shree acids chemicals ltd Auditors report

SHREE ACIDS AND CHEMICALS LIMITED ANNUAL REPORT 1999-2000 AUDITORS REPORT The Members, SHREE ACIDS AND CHEMICALS LTD. We have audited the attached Balance Sheet of Shree Acids and Chemicals Ltd. as at 30th June, 2000 and the Profit and Loss Account of the Company 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 enclose in the Annexure a Statement on the matters specified in the paragraphs 4 and 5 of the said order. 2. Further to our comments in the Annexure referred to in paragraph 1 above, we state that: a) 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. b) In our opinion, proper books of account as required by Law have been kept by the Company so far as appears from examination of books. c) The Balance Sheet and Profit & Loss Account dealt with by the report are in agreement with the Books of Account. d) In our opinion, the Balance Sheet and Profit & Loss Account complies with the Mandatory Accounting Standards referred to in Sub-section 3(c) of Section 211 of the Companies Act, 1956. e) In our opinion and to the best of our information and according to the explanations given to us, the accounts subject to following Notes of Schedule 14: Note No. 4 : relating to non-provision of accruing liabilities for future payment of gratuity amounting to Rs.58.28 lacs; Note No. 10: relating to change in the basis of accounting of Excise Duty in respect of Closing Stock of goods manufactured by the Company, pursuant to revised guidance note on "Accounting treatment of Excise Duty" issued by the Institute of Chartered Accountants of India, having no impact on the loss for the year; Note No. 13: relating to no provision being made for the amounts considered doubtful of recovery for Rs.492.04 lacs of Sundry Debtors/Loans & Advances and for Rs. 341.49 Lacs of stocks lying with other parties. and read together with other notes thereof and schedules thereto 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 Balance Sheet of the state of affairs, of the Company as at 30th June, 2000 and ii) In the case of Profit & Loss Account of the Loss for the year ended 30th June, 2000. for K. L. Chandak & Co. Chartered Accountants Place : Delhi Punit Jain Dated : 15.11.2000 Partner ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE 1. The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. We have been informed that the fixed assets of the Company have been physically verified by the Management at reasonable intervals and no serious discrepancy has been noticed on such verification as compared to the information available with the Company. 2. None of the Fixed Assets have been revalued during the year. 3. The Stocks of Finished Goods, Stores, Spare Parts and Raw Materials of the Company at all its locations including those lying with the third parties and in transit have been physically verified by the management at reasonable intervals over which we have relied upon. 4. As explained to us, the procedure of physical verification of stocks followed by the Management is reasonable and adequate in relation to the size of the Company and nature of its business. 5. The discrepancies between physical stocks and book stocks have been properly dealt with in the books of account. 6. As explained to us, the valuation of stocks is fair and proper and by and large in accordance with normally accepted accounting principles and is on the same basis as in the preceding year. 7. The Company has not taken any loans from companies, firms and other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, and/or from the companies under the same Management. 8. The Company has not given any loan to companies, firms and other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and/or to the Companies under the same management. 9. Advances in the nature of Loans given to employees and included in advances are being repaid as stipulated and no interest is charged on such advances. 10. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to accounting of purchase of Stores, Raw Materials including components, plant and machinery, equipment 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 sale of goods, materials and services, made in pursuance of contracts or arrangements entered in the Registers maintained under Section 301 and aggregating during the year of Rs.50,000/- or more in respect of each party have been made at prices which are generally reasonable having regard to prevailing market prices for such goods, materials or services or the prices at which transactions for similar goods, materials or services have been made with other parties. 12. As explained to us, the Company has regular procedure for determination of unserviceable or damaged stores and raw materials. Adequate provision has been made in the accounts for the loss arising on the items so determined. 13. In our opinion and according to the information and explanations given to us, the Company has complied with provisions of Section 58A of the Companies Act, 1956 and the rules made thereunder with regard to deposits accepted from public. 14. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of by-products and scrap. 15. It was explained to us that the Company has adequate staff commensurate with the size and nature of its business to carry out internal audit. However reports of such internal audit have not been provided to us. 16. We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the Central Govt. for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima-facie the prescribed records have been maintained. 17. The Company has been generally regular in depositing Provident Fund dues statutorily payable under the provision of the Provident Fund Act and the rules made thereunder during the period. However there had been some delay in depositing with appropriate authority in some cases. 18. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income Tax, Sales Tax, Custom Duty and Excise Duty which have remained outstanding as at 30th June, 2000 for a period of more than six months from the date they become payable. 19. According to the information and explanations given to us, no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practices. 20. The Company is a Sick Industrial Company within the meaning of Clause (0) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. for K. L. Chandak & Co. Chartered Accountants Place : Delhi Punit Jain Dated : 15.11.2000 Partner