vantech industry ltd Auditors report

VANTECH INDUSTRY LIMITED ANNUAL REPORT 1999-2000 AUDITORS REPORT To The Members of VANTECH INDUSTRY LIMITED HYDERABAD We have audited the attached Balance Sheet of VANTECH INDUSTRY LIMITED as at 31st March, 2000 and the Profit and Loss Account for the year ended on that date annexed thereto and report that: 1. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4-A) of the Companies Act, 1956, we annex hereto a statement on the matter specified in paragraphs 4 and 5 of the said Order. 2. Further to our comments in the statement referred to in paragraph 1 above, we state that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes 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 fro our examination of such books. c) The Balance Sheet and the Profit and Loss Account referred to in this report are in agreement with the books of account. d) In our opinion, the Balance sheet and profit and loss account comply with the Accounting Standards referred to in Section 211(3c) of the Companies Act, 1956. e) In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account read with Note No.4 of Schedule P Re: Sundry Debtors and together with 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) insofar as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2000, and ii) insofar as it relates to the Profit and Loss Account, of the Loss of the Company for the year ended on that date. for M.Bhaskara Rao & Co., Chartered Accountants Place: Hyderabad ANIL KUMAR MEHTA Date : 29th June, 2000 PARTNER RE: VANTECH INDUSTRY LIMITED Statement Referred to in paragraph 1 of our report of even date 1) The Company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets. However, the fixed asset register for the year under report is to be compiled. The major fixed assets of the Company have been physically verified partially by the Management during the year and no material discrepancies were noticed in such verification. 2) None of the fixed assets has been revalued during the year. 3) The stocks of the finished goods, stores, spare parts and raw materials have been physically verified at the year end by the management. 4) The procedures of physical verification of stocks followed by the management are reasonable in relation to the size of the Company and the nature of its business. 5) The discrepancies noticed on the physical verification of stocks as compared to book records, were not material and the same have been properly dealt with in the books of account. 6) In accordance with the information and explanations given to us, and on the basis of our examination of stock records, we are of the opinion that the valuation of stocks is fair and proper to accordance with normally accepted accounting principles, and is on the same basis as to the preceding year. 7) The Company has not taken any loans, secured or unsecured from Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. As Section 370 of the Companies Act Re:Loans, etc., to Companies under the same management has been made inoperative on and after 31st October, 1998 by the Companies (Amendment) Act,1999, no comments are offered. 8) The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. As Section 370 of the Companies Act Re: Loans, etc., to Companies under the same management has been made inoperative on and after 31st October, 1998 by the Companies (Amendment) Act,1999, no comments are offered. 9) Interest bearing and interest free advances were given by the Company to employees and others who are repaying the principal and interest (where applicable) as stipulated except in case of Inter Corporate Deposits (refer Note No.9 of Schedule P). 10) In our opinion and in accordance with the information and explanations given to us, the internal control procedures need to be further strengthened to commensurate with the size of the Company and nature of its business with regard to the purchase of stores including components, plant and machinery, equipment and other assets and for the sale of goods. 11) There are no contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and hence requirement of reporting regarding transactions of purchase of goods and materials and sale of goods, materials and services made in pursuance of such contracts aggregating to Rs.50,000/- or more in respect of each party does not arise. 12) As per the explanations given to us, there is a procedure for determination of unserviceable or damaged stores, raw materials and finished goods. No unserviceable or damaged stores, raw materials and finished goods have been determined during the year. 13) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the Public. 14) As explained to us, the Companys manufacturing process does not generate any realisable by-products or scrap. 15) The Internal Audit of the Company is conducted by a firm of Chartered Accountant. In our opinion, the scope and coverage of the same needs to be extended to commensurate with the size of the Company and nature of its business. 16) In our opinion and according to the information and explanations given to us, the Company has maintained cost records as specified by the Central Government under Section 209 (1) (d) of the Companies Act, 1956. The contents of these records have not been examined by us. 17) The Company is regular in depositing Provident Fund and Employees State Insurance dues with appropriate authorities. 18) According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Customs Duty and Excise Duty which have remained outstanding as on 31st March, 2000 for a period of more than six months from the date they became payable. 19) In our opinion and according to the information and explanations given to us, personal expenses have not been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice. 20) The Company is not Sick Industrial Company within the meaning of Clause (O) of the Sub-section (1) of the Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 21) In respect of traded goods, value of damaged goods is insignificant. for M.Bhaskara Rao & Co., Chartered Accountants Place: Hyderabad ANIL KUMAR MEHTA Date : 29th June, 2000 PARTNER.