chiplun fine chemicals ltd Auditors report

CHIPLUN FINE CHEMICALS LIMITED ANNUAL REPORT 2003-2004 AUDITORS REPORT To the Members of Chiplun Fine Chemicals Ltd. For the year ended on 31st March 2004. 1. We have audited the attached Balance Sheet of CHIPLUN FINE CHEMICALS LTD: as at 31st March, 2004 and the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 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 misstatements. 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 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. 4. Further to our comments in the Annexure referred to above, we REPORT that :- a. We have obtained ail me 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 those books. c. The Balance Sheet and the Profit & Loss Account dealt with by this Report are in agreement with the Books of Account. d. In our opinion, the Balance Sheet and Profit & Loss Account dealt with by this report comply with the Accounting Standards referred to in sub- section 3(C) of section 211 of the Companies Act, 1956. e. 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 a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956; f. In our opinion and to the best of our information and according to the explanations given to us, the said account 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 on 31st March, 2004 ii) in the case of the Profit & Loss Account, of the PROFIT for the year ended on that date. For SANZGIRI ACHARYA & ASSOCIATES Chartered Accountants Place : Mumbai M.K. SANZGIRI Dated : 22nd July, 2004 (Partner) ANNEXURE TO THE AUDITORS REPORT (REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE) i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification. (c) During the year, the company has not disposed off any part of the Fixed Assets. ii. (a) The Inventory has been physically verified during the year by the management. In our, opinion, the frequency of verification is reasonable. (b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) The company is maintaining proper records of inventory. The discrepancies noticed by management on verification between the physical stocks and the book records were not material. iii. (a) The company has taken loans from parties covered In the Register maintained under section 301 of the Companies Act, 1956. The Maximum amount involved during the year was Rs. 170.03 Lacs and the Year-end balance of loans taken from such parties was Rs. 170.03 Lacs. (b) In our opinion, the rate of interest (interest free) and other terms and conditions on which loans have been taken from, companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudical to the interest of the company. (c) The company is regular in repaying the principal amounts as stipulated. iv. 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 fixed assets. During the course of our audit, we have, not observed any continuing failure of correct major weaknesses in internal controls. v. (a) According to the Information and explanation given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act 1956 have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered In the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs In respect of any party during the year have been made at prices which are reasonable having regard to prevailing market at the relevant time. vi. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from public. The provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (acceptance of Deposits) Rules, 1975 are not applicable to the company. vii. In our opinion, the company has an internal audit system commensurate with. the size and nature of its business. viii. We are informed that the company is taking opinion about maintenance of cost accounting records under section 209 (1) (d) of the Companies Act, 1956, in respect of Companys products. Such records have not been maintained so far. ix. (a) The company is not regular in depositing with appropriate authorities undisputed statutory dues including income tax, profession tax, provident fund, custom duty, excise duty, cess and other material statutory dues applicable to it. The arrears of statutory dues outstanding for more than six months. Nature Amount Period to which the Remarks of Dues (Rs.) amount relates DS 1,07,723/- 2000-01 not yet paid DS 42,215/- 2001-02 not yet paid DS 90,302/- 2002-03 not yet paid Provident Fund 7,83,543/- up to July 2003 not yet paid Profession Tax 47,105/- 2000-01 not yet paid Profession Tax 56,320/- 2001-02 not yet paid Profession Tax 65,035/- 2002-03 not yet paid (b) According to the information and explanations given to us, no disputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty and Excise Duty and cess were in arrears, as at 31/03/2004 for a period of more than six months from the date !hey became payable. x. In our opinion, the Accumulated losses of the company are not more than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, or bank except discussion in progress on enhancement of facilities by State Bank of India. xii. We are of the opinion that the company has maintained adequate records whether the company has granted loans and advances on the basis of security by way of pledge of shares and other securities. xiii. In our opinion, the company is not a chit fund, or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company. xiv. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003. xv. In our opinion, the terms and conditions on which the company has not given guarantees for loans taken by others form banks or financial institutions are not prejudicial to the interest of the company. xvi. In our opinion, the terms loans have been applied for the purpose for which they raised. xvii. According to the information and explanations given to us and on an overall examinations of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital. xviii. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. xix. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued and debentures. xx. According to the Information and explanations given to us, during the period covered by our audit report, the company has not made any public issue. xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit. For SANZGIRI ACHARYA & ASSOCIATES Chartered Accountants Place :- Mumbai M.K. SANZGIRI Date :- 22nd July, 2004 (Partner)