rmi steels ltd share price Auditors report

RMI STEELS LTD. ANNUAL REPORT 2000-2001 AUDITORS REPORT TO THE SHAREHOLDERS We have audited the attached Balance Sheet of RMI STEELS LIMITED as at 31st March, 2001 and also the Profit and Loss Account for the year ended on that date annexed thereto. and report that:- 1. As required by the Manufacturing and Other Companies (Auditors Report) Order. 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act. 1956 we annex hereto a statement on the matter specified in paragraphs 4 and 5 of the said Order. 2. Further to our comments in annexure referred to in paragraph I above:- (a) We have obtained all the information and explanations which to the best of our acknowledge and belief were necessary for the purpose of our audit: (b) 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 such books: (c) The Balance Sheet and Profit and Loss Accounts dealt with by this report are in agreement with the books of account: (d) In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956. (e) On the basis of written representation received from the Directors, and taken on record by Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2001 from being appointed as Directors in terms of clause (g) of the sub-section (1) of Section 274 of the Companies Act, 1956. (f) In our opinion and to the best of our information and explanation given to as, the said Balance Sheet and the Profit & Loss Account subject to Note No.9 regarding Balances of Sundry Debtors. Sundry Creditors. Advances to Suppliers and Others including debit notes which are subject to confirmation/reconciliation and consequential adjustment, if any, Note No.10 regarding provisions for doubtful debts for which in the absence of confirmation/reconciliation of the accounts from the parties concerned, we are unable to comment on the adequacy of such provisions and Note No.11 regarding provision of interest on Term Loans of financial institutions on the basis of simple rate of interest instead of compound rate of interest and also non-provision of penal interest as required under loan agreement which have resulted in under statement of Losses for the year by Rs.40.52 Lakhs and liabilities and Losses upto 31.03.2001 are lower by Rs.82.32 lakhs all notes referred to in Schedule 15 and read together with accounting policies and other notes to accounts given in Schedule 15 give the information required by the Companies Act, 1956 in the manner so required and give a true and fair views- i) in the case of Balance Sheet of the state of affairs of the Company as at 31st March, 2001; and ii) in the case of Profit and Loss Account of the Loss of the Company for the year ending on that date. for B.K. KAPUR AND COMPANY Chartered Accountants, PLACE: NEW DELHI (N.K. JAIN) F.C.A. DATED: 05.09.2001 Partner. ANNEXURE TO THE AUDITORS REPORT Referred to in Paragraph-1 of our Report of even date on the accounts of RMI STEELS LIMITED for the year ending 31st March, 2001. 1. a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets. b) As informed to us, all the fixed assets of the Company have been physically verified during the year by the management at reasonable intervals and no material discrepancies between the book records and the physical inventory have been noticed on such verification. 2. The fixed assets of the company have not been revalued during the year. 3. The stocks of finished goods, Stores, spare parts and raw material of the Company except for the stocks lying with the third parties. have been physically verified by the Management at reasonable intervals during the year/at the year end. 4. According to information and explanation given to us, in our opinion, the procedures of physical verification of stocks followed by the management was reasonable and adequate in relation to the size of the Company and nature of its business. 5. the discrepancies noticed on physical verification of stocks as compared to book records, which were not material, have been properly dealt within the books of accounts. 6. On the basis of our examination of stock records, in our opinion, the valuation of stock is fair and proper in accordance with the normally accepted accounting principles, and is on the same basis as in the preceding year. 7. According to information and explanations given to us, the Company has not taken any loan secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, and/or from the Company under the same management as defined under Section 370 (1-B) of the Companies Act, 1956. 8. According to information and explanation given to us, Company has given unsecured loan to a Company under the same management. Except this Company has not given any other loan secured or unsecured, to Companies firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and/or to the Company under the same management as defined under Section 370(1-B) of the Companies Act, 1956. The rate of interest and other terms and conditions for Loan to the Company, in our opinion, is not prima facie prejudicial to the interest of the Company. 9. The parties to whom loans or advances in the nature of Loans and deposit have been given are repaying the principal amount as per stipulations, wherever made. Interest, wherever applicable has been debited to the account of parties. 10. In our opinion and according to the information and explanation given to us. there is an adequate internal control procedure commensurate with the size of the Company and nature of its business, for purchases of stores, raw materials, including components, plant and machinery, equipment and other assets, and with regard to the sale of goods. 11. According to information and explanation given to us, except the transaction for sale of goods there was no other transaction for purchase of goods and material and sale of material and services aggregating during the year to Rs.50,000/- or more in respect of each party in pursuance of contracts or arrangement entered in the Register maintained under Section 301 of the Companies Act, 1956. The transaction for the sale of goods have been made at price which are reasonable having regard to the prevailing market price for such goods or the prices at which similar transaction have been made with other parties. 12. As explained to us, the Company has a regular procedure for the determination of unserviceable or damaged stores, raw materials and finished goods. Adequate provisions has been made in the accounts for the loss arising on the items so determined. 13. The Company has not accepted any deposit from the public. 14. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business. 15. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of scrap. The Company has no by-product. 16. The Central Government, to the best of our knowledge and belief, has not prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 for the products of the Company. 17. According to the records of the Company. Employees Provident Fund dues have not been regularly deposited during the year with the appropriate authorities. There was arrears of Rs.15,43,990/- at the year end out of which Rs.10,08,254/- has been subsequently deposited. Further the provision of Employees State Insurance Act, 1948, as informed to us, are not applicable to the Company for the time being. 18. According to the information and explanation given to us, there were no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax and Custom duty as at 31st March, 2001, which was outstanding for a period of more than six months from the date they became payable. 19. According to the information given to us and the examination of the records made by us, no personal expenses have been charged to the revenue account other that those payable under contractual obligations or generally accepted business practice. 20. The Company has become a sick industrial Company within the meaning of clause (O) of section 3(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 as its accumulated Losses exceeded its net worth as at the end of the financial year. As informed to us by the management reference to BIFR shall be made in due course. 21. In respect of trading activities, there was no damaged goods. for B.K. KAPUR AND COMPANY Chartered Accountants, PLACE: NEW DELHI (N.K. JAIN) F.C.A. DATED: 05.09.2001 Partner