SOUTHERN SHELTERS LIMITED
ANNUAL REPORT 2001-2002
THE MEMBERS OF THE
SOUTHERN SHELTERS LIMITED
We have audited the attached Balance Sheet of SOUTHERN SHELTERS LIMITED, as
at 31st March 2002 and also the Profit and Loss Account for the year ended
on that date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examing, on basis,
evidence supporting the amounts and disclosure in the financial statements.
An audit also includes the assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statements presentation. We believe that our audit provides a
reasonable basis for our opinion.
1. As required by the Manufacturing and Other Companies (Auditor's Report)
Order, 1988 issued by the Central Government of India in terms of sub-
section (4A) of Section 227 of the Companies Act, 1956, we enclose in the
Annexure 2 a statement in the matters specified in paragraphs 4 and 5 of
2. Further to our comments in the Annexure referred to above, we report
(i) We have obtain all the information and explanations, which to the best
of our knowledge and belief were 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 so far as appears from our examination of those books.
(iii) The Balance Sheet and Profit and Loss account dealt with by this
report are in agreement with the books of account.
(iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt
with by this report comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956 except the non
Compliance of AS 22 regarding "Accounting of Taxes on Income " order note
No. A(14) of Schedule "M".
(v) On the basis of written representation received from the directors, as
on 31st March 2002 and taken on record by the Board of directors, we report
that none of the director is disqualified as on 31st March 2002 from being
appointed as a director in terms of clause (g) of sub-Section 274 of the
Companies act, 1956;
(vi) In our opinion and to the best of our information and according to the
explanation given to us, the Balance Sheet and Profit & Loss Account read
together with notes thereon and subject to Note No.A(2) of schedule "M"
regarding with non provision of Interest on Unsecured Loan, Note No.A(6)(a)
of Schedule "M" regarding non reconciliation of the Unclaimed dividend
account, Note NO.A(7) of Schedule "M" regarding postponement of charging of
relevant Miscellaneous Expenditure, Note No.A(8) of Schedule "M" regarding
non compliance with the P.F Act and ESI act and non creation of Gratuity
Fund, Note No.A(9) of Schedule "M" regarding Non accounting of certain
items of Expenditure on accrual basis, and Note No.B(1) of Schedule "M"
regarding the Non confirmation of balances, give the information required
by the Companies Act, 1956, in the manner so required and give a true and
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2002; and
(b) In the case of the Profit and Loss Account, of the Profit for the year
ended on that.
FOR KRISHNAN & SEKARAN
CHENNAI V. RADHAKRISHNAN
ANNEXURE TO AUDITORS' REPORT
1. The Company is maintaining proper records showing full particulars of
fixed assets including quantitative details and situation of fixed assets.
As informed to us, the fixed assets have been physically verified by the
Management and no discrepancies have been noticed on such verification.
2. None of the fixed assets have been revalued during the period.
3. Raw Materials stores were physically verified by the management during
the year and the frequency of physical verification of stocks followed by
the management is reasonable and adequate in relation to the size of the
company and the nature of its business. The discrepancies between the
physical stocks and the book stocks, which were not significant, have been
properly dealt with in the accounts.
4. In our opinion, the valuation of stocks of stores and raw materials is
fair and proper and is in accordance with the normally accepted accounting
5. The company has taken unsecured loan from Mr. R. Rajasankar, Director
(closing balance as on 31.03.2002, Rs.8,72,628/- and the maximum
outstanding balance during the year Rs.11,26,092/- for which no interest
has been provided.
6. The company has not granted any Secured or Unsecured loan during the
7. The company has given loans or advances in the nature of loans to its
employees and other parties and they are repaying the principal amounts as
stipulated and are also regular in the payment of interest where
8. In our opinion, and according to the information and explanations given
to us, there is adequate internal control procedure commensurate with the
size of the company and the nature of its business for purchase of stores,
raw materials, plant & machinery equipments and other assets and for sale
9. As far as we have been able to ascertain and according to the
information and explanations given to us, the transaction of purchase of
goods and materials and sale of goods, materials and service 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 the prevailing market prices
for such goods and services or the prices at which transactions for similar
goods, materials or services have been made with other parties.
10. As explained to us, the company has regular procedure for the
determination of unserviceable or damaged stores, raw materials and
necessary adjustments for the losses have been made in the accounts.
11. The company has not accepted any Fixed Deposits from the public during
12. According to the information and explanations given to us the company's
operations do not generate scrap or by-products.
13. In our opinion and according to the information provided to us, the
company has an adequate internal audit system commensurate with the size
and nature of its business.
14. We are informed that the Central Government has not prescribed the
maintenance of cost records under Section 209(1) (d) of the Companies Act,
15. The provisions of Provident Fund and Employees State Insurance Act are
yet to be complied with by the company.
16. According to the information and explanations given to us, there are no
undisputed amounts payable in respect of Income-tax, Wealth-tax, Customs
Duty and Excise Duty which have remained outstanding as at 31st March 2002
for a period of more than Six months from the date on which they became
payable. Sales tax liability was outstanding for the year 1993-94 to 1996-
97 consequent to the amendment in the T.N.G.S.T Act pending determination
17. As per 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.
18. The company is not a sick industrial company within the meaning of
Clause `O' of sub-section (1) of Section 3 of the sick industrial Companies
(Special Provisions) Act, 1985.
FOR KRISHNAN & SEKARAN
CHENNAI V. RADHAKRISHNAN