Union Bearings India Ltd Auditor Reports

UNION BEARINGS (INDIA) LIMITED ANNUAL REPORT 2004-2005 AUDITORS REPORT To the Members of UNION BEARINGS (INDIA) LIMITED 1. We have audited the attached Balance Sheet of UNION BEARINGS (INDIA) LIMITED as at 31st March, 2005 and also the Profit & Loss Account and cash flow statement for the year ended on that date annexed hereto. 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 auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statement are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the 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 as amended and issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 we enclose in the annexure a Statement on the matters specified in Paragraphs 4 & 5 of the said order to the extent applicable to the Company. 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 Account as required by law have been kept by the Company so far as appears from our examination of the books; (C) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the Books of Account; (d) In our opinion, the Balance Sheet and the Profit & Loss Account and Cash flow Statement dealt with this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable. (e) On the basis of the written representations received from the Directors and taken record by the Board of Directors none of the Directors is disqualified as on 31st March,2005, from being appointed as a director in terms of Section 274(1) (g) of the Companies Act,1956. 5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information as 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: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31, March, 2005. (ii) in the case of the Profit & Loss Account, of the profit for the year ended on that date. (iii) in the case of the Cash Flow Statement, of the cash flow for the year ended on that date. K.P. JOSHI & CO. Chartered Accountants Mumbai : 30th August, 2005. K.P. JOSHI Proprietor Annexure referred to in paragraph 3 of our report of even date 1. a) The Company has maintained proper records showing full particular including quantitative details and the situation of its fixed assets; b) A major portion of fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed have been properly dealt with in the books of account; c) The assets disposed off during the year are not significant and therefore do not affect the going concern assumptions; 2. a) The inventory other than that with third parties have been physically verified by the management at reasonable intervals. There is a process of obtaining confirmations in respect of inventory with the third parties; b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business; c) In our opinion the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account; 3. According to the information and explanations given to us, during the year the company has not granted or taken any loans, secured or unsecured to or from companies, firms or other parties listed in the register maintained under Section 301 the Companies Act, 1956. 4. In our opinion and according to the information and explanations provided 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 inventory, fixed assets and for sale of goods. During the course of our audit, no major weakness has been noticed in the internal control. 5. To the best of our knowledge and belief and adding to the information and explanations given to us there are no contracts or arrangements that need to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956. 6. The Company has not accepted any deposits from the public; 7. Internal Audit function was not entrusted to any independent Auditor during the period. Management is of the view that the operation level did not suggest for internal audit. However, internal control procedure was deployed during the period. 8. The Central Government has not prescribed any rule under Section 209(1) (d) of the Companies Act, 1956 for maintenance of Cost records. 9. In respect of Statutory dues :- a. According to the information and explanations given to us, the company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth tax, Custom Duty, Excise Duty, cess and any other material statutory dues with the appropriate authorities during the period and there are no undisputed statutory dues outstanding for a period of more than six months from the date they became payable as at the balance sheet date. b. According to the information and explanations given to us, there are no dues of sales-tax, Wealth tax, Custom Duty, Excise Duty, cess which have not been deposited as on March 31, 2005 on account of any dispute excepting to Income tax the details of which are given below : Name of the Nature of Amount Period to Forum Statute the Dues (Rs in lacs) which the where amount dispute is relates pending Income Tax Income Tax 17.82 1995-96 DCSp.Range Act 1961 Central Sales CST 3.05 1994-95 DC,CST. Tax Act Ahmedabad 10. The Company has no accumulated losses at the end of the financial year and has not incurred cash losses during the year and in the immediately year preceding; 11. Based on our audit procedures and on the information and explanations given by the management, the Company has not defaulted in repayment of dues to any financial institution or bank; 12. Based on our examination and 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; 13. The company is not a chit/nidhi/mutual benefit fund/society and clause xiii of the Order is not applicable. 14. The Company is not dealing or trading in shares, securities, debentures and other investments; 15. On the basis of the information and explanations given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions. 16. There was no term loan outstanding during the year. 17. On the basis of our examination of the books of accounts and the information and explanation given to us, in our opinion, the funds raised on short-term basis have not been used for long-term investment and vice versa; 18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act; 19. The Company did not have any outstanding debentures during the year: 20. The Company has not raised any money by public issues during the year: 21. Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit. K.P. JOSHI & CO. Chartered Accountants Mumbai : 30th August, 2005. K.P. JOSHI Proprietor