wellman incandescent india ltd Auditors report

WELLMAN INCANDESCENT INDIA LIMITED ANNUAL REPORT 2000-2001 AUDITORS REPORT TO THE MEMBERS OF WELLMAN INCANDESCENT INDIA LIMITED We have audited the attached Balance Sheet of Wellman Incandescent India Limited as at 31st March, 2001 and also the attacked Profit & Loss Account of the Company for the year ended on that date and 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 account as required by law have been kept by the Company, so far as appears from our examination of those books. 3. The said Balance Sheet and Profit & Loss Account are in agreement with the books of account. 4. In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report are in compliance with accounting standards referred to in Section 211 (3C) of the Companies Act, 1956. 5. As per the representation made by the Company and all its Directors, no Director is disqualified from being appointed as Director U/s. 274(1)(g) of the Companies Act, 1956. 6. In our opinion and to the best of our information and according to the explanations given to us the accounts together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view. a) In the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2001, and b) In the case of the Profit & Loss Account of the Loss for the year ended on that date. As required by the Manufacturing and other Companies (Auditors Report) Order 1988 issued by the Government of India and on the basis of such checks we considered appropriate, we further state that: (i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. Physical verification of fixed assets has been conducted by the Management at reasonable intervals. The minor discrepancies noticed on such verification, are in the process of reconciliation. (ii) The Company has not revalued any of its fixed assets during the year. (iii) The stocks of finished goods, stores, spare parts, tools and raw materials, except stocks with the sub-contractors, have been physically verified by the management at reasonable intervals. (iv) The procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. (v) The discrepancies noticed on physical verification of stocks as compared to book records have been properly dealt with in the books of account. (vi) In our opinion and on the basis of our examination, the valuation of stocks of Raw Materials, Stores, Spare Parts, Tools, Work in Progress and Finished Goods is fair and proper in accordance with normally accepted accounting principles and is on the same basis as in the preceding year. (vii) The Company has not taken any loans from companies listed In the register maintained under Section 301 of the Companies Act, 1956. In terms of sub section (6) of Section 370 of the Companies Act, 1956, provisions of the Section are not applicable to a Company on or after 31st October, 1998. (viii) The Company has not granted any loan to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. In terms of sub section (6) of Section 370 of the Companies Act, 1956. provisions of the Section are not applicable to a Company on or after 31st October, 1998. (ix) The Company has given interest-free loans or advances in the nature of loan to its employees who are generally regular in payment of the principal as stipulated. (x) 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 for the sale of goods. (xi) There were no transactions of purchase of goods and materials, but there were transactions of sale of goods and materials 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, at prices which are reasonable having regard to the prevailing market prices for such goods and materials or the prices at which transactions for similar goods have been made with other parties. (xii) As explained to us, unserviceable or damaged stores, tools, raw materials and finished goods are determined by the Company and adequate provision has been made in the accounts for loss on the items so determined. (xiii) The Company has complied with all the formalities as required by Section 58A of the Companies Act, 1956 and the rules framed thereunder in respect of deposits invited from the public. (xiv) In our opinion reasonable records have been maintained by the Company for the sale and disposal of resaleable scraps. The Company has no by-products. (xv) The Company has an internal audit system. However, in our opinion, the same needs to be made more comprehensive considering the size of the Company. (xvi) The Central Government has not prescribed under Section 209(1)(d) of The Companies Act, 1956 the maintenance of costs records for the products of the Company. (xvii) According to the records of the Company, Provident Fund and Employees State Insurance dues have been regularly deposited with the appropriate authorities although there have been delays in some cases. (xviii) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income tax, Wealth-tax, Customs Duty and Excise Duty as at 31st March 2001 which are outstanding for a period of more than six months from the date they became payable except Sales-tax amounting to Rs.23,16,747/-. (xix) During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices, we have not come across any personal expenses which have been charged to Profit & Loss Account, other than those payable under contractual obligation or in accordance with the generally accepted business practices. (xx) The Company has been declared sick by the Board for Industrial and Financial Reconstruction as per clause (o) of Sub-section(1) of Section 3 of the Sick industrial Companies (Special Provisions) Act, 1985. (xxi) In respect of service activities (a) The Company has a reasonable system of recording receipts, issues and consumption of materials and stores and such system provides for a reasonable allocation of the materials consumed and man-hours utilised to contracts commensurate with their size and nature. (b) There is a reasonable system of authorisation at proper levels and an adequate system of internal control commensurate with the size of the contracts and their nature, on issues of stores and allocation of stores and labour to departments. (xxii) In respect of Companys trading activities, according to the information and explanations given to us there were no damaged goods. For FORD, RHODES, PARKS & CO. Chartered Accountants 15 Chittaranian Avenue, Kolkata - 700 072 A. K. Pal Dated : 13th August, 2001 Partner