aec enterprises ltd Auditors report

AEC ENTERPRISES LIMITED AUDITORS REPORT ANNEXURE TO AUDITORS REPORT Referred to in Paragraph 1 of our Report of even date. 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. We have been informed that these have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verifications. 2. None of the fixes assets have been revalued during the year. 3. The Physical verification of the finished goods, stores, spare parts and raw materials was conducted by the Management during the year. In our opinion the frequency of such verification is reasonable. 4. The procedure of physical verification of stocks followed by the management were found reasonable and adequate in relation to the size of the company and nature of its business. 5. We were informed that no material discrepancies were noticed on physical verification of stocks as compared to the books and records. The discrepancies notice have been properly dealt with in the books of accounts. 6. In our opinion, the valuation of stocks is fair and proper in accordance with normally accepted accounting principles and is on the same basis as in the preceding year. 7. According to the information and explanations given to us the company has not taken and secured or unsecured loan from companies and other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and/or from the company under the same management as defined under sub-section (IB) of Section 370 0f the Companies Act, 1956. 8. According to the information and explanations given to us the company has given unsecured interest free loans to the parties listed in the register maintained under Section 301 and 370 (IB)of the companies Act, 1956 and subject to note No 22 given in schedule 18 Notes to the Accounts terms and condition of such loans are Prima facie not prejudicial to the interest of the Company. 9. According to the information; and explanations given to us the company has given loans or advances in the nature of loans during the year and terms and condition of such loans are Prima facie not prejudicial to the interest of the Company. 10. In our opinion and according to the information and explanations given to us, internal control procedures with regard to purchase of stores, raw materials including components, plant & machinery, equipment other assets and for the sale of goods need to be strengthened having regard to the size of the Company and nature of its business . 11. According to the information and explanations given to us, the transactions of purchase of goods and materials and sales of goods, materials and services made in pursuance of contracts or arrangements falling under Section 301 of the Companies Act, 1956, and aggregating, during the period 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 of such goods, material or services at which transactions for similar goods or materials or services have been made with other parties . 12. As explained to us, the company has a regular procedure for the determination of unserviceable or damaged stores and raw materials. 13. According to information and explanations given to us, the company has not accepted any deposits from the public during the year as per the provisions of Section 58A of the Companies Act, 1956 and the Company (Acceptance of Deposits) Rule, 1975. 14. In our opinion, reasonable records have been maintained by the company for the sale and disposal of scraps. 15. In our opinion, the company has an adequate internal audit system commensurate with the size and nature of its business. 16. As explained to us, the maintenance of cost records, for the company has not been prescribed by the Central Government under Section 208(1) (d) of the companies Act, 1956. 17. According to the records of the Company, in general Provident Fund dues have been regularly deposited during the year with the appropriate authorities. As explained to us, the company is not covered under Employees State Insurance Scheme. 18. According to the information and explanations given to us, there were no undisputed amounts payable in respect of income tax, wealth tax, Sales tax, customs duty and excise duty, which have remained outstanding as at 30th June, 1998 for a period of more than six months from the date, they became payable other than Income Tax liability. 19. According to the information and explanations given to us and as per the records of the company examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with the generally accepted business practices. 20. 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. 21. In respect of service activities of the company: a) The Company has a reasonable system of recording receipts, issues and consumption of materials & stores and allocation of materials consumed to relative jobs, commensurate with its size and nature of its business. b) The Company has a reasonable system of allocating man hours utilised to the relative jobs, commensurate with its size and nature of its business. c) The Company has a reasonable system of authorisation at proper levels, however, system of internal control on issues of stores and allocation of stores and labour to jobs needs to be strengthened. 22. In respect of trading activities of the company, there were no significant damaged goods during the year. FOR V.V. KALE & CO. CHARTERED ACCOUNTANTS (VIJAY V. KALE) PARTNER PLACE: NEW DELHI DATE : 28.11.98 AUDITORS REPORT The Members of AEC Enterprises Limited We have audited the attached Balance Sheet of M/s AEC ENTERPRISES LIMITED as at 30th June, 1998 and the Profit & Loss Account of the Company for the period ended on that date annexed thereto and report that: 1. As required by 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 enclose in the Annnexure a statement on the matters specified in paragraphs 4 & 5 of the said order. 2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that: a) We have obtained all the information and explanations which to best of our knowledge and belief were necessary for the purpose of our audit. b) In our opinion, proper books of accounts, as required by law have been kept by the Company, so far as appears from our examinations of such books. c) The Balance Sheet and Profit & Loss Account referred to in this Report are in agreement with the books of accounts . d) In our opinion and to the best of our information and according to the explanation given to us, the said Balance Sheet and Profit & Loss Account, subject to Note No. 5,16,17 regarding non-provision of interest liability, gratuity liability & leave encashment respectively, Note No. 21 and 22 regarding non-provision for doubtful debtors and loans & advances respectively, Note No. 23 & 24 regarding treatment of deferred revenue expenditure, Note No.25 regarding treatment of lease rent and read together with the other notes given in Schedule 18 - Notes to Accounts, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair View - i) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 30th June, 1998 and ii) In so far as it relates to the Profit & Loss Account of the Loss of the Company for the period ended on that date. for V.V. KALE & CO. CHARTERED ACCOUNTANTS VIJAY V. KALE PARTNER Place: New Delhi Date : 28-11-98