arun mantex ltd Auditors report

ARUN MANTEX LIMITED ANNUAL REPORT 2000-2001 AUDITORS REPORT REPORT OF THE AUDITORS TO THE SHAREHOLDERS OF ARUN MANTEX LIMITED We have audited the attached Balance Sheet and Income & Expenditure Account of Arun Mantex Limited as at 31st March 2001 and have to report that : 1. The Accounts are prepared on "Going Concern Basis". 2. As required by the manufacturing and other Companies (Auditors Report) Order 1975 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, and on basis of such checks as we considered necessary and information and explanation given to us, we enclose in the annexture a statement of matters specified in paragraphs 4 and 5 of the said order. 3. 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. 4. In our opinion, proper books of account, as required by law have been kept by the company so far as it appears from our examinations of the books. 5. The Balance Sheet dealt with by this report are in agreement with the books of accounts. 6. The Profit and Loess and the Balance Sheet comply with the accounting standards prescribed under section 211 (3) of the Companies Act, 1956. 7. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, are in 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. b) In the case of the Profit & Loss Accounts of the Loss for the year ended as on 31st March, 2001. For V.B. SHAH & CO CHARTERED ACCOUNTANTS V.B. SHAH PROPRIETOR Annexure as referred to para 1 of the report of even date :- 1. The Company has maintained proper records showing full particulars including quantitative details and situations of fixed assets. We are informed by the management that they has carried out the physical verification during the year and no discrepancies between the books records and the physical inventory has been noticed. 2. There has been no revaluation of any of the fixed assets during the year. 3. Physical verification has not been conducted by the management in respect of work in progress and raw materials. 4. The procedure for physical verification of sticks, 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 verification between the physical stocks and the book records were not material. 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 no the basis as in the preceding year. 7. In our opinion, the rate of interest and other terms and conditions on which the loans have been taken from the parties listed in the registers maintained under section 301 of the Companies Act, 1956, are not, prima facie, prejudicial to the interest of the company. 8. In our opinion the rate of interest and other terms and conditions on which the loans have been granted to companies, firms or other companies listed in the registers maintained under section 301 and to the companies under the same management are not, prima facie, prejudicial to the interest of the company. 9. Parties to whom loans and advances in the nature of loans have been given are repaying the principal amount as stipulated and are also regular I payment of interest, where applicable. 10. In our opinion and according to the information and explanations given to us, there are adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchases of stores, raw materials including components, plant and machinery, equipments and other assets with regard to the sale of goods. 11. In our opinion and according to the information and explanations given to us, the transactions of purchases and sale of goods and materials in pursuance of contracts or arrangements entered in the register maintained under section 301 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 prices at which transactions of similar goods and materials have been made with other parties or quoted by the other parties except where comparable quotation are not available having regard to the specialized nature of materials purchased by the company. 12. As explained to us, the company has a regular procedure for the determination of unserviceable or damaged stores, raw materials and finished good. Subject to our note No. 16 od schedule "Q" to the accounts, adequate provision has been made in the accounts for the loss so determined. 13. In our opinion and according to the information and explanation given to us, the company has complied with the provisions of section 58-A of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975. The Company has not accepted deposits from public. 14. The Company has maintained reasonable records in respect of sale and disposal of scrap. We are informed that the manufacturing process of the company does not give rise to any by products. 15. In our opinion the company has an internal audit system commensurate with the size and nature of its business. 16. The Central government has not prescribed, maintenance of cost records under section 201 (1) (d) of the Companies Act, 1956 for any of the products of the company. 17. Provident Fund / Employees State Insurance dues relating to the year and aggregating to Rs.3,27,531/-which has fallen due for deposit with the appropriate authorities has not been deposited. 18. According to the information and explanations given to us, no undisputed amounts payable in respect of Wealth Tax, Custom Duty and Excise duty were outstanding as on March 2001 for a period of more than six months they became payable, as regards to liability of Excise Duty of Rs. 4,70,281/- is concerned the same is contested by the Company, however there are outstanding dues of Income Tax for Rs. 8,38,802/- and of Sales Tax for Rs. 10,42,889/- 19. 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 obligation. 20. The company has become a Sick Industrial Company within the meaning of the clause (0) of the sub-section (1) of section 3 of the Sick Industrial Companies (Special) Provisions Act, 1985. Reference has been made to the Board for Industrial and Financial Reconstruction under section 15 of the Act which was rejected by Board in Appeal. Company is making fresh application. 21. In respect of the trading activity of the company there are no damaged goods in closing stock. For V.B. SHAH & CO. (Chartered Accounts) PLACE: BOMBAY V.B. SHAH DATE: 12/04/01 PROPRIETOR