shreeji phosphate ltd Auditors report

SHREEJI PHOSPHATE LIMITED ANNUAL REPORT 2002-2003 AUDITORS REPORT TO THE MEMBERS WE HAVE AUDITED THE ATTACHED BALANCE SHEET OF M/S. SHREEJI PHOSPHATE LIMITED AS AT 31ST MARCH, 2003 AND ALSO THE ATTACHED PROFIT AND LOSS ACCOUNT OF THE COMPANY FOR THE YEAR BLED ON THAT DATE ANNEXED THERETO AND CASH FLOW STATEMENTS FOR THE PERIOD ENDED ON THAT DATE. THE FINANCIAL STATEMENTS ARE THE RESPONSIBILITY OF THE COMPANYS MANAGEMENT. OUR RESPONSIBILITY IS TO EXPRESS AN OPINION ON THESE FINANCIAL STATEMENTS BASED ON OUR AUDIT. We conducted our Audit in accordance with the Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on test basis, evidence supporting about whether the financial statements are free of material misstatements. An audit also includes assessing the accounting principles as well as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion. In our opinion, proper books of Accounts as required by law have not been kept by the Company so far as appears from our examination of the books. Subject to the above, we unable to form an opinion as to : (i) Whether proper books of account as required by the Company and (ii) Whether the accounts give true and fair view in the case of the Balance Sheet of the State of Companys affairs as at the end of its financial year ended 31st March, 2003 and in the case of the profit and loss account of the profit / loss for its financial period on that day. In our opinion the Balance Sheet and Profit and Loss Account complies with the requirements of the Mandatory accounting standards referred to in Section 211 (3C) of the Companies Act, 1966 Based on the representations made by all the directors of the Company and the information and explanations as made available to us by the Company, none of the Directors of the Company has prima facie any disqualification as referred to in clause (g) of sub-section (1) of Section 274 of the Act. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the Significant Accounting Policies and subject to all the notes thereon give the information required in the Companies Act, 1956 in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India ; (a) In the case of Balance Sheet of the State of the Affairs of the Company as at 31st March 2003 and (b) In the case of Profit and Loss Account of the profit for the year ended on that date. (c) in so far as it relates to the Cash flow Statement, of the cash flows of the Company for the year ended on that date. As required by the Manufacturing and other Companies (Auditor Report) order, 1968 issued by the Central Government of India in term of subsection (4A) of section 227 of the Companies Act, 1956 and on the basis of such checks we considered appropriate, we further report that : 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed Assets. the fixed assets have been physically verified by the Management. In our opinion the frequency if verification is reasonable. No material discrepancies have been noticed on such verification. 2. None of the fixed assets have been revalued during the year. 3. The stocks and finished goods, stores, spare parts and raw materials have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. 4. In our opinion, the procedure of physical verification of stocks followed by the management are reasonable and adequate relation to the size of the Company and the nature of its business. 5. The discrepancies noticed on physical verification of stocks as compared to book records were not material and the same have been properly dealt with in books of accounts. 6. In our opinion, the valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the basis as in the preceding year. 7. The Company has not taken any Loans Secured or Unsecured to the Companies, Firm on other parties listed in the register maintain under Section 301 and / or from the Companies under the same Management as defined under Section 370 (1 B) of the Companies Act, 1956. 8. The Company has not granted, any loans secured or unsecured to the Companies, Firm on other parties listed in the register maintain under Section 301 and/or from the Companies under the same Management as defined under Section 370 (1 B) of the Companies Act, 1956. 9. In respect of Loans and Advances in the nature of loans given by the Company parties have repaid the principal amount as stipulated and also have been regular in payment of the interest wherever applicable. 10. In our opinion and according to the information and explanations given to us, there are not adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of Stores, Raw Materials including Components, Plant and Machinery, Equipment and other assets and for the sale of goods. 11. In our opinion and according to the information and explanations given to us the prices paid for purchase of goods and materials & sale of goods material and services, made in purchase of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 50,000/- or more in respect of each party are reasonable having regard to the prevailing market prices as transaction for similar goods or services have been made with other parties. 12. As explained to us, the Company has regular procedure for the determination of unserviceable or damaged Stores, Raw Materials and Finished Goods Adequate provision has been made in the accounts for the loss arising on the items so determined. 13. The Company does not accept any deposits, to which the provision of Section 58 - A of the Companies Act, 1956 and the rules framed there under are applicable. 14. In our opinion, reasonable records have not been maintained by the Company for the sale and disposal of scrap. The Company has no by-products. 15. 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 the nature of its business with regard to purchase of Stores, Raw Materials including Components, Plant and Machinery, Equipment and other assets. 16. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 in respect of the Companys products to which the said rules are made applicable and are of the opinion that prima facie the prescribed records have been made and maintained. We have however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete. 17. According to the records of the Company Employees State Insurance dues have been regularly deposited during the year with the appropriate authorities. And the Company has complied with the formalities under the Provident Fund Act. 18. According to the information and explanation given to us and the records examined by us no personnel expenses have been charged to revenue account, other that those payable under contractual obligation or in accordance with generally accepted business practice. 19. According to the records of the Company, there were no undisputed amounts payable in respect of Income-Tax, Wealth-Tax, Sales Tax, Customs duty and Excise Duty outstanding as at 31st March, 2003 for a period of more that Six months from the date they become payable. 20. The Networth of the Company as on 31.3.2003 of Rs. 1139.04 lacs been fully eroded by accumulated losses of Rs. 1142.24. However the Company will complete its 20 years on 31.03.2003 and hence it will require to file its reference application to Board for Industrial and Financial Reconstruction in terms of provisions of Section 15(1) of the Sick Industrial Companies (special Provisions) Act, 1985. 21. In respect of Trading activities according to information and explanation given to us there were no damaged goods of significant value. For Bharat Parikh & Associates Chartered Accountants Place : Vadodara Bharat Parikh Date : 9th August, 2003 Partner