pan drugs ltd Auditors report

ANNUAL REPORT 1998-99 PAN DRUGS LIMITED AUDITORS REPORT THE MEMBERS OF PAN DRUGS LIMITED VADODARA We have audited the attached Balance Sheet of Pan Drugs Limited, 301 World Trade Centre, Sayajigunj, Baroda 390005 as at 31st March,1999 and also the Profit and Loss Account of the Company for the year ended on that date and 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 accounts as required by law have been kept by the Company so far as it appears from our examination of the said books. (3) The Balance Sheet and the Profit and Loss Account dealt with this report are in agreement with the books of accounts. (4) In our opinion, the profit and loss account ar,d the balance sheet dealt with by this report comply with the accounting standards referred to in sub-section 3 ( C ) of section 211 of the Companies Act, 1956 (5) In our opinion and to the best of our information and according to the explanation given to us, and subject to notes to the accounts, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view i) In the case of the Balance Sheet of the state of affairs of the Company as at 31st March 1999 and ii) In the case of the Profit and Loss Account of the Profit for the year ended on that date As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by Company Law Board in terms of section 227(4A) of the Companies Act 1956 and on the basis of such checks of books and records of the Company as we considered appropriate, we further report as under:- 1.The Company has maintained proper record showing full particulars including quantitative details and situation of fixed assets. We are informed that all of the fixed assets of the company have been physically verified by the management at reasonable intervals and no serious discrepancies have been noticed on such verification. 2. None of the fixed assets have been revalued during the year. 3. The stock of stores, spare parts and raw materials have been physically verified by the management at the end of the year. 4. Stocks are physically verified at the Companys Plants under the supervision of one of the Directors The procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business. 5. In our opinion, the discrepancies noticed on physical verification of stocks as compared to the book record were not material having regard to the size of the operations of the Company and the nature of stocks held and have been properly dealt with in the books of account. 6. In our opinion, on an examination of the stock records of the Company, the valuation is fair and proper and in accordance with the normally accepted principles 7. The Company has not taken any loans secured or unsecured from Companies, firms, or other Parties listed in the register maintained under section 301 of the Companies Act,1956 ( 1 of 1954 ) and from the Companies under the same management as defined under sub section (1B) of Section 370 o Companies Act 1956 (1 of 1956). 8. According to the information and explanation given to us, the Company has granted a loan to Company listed in the register maintained under section 301 of the Companies Act, 1956 and to th Companies under the same management as defined under sub section (1 B) of section 370 of th Companies Act, 1956 (1 of 1956). 9. In addition to the interest free advances to its employees, who are repaying the principal amounts as stipulated, the Company referred to in clause 8 above to whom this company has given the loan or advances in the nature of loan referred to above has not paid or provided for interest to be paid to this Company. 10.In our opinion and according to the information given to us the Company has established adequate internal control procedures, commensurate with the size of the Company and the nature of its business. for the purchase of stores, raw materials including components, plant and machinery, equipment and other assets the sale of goods. 11. The Company has entered into contracts for purchase and sale of goods, materials and services with a Company which needs to be entered in the Register maintained under section 301 of the Companies Act, 1956. In our opinion, the prices at which the transactions have been entered into are reasonable having regard to the prevailing market conditions, the terms offered and the transactions for similar goods/services with other parties. 12. No unserviceable stores raw materials or finished goods have been determined during the year and therefore no provision is necessary in the accounts in the books of accounts in respect of the same. 13. According,to the explanation given to us, the Company has not accepted any deposit from the public and therefore the provisions of Section 58-A of the Companies Act. 1956 and the Rules framed thereunder are not applicable. 14. According to the information given to us, the activities of the Company do not generate any significant scrap nor any by products. Reasonable records by way of Registers under Central Excise Regulations are maintained. 15. The Company has not established an internal audit system and relies on the checking controls by senior officials of the Company. The System needs improvement. 16. The Central Government has not prescribed the maintenance of Cost Records under Section 209(1)(d) for any of the products of the Company. 17. The Company is regular in depositing Provident Fund and Employee State Insurance dues with the appropriate authority. 18. According to the information and explanation given to us, except for outstanding Income-Tax demands of Rs. 1,70,755 there were no undisputed amounts payable by the Company in respect of Income- Tax, Wealth Tax, Sales Tax, Customs Duty or Excise Duty on the last day of the accounting year which were outstanding for a period exceeding six months from the date they first became payable. 19. As per the information explanations given to us no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business principles. 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. We are informed that in respect of the Companys trading activities, there were no significant damaged goods in respect of which provision for loss would have been necessitated in the books of accounts For S.G.Bhagwat & Co., Chartered Accountants Place: Baroda (S.G.Bhagwat) Dated: 24th September,1999. Partner