bharatpur nutritional products ltd Auditors report
BHARATPUR NUTRITIONAL PRODUCTS LIMITED
(Formerly known as Dalmia Industries Limited)
ANNUAL REPORT 2001-2002
AUDITORS REPORT
To
The Shareholders of
BHARATPUR NUTRITIONAL PRODUCTS LIMITED
(Formerly known as Dalmia Industries Ltd.)
We have audited the attached Balance sheet of BHARATPUR NUTRITIONAL
PRODUCTS 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 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
statements 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 the management, as well
as evaluating the overall financial statements presentation. We believe
that our audit provides a reasonable basis to for our opinion.
We 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 annex a statement on the matters specified in
paragraph 4 & 5 of the said Order.
2 a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of our
audit, subject to our comments below under para 2(b), 2(c), 2d(ii),
2d(iii), 2d(iv), 2d(v), 2d(vi), 2d(vii), 2d(viii), 2d(ix), 2d(xi), 2d(xii)
2d(xiii) and 2d (xiv).
b) We have conducted audit (Note No. 5 of Schedule 14) in respect of
Kolkata Sales Office and Bharatpur Works on the basis of data/details
available with other office/establishments of the Company and authenticated
by the management in the absence of books and original/primary records
maintained at respective office/works. Consequential impact arising out of
verification of records, on various revenue heads, sundry debtors, sundry
creditors and other balances, will be accounted for in the year of
verification.
c) The accounts of the company have been prepared on the basis that it is a
going concern. However, in view of its accumulated losses whereby the net
worth of the Company has become negative and suspension of manufacturing
and other operations of the Company, we are unable to express our opinion
on its ability to continue as a going concern. In the event of the same not
being held to be a going concern and various assets and liabilities being
consequently adjusted with respect to their realisable value, the impact
thereof has not been ascertained and therefore cannot be commented upon by
us.
d) Attention is drawn on the following notes of Schedule 14 to the
accounts:
(i) Note No. 4 - regarding preparation of accounts on "Going Concern
Basis."
(ii) Note No. 6 regarding non-availability of certain Secretarial records
to the extent stated in the said note.
(iii) Note No. 7 & 12 - regarding pending confirmation/reconciliation of
balances of respective parties, and balances of Financial Institutions and
certain banks and their impact on the profit and loss account and state of
affairs not being ascertained.
(iv) Note No. 8 - regarding non-provision against diminution in value of
stores & spares and raw materials (amount unascertained).
(v) Note No. 10 - regarding non-provision of penal interest and liquidated
damages on loans/debentures/credit facilities (amount unascertained).
(vi) Note No. 11 - regarding accounting of interest income on ICD as stated
in said note on receipt basis for the reason stated in the said note.
(vii) Note No. 13 - regarding accounting of interest on fixed deposits
certain debentures, loans to Bodles Corporates and Security Deposit (amount
unascertained) on payment basis.
(viii) Note No. 15 - regarding non-provision against diminution in value
of unquoted investments (amount unascertained).
(ix) Note No. 18 - regarding non-provision against doubtful advances
amounting to Rs. 228.37 lacs.
(x) Note No. 19 - regarding loans and investments had been made without
seeking prior approval of Financial Institutions under Section 372 (A) of
the Companies Act, 1956.
(xi) Note No. 20 - regarding overdue sundry debtors and loans and advances
aggregating to Rs. 2199.10 lacs, the eventful recovery of which and
provision there against, if any required cannot be commented upon
presently.
(xii) Note No. 23(b) - regarding non-provision for interest on overdue
amount of SSI Units as stated in said note. (amount unascertained).
(xiii) Note No. 25 - regarding non-payment of instalments to IDBI under
OTS.
(xiv) Note No. 28 - regarding non-provision of liability for Gratuity and
Leave Encashment of Rs. 45.49 lacs. and Rs. 4.22 lacs. respectively.
e) The Balance Sheet and Profit and Loss Account dealt with by this report
are in agreement with the books of accounts of the Company except as stated
in 2(b) above.
f) In our opinion, proper books of accounts as required by laws have been
kept by the Company, so far as appears from our examination of such books,
subject to para 2d(vi), d(vii), d(xii), d(xiv) regarding provision for
Gratuity and Leave Encashment on cash basis.
g) In our opinion, the Profit & Loss Account and Balance Sheet comply with
the Accounting Standards referred to in sub section 3(C) of section 211 of
the Companies Act, 1956, except in respect of the following:
(a) Non-provision against diminution (amount unascertained) in the value of
investments (Refer Note No. 15 of Schedule 14) as against the requirements
of AS-13 (Accounting for Investments).
(b) Non-provision of liability for Gratuity and Leave Encashment (Refer
Note No. 28 of Schedule 14) as against the requirements of AS-15
(Accounting for Retirement benefits).
(c) We further report, without considering items mentioned in 2(b), (c),
d(iv), (v), (vi), (vii), (viii), (xii), (xiii) above, the effect of which
could not be determined, had the observations made by us in Para 2d (ix),
(xi), (xiv) considered, the loss for the year would have been Rs. 3113.65
lacs (as against the reported figure of Rs. 636.47 lacs) current assets
would have been Rs. 331.97 lacs (as against the reported figure of
Rs.2759.44 lacs) and total current liabilities would have been Rs. 1677.45
lacs (as against reported figure of Rs. 1627.74 lacs.).
i) On the basis of information and explanations given to us and
representation received from all Directors of the Company and taken on
record by Board of the Directors, we report that none of the Directors are
disqualified from being appointed as Directors of the Company under
clause(g) of sub-section (1) of section 274 of the Companies Act 1956.
Subject to the foregoing, in our opinion and to the best of our information
and according to the explanations given to us, the said accounts read
together with other notes, give the information required by the Companies
Act, 1956, in the manner. so required and also give a true and fair view,
in conformity with the accounting principles generally accepted in India
(i) In the case of Balance Sheet of the state of affairs of the Company as
at 31.03.02.
(ii) In the case of Profit and Loss Account, of the loss for the period
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Refer to in Paragraph 1 of our report of even date to the members of
BHARATPUR NUTRITIONAL PRODUCTS LIMITED
(formerly known as Dalmia Industries Limited))
1. The Company is maintaining proper records to show full particulars
including quantitative details and situation of fixed assets. which needs
to be updated except records at Kolkatta Sales office (including North-
Eastern region) and Bharatpur work, which were not made available, for the
reason stated in note no. 5 (a) of schedule 14. Further, as per the
programs, the management has physically verified certain fixed assets of
the company and balance is in process of physical verification except the
physical verification of fixed assets of the company which could not be
carried out during the year for the reasons stated in note no. 5(a) of
schedule 14. In view of the above, the discrepancies, if any between book
records and physical verification have not been presently ascertained.
2. None of the fixed assets have been revalued during the period.
3. The stocks of finished goods, stores, spare parts and raw materials have
not been physically verified by the Management at reasonable intervals
during the year because of the reasons as indicated in note no. 5(b) of
schedule 14.
4. We can not comment on the reasonableness and adequacy of the procedures
of physical verification of stocks followed by the management because of
the reasons as indicated in note no. 5(b) of Schedule 14.
5. It has not been possible to ascertain and comment on the discrepancies,
if any in these stocks at the end of the year and the adjustments to be
carried consequent to such verifications and ascertainment of amount
thereof. In our opinion and on the basis of our examination, the valuation
of stocks is fair and proper and in accordance with normally accepted
accounting principles, read together with our comment in note no. 8 of
schedule 14 and is on the same basis as in the previous period.
7. The Company has not taken any loan from companies, firms and other
parties listed in the register maintained under Section 301 of the
Companies Act, 1956.
8. The Company has not granted any loan to the companies, firms or other
parties listed in the register maintained under Section 301 of the
Companies Act, 1956.
9. The Company has given inter corporate deposits repayable on demands
amounting to Rs.106.93 lacs. Interest amounting to Rs. 199.47 lacs up to
30.09.1999 has not been received and interest for the period 1.10.99 to
31.03.2002 (amount unascertained) will be accounted for on settlement
basis. Necessary steps have been or are being taken up by the Company, for
recovery of the principal amount and/or interest thereon. In respect of
other loans and advances in the nature of loans giver, to employees and
some of the parties, the repayment of principal and interest, wherever
applicable, are generally in accordance with the stipulations. Interest
free advances in the nature of demand loans have also been given by the
Company to its wholly owned subsidiaries.
10. In our opinion and according to the information and explanations 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 stores, raw materials including components, plant and machinery,
equipment and other assets, and with regard to the sale of goods.
11. In our opinion and according to the information and explanations given
to us, the transactions of purchase of goods and materials and services in,
pursuance of contract 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 prevailing market prices for
such goods, materials or services or the prices at which transactions for
similar goods 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, raw materials and
finished goods and adequate provision for loss has been made in the
accounts, read with our comment with note no.8 of schedule 14.
13. Except for shortfall in maintenance of liquid assets and non payment of
certain deposits with due interest thereon which had become overdue for
payment at 31.3.2002 (Note no.13(a) of schedule 14), in our opinion and
according to the information and explanations given to us, the Company has
complied with the provisions of section 58A of the Companies Act, 1956, and
rules framed thereunder.
14. In our opinion, reasonable records have been maintained by the Company
for sale and disposal of realisable scraps. The Company has no by-products.
15. In our opinion, the Company has an internal audit system commensurate
with the size and nature of its business but internal audit has not been
carried out during the year.
16. In view of the suspension of production facilities at Bharatpur works
of the Company and non availability of records as indicated in note no.5 of
schedule 14, books of accounts maintained by the Company, pursuant to the
Order made by the Central Government for the maintenance of cost records
under section 209(1) (d) of the Companies Act, 1956, in respect of infant
Milk food, could not be reviewed by us.
17. According to the records of the Company, Provident fund and employee
state insurance dues have been regularly deposited during the year with the
appropriate authorities. The arrears at year end for Employees State
Insurance was Rs. 31,252 as per the records of the Company.
18. 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, were outstanding as at 31.03.2002, for a period of
more than six months from the date they became payable except Sales Tax
amounting to Rs.18,57,020/-, tax deducted at source Rs.1,039/-, and
professional tax Rs.14,440/-.
19. According to the information and explanations given to us, no personal
expenses of employees and/or Directors have been charged to revenue
account, other than those payable under contractual obligations or in
accordance with generally accepted business practice.
20. The Company has become 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. Reference required to be made to the Board
for Industrial and Finance Reconstruction under section 15 of that Act, has
been made on 28.02.2001 and the same has been rejected in May02. Against
the same, the Company has gone in appeal to the Appellate Authority for
Industrial and Financial Reconstruction.
21. In respect of trading activities of the Company, we are informed that
the Company does not have damaged goods lying with it at the end of the
period.
For LODHA & CO.
Chartered Accountants
Place: New Delhi N.K. LODHA
Date : 23rd July, 2002 Partner