rmi foods ltd Auditors report

RMI FOOD LIMITED AUDITORS REPORT TO THE MEMBERS RMI FOODS LIMITED We have audited the attached Balance Sheet of RMI FOODS LIMITED as at 31st March 1998 and also the Profit & Loss Account of the Company for the year ended on that date annexed thereto. We report as follows :- 1. As required by the Manufacturing and other Companies (Auditors Report order 1998), we enclose in the annexure statement on the matter specified in paragraphs 4 & 5 of the said order. 2. Further to our observations in the annexure referred to in paragraph I above we state that: a) We have obtained all the information explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. h) 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 the books of account of the Company. c) The Balance sheet and the Profit & Loss Account dealt with by the report are in agreement with books of accounts of the Company. d) In our opinion and to the best of our information and according to the explanation given to us the said Balance Sheet and Profit & Loss Account subject to Note II of the schedule 19 regarding Non-Provision of gratuity liability and Note 15 regarding Public Issue Suspense Account give the information required by the Companies Act 1956 in the manner 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 1998 and: ii) In the case of the Profit & Loss Account of the Loss of the Company for the year ended on that date. For V.GUPTA & ASSOCIATES CHARTERED ACCOUNTANTS PLACE: NEW DELHI (V.K.GUPTA) DATE : 28.10.98 PARTNER ANNEXURE TO AUDITORS REPORTS (REFERRED TO IN PARAGRAPH I OF OUR REPORT OF EVEN DATE) 1.a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. b) All the fixed assets of the Company have been physically verified during the year by the Management and no material discrepancies between the book records and physical inventory have been noticed. 2. The Fixed assets of the Company have not been revalued during the year. 3. The Stocks of finished goods, store, spare parts and raw material of the Company have been physically verified by the Management once in the year end. 4. In our opinion, the procedure of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. 5. The discrepancies between the physical stocks and the book stock which have been properly dealt with in the books of account were not significant. 6. In our opinion the valuation of stock of finished goods, store and spare parts in raw materials has been fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the earlier year. 7. In our opinion, the rate of interest and terms and conditions on which loans have been taken from the Parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima-facie prejudicial to the interest of the Company. No interest is paid payable on the loans. 8. The Company has not granted any loans, secured or un-secured to Companies, firm or other parties listed in the Registers maintained under section 301 and/or to the Companies under the same management as defined under sub-section (1B) of the section 370 of the Companies Act, 1956. 9. No Loans or Advances in the nature of loans except interest free loans & advances to employees have been given by the Company. Employees are repaying the principal amount of Loans & Advances as stipulated. 10. In our opinion there is an adequate internal control procedure commensurate with the size of the Company and nature of its business for purchase of stores, raw materials including components, plant and machinery, equipment and other similar assets and for the sale of goods. 11. In our opinion and according to the information and explanations given to us there was no purchase of goods and material and sale of goods, material and services made in pursuance of contract or arrangement entered in the register maintained under section 301 respect of each party. 12. On the basis of information made available to us there was no un- serviceable or damaged stores, raw materials or finished goods 13. The Company has neither accepted nor renewed any deposits defined under Section 58 A of the Companies Act, 1956, and rules framed thereunder. 14. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of by-product. 15. The Company has internal audit system commensurate with the size and the nature of its business. However in our opinion, the same needs to be strengthened. 16. According to the record of the Company, there has been some delays in deposit Provident fund and Employees State Insurance dues during the year with appropriate authorities. However there are no arrears in respect of year ended 31st March 1998, as on the date. 17. We have broadly reviewed hooks of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and we are of the opinion that prima facie prescribed accounts and records have been maintained. We have not however, made a detailed examination of the said records. 18. There was no amount outstanding on 31st March, 1998 in respect of un- disputed income tax, Wealth Tax, Sales Tax, Custom Duty and Excise Duty which were due for more than six months from the date they became payable. 19. During the course of our examination of the books of accounts of accepted auditing practices, have neither come across any personal expenses which have been charged to Profit & Loss Account nor we have been informed of such case by the Management. 20. The Company is a Potentially Sick Industrial Company within the meaning of Section 23 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985. 21. As explained to us there is no damaged goods in the case of goods purchased for resale. For V.GUPTA & ASSOCIATES CHARTERED ACCOUNTANTS (V.K.GUPTA) PARTNER PLACE: NEW DELHI DATE : 28.10.98