nubal india ltd Auditors report

NUBAL (INDIA) LIMITED ANNUAL REPORT 1999-2000 AUDITORS REPORT To the Members of Nubal (India) Limited, Chennai. We have audited the attached Balance Sheet of M/s. NUBAL (INDIA) LIMITED as at 31st March 2000 and the annexed Profit & Loss Account of the Company for the year ended on that date. In accordance with the provisions of Section 227 of the Companies Act, 1956, we report as under 1. As required by the Manufacturing and other companies (Auditors Report) Order, 1988 issued by the Government of India U/S 227 (4A) of the Companies Act 1956, we enclose in the annexure our report on the matters specified in paragraphs 4 and 5 of the said Order. 2. Further to our comments in the annexure referred to in paragraph 1 above a) We have obtained all the information and explanation, 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 Profit and Loss Account referred to in this report are in agreement with the books of account. d) In our opinion, the Profit and Loss account and the Balance Sheet dealt with by this report complied with the accounting standards referred to in sub-section 3(c) of section 211 of the Companies Act 1956. Attention is invited to the following : i) Work-in-progress and finished goods are valued on the basis of the technical officers estimate. We are unable to comment whether the valuation of work-in-progress and finished goods are true and fair. ii) Note (i) of Schedule G in respect of provision for leave Encashment which has not been made. iii) Note No.3 Schedule H regarding excise duty, in respect of which we are unable to express any opinion. e) Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the accounting policies and the notes thereon in schedule "G" & "H" give the information required by the Companies Act, 1956 in the matter so required and give a true and fair view : i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2000 and ii) In the case of the Profit & Loss Account, of the profit of the Company for the year ended on that date. Place : Chennai For KURUVILLA & KURUVILLA Date : 29th June 2000 Chartered Accountants (K. Ramachandran) Partner ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 1 of our report of even date) 1. The Company is maintaining proper records to show full particulars including quantitative details and situation of all fixed assets. There is annual verification of Fixed Assets by the management, which in our opinion is reasonable having regard to the size of the Company and nature of assets. No discrepancies have been noticed on such verification. However, in respect of new items of machinery and equipment purchased during the year, the said fixed assets register is being updated. 2. None of the fixed assets have been revalued during the year. 3. As explained to us, stocks of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals during the year. 4. As explained to us, the procedure of physical verification of stocks followed by the management,are in our opinion, reasonable, and adequate in relation to the size of the Company and the nature of its business. 5. The discrepancies between the physical stocks and book records were not material and have been properly dealt with in the books accounts. 6. In our opinion, the valuation of stocks except work-in-progress and finished goods is fair and proper, in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year, work-in-progress and finished goods are valued on the basis of the technical officers estimates (Refer para 2(d) (i) of the Report). 7. The Company has not taken any loans, secured or unsecured, from Companies, Firms, or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956 except unsecured loans from directors. The terms and conditions of such loans are prima-facie not prejudicial to the interest of the Company. As explained to us, there are no Companies under the same management referred to in sub-section (1 B) of Section 370 of the Companies Act. 1956. 8. The Company has not granted any loan, 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 Sub section (1 B) of Section 370 of the said Act. 9. The parties to whom loans and advance in the nature of loans have been given by the Company are generally repaying the principal amounts as stipulated and also interest where applicable. 10. In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and nature of its business, through personal supervision of the management, in respect of purchases of stores, raw material including components, trading goods, plant and machinery and other assets and for the sale of goods. 11. According to the information and explanations given to us, there have been no transaction of purchases of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and aggregating during the year to Rs.50,000/- or more in respect of each party. 12. As explained to us, the Company has an adequate system of determining unserviceable or damaged stores, raw material and finished goods, trading goods. 13. The Company has accepted certain unsecured loans during the year which in our opinion would fall under the provisions of Section 58A of the Companies Act 1956 and the Companies (Acceptance of Deposits) Rules, 1975 which the Company has not complied with. 14. As explained to us, the Company is maintaining reasonable records, of sale and disposal of realizable scrap. We are informed that the Company has no realizable by-product. 15. In our opinion, the Company has an internal audit system, which needs to be strengthened to be commensurate with the nature and size of the business. 16. The Central Government has not prescribed the maintenance of Cost records by the Company under section 209 (1) (d) of the Companies Act, 1956 for any of the products of the Company. 17. The Company has not been regular in depositing Provident Fund and Employees State Insurance dues with the appropriate authorities within the due dates. The amount of Provident Fund not deposited with the authorities was Rs.509154.64 as on 31.03.2000. The amount of E.S.I. not deposited with authorities as on 31.03.2000 was Rs.296,049.89. 18. According to the information and explanations given to us, no undisputed amounts payable in respect of Wealth Tax, Customs Duty and Excise Duty were outstanding as at 31st March 2000, for a period of more than six months from the date they became payable except for the Sales tax of Rs.36,062 and Income Tax deducted at source and not remitted to the Department of Rs.43,067/-. 19. According to the information and explanations given to us and the records of the Company examined by us, no personal expenses have been charged to the revenue account other than those payable under contractual obligations or in accordance with the generally accepted business practices. 20. 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. Place : Chennai For Kuruvilla & Kuruvilla Date : 29th June 2000 Chartered Accountants (K. Ramachandran) Partner