shoppers investment finance co ltd Auditors report

SHOPPERS INVESTMENT AND FINANCE COMPANY LIMITED AUDITORS REPORT We have examined the attached Balance Sheet of SHOPPERS INVESTMENT & FINANCE COMPANY LIMITED as at 30th June,1997 and the Profit and Loss Account for the year ended on that date annexed thereto and report that: 1. Balances appearing under, Interest payable on Fixed Deposits and Hirers Control accounts are subject to reconciliation the effect of which on the revenue is not quantifiable. 2. Balances appearing under Stock on Hire, Sundry Debtors and Sundry Creditors are subject to confirmation from the respective parties. 3. In the absence of adequate details of hire purchase and lease transactions year wise, the accuracy of the finance charges/lease income accounted during the year is not capable of detailed verification pending reconciliation. 4. Payment of Dividend declared by the Company at the Annual General Meeting held on 28.12.1996 has not been made in accordance with the provisions of Section 205A of the Companies Act, 1956 to the extent of Rs.1.49 Crores. Subject to our above observations, in our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with the notes thereon, 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 the Companys affairs as at 30th June, 1997 and ii) in the case of the Profit and Loss Account, of the Profit for the financial year ended 30th June, 1997. 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. In our opinion, proper books of account, as required by law, have been kept by the Company so far as it appears from our examination of these books. The Companys Balance Sheet and Profit and Loss Account, dealt with by this Report, are in agreement with the books of account. As required by the Manufacturing and other Companies (Auditor Report) Order, 1988, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we further report that: 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets other than equipment on lease. The assets other than those leased out have been physically verified by the Management during the year and no material discrepancies were noticed on such verification. 2. None of the fixed assets have been revalued during the year. 3. According to the explanation given to us physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores, spare parts and raw materials other than Stock-on-Hire. 4. The procedure for physical verification of stocks other than Stock-on- Hire followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. 5. According to the explanations given to us no material discrepancies were noticed on physical verification of stocks as compared with the books records. Minor discrepancies have been properly dealt with in the books of accounts. 6. On the basis of our examination of stocks other than Stock-on-Hire, we are satisfied that the valuation of such stocks is fair and proper and is in accordance with the normally accepted accounting principles. The basis of valuation of such stocks is the same as in the preceding year. 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 or from companies under the same Management as defined under Sub-section (lB) of Section 370 of the Companies Act, 1956. 8. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 or from companies under the same Management as defined under Sub section (IB) of Section 370 of the Companies Act, 1956. 9. (a) Loans and advances in the nature of loans have been given to employees and certain other parties who have been repaying the principal amount and interest wherever applicable and in cases of default, reasonable steps have been taken for their recovery. (b) In respect of hire purchase advances made by the Company, shown as stock on hire, where instalments are overdue, we are of the opinion that reasonable steps have been taken by the Company for their recovery. 10. In our opinion and according to the explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for purchase of assets and for sale of goods. 11. In our opinion and according to the information and explanations given to us, the transactions of purchase of goods and materials and sale of goods, materials & 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 from each party have been made at prices which are reasonable, having regard to prevailing market prices for such goods, materials or services or the prices at which transactions for similar services have been made with other parties. 12. The Company does not generate by-products or scrap. 13. The Company has a system of internal audit which in our opinion needs to be further strengthened to be commensurate with the size of the Company and the nature of its business. 14. The Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for the Company. 15. The Company is regular in depositing Provident Fund and Employees State Insurance dues with the appropriate authorities. 16. There are no undisputed amounts payable in respect of income-tax, wealth tax, sales tax, customs duty and excise duty outstanding as at the last day of the financial year for a period of more than six months from the date they become payable. 17. According to the information and explanations given to us, and on the basis of test checks carried out by us, no personal expenses have been charged to revenue account. 18. The provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 are not applicable to the Company. 19. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities. 20. The Company has accepted deposits from the public and the directives issued by the Reserve Bank of India have not been complied with reference to maintenance of liquid assets which has marginally fallen below the required percentage during the relevant financial year and non re-payment of deposits on maturity. 21. According to the information and explanations given to us, the provisions of special statutes applicable to chit fund, nidhi or mutual benefit society are not applicable to the Company. 22. Proper records have been maintained by the Company of the transactions and contracts in respect of investments in shares/securities and timely entries have been made therein; such shares, securities, debentures and other investments, have been held by the Company in its own name. For SAMPATH KUMARAN & CO. Chartered Accountants P.T.RAM KUMAR Partner Place: Chennai Date : 30th September, 1997