bathina technologies india ltd Auditors report

BATHINA TECHNOLOGIES (INDIA) LIMITED ANNUAL REPORT 2003-2004 AUDITORS REPORT To The Shareholders M/s Bathina Technologies (India) Limited, Hyderabad. We have audited the attached Balance Sheet of M/s Batbina Technologies (India) Limited as at 31st March 2004 and the Profit and Loss Account along with notes to accounts for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys 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 results are free of material misstatement. An Audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement preparation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we attach here to our report on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we 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 account as required by law have been kept by the company so far as it appears from our examination of the books; 3. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts. 4. In our opinion, the Balance sheet and Profit a Loss Account dealt with by this Report have be drawn up in accordance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956. 5. On the basis of the written representation from directors, taken on record by the Board of Dire q none of the Directors is disqualified as on 31st March 2004 from being appointed as a director under section 274(1)(g) of the Companies Act, 1956. A. In our opinion, Debtors are not being realize though the debts have become overdue. Hence, the Company is required to make pro vision for Rs 29,22,66,062 towards irrecoverable and doubtful debts. B. The Company is required to make a provision for loans and advances that are irrecoverable to a tune of Rs 17,00,000. C. In our opinion, capital work in progress of Rs. 2,34,40,460 does not have a realizable value and deserves to be considered at NIL value. D. Share Warrants Forfeited for value of R 45,83,710 should not have been credited Profit and Loss Account. 6. Subject to above, in our opinion and to the best our information and according to the explanation given to us, the said accounts read together with the schedules and other notes thereon, give the information required by the Companies Act, 1956 in the manner prescribed and give a true and fair view in conformity with the accounting principles general accepted in India : A. In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2004. B. In the case of Profit & Loss Account, of the Profit for the year ended 31st March 2004. For JBRK & Co. Chartered Accountants (P. JITENDRA KUMAR) Partner Place : Hyderabad Date : 4 August 2C04 ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE As required by the Companies (Audit Report) Order, 1988 issued under Section 227 (4A) of the Companies Act, 195&, we further report that: i) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. Fixed assets have not been verified by the management during the year. ii) According to the information and explanations given to us, the company has not disposed off substantial part of fixed assets during the year. iii) Company did not have inventory at the year-end hence physical verification was not carried out. iv) In our opinion, the Company has not granted any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under section 301 of the companies act, 1956 and from the Companies under the same management as defined U/s 370(1B) of the Companies Act 1956. The company has taken interest free unsecured demand loans from directors to tune of Rs 1,77,69,017. v) In our opinion, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of Plant and Machinery, Equipment and other assets and for the sale of products. vi) In our opinion and according to the information and explanation given to us, the company has not accepted any deposits from the public to which the provisions of section 58A and 58AA of the Companies Act, 1956, and the rules framed thereunder are applicable. vii) The Company is presently managing the internal audit through Audit Committee, which requires appointment of a separate agency. viii) In our opinion, the maintenance of cost records as prescribed by the Central government U/s 209(1)(d) of the Companies Act, 1956, is not applicable to the company, as such no accounts and records have been made and maintained. ix) The Company is irregular during the year in depositing Provident Fund and Employees State Insurance dues with the appropriate authorities and the amount payable as on the date of our report is Rs. 2,50,202. x) There are no undisputed amounts payable in respect of Wealth Tax, Customs duty and excise duty except income Tax and sales Tax were outstanding as at 31st March 2004, for a period of more Than six months from the date they became payable. The Income Tax liability in respect of Dividend Tax of Rs 16,53,247/-, Income Tax of Rs. 26,90,406/- and Sales, Tax liability of Rs 4,76,903/- is due by the company. xi) The company has not defaulted in the repayment of dues to financial institutions or banks. xii) The Company has not granted any loans and advances on the basis of security of way of pledge of shares, debentures and other securities. xiii) In our opinion and according to the information given to us, the company has debts that are outstanding for more than six months amounting to Rs. 29,22,66,062. xiv) The provisions of any special statute as applicable to Chit Fund, Nidhi, or Mutual Benefit Society are not applicable to the company. xv) In our opinion and according to the information and explanation given to us, the company is not a dealer or trader in securities. xvi) The Company has not even any guarantees for loans taken by others from banks or financial institutions, the terms and conditions, whereof, in our opinion are prima facie prejudicial to the its cost of the Company. xvii) The Company has not certained at term loans hence utilization does not arise. xviii) Based on the informaties and examinations given to us and on an overall examination of the valance sheet of the company in our opinion, there are no funds raised on a short term basis which have been used for long term investment, and vice versa. xix) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year. xx) In our opinion and according to the information and explanation given to us the Company did not issue any debenture and as such, no securities have been created in respect of the debentures. xxi) The company has not raised any public issue during the year. xxii) According to the information and explanations given to us no fraud by the company has been noticed or reported during the year. xxiii) In our opinion and according to the best of our knowledge and information give to us, companys accumlated losses are less than 50% of its worth and the Company would have incurred cash loss during the year if the forfeited share warrants are not routed through profit and loss account. For JBRK & Co. Chartered Accountants (P. JITENDRA KUMAR) Partner Place : Hyderabad Date : 4 August 2004.