narmada cement company ltdmerged Auditors report

NARMADA CEMENT COMPANY LIMITED ANNUAL REPORT 2004-2005 AUDITORS REPORT TO THE MEMBERS OF NARMADA CEMENT COMPANY LIMITED 1. We have audited the attached Balance Sheet of Narmada Cement Company Limited (the Company) as at September 30, 2005 and also the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto, 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 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act 1956 (the Act), and on the basis of such checks of the books and records as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable to the Company. 4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: a) we have obtained all the information and explanations 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Act to the extent they are applicable to the Company; e) on the basis of the written representation received from the directors of the Company as on 30th September 2005, and taken on record by the Board of Directors of the Company, we report that none of the directors is disqualified as on 30th September 2005 from being appointed as directors in terms section 274 (1)(g) of the Act; f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto, give the information required by the Act, 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 at 30th September, 2005: (ii) in the case of the Profit and Loss Account, or the profits of the Company for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. For HARIBHAKTI & CO. Chartered Accountants Place : Mumbai CHETAN DESAI Date : 8th November, 2005 Partner Membership No. 17000 ANNEXURE TO THE AUDITORS REPORT Annexure referred to in Paragraph 3 of the Auditors Report of even date to the members of Narmada Cement Company Limited on the accounts for the year ended September 30, 2005. Fixed Assets: 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. 2. We have been informed that fixed assets have been physically verified by the management according to the regular programme of periodical verification in phased manner. The discrepancies noticed on such physical verification were not material. 3. The Company has not disposed off substantial part of its fixed assets during the year. Inventory: 4. We are informed that the inventory has been physically verified by the management during the year at reasonable intervals. 5. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to size of the Company and the nature of its business. 6. The Company has maintained proper records of inventory. We are informed that the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of accounts. Loans and Advances: 7. We are informed that the Company has not taken / granted loans from / to companies, firms or other parties registered under section 301 of the Act, during the year. Internal Controls: 8. There are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets, and for the sale of goods. During the course of our audit we have not observed any continued failure to correct major weaknesses in internal controls. Transactions with parties under section 301 of the Act: 9. According to the information and explanation given to us by the management, there are no transactions that need to be entered in the register maintained under section 301 of the Act. Fixed Deposits: 10. According to the information and explanations given to us, the Company has not accepted any deposits under the provisions of Sections 58A and 58AA of the Act or the rules framed thereunder. Internal Audit: 11. In our opinion, the Company has an adequate internal audit system commensurate with the size of the Company and the nature of its business. Cost Records: 12. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Act. We are of the opinion that prima-facie, the prescribed accounts and records have been maintained. However, we have not made a detailed examination of these records with a view to determine whether they are accurate or complete. Statutory Dues: 13. According to the books and records of the Company as produced and examined by us in accordance with generally accepted auditing practices in India and also based on management representation, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Service Tax, Excise Duty, Custom Duty, Cess and any other statutory dues with the appropriate authorities. 14. According to the information and explanations provided to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues were outstanding as at 30th September 2005 for a period of more than six months from the date they became payable. 15. As at 30th September 2005, according to the information and explanations provided to us, there are no dues of sales tax, income tax, custom duty, service tax, excise duty or cess which have not been deposited on account of any dispute except as follows: Name of Nature of Amount Period to Forum where dispute Statute Dues (Rs. Lakhs) which the is pending amounts relates Sales Tax Sales Tax 126.92 1998-1999 Appellate Authority Laws Tribunal level 0.31 1994-1995 Deputy Commissioner Central Excise 119.22 1997-2004 Appellate Authority Excise Act, Duty Upto Commissioners / 1944 Revisional Authorities Level 6.99 2002-2003 Appellate Authority Tribunal level Customs Customs 934.88 2003-2004 Appellate Authority Act, 1962 Duty Upto Commissioners/ Revisional Authorities level Mineral Interest 130.91 Various Geologist-Amreli Concession on Royalty Years Rules Land Land 44.13 Various Revenue Department Revenue Revenue Years Government of Gujarat Act Potentially Sick Company: 16. The accumulated losses of the Company at the yearend exceeds fifty percent of its networth. The Company has incurred cash profits during the year covered by our audit and cash losses in the immediately preceding financial year. Repayment of Dues: 17. The Company has not defaulted in repayment of dues to bank. Guarantees Given: 18. According to the information and explanations provided to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Sources and Application of Funds: 19. On the basis of review of utilization of funds, which is based on an overall examination of the balance sheet of the Company and related information as made available to us and as represented to us by the management, no funds raised on short basis have been used for long term purpose. Fraud: 20. Based upon the audit procedures performed and the information and explanations provided to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. Other Clauses: 21. Following clauses of Paragraph 4 of Companies (Auditors Report) Order, 2003 are not applicable to the Company and hence the same are not reported upon:- Clause (xii), Clause (xiii), Clause (xiv), Clause (xvi), Clause (xviii), Clause (xix) and Clause (xx). For HARIBHAKTI & CO. Chartered Accountants Place : Mumbai CHETAN DESAI Date : 8th November, 2005 Partner Membership No. 17000