shri bhagavati bright bars ltd Auditors report

SHRI BHAGAVATI BRIGHT BARS LIMITED ANNUAL REPORT 2004-2005 AUDITORS REPORT To, The Shareholders of SHRI BHAGAVATI BRIGHT BARS LIMITED SHAPAR DIST.: RAJKOT. We have audited the attached Balance Sheet of SHRI BHAGAVATI BRIGHT BARS LTD. SHAPAR, as at 31st March, 2005 and its Profit & Loss Account for the Period of Fifteen Month ended on that date annexed thereto. These 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 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 materiel misstatements. An Audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes accessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 1. As required by the Companies (Auditors Report) Order, 2003 issued by the Department of Company affairs in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement an the matters specified in paragraphs 4 end 5 of the said Order. 2. Further to our comments in the Annexure referred to in paragraph 1 above: (a) We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit. (b) In our opinion proper books for accounts as required by law have been kept by the company as far as appears from our examination of such books. (c) The Balance sheet and Profit and Loss Account referred to in this report are in agreement with the books of accounts. (d) In our opinion, the Balance Sheet and Profit & Loss Account referred to in this report comply with the accounting standard referred to in sub- section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable, except Accounting Standard-15 regarding provision for liability for Leave encashment and retirement benefits. (e) On the basis of written representation received by us from the Directors of the Company as at 31st March, 2005 and taken on record by the Board of Directors, we report that no Director is prima-facie disqualified form being appointed as Director of the company under clause (g) of sub- section (1) of section 274 of the companies Act, 1956. f) Account read together 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 affairs of the company as at 31st March, 2005 and. ii) In the case of the profit and Loss Account, the Profit of the company for the period ended on that date. iii) In the case of Cash Flow statement of the cash flows for the period ended on that date. For P.T. MAKADIA & CO. Chartered Accountants (P.T. MAKADIA) partner PLACE : RAJKOT DATE : 29-08-2005 Annexure referred to in paragraph 1 of our report of even date for period ended on 31st March, 2005. 1(a) The Company is in process to maintained proper records showing full particulars including quantitative details and situation of fixed assets. 1(b) The Fixed Assets were physically verified by the management at reasonable intervals having regard to the size of the company and the nature of its assets. No materials discrepancies were noticed on verification. 1(c) Company has disposed off Plant and Machineries of Rs. 1.43 Cores during the period under review and as per explanation and representation given by the management it does not effect to going concern. 2(a) The Inventory has been physically verified by the Management regularly during the period at reasonable intervals and in our opinion, the frequency of verification is reasonable. 2(b) The procedure of physical verification of Inventory followed by the Management is considered reasonable and adequate in relation to the size of the company and the nature of its business. 2(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. 3(a) The Company has taken unsecured loans from companies, firms or other parties covered in the Register maintained Under Section 301 of the Companies Act, 1956. 3(b) The rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the Company. 3(c) Repayment of principal Amount and interest on the said loan does not stipulated. 3(d) The Company has taken unsecured loans from others and no terms and conditions specified for overdue amount and reasonable steps of recovery of principal amount and interest. 4. In our opinion and according to the information and explanation given to us during the course of audit there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purpose of Inventory and Fixed Assets and also for the Sale of Goods under the supervision of directors and management and there is no major weaknesses or its continuous failure. 5(a) As per explanation and information provided by the management and examination of records by us, there were no transactions which attracts the provisions of section 301 of the companies Act, 1956. 5(b) There is no such transactions and hence question regarding the reasonable prices are not arise. 6. The company has accepted unsecured loans of Rs.44.78/- lacs and has not complied with the provisions of section 58A of the Companies Act, 1956. 7. As per explanation & Information given to us the company does not have any formal Internal Audit system but company has employed experienced staff and follow informal Internal Audit system under the supervision, management & control of the directors of the Company 8. The Central Govt. has not prescribed maintenance of cost records u/s. 209(1)(d) of the companies Act, 1956, in respect of products manufactured by the company. 9(a) As per information & explanation given to us, company is regular in depositing undisputed statutory dues applicable to the company in case of Income tax, Sales tax, Wealth tax, Custom Duty, Excise Duty, Cess, Provident Fund and other dues with the appropriate authorities except the pending demand of MAT For A.Y. 1997-98 of Rs.723141/-. and provisions relating to the Investor Education and protection Fund and Employees State Insurance are not applicable to the company. 9(b) As per explanation and information there is no disputed amounts except shown in note no. 16 of the report with regards to payment of dues to sales tax, Income tax, Custom Duty, Excise Duty, Wealth Tax and Cess. 10. The accumulate losses as on 31.03.05 are not less than fifty per cent of its net worth and the company has incurred loss in the financial Period under audit but has incurred losses in the financial year immediately preceding this financial period. 11. The company has defaulted in repayment of dues to bank of Baroda for Rs.4.28 Crores. The company has approached for OTS Scheme and the approval for the same is received on 18-03-2005 after that the company is regular to pay the dues as per terms & conditions of the Bank. Company does not have any debenture holders. 12. Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence no records are maintained. 13. Company does not have any Chit Fund and hence no special statute applicable to the Company and also Company does not have any Nidhi/Mutual Benefit Funds/Societies and hence this clause not applicable to the company. 14. Company is not doing trading in shares, securities, debentures and other investments and hence question of maintenance of records does not arise. 15. Company has not given any guarantee for loans taken by others from Bands or Financial Institutions and hence this clause not applicable to the Company. 16. Company dies not have any Term Loan and hence this Clause does not applicable. 17. In our opinion and on the basis of information and explanation given to us the company does not have used the funds raised on short Term basis for Long-term Investment and funds raised on Long-term basis for short-terms Investments. 18. The company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956 and hence this clause not applicable to the Company. 19. Company dies not have any debenture issue and hence question of creation of security does not arise. 20. Company does not have any public issue and hence this clause is not applicable to the company. 21. In our opinion and on the basis of examination of records and explanations and information given by the directors, no fraud on or by the company has been noticed or reported during the period under audit. For P.T. MAKADIA & CO. Chartered Accountants (P.T. MAKADIA) partner PLACE : RAJKOT DATE : 29-08-2005