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RAJINDER STEELS LIMITED
AUDITORS' REPORT
To
The Shareholders of
RAJINDER STEELS LIMITED
We have audited the attached Balance Sheet of Rajinder Steels Limited as at
30th June, 1997 and the Profit and Loss Account for the twelve months ended
on that date and report that :-
1. We have obtained all the information and explanations which, to the best
of our knowledge and belief, were necessary for the purpose of our audit.
2. In our opinion, proper books of accounts as required by law, have been
kept by the Company, so far as it appears from our examinations of such
books and proper returns adequate for the purpose of our audit have been
received from branches not visited by us.
3. The Balance Sheet and Profit and Loss account dealt with by the report
are in agreement with the books of the Company.
4. In our opinion and to the best of our information and according to the
explanations given to us the said statement of accounts 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 view:-
a) in the case of Balance Sheet of the state of affairs of the Company as
at 30th June, 1997
and
b) in the case of Profit and Loss Account, of the profit for the twelve
months ended on that date.
5. As required by the Manufacturing and Other Companies (Auditors' Report)
Order, 1988, issued by the Company Law Board under Section 227(4A) of the
Companies Act, 1956 and in terms of the information and explanations given
to us and on the basis of such checks as we considered appropriate, we
further report that :-
I. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. We are
informed that certain assets have been verified during the year and as
explained to us the Company has regular programme of verification of fixed
assets over a reasonable period of time. No major discrepancies were
noticed out of the assets verified during the year.
II. None of the assets have been revalued during the year.
III. The physical verification has been conducted by the Management at
reasonable intervals in respect of finished goods, stores, spare parts and
raw materials.
IV. The procedure of physical verification of stocks followed by the
management was found reasonable and adequate in relation to the size of the
Company and the nature of its business.
V. The discrepancies noticed on physical verification of stocks as compared
to book records were not material and the same have been properly dealt
with in the books of accounts.
Vl. In our opinion the valuation of stock is fair and proper in accordance
with the normally accepted accounting principles and is on the same basis
as in the preceding year.
Vll. The Company has not taken any loan, secured or unsecured from
companies, firms or other parties listed in the Register maintained u/s 301
of the Companies Act, 1956 and/or from the Companies under the same
management as defined under sub-section (1B) of Section 370 of the
Companies Act, 1956.
Vlll. The Company has not given any loans, secured or unsecured to
Companies, firms or other parties listed in the register maintained u/s 301
of the Companies Act, 1956 and/or to the companies under the same
management as defined under sub-section (1B) of Section 370 of the
Companies Act, 1956.
IX. The advances in the nature of loans to the employees and parties with
or without interest are being recovered as stipulated.
X. In our opinion, there is an adequate internal control procedure
commensurate with the size of the Company and nature of its business for
the purchase of stores, raw materials including components, plant and
machinery, equipment and other assets and for the sale of goods.
Xl. The transaction for purchase of goods and materials and sale of goods
and materials 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/- (Rupees Fifty Thousand) or
more, in respect of each party, have been made at prices for such goods and
materials on the prices at which transactions for similar items have been
made with other parties.
Xll. As explained to us, the Company has regular procedure for
determination of unserviceable or damaged stores, raw material and finished
goods. Adequate provision has been made in the accounts for loss arising on
the items so determined.
Xlll. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions to Section 58A of
the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975 with regard to the deposits accepted from the public.
XIV. In our opinion, the Company has maintained reasonable record for sale
and disposal of realisable by-products and scraps.
XV. In our opinion, the Company has an internal audit system commensurate
with the size and nature of its business.
XVI. On the basis of the records produced we are of the opinion that prima
facie the cost records and accounts prescribed by the Central Government
under Section 209 (1) (d) of the Companies Act, 1956 have been made and
maintained by the Company. However, we have not carried out any detailed
examination of such records and accounts.
XVll. The Company is generally regular in depositing ESI and Provident Fund
dues to appropriate authorities.
XVIII. According to the information and explanations given to us no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax,
Customs Duty and Excise Duty excepting certain TDS for a period of more
than six months from the date they became payable.
XIX. 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.
XX. The Company is not a sick industrial company within the meaning of
clause (o) of sub-section (1) of Section (3) of Sick Industrial Companies
(Special Provisions) Act, 1985.
XXI. In relation to trading activity of the Company, we have been explained
that there were no damaged goods during the year.
XXII. In respect of its service activities the company has a reasonable
system of recording receipts, issue and consumption of components and
stores commensurate with its size and nature of its business. The system
provides for a reasonable allocation of material to the relative jobs, but
it is not considered necessary by the management to allocate man hours
consumed to relative jobs, in our opinion there is a reasonable system for
authorisation at proper level and adequate system of internal control
commensurate with the size of the company and the nature of its business.
For KAMAL GUPTA ASSOCIATES
Chartered Accountants
KAMAL GUPTA
Partner
Place: Mumbai
Date : 1st December, 1997.
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