gordon herbert india ltd Auditors report

GORDON HERBERT (INDIA) LIMITED AUDITORS REPORT TO THE SHAREHOLDERS OF GORDON HERBERT (INDIA) LTD. We have audited the attached Balance Sheet of GORDON HERBERT (INDIA)) LIMITED as at 31 December, 1 998 and also the Profit and Loss Account of the company for the year ended on that date annexed thereto in which the accounts of branches are incorporated 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 (4A) of the Companies Act, 1 956 and on the basis of such checks of books and records of the company as were considered appropriate and the information and explanation given to us during the course of audit, we, annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order. 2. Further to our comments in the annexure referred to in para 1 above we state that: a- We have obtained all informations 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 accounts, as required by law have been kept by the company so far as appears from our examination of such books, and proper returns adequate for the purpose of the audit, have been received from the branches, not visited by us. c- The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts . !n our opinion the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred in Section 211 (9C) of the Companies Act, 1 956 to the extent applicable. d- In our opinion and to the best of our information and according to explanation given to us the said accounts, read together with Notes on Accounts in Schedule "P", give the information required by the Companies Act, 1 956 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 31st December, 1998, and ii) In the case of Profit and Loss Account of the Profit for the period ended on that date . For and on behalf of Bansal & Co. Chartered Accountants PLACE : NEW DELHI S. K. Bansal DATE : APRIL 19,1999 PARTNER ANNEXURE TO AUDITORS REPORT In our opinion :- i) the company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets. Physical verification of its assets was carried out by the Management during the period and having regard to the size of the company and nature of the assets, no material discrepancies between the book records and physical verification have been noticed. ii) Physical verification of stocks except lying with third parties have been conducted by the Management during the period at reasonable intervals in respect of finished goods, stores, spare parts, spare parts, raw materials and shares. In our opinion. the frequency of verification is reasonable. iii) The procedure of physical verification of stock followed by the Management is reasonable and adequate in relation to the size of the company and nature of its business. iv) The discrepancies noticed on verification between the physical stock and book records were not material and the same have been properly dealt within the books of accounts. v) Valuation of stock of finished goods, stores, spare parts, raw materials and shares is fair and proper and in accordance with normally accepted principles and is on the same basis as in the previous year. vi) The company has not taken any loans, secured or unsecured, from companies/firms or any other parties listed in the register maintained under section 301 of the Company Act,1956 and to companies under the same management as defined under section 370 (1B) of the companies act, 1956. vii) The company has not granted any loans, secured or unsecured, to companies/firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 and to companies under the same management as defined under section 370 (1B) of the companies act 1956. viii) There are no loans, or advances in the nature of loans except interest free advances amounting to Rs. 1.18 lacs given to the employees of the company who are repaying the principal amount as stipulated. ix) There is an adequate internal control procedure commensurated with the size of the company and nature of its business for the purchase of stores, raw materials including components, plant & machinery, equipments and other assets, and for the sale of goods. x) The transactions of the purchase of goods and materials and sale of goods,materials and services made in pursuance of contracts of 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 in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such Goods, Materials and Services or the prices at which transactions for similar goods or services have been made with other parties. xi) On the basis of evaluation made by persons responsible for custody of stocks, unserviceable or damaged stores, raw material or finished goods have been determined by the Company and necessary adjustment for loss have been made in accounts. xii) The company has not accepted any deposit from the public therefore the provisions of Section 58A of the Companies Act, 1956 are not applicable. xiii) The Company is maintaining reasonable records for the Sale and Disposal of realisable Scrap and the Company has no by-products. xiv) In our opinion, the company has an adequate internal audit system commensurate with the size and nature of its business. xv) The cost records have not been prescribed by the Central Government under Section 209(1)(d) do the Companies Act,1956. xvi) Provident Fund has been regularly deposited with appropriate authorities during the period. xvii) There was no undisputed amount in respect of Income Tax, Wealth tax, sales Tax, Custom Duty and Excise Duty outstanding as at the end of the financial period for a period of more than six months from the date they become payable. xviii) According to the information and explanations given to us, we have not come across any personal expenses which have been charged to Profit and Loss Account other than those payable under contractual obligations or in accordance with prevailing business practices. xix) 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. xx) In respect of the companys service activity in our view, considering its nature, the system of allocation of materials and man hours consumed on jobs are not in existence as they are not practicable in view of the nature of the activity. The system of recording of receipts, issues and consumption of materials and allocation thereof and the system of authorization at proper levels are adequate for internal control in respect of such service activity commensurate with the size of the company and nature of its business. xxi) In case of trading activity, we were informed that there were no damaged goods. xxii) In respect of investment and financial activities of the company, adequate document and records have been maintained and timely entire made therein. For and on behalf of Bansal & Co. Chartered Accountants Place : New Delhi S. K. Bansal Date : April 19,1999 PARTNER