narang industries ltd Auditors report
THE NARANG INDUSTRIES LIMITED
ANNUAL REPORT 2004-2005
AUDITORS REPORT
TO
THE MEMBERS OF
THE NARANG INDUSTRIES LIMITED
We have audited the attached Balance Sheet of The Narang Industries Limited
as at March 31, 2005, the Profit and Loss Account and Cash Flow Statement
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 management, as well as evaluating the
overall financial statement presentation. 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 enclose in the Annexure, a statement on the
matters specified in paragraph 4 and 5 of the said order.
Further to our comments in the Annexure referred to above, we report that:
(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;
(b) In our opinion, proper books of account, as required by law, have been
kept by the Company, so far as appears from our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the mandatory
Accounting Standards referred to in Sub-section(3C) of Section 211 of the
Companies Act, 1956;
(e) On the basis of the written representations received from the
Directors, as on 31st March, 2005, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on 31st
March, 2005 from being appointed as a Director in terms of Clause (g) of
Sub-Section(1) of Section 274 of Companies Act, 1956;
(f) In our opinion and to the best of our information and according to the
explanations given to us, subject to Note C-9 of the Notes on Accounts in
respect of cash on hand being maintained for part of the year in excess of
day to day requirements of the Company, the said accounts read together
with the Notes and Significant Accounting Policies thereon, give the
information required by the Companies Act, 1956, in the manner so required
and give a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) In so far as it relates to the Balance Sheet, of the state of affairs
of the Company as at March 31, 2005;
(ii) In so far as it relates to the Profit and Loss Account, of the loss of
the Company for the year ended on that date; and
(iii) In so far as it relates to the Cash Flow Statement, of the cash flows
of the Company for the year ended on that date.
For S.P. Nagrath & Co.,
Chartered Accountants
(Sanjay Kumar Bejwani)
Place: New Delhi Partner
Dated: June 28, 2005 Membership No.: 97225
ANNEXURE REFERRED TO IN PARAGRAPH (3) OF THE AUDITORS REPORT OF EVEN DATE
TO THE MEMBERS OF NARANG INDUSTRIES LIMITED FOR THE YEAR ENDED MARCH 31,
2005:
i) a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) According to the information and explanations given to us, the fixed
assets have been physically verified by the management at reasonable
intervals. No material discrepancies were noticed on such verification.
c) During the year the Company has disposed of major part of its fixed
assets. According to the information and explanation given to us, we are of
the opinion that the sale of the said part of assets has not affected the
going concern status of the Company.
ii) a) As explained to us, the Stocks of shares have been physically
verified by the management during the year at reasonable intervals and in
our opinion, the frequency of such verification is reasonable,
b) In our opinion and according to the information and explanations given
to us, the procedures of physical verification of stocks of shares followed
by the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c) In our opinion, the Company is maintaining proper records of the stocks
of shares. No discrepancies were noticed on verification between physical
stocks of shares and the book records.
iii) During the year, the Company has not granted or taken any loan to/from
any of the parties covered in the register maintained under section 301 of
the Companies Act, 1956.
iv) In our opinion and according to the information and explanations given
to us, there are adequate internal control systems commensurate with the
size of the Company and the nature of its business with regard to purchase
of inventory, fixed assets and also with regard to sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal controls.
v) a) According to the information and explanations given to us, there are
no transactions of purchase of goods and materials and sale of goods,
material and services made in pursuance of contracts arrangements entered
that need to be entered in the register maintained under section 301 of the
Companies Act, 1956.
b) In our opinion and according to the information and explanations given
to us, no transactions of purchase of goods and materials and sale of
goods, material and services made in pursuance of contracts or arrangements
entered in the registers) maintained under section 301 of the Companies
Act, 1956 and aggregating during the year to Rs.5,00,000 (Rupees Five Lacs)
or more in respect of each party have been made.
vi) In our opinion and according to the information and explanations given
to us, during the year the Company has not accepted any deposits from the
public within the meaning of Section 58A and 58AA or any other related
provisions of the Companies Act, 1956 and the Companies (Acceptance of
Deposit) Rules, 1975. No return as required to be filed by 30th June 2005,
has been filed till date of signing of accounts. No order has been passed
by the Company Law Board or National Company Law Tribunal or Reserve Bank
of India or any Court or any other tribunal.
vii) The Company does not have a formal Internal Audit System. However, the
internal checks applied by the Company, in our opinion, are commensurate
with the size and the nature of Companys business.
viii) The Central Government has not prescribed the maintenance of cost
records under section 209(1)(d) of the Companies Act, 1956.
ix) a) According to the information and explanations given to us, the
Company during the year is generally regular in depositing with the
appropriate authorities the undisputed statutory dues including provident
fund, investor Education and Protection Fund, Employees state insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty,
Cess and any other statutory dues and no undisputed amounts payable were
outstanding as at 31st March, 2005 for a period of more than six months
from the date they became payable.
b) According to the information and explanations given to us, the
particulars of the disputed statutory dues which have not been deposited on
account of matters pending before the appropriate authorities have been
stated in Note C-21 of the Notes on Accounts.
x) The companys accumulated losses as at the end of the year are not less
than fifty percent of its net worth. Also, the Company has incurred cash
loss during the current financial year, however, it has not incurred cash
losses during the immediately preceding financial year.
xi) In our opinion and according to the information and explanations given
to us, the Company has not defaulted in the repayment of dues to financial
institutions or banks or debentures holders.
xii) According to the information and explanations given to us, the Company
has not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
xiii) The provisions of any Special Statute applicable to Chit Fund, Nidhi
or Mutual Benefit Fund/Societies are not applicable to the Company.
xiv) The Company has maintained the proper records of transactions and
contracts in respect of trading in securities, debentures and other
investments and timely entries have been made therein. All the shares,
debentures and other investments have been held by the Company in its name.
xv) According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks and
financial institutions.
xvi) According to the information and explanations given to us, the Company
has not raised any new term loan during the year.
xvii) According to the information and explanations given to us and on the
overall examination of the Balance Sheet of the Company, we are of the
opinion that the Company has not used funds raised on short term basis for
long term investment.
xviii) During the year, the Company has not made any preferential allotment
of shares to parties and companies covered under register maintained under
section 301 of the Companies Act, 1956.
ix) The Company has not issued any debentures during the year.
xx) The Company has not raised money by any public issues during the year.
xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company was
noticed or reported during the year.
For S.P. Nagrath & Co.,
Chartered Accountants
(Sanjay Kumar Bejwani)
Partner
New Delhi, June 28, 2005 Membership No.: 97225