apr ltd Auditors report

ANNUAL REPORT 1998-99 APR LIMITED AUDIT REPORT To The Shareholders of APR LIMITED We have audited the attached Balance Sheet of APR LIMITED as at 30th June, 1999 and the attached Profit and Loss Account for the period ended on that date with the books of the Company 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(4-A) of the Companies Act, 1956, we enclose in the Annexure 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: 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. Proper books of account as required by law have been kept by the Company so far as it appears from our examination of such 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 and Loss Account and the Balance Sheet comply with the Accounting Standards referred in Section 211 (3C) of the Companies Act, 1956 to the extent applicable except in respect of the following: (i) No provision has been made in the accounts for decline in the book value of Long Term Investments as per Accounting Standard 13 i.e., Accounting for Investments, as mentioned in Note 2(e) of Notes to Accounts vide Schedule 22, amounting to Rs.10,30,72,926/- resulted in overstatement of Profit for the Year. (ii) Treatment of unallocated capital expenditure and allocation of the same to the assets and date of commencement of commercial production are as confirmed and certified by the management as mentioned in Note - 11 of Notes to Accounts vide Schedule 22. In view of the above, we are unable to express the view whether the Company has complied with the Accounting Standard 6 i.e., Depreciation Accounting and Accounting Standard 10 i.e., Accounting for Fixed Assets. e. Unserviceable and damaged stocks in respect of non moving stocks as mentioned in Note 13 of Notes to Accounts vide Schedule 22, amounting to Rs.27,61,94,168/- have not been determined during the year. f. No provision has been made in the accounts for doubtful debts as mentioned in Note 14 of Notes to Accounts vide Schedule 22, amounting to Rs.4.60.10.041/-. 9. Balances outstanding to the debit or credit of parties are subject to confirmation and consequential adjustments. Subject to the foregoing, in our opinion and to the best of our information and according to the explanations furnished to us, the accounts, read in conjunction with the Schedules give the information as required by the Companies Act, 1956 in the manner so required and give a true and fair view: i. In the case of Balance Sheet of the state of affairs of the Company as at 30th June, 1999; and ii. In the case of Profit and Loss Account of the Profit for the period ended on that date For M.R. DEVINENI & Co., Chartered Accountants N.ANKA RAO Partner Place: HYDERABAD Date: 29.10.1999 ANNEXURE REFERRED TO IN PARAGRAPH 1 OF AUDITORS REPORT OF EVEN DATE I. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The assets have been physically verified by management according to the phased programme designed to cover all assets on rotation basis. In respect of assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification. As regards Capital works-in-progress, the same will be verified by the management on completion of assets. Il. None of the fixed assets have been revalued during the year lll. The stocks of finished goods, stores, spare parts and raw materials of the Company have been physically verified at the year end and / or at reasonable intervals during the year by the management. Stocks Iying with third parties at the end of the year have been confirmed by the parties. IV. The procedures of physical verification of stocks followed by the management are generally reasonable and adequate in relation to the size of the Company and the nature of its business. V. The discrepancies noticed on verification between physical stocks and the book balances have been properly dealt with in the books of account. Vl. In our opinion and on the basis of our examination, the valuation of stocks is fair and proper in accordance with the normally accepted accounting principles. The valuation of stocks is on the same basis as in the previous year Vll. The rates of interest and the terms and conditions of loans taken by the Company from parties listed in the register maintained under Section 301 of the Companies Act, 1956 are in our opinion prima facie not prejudicial to the interests of the Company. The Company has also taken interest free loans from a company listed in the registers maintained under Section 301 and 370(1-C) of the Companies Act, 1956. Vlll. The Company has not granted any loans to companies, firms or other parties listed in the registers maintained under Section 301 and 370(1-C) of the Companies Act, 1956. IX. Parties/Employees to whom loans and advances in the nature of loans have been given by the Company are repaying the principal amounts as stipulated/re-stipulated and are also regular in payment of interest where applicable, except in few cases. 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, components, plant and machinery, equipment and other assets and with regard to the sale of goods. Xl. In our opinion and according to the information and explanations given to us the transactions of purchase of materials and sale of goods, made in pursuance of contracts or arrangements required to be entered in the register maintained under Section 301 of the Companies Act, 1956 and aggregating during the year to Rs. 50,000/- (Rupees Fifty Thousand only) or more in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such goods and materials or the prices at which transactions for similar goods and materials have been made with other parties. Xll. As explained to us, unserviceable or damaged stocks have not been determined during the year. Xlll. In our opinion and according to the information and explanations given to us, the Company has generally complied with the provisions of Section 58A of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. XIV. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of realisable scrap where applicable and significant. The Company has no by-products. XV. In our opinion and according to the information and explanations given to us, the Companys Internal Audit System is not commensurate with its size and nature of its business. XVI. The Central Government has not prescribed the maintenance of cost records by the Company under Section 209(1)(d) of the Companies Act, 1956 for its products. XVII. As per the records of the Company, Provident Fund dues have been regularly deposited during the year with the appropriate authorities. XVIII. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty as at 30.06.1999 which are outstanding for a period of more than six months from the date they became payable . XIX. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account other than those payable under contractual obligations and in accordance with generally accepted business practice, nor we have been informed of such case by the management. XX. According to the information and explanations given to us, 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. XXI. In respect of trading activities, as per the information and explanations given to us, damaged goods have not been determined and provision made for loss as at 30th June, 1999. For M.R.DEVINENI & Co., Chartered Accountants Place: HYDERABAD N.ANKA RAO Date : 29.10.1999 Partner