ahura welding electrode manufacturers ltd Auditors report

AHURA WELDING ELECTRODE MANUFACTURING LIMITED ANNUAL REPORT 2003-2004 AUDITORS REPORT To The Shareholders M/s. Ahura Welding Electrode Manufacturing Ltd. Coimbatore. 1) We have audited the attached balance Sheet of M/s. Ahura Welding Electrode Manufacturing Ltd., Coimbatore, as at 31st March 2004 and also the Profit and Loss account for the year ended on that date annexure there to:- 2) We conducted our audit in accordance with the 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. 3) As required by the Companies (Auditors Reports) Order 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclosed in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4) Further to our comments in the Annexure referred to in paragraph (1) above, we report that I) 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: II) In our opinion, proper Books of Accounts required by law have been kept by the company so far as it appears from our examination of those books: III) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts: IV) In our opinion the Profit and Loss Account and the Balance Sheet dealt with by this report comply with the accounting standards referred to in sub section (3C) of sec. 211 of the companies Act, 1956 except Accounting Standard 6 depreciation Accounting issued by the Institute of Chartered Accountants of India. The Deviations are mentioned in Note No.3. V) On the basis of written representations received from the Directors as on 31st March 2004 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2004, from being appointed as Directors m terms of clause (g) of subsection (f) of section 274 of the Company Act, 1956, VI) In our opinion and to the best of our information and according to the explanations given to us, the said Balance sheet and Profit & Loss account read together with the notes thereon. In particular note no:7 regarding non- Confirmation / reconciliation of balance of some parties shown under Sundry Creditors, Sundry Debtors, Loans & Advances, if any., 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 the case of the Balance Sheet of the State of Affairs of the company as at 31st March 2004 and (ii) In the case of Profit and Loss Account, of the Loss for the period ended on that date. For S.P.ANANDAKUMAR & CO., Chartered Accountants (Sd) S.P.Anandakumar Place : Coimbatore Date : 8th December 2004 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE 1) The company has not maintained proper records showing full particulars including quantitative details and situation of fixed assets. We are informed that the assets have been physically verified by the management during the year and no material discrepancies have been noticed on such verification. Deviations are reported in Note No: 5 regarding Fixed Assets. 2) The stock of finished goods, stores, spare parts and raw materials, have been physically verified during the period by management in our opinion, the frequency of verification is reasonable. 3) 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. 4) As explained to us, there were no material discrepancies noticed on physical verification of the stocks of raw materials, stores and spares and finished goods, having regard to the size of the operations. 5) There are no loans taken from parties listed in the register maintained under section 301 of the companies act, 1956. 6) In respect of loans, secured or unsecured, given to companies, firms or other parties listed in the register maintained under section 301 & 370 (1B) of the Companies Act, 1956, the rate of interest is not prima facie prejudicial to the interest of the company. There is no recovery of interest though the same is debited to the parties account. Also there is no stipulation for re-payment of the loans. 7) In respect of other advances in the nature of loans given to the employees, they are repaying the principal and interest wherever stipulated. 8) In our opinion and according to the information and explanation given to us, there is adequate internal control procedure commensurate with the size of the company and the nature of its business for the purchase of spare parts, machinery, equipments and other assets and for the sale of goods. 9) There are no transaction of purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or agreements entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the period to Rs.50,000 or more. 10) The company has a regular procedure for determination of unserviceable or damaged stores and raw materials including components and finished gods. Adequate provisions has been made in the accounts for the loss arising on the items so determined. 11) During the period, the Company has not accepted any deposits from the public. 12) In our opinion and according to the information and explanation given to us, the company has maintained reasonable records for the sale and disposal of waste and scrap. 13) There was no releasable by product for this company during the period. The company has maintained reasonable records for the sale and disposal of waste and scrap. 14) The company internal audit system, which in our opinion is commensurate with the size and nature of the company. 15) The maintenance of cost records for the industry in which the company is engaged has not been prescribed by the central government under section 209 (1) (d) of the Companies Act, 1956. 16) The company is yet to deposit the provident fund dues amounting to Rs.5,42,316/- as on 31.03.2003. 17) To the best of our knowledge and according to the information and explanations given to us, there is some specified amounts payable in respect on ESI, income tax, wealth-tax, sales-tax, customs duty and excise duty which were outstanding for a period of more than 6 months from the date they become payable as on 31st March 2004. The Expected amount payable will not be judgeable because the company was closed. 18) To the best of our knowledge and on the basis of information and explanation given to us there are no personnel expenses charged to revenue account other than the expenses under the service contract obligations with the company, employees and / or generally accepted business practices. 19) The company is not 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. For S.P ANANDAKUMAR & CO., Chartered Accountants (Sd) S.P Anandakumar Proprietor Place : Coimbatore Date : 8th December 2004