records which in our opinion were not material have been properly dealt
with in the books of account.
6. In our opinion and on the basis of our examination, the valuation of the
stock is fair and proper and in accordance with the normally accepted
accounting principles and is on the same basis as in preceeding period.
7. The Company has not taken any loans,secured or unsecured from
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 within the meaning of Section 370(1-B)
of the Companies Act,1956.
8. The Company has not granted any loans secured or unsecured to Company,
firms or 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 within the meaning of Section 3701-B) of the Companies
9. Parties to whom loans and advances in the nature of loans have been
given are repaying the principal amount as stipulated and are also regular
in payment of interest where applicable.
10. In our opinion and according to the information and explanation 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 purchase
of plant and machinery,equipments and other assets and for the sale of
11. In our opinion and according to the information and explanations given
to us, the transaction of purchase of goods and materials or sale of
goods,material and services made in pursuance of contracts or arrangements
entered in the Register 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 service, or at prices, at which
transactions of similar goods have been made with other parties.
12. The company has not accepted any deposits from public during the year
within the purview of section 58A of the Companies Act, 1956 & the rules
13. As informed to us, the Company has regular procedure for determination
of unserviceable or damaged stores, raw materials and finished goods and
adequate provision has been made for the losses arising on the items so
determined in the accounts, if any.
14. In our opinion, reasonable record have been maintained by the Company
for the sale and disposal of scrap. As explained to us there are no by-
products of the Company.
15. In our opinion, the company has adequate internal audit system
commensurate with the size & nature of its business.
16. The Central Government has not prescribed for maintenance of cost
records under section 209(1)(d) of the Companies Act,1956 for the products
of the Company.
17. We are informed that Provident Fund Act is not applicable to the
Company during the year and hence the question of depositing the same
regularly does not arise.
18. There are no undisputed amounts payable in respect of Income tax,Sales
tax,Wealth tax,Custom duty and Excise duty as at 31st March, 1999 which are
outstanding for a period of more than six months from the date they become
19. In our opinion and according to the information and explanations given
to us no personal expenses of employees and Directors (Other than those
payable in accordance with terms of service conditions of employees or in
accordance with generally accepted business practice) have been charged to
the revenue account.
20. The Company is not a sick industrial Company within the meaning of
clause(O) of sub section(l) of section 3 of the Sick Industrial
Companies(Special Provisions) Act,1985.
21. In respect of the Job activities of the Company;
(i) The Company has a reasonable system of recording receipts, issues and
consumption of material and stores commensurate with its size and nature of
(ii) The Company does not have any specific system of allocation of
material in respect of the processing activities carried at on "job work"
(iii) The Company does not have any specific system of allocating man-hours
utilised to the relative jobs; and
(iv) There is reasonable system of authorisation at proper levels and an
adequate system of internal control with the size of the Company and the
nature of its business on the issue of stores and allocation of stores and
labour to relative jobs.
For ARUN KARWA & COMPANY
Camp: AHMEDABAD (ARUN D. KARWA)
Date: 23rd August, 1999 Partner