suncity industries ltd Auditors report

SUNCITY INDUSTRIES LIMITED ANNUAL REPORT 2003-2004 AUDITORS REPORT To The Members of SUNCITY INDUSTRIES LIMITED 1. We have audited the attached Balance sheet of SUNCITY INDUSTRIES LIMITED at 31st March, 2004 together with the Profit & Loss Account of the Company for the year 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. 2. We conducted our audit in accordance with the auditing standards generally accepted in India These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating to overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order 2003 issued by the Central Government of India in terms of Section 227(A) of the Companies Act, 1956 a statement on the matters specified in paras 4 &5 of the order to the extent applicable to the Company is given in the Annexure to this report. 4. Further to our comments in the Annexure referred to above, we report 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 accounts as required by law have been kept by the Company so far as it appears from our examination of such books. c) Balance Sheet and the Profit & Loss Account referred to in this report are in agreement with books of account. d) In our opinion, the Profit & Loss Account and the Balance Sheet comply with the Accounting standards referred to in sub section (3C) of section 211 of Companies Act. 1956 to the extent applicable. e) On the basis of written representation received from the directors, as on 31st March 2004 and taken on record by the Board of Directors, We report that none of the directors is disqualified as on 31st March form being appointed as a director in terms of clause (g) of sub-section 91 of Section 274 of the Companies Act 1956; Refer the following notes in SCHEDULE 18: i. NOTE N. -A (J) regarding non-provisions of gratuity and leave encashment on accrual basis, amount not ascertainable. ii. NOTE N. -B (9) & (11) regarding non confirmation of loans taken sundry creditors and certain loans and advances, sundry debtors and consequential reconciliation and adjustments if any, iii. NOTE N. -B (10) regarding reconciliation of S.B.B.J. & RAJASTHAN BANK accounts and adjustment if any, iv. NOTE N. -B (12) regarding non-provisions of interest of secured and unsecured loans. v. NOTE N. -B (13) regarding non-accounting of deferred tax as per accounting standard-22 issued by the INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, figures are not ascertainable.. vi. NOTE N. -B (14) (3) regarding surrendering / acquisition of 16760 Sq meters land to RIICO LTD against this account company confirms that Rs.6388141/- lips been credited by RIICO LTD. and appropriated between RIICO LTD. AND IDBI, but confirmation and reconciliation are pending. vii. NOTE N. -14 (1) regarding lumsum additions of Rs. 1.00 Crores in the A.Y 99-2k made by ACIT CIRCLE 1st JODHPUR, without specifying the nature of additions. Adjusted in sec. 43(B). viii. NOTE N. -A (c) regarding non-provisions for diminution in the books value of investments. SUBJECT to above notes and their consequential effect on the profit and loss for the Year. Secured Loan, Loans & Advances, Investments. Currents Liabilities and provisions. In our opinion, and to the best of our information and according to the explanation given to us, the said accounts give the information required by the Companies Act 1956 in the manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India; g) In our opinion and to the best of our information and according to the explanation given to us, the said Account read together with significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required, give a true and fair view subject to above notes to schedule No.18 are in conformity with the Accounting Principles generally accepted in India. i. In case of the Balance Sheet, of the state of affairs of the Company as at 31 March. 2004 and ii. In case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date. For RAJKUMAR SANKLECHA & CO, Chartered Accountants Sd/- (R.K. SANKLECHA) Place : Jodhpur Partner Date : 26.05.2004 M.N. 70995 ANNEXURE TO THE AUDITORS REPORT (REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATED) 1. a). The Company has not maintained adequate records showing particulars, including quantitative details and situation of fixed assets. b). These fixed assets have not been physically verified by the Management at regular intervals in a phase periodical manner which, in our opinion, is not reasonable having regard to the size of the company and the nature of its assets. To the best of our knowledge, no material discrepancies were noticed on such verification. c) As per information and explanations given to us No fixed assets has been disposed off during the year, except reported in schedule no. 5A of the balance sheet. 2. a) As explained to us, the inventories have been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable. b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories follow by the Management are reasonable and adequate relation to the size of the Company and the nature of its business. c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book stocks have been properly dealt, with the books of accounts and were not material. 3. a) As informed to us, the Company has not granted any loans, secured on unsecured during the year to Companies, firm and other parities listed in the register maintained under section 301 of the Companies Act 1956. The Company has taken loan, secured or unsecured from 2 directors. The amount involved during the year was Rs.13.35 lacs and the year end balance was Rs.17.06 lacs from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956. b) In our opinion, the rate of interest and other terms and conditions on which loan as been taken are not prima facie, prejudicial to the interest of the company. c) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest. d) There is no overdue amount of loans taken from companies, firm or other parties pound in the register maintained under section 301 of the Companies Act, 1956. 4. In 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 for the purchase of inventory, fixed assets and for the sale of goods. sting the course of our audit we have not observed any continuing failure to correct a)or weaknesses in internal control. 5 a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transaction that need to be entered into the register maintained under Section 301 of the Companies Act 1956 have been so entered. b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contractors or arrangements entered in the register maintained under section 301 of the Companies Act 1956 and exceeding the value of Rupees five lacks in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. 6. In our opinion and according to the information and explanations given to us, the company has not accepted and deposits from public within the meaning of the provision of Section 58A & 58AA of the companies Act, 1956 and the companies (Acceptance of Deposits) Rules 1975, Hence the clause is not applicable. 7. In our opinion, the company has an internal audit system commensurate with the size and nature of its business. 8. We have been informed that the Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956. 9. a) According the information and explanations given to us, and as per records of the Company the company has not deposited the old outstanding dues towards provident fund and employees state insurance fund and Rajasthan Sales Tax with appropriate authorities. No amount is due to be credited to the Investor Education and Protection Fund. b) According to the information and explanations given to us, and as per records of the company there were various undisputed amounts payable in respect of E.S.I. of Rs.16919.33 and E.P.F. of Rs.96678.76 and R.S.T. of Rs. 8920.20 were in arrears, as at 31st March, 2004 for a period of more than six month from the date they became payable. c) According to the information and explanations given to us, there are no disputed amount on account of Income Tax, Wealth Tax, Sales Tax, Excise Duty, E.S.I. and other Material, Statutory dues that have not been deposited as on 31st March, 2004 10. The Company have accumulated losses as at 31st March, 2004 and also the company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial years. 11. In our opinion and according to the information and explanations given to us, the company has defaulted in repayment of dues to banks. 12. According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of clause 4 (xii) of the companies (Auditors Report) Order, 2003 are not applicable to the Company. 13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order. 2003 are not applicable to the Company. 14. In Our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provision of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. 15. According to the information and explanation given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions. 5. According to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained. 17. According to the information and explanations given to us and on an overall examinations of the Balance Sheet of the Company. We report that the funds raised on short term basis have not been used for long term investment and vice versa. 18. According to the information and explanations given to us, during the period covered by our Audit Report, 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. 19. According to the information and explanations given to us, the Company has no outstanding debentures at the end of the year. 20. During the period covered by our Audit Report, the Company has not raised money by pubic issues. 21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit. FOR RAJKUMAR SANKLECHA & CO. Chartered Accountants Sd/- (R.K. SANKLECHA) Partner Place : Jodhpur Date : 26.05.2004