vitara chemicals ltd Auditors report

VITARA CHEMICALS LIMITED AUDITORS REPORT TO THE MEMBERS OF VITARA CHEMICALS LIMITED We have audited the attached Balance Sheet of VITARA CHEMICALS LIMITED as at 31st March, 1999 and also the annexed Profit and Loss Account for the year ended on that date and 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 give in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2. Further to our comments in the Annexure referred to in Paragraph 1 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 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 appears from our examination of the books; c. the Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account; d. in our opinion,the Profit Loss Account & the Balance Sheet comply with the in our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to Note 2(f) of Schedule O regarding non-provision of interest on delayed/non-payment of lease rental/hire charges and read together with accounting policies and other notes appearing in Schedule O 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. (ii) in the case of Profit and Loss Account of the Loss for the year ended on that date. For PRAMOD.C.SHAH & CO. Chartered Accountants PRAMOD.C.SHAH (Proprietor) PLACE: MUMBAI DATE : 19TH MAY,1999. ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS FOR-THE YEAR ENDED 31ST MARCH, 1999 OF VITARA CHEMICALS LIMITED 1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. We are informed that the fixed assets were physically verified by the management at regular intervals during the year and no material discrepancies have been noticed on such verification. 2. None of the fixed assets have been revalued during the year. 3. The stock of finished goods, stores, spare parts and raw materials have been physically verified by the management during the year. In our opinion,the frequency of such verification is reasonable 4. In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business 5. The discrepancies noticed on physical verification of stocks as compared to the book records were not material and have been properly dealt with in the books of account. 6. On the basis of our examination of stock records, we are of the opinion that the valuation of stock is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year. 7. In our opinion,the rate of interest and the terms and conditions on which loans have been obtained from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956 and/or from the Companies under the same management as defined under Section 370 (1B) of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company. 8. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act,1956, or to Companies under the same management within the meaning of Section 370 (1 B) of the Companies Act, 1956. 9. The employees to whom interest free loans have been given are generally regular in repayment of loans. 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 raw material, stores, plant and machinery, equipments and other assets, and with regard to sale of goods. 11. In our opinion and according to the information and explanations given to us, the transaction of the purchase of goods and materials and sale of goods, materials and services in pursuance of contracts 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 the specialized nature of items purchased at prevailing market price for such goods,materials or services or the prices at which transactions for similar goods, materials or services have been made with other parties. 12. As explained to us, there were no unserviceable or damaged raw- materials. stores, finished goods and goods in trade. 13. The Company has not accepted any public deposits, to which the provisions of Section 58A of the Companies Act, 1956 are applicable. 14. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of realisable by-products and scrap. 15. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business. 16. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to Rules made by the Central Government, for the maintenance of cost records, under Section 209 (1) (d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribed accounts and records have generally been maintained and are under preparation. However, we have not made a detailed examination of the records. 17. There have been delays in depositing the Provident Fund and Employees State Insurance dues with the appropriate authorities. The arrears of such dues on the Balance Sheet date aggregate to Rs. 1.37 Lakhs. 18. According to the information and explanations given to us,there were no undisputed amounts payable in respect of Wealth tax, Sales Tax, Customs Duty and Excise Duty except Rs.125 Lacs towards Income Tax 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 explanation givens to us and the records of the Company examined by us, no personal expenses of employees or Directors have been charged to revenue account, other than those payable under contractual obligation or in accordance with generally accepted business practice. 20. The Company has become a Sick Industrial Company as defined within the meaning of clause (O) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 21. In respect of trading activities of the Company, we are informed that there were no damaged goods during the year. For PRAMOD.C.SHAH & CO Chartered Accountants PRAMOD.C.SHAH (Proprietor) Place: Mumbai Date : 19th May,1999.