superior sox ltd Auditors report

SUPERIOR SOX LIMITED ANNUAL REPORT 1998-99 AUDITORS REPORT To, The Members of SUPERIOR SOX LIMITED We have audited the attached Balance Sheet of SUPERIOR SOX LIMITED as at 31st March, 1999 and also the Profit and Loss Account of the Company for the year ended on that date annexed thereto. 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 hereto statement on the matters specified in paragraphs 4 & 5 of the said order to the extent applicable. 2. Further to our comments in the Annexure referred to in Paragraph 1 above, we state that: a) 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; b) 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 those books; c) the Balance Sheet and Profit and Loss Account dealt with by this Report are in agreement with the books of account of the Company; d) in our opinion the Balance sheet and the Profit and Loss Account are drawn up in compliance with the mandatory Accounting Standards referred in Section 211 (3C) of the Companies Act, 1956; and e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to Note No.23 relating to accounting of sales tax set off on basis, Note No.2.4 regarding non- provision of doubtful capital advances amounting to Rs.2,36,080 and its consequent effect on the loss for the year and read together with the other notes thereon in Schedule R give the information as 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 Profit and Loss Account, of the Loss For the year ended on that date. For MALPANI & ASSOCIATES CHARTERED ACCOUNTANTS Place:MUMBAI, SHYAM S. MALPANI Date 1st September, 1999 PROPRIETOR ANNEXURE TO AUDITORS REPORT (REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS REPORT 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. As informed to us, the fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the company and the nature of its business. No material discrepancies have been noticed on such verification. 2. None of the fixed assets has been revalued during the year. 3. We have been informed that physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores, spare parts and raw materials. 4. In our opinion and according to the information and explanations given to us, the procedure followed by the management for physical verification of stocks is reasonable and adequate in relation to the size of the company and the nature of its business. 5. No material discrepancies have been noticed on physical verification of stock, as compared to book records. 6. In our opinion and on the basis of our examination, the valuation of stocks, certified by the management is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the previous year. 7. The Company has taken loans from parties listed in the register maintained under section 301 of the Companies Act, 1956. The rate of interest and other terms and conditions of such loans are not prima-facie against the interests of the Company. As explained to us, there are no companies under the same management as defined under section 370 (1B) of the Companies Act, 1956. 8. The Company has not granted any loans, secured or unsecured during the year to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. As explained to us, there are no Companies under the same management as defined under section 370(1B) of the Companies Act, 1956. 9. The parties to whom loans and advances in the nature of loans have been granted by the Company are generally repaying the principal amounts as stipulated and are also regular in the payment of interest wherever applicable. 10. In our opinion and according to the information and explanations given to us, there are reasonable 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 & machinery, equipments and other assets, and also for sale of goods. 11. According to the information and explanations given to us, no transaction of purchase and sale of goods, materials and services were made during the year in pursuance of contracts or arrangements with such parties as listed in the register maintained under section 301 of the Companies Act, 1956. 12. As explained to us there were no unserviceable or damaged stores, raw materials or finished goods at any time during the year. 13. The Company has not accepted any deposits from public during the year within the meaning of section 58A of the Companies Act, 1956 and the rules framed thereunder. 14. In our opinion and according to the explanations given to us, the Company has maintained reasonable records for the sale and disposal of scrap. As explained to us, the Company does not generate any by-products. 15. In our opinion, the internal audit system of the company needs to be further strengthened to make it commensurate with the size and nature of its business. 16. As explained to us the maintenance of cost records has not been prescribed by the Central Government under section 209 (1 )(d) of the Companies Act, 1956, for the products of the Company. 17. As per records of the company, the company has generally been irregular in depositing Provident Fund dues with the appropriate authorities. As explained to us, the Employees State Insurance Scheme does not apply to the employees of the Company. 18. According to the information and explanations given to us, no undisputed amounts payable in respect of Income-tax, Sales-tax, Wealth-tax, Customs-duty and Excise-duty were outstanding as at 31st March, 1999 for a period of more than six months from the date they became payable. 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 other than those payable under contractual obligations or in accordance with generally accepted business practices. 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 at the end of the current year and reference is required to be made to the Board For Industrial And Financial Reconstruction under Section 15 of that Act.. . 21. In respect of trading activity we are informed that no damaged goods have been determined during the year. For MALPANI & ASSOCIATES CHARTERED ACCOUNTANTS Place: MUMBAI, SHYAM S. MALPANI Date :1st September, 1999 PROPRIETOR