shree pomani metals alloys ltd Auditors report

SHREE POMANI METALS & ALLOYS LIMITED ANNUAL REPORT 1999-2000 AUDITORS REPORT To, The Members of Shree Pomani Metals & Alloys Ltd. We have audited the attached Balance Sheet of SHREE POMANI METALS & ALLOYS LIMITED as at 31st March 2000 and annexed Profit and Loss Account of the Company for the year ended on that date and reports that: 1. 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. 2. In our opinion, proper books of account as required by law have been maintained by the company so far, as appears from our examination of these books. 3. In our opinion the Balance sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account. 4. The accounts of the Company has been prepared on going concern assumption as mentioned in Note 1 of Schedule U, as in the opinion of the management, the company will be able to recoup the losses during subsequent years by taking effective measures to the production and profitability. Subject to above, in our opinion the Balance Sheet and Profit and Loss Account dealt with by this report comply with the mandatory accounting standards referred in section 211 (3C) of the Companies Act, except for Accounting Standards (AS) 15 in so far as it relates to leave encashment benefits to employees as referred to in the Notes of Accounts item No.4. 5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other 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 Balance Sheet on the state of affairs of the Company as at 31st March 2000 and; ii) In the case of the Profit and Loss Account of the Loss of the Company for the year ended on that date. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Central Government u/s 227 (4A) of the Companies Act, 1956, on the basis of such checks of books and records as were considered appropriate and information and explanations given to us during the course of our audit. We further report that in our opinion: i) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. The assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification. ii) None of the Fixed Assets of the Company have been revalued during the year. iii) Stock of finished goods, stores, Spare parts and raw materials have been verified by the management wherever practicable except material in transit and material sent for job work to other parties certificate whereof from management were accepted. iv) The procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. v) The discrepancies noticed on physical verification of stocks as compared to book records, which in our opinion were not significant, have been properly dealt with in books of accounts. vi) On the basis of our examination of stock records, the valuation of stock is fair and proper in accordance with normally accepted accounting principles and is on the same basis as in the preceding year. vii) The Company has not taken unsecured loan from companies, firms and other parties listed in the register maintained u/s 301 of the Companies Act, 1956 and / or from companies under the same management as defined u/s 370 (1B) of the Companies Act, 1956. viii) The Company has not granted any loan secured or unsecured to companies, firms or other parties listed in the register maintained u/s 301 and sec 370 (1B) of the Companies Act, 1956. ix) As informed to us, the parties including the employees to whom interest free advance have been given are repaying the principal amount for which no terms are stipulated. x) On the basis of checks carried out during the course of audit and as per explanation given to us, company has adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of stores, raw materials including components, plant and machinery, equipments and other assets and for the sale of goods. xi) According to the information and explanations given to us, the transactions of purchase and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of Companies Act, 1956, aggregating during the year Rs. 50,000/- or more in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials and services at the prices at which transactions for similar goods, materials and services have been made with other parties. xii) According to explanation given to us and as confirmed by the management, there are no stocks of unserviceable or damaged stores, materials, spares, finished goods etc. as on the Balance Sheet date and as such no provision is necessary in the account for the same. xiii) The Company has not accepted any deposits from the public to which provisions of section 58 A of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules, 1975 apply. xiv) The Companies has maintained reasonable records for the sale and disposal! of realised by-products and scrap. xv) The Company has an internal audit system, which is commensurate with the size and nature of its business. xvi) We have been informed that the maintenance of cost records has not been prescribed by the Central Government in respect of the activities of the Company pursuant to section 209 (1)(d) of the Companies Act, 1956. xvii) According to records of Company, the Company has been generally regular in depositing Providend Fund dues and payments under Employees State Insurance Act with proper authorities. xviii) As informed to us there are no undisputed amounts payable in respect of Income-Tax, Wealth-Tax, Sales Tax, Customs Duties outstanding as on 31st March 2000 for a period of more than six months from the date they became payable except Rs.62,359 /- towards Sales Tax for 95-96 remaining unpaid xix) During the course of our examination of the books of accounts carried out in accordance with the generally accepted audit practices, we have not come across with any personal expenses of Employees or Directors which h ave been charged to revenue account other than those payable under contractual obligation or in accordance with the generally accepted business practice. xx) The Company is a potentially Sick Industrial Company within the meaning of clause (o) of sub-section (1) of section 23 of Sick Industrial Companies (Special Provisions) Act, 1985. xxi) In respect of Companys Service Activity, the Company has a reasonable system of recording receipt, issue and consumption of material and stores and allocating materials consumed to the relative jobs are not directly allocated for billing but are properly considered at predetermined rates per job. Considering the nature of services rendered there is a system of reasonable allocation of the stores, the raw materials and labour to the related service jobs and the system of Internal Control is commensurate with the size and nature of business of Company. xxii) According to the information and explanation given to us there were no damaged goods in the case of goods traded by the company. For R. T. JAIN & CO. (Chartered Accountants) Place: Mumbai (R. T. JAIN) Date : 25-11-2000 Proprietor