mohatta heckel ltd Auditors report

MOHATTA AND HECKEL LIMITED ANNUAL REPORT 2001-2002 AUDITORS REPORT To the Members of Mohatta & Heckel Limited 1. We report that we have audited the attached Balance Sheet of M/s. Mohatta & Heckel Limited as at 3lst March, 2002 and also the Profit & Loss Account for the year ended on that date annexed thereto both of which we have signed under reference to this report. 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 use 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. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thefeon and attached thereto and the Statement on Significant Accounting Policies give in the prescribed manner the information required by the Companies Act, 1956, of India (the Act), and also give respectively a true and fair view in conformity with the accounting principles generally accepted in India subject to following notes of Schedule M: (i) Note no. 1(v): In respect of payment of gratuity. (ii) Note no. 9: In respect of non provision of interest on C.C. A/c., SBI Mutual fund (Debentures) & Other deposit (amount not ascertained) (iii) Note no. 10: In respect of non provision for power & fuel. (a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2002 and (b) in the case of the Profit and Loss Account, of the loss for the year ended on that date. 4. 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. In our opinion, proper books of account have been kept by the Company as required by law so far as appears from our examination of these books and the aforementioned Balance Sheet and Profit and Loss Account are In agreement therewith. 5. In our opinion, these accounts have been prepared in compliance with the applicable Accounting Standards referred to in section 211(3C) of the Act. 6. On the basis of written representations received from the director, as on 31st March, 2002 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2002 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act. 7. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 dated 7th September 1988 issued by the Government of India in terms of sub-section (4A) of Section 227 of the Act and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that: i. The fixed Assets register of the Company which shows the full particulars including quantitative details & situation of Fixed Assets is in the process of being updated. We have been informed that Fixed Assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification. ii. None of the Fixed Assets have been revalued during the year. iii. We have been informed that the Management has physically verified the stock of Finished Goods, Stores, Spare Parts and Raw Materials during the year. iv. In our opinion and according to the information and explanation given to us, the procedure followed by the management for such physical verification are, reasonable and adequate in relation to the size of the company and the nature of its business. v. The discrepancies noticed on such verification between the physical stock and books and records were not material in relation to the operations of the Company and so have been properly dealt with in the books of accounts. vi. In our opinion the valuation of stock is fair & proper and in accordance with the normally accepted accounting principles and is on the same basis as in the previous year. vii. The Company has taken unsecured loans from companies listed in the register maintained u/s 301 of the Companies Act., 1956 and from the companies under the same management as defined under sub section (1B) of section 370 of the Companies Act, 1956. In our opinion the terms and conditions of such loans are prima facie not prejudicial to the interest of the company. viii. The Company has not granted any loans secured or unsecured to companies, firm or other parties in which directors are interested. ix. In respect of loans & advances in the nature of loans there are cases where the principal amount & interest thereon have not been recovered as stipulated & reasonable steps have been taken by the company for their recovery. X. In our opinion and according to the information and explanations given to us, there are inadequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of Plant & Machinery, Equipment and other assets and sale of goods. xi. According to the information and explanation given to us, no transactions of Purchase of goods, sale of goods and services, made in pursuance of contracts and arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rs. 50,000/-. xii. According to the information and explanation given to us, the Company has not determined damaged or unserviceable stores and raw materials during the year. xiii. The Company has accepted deposits from Share Holders. In our opinion the directions issued by the Reserve Bank of India and the rules framed thereunder have been complied with. xiv. The company has maintained reasonable records for the sale and disposal of realizable scrap. The Company has no by-products. Xv. The Company did not have any formal Internal Audit system during the period under review. Xvi. As per the information given to us, maintenance of costs records has not been prescribed by the Central Government under Section 209(1)(b) of the Companies Act, 1956 xvii. According to the Information & explanation given to us the company has not been regularly depositing Provident Fund dues & Employees state Insurance dues with appropriate authorities. xviii. According to the information and explanation given to us, the books and records examined by us, there are no undisputed amounts payable in respect of income-Tax , Sales-Tax, Customs Duty, and Excise. Duty outstanding as at 31st March, 2002 for a period exceeding six months from the date they become payable. xix. On the basis the examination of (i) the books of accounts (ii) other records, (iii) the explanations given to us on our inquiries, no personal expenses have been charged to revenue account. Xx. The Company has been declared as Sick Industrial Company within the meaning of Sick Industrial Companies (Special Provisions) Act 1985, by the Board for Industrial & Financial Reconstruction. xxi. In respect of the trading activities, as per information & explanations given to us no damaged goods have been determined by the company and no provision for the loss have been made in the Books of Accounts. xxii. In respect of services rendered : a. In our opinion the Company has a reasonable systems of recording receipts, issues and consumption of materials and stores and allocating materials and stores consumed to the relative jobs, commensurate with its size and nature of its business. b. Considering the nature of services rendered and the basis of billing, it is not considered necessary to have a system of allocation of man-hours utilized to the relative jobs. c. In our opinion there is a reasonable system of authorization of proper levels with necessary control on the issue of stores and allocation of stores and standard labour cost to various jobs and the related system of internal controls of the Company is commensurate with the size and the nature of its business. For M.V. KRISHNA MOORTHY Chartered Accountants (M. V. KRISHNA MOORTHY) Proprietor Place: Mumbai Date : July 18th 2002