national switchgears ltd Auditors report

NATIONAL SWITCHGEARS LIMITED ANNUAL REPORT 2001-2002 AUDITORS REPORT THE AUDITORS REPORT TO THE MEMBERS OF NATIONAL SWITCHGEARS LIMITED We have audited the annexed Balance Sheet of M/s National Switchgears Limited as on 31st March 2002- and the Profit & Loss Account for the year ended on that date and reports that 1. 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. 2. In our opinion, proper books of accounts have been kept by the Company as required by law. so tar as it appears from our examination of these books. The Balance Sheet and Profit & Loss Account referred to in this report are in agreement with the Books of Accounts. 3. In our opinion, the Balance Sheet and Profit & Loss Account comply with the requirements of the mandatory accounting standards referred to Sub- section (3C) of section 211 of the Companies Act, 1956, to the extent applicable. 4. On the basis of information obtained, none of the Directors of the Company are prima facie disqualified under Section 274(1)(g) of the Companies Act, 1956 as on 31st March, 2002 from being appointed as Directors. 5. Attention of the members is drawn to the following 5.1 Operations of the Company have been discontinued including discontinuance of services of employees, excepting a few security staff. Accordingly, as stated in par a A-1 and B-2 of Schedule XII, the accounts of the Company have been prepared on the basis of discontinuance of operations i.e. not on Going Concern Basis. 5.2. The security personnel have filed a suit against the company for their regularisation as employees of the company. Since the matter is subjudice, no liability has been determined and considered in accounts. No amount has been considered as contingent liability even. 5.3 Par a A(3) of Schedule XII relating to revaluation of assets in accordance to the Accounting Standard 24 of the Institute of Chartered Accountants of India though being applicable w.e.f, 1st April, 2002, has been considered by the Company while finalising the accounts. Accordingly, the Company has recognised the impairment loss of Rs 8,348,726/- on the value of fixed assets re, on leased land and plant & machinery including furniture & fixture on the basis of sale offers received from the parties and accepted by the management. Had this not been considered, the net loss would have been lower by the above amount. Subject to above in our opinion and to the best of our information and according to the explanations given to us the Balance Sheet and Profit & Loss Account read together with the notes thereon, give the, information as required by the Companies Act, 1956 in the manner so required and give a true and fair view: a) In the case of Balance Sheet, the state of affairs of the Company as on 31st March 2007 and b) In the case of Profit & Loss Account of the loss of the Company for the year ended on that date. 6. As required by the Manufacturing and other Companies (Auditors) Report Order, 1988, issued by tile Company Law Board in terms of under section 227(4A) of the Companies Act 1956, we further report that: i. The Company has maintained proper records showing full particulars including quantitative details of the fixed assets. As explained to us, all the fixed assets have been physically verified by tire management during the year according to the regular program which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification. ii. The Companys assets have been revalued during the year on the basis of sale offer received from the parties and the impairment loss to fixed assets has accordingly been reduced from the value of the fixed assets: iii. There was no stock of stores. raw material, finished goods and spare parts. Hence the clause (iii), (iv). (v), (vi) and (xii) relating to MAOCAR0 are not applicable. iv. The Company has not taken any loans secured or unsecured from the Companies, firms or other parties listed in the register maintained under Section 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. v. The Company has not granted any loan secured or unsecured to the Companies, of other parties listed in the register maintained under the sub section (1B) of section 370 of the Companies Act, 1956. vi. The Company has not given any loans or advances to the parties, Companies and firms listed in the register maintained under section 301 of the Companies Act, 1956, and from the companies under the same management as defined under Sub-section (13) of section 370 of the Companies Act, 1956. vii. In our opinion and according to information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for sale of raw material including components, stores, plants and machinery equipments. viii. As informed to us the Company has not purchased ar sold goods and materials aggregating to Rs.50,000/- or more to any party in pursuance of contractor arrangement entered in the register maintained under section 301 of the Companies Act, 1956. ix. During the year, the Company has not accepted any deposits from the public covered under the provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. x. The Company has no by-products and there is no sale of scrap. xi. No Internal Audit has been done during the year. xii. The Central Government has not prescribed the maintenance of cost records by the Company under section 209(1)(d) of the Companies Act, 1956 or of its products. xiii In view of closure of operation of the Company no Provident Fund and Employees State Insurance have been deducted and deposited during the year with the appropriate authorities. xiv. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Wealth Tax. Sales Tax, Customs Duty and Excise Duty which are outstanding as on 31st March, 2002 for a period of more than six months from the date they become payable. xv. On the basis of the examination of the books of accounts as carried out and in accordance with the generally accepted auditing practices and according to the information and explanations given to us, no personal expenses of employees or Directors have been charged to these accounts other than those payable under contractual obligations or in accordance with the generally accepted business practices. xvi. The Company is not a sick industrial Company within the meaning of section (3)(1)(o) of the Sick Industrial Company (Special Provisions) Act, 1985. For Krishna Sharma & Co. Chartered Accountants Sharad Sharma Propietor Date : 20th June, 2002 For & on behalf of the Board of Directors for KRISHNA SHARMA & CO. Chartered Accountants SHARAD SHARMA Proprietor PLACE: LUCKNOW DATE : 20.06.2002