| ANNUAL REPORT 2005-2006
AUDITORS' REPORT
To
The members of
Vajra Bearings Limited
We have audited the attached balance sheet of Vajra Bearings Limited, as at
31st March 2006 and the attached Profit and Loss Account of the Company for
the year ended on that date. The financial statements are the
responsibility of the Company's 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, which requires that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements
are free of material misstatement and also includes assessing the amounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statements presentation. We believe that
our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditors' Report) Order, 2003 issued by the
Central Government of India in terms of sub-section (4A) of section 227 of
the Companies Act, 1956 and on the basis of such checks of books and
records of the Company as considered appropriate and as per the information
and explanations given to us, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report that:
(1) We have obtained all the information and explanations which to best of
our knowledge and belief were necessary for the purpose of our audit;
(2) 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 such books;
(3) The Balance Sheet and Profit and Loss Account dealt with by this report
are in agreement with the books of Accounts of the Company;
(4) In our opinion, the Balance Sheet and Profit and Loss Account comply
with the Accounting Standards referred to in sub-section (3C) of Section
211 of Companies Act, 1956 to the extent applicable;
(5) On the basis of the written representation from the directors, taken on
record by the Board of Directors, none of the directors are disqualified as
on 31st March, 2006 from being appointed as director under section 274 (1)
(g) of the companies Act, 1956;
(6) In our opinion, and to the best of our information and according to the
explanations given to us, the said accounts read with the notes thereon
except non provision of bad & doubtful advances and receivables of
Ks.23,39,748/- 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:
(i) in the case of the Balance sheet, of the sate of affairs of the Company
as at 31st March, 2006; and
(ii) in the case of the Profit and Loss Account, of the loss for the year
ended on that date.
(iii) In case of cash flow statement, of the cash flows for the year ended
on that date.
For Divyakant Zaveri & Co.,
Chartered Accountants
Place : Vadodara [D. R. Zaveri]
Date : 05/05/2006 Proprietor
RE : VAJRA BEARINGS LIMITED
ANNEXURE TO AUDITORS' REPORT ON THE ACCOUNTS FOR THE YEAR ENDED ON 31ST
March 2006
As required by the Companies (Auditor's Report) Order,2003 issued by the
Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956
and on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and explanations
given to us during the course of our audit, we further report that :-
i) The Company has maintained proper records shoeing full particulars
including quantitative details and situation of fixed assets. These fixed
assets were physically verified by the management at reasonable intervals
and no serious discrepancies were noticed on such verification.
(ii) (a) As explained to us, the inventories have been physically verified
by the management at reasonable intervals during the year. In our opinion,
the frequency of such Verification is reasonable having regard to the size
of the Company and the nature of its business.
(b) In our opinion and according to the information and explanations given
to us, the Procedures of physical verification of inventories followed by
the management are Reasonable and adequate in relation to the size of the
Company and the nature of the business.
(c) The company has maintained proper records of inventory. As explained to
us, there were no material discrepancies noticed on physical verification
of stocks, as compared to book records.
iii) The Company has taken from parties ,(outstanding at the year end Rs
2.09 lacs) unsecured, interest free loans and deposits from the parties
listed in the register maintained under section 301 of the Companies Act
1956.
iv) The company has not granted unsecured, interest free loan to a company
listed in the register maintained under section 301 of the companies act
1956
v) There are adequate internal control procedures commensurate with the
size of the Company and the nature of its business and the purchase of
stores, raw materials including components, plant and machinery, equipment
and other assets and for the sale of goods.
vi) As explained to us there has not been any transaction during the year
that need to by entered in the register maintained under section 301 of the
Companies Act 1956 and exceeding during the year to Rs 5,00,000 or more in
respect of each such party.
vii) In our opinion, and according to the information and explanations
given to us; the Company has not complied with the certain provisions
section 58A of the Companies Act 1956 and the Companies (Acceptance of
Deposits) Rule, 1975 with regard to the deposits accepted from the public
like filing of statement in lieu of Advertisements, Nominations of
Depositors, Period of Deposits etc.
viii) The Company has a system of internal audit, which in our opinion, is
commensurate with the size and the nature of its business.
ix) We are informed that the company is not required to maintain the cost
records under Section 209(1) (d) of the Company.
x) According to the information given to us and in our opinion the E.S.I.
Act is not applicable to the Company. The company is not regular in
depositing the Provident Fund with appropriate authority during the year.
At the year end the amount of Provident Fund contribution not deposited
with the authority and remaining outstanding is Rs 25597 (Sine Paid)
The undisputed amount payable in respect of the following has not been paid
or deposited. With the appropriate authorities and remaining outstanding
for period Exceeding six months as at 31st March 2005.
Sales Tax Rs. 397,177/-
Grampanchayat Cess Rs. 12,000/-
Professional Tax Rs. 5,580/-
Fringe Benefit Tax Rs. 6,805/-
xi) The Company was registered on 26.08.1988. Thus the company has been
registered for a period not less than five years. Its accumulated losses at
the end of the financial year i.e. as on 31st March 2006, is Rs..607.49
lacs which is more than 1000/a of its net worth after considering the
Deferred Revenue Expenditure and Preliminary Expenses.
The Company is a sick company within the meaning of section 3(1) (o) of
Sick Industrial companies (Special Provision) Act 1985.
The company incurred cash losses in the financial year ending 31.03.2006
and also in the financial year ending 31.03.2005, being immediately
preceding financial year amounting Rs.2.38 lacs and Rs 15.74 lacs
respectively.
xii) According to the information and explanations. given to us, the
company has defaulted in the following manner in repayment of dues to the
bank.
Name of the Bank Period of Default Amount (Rs lacs)
(Principal+ Interest)
Anyonya Co-op Bank Ltd Since Year 2000 334.78
Subhanpura Branch
Subhanpura
Vadodara
xiii) According to the information and explanations given to us, the
company, has not given any guarantee for loans taken by others from bank or
financial institutions.
xiv) The Company is not a clot fluid, Nidhi or mutual benefit Society.
Hence the requirements of item (xiii) of paragraph 4 of the Order is not
applicable to the company.
xv) The company is not dealing or trading in shares, securities, debentures
and other investments. Hence the requirements of item ( xiv) of paragraph
4 of the Order is not applicable to the company.
xvi) During the year under review company did not obtain /raised any Term
loan, hence the question of purpose of applying the term loan does not
arise. In the past company did obtain the term loan from a bank, however,
we are unable to comment on the purpose for which term loan was obtain and
applied for the purpose for which it was raised or obtained.
xvii) According to the information and explanations given us, the company,
during the year have raised funds on short term basis and the same have
been used for short term purposes only.
No funds have been raised on long term basis and have been used for short
term Investments.
xviii) According to the information and explanations given to us no
preferential allotment of Shares has been made by the company to Companies,
firms, or other parties listed in the register maintained under section 301
of the Companies Act, 1956.
However, company has not issued shares on preferential allotment basis,
during the year and review.
xiv) The Company has not issued any debentures. Hence the requirements of
clause (xix) of paragraph of the Order is not applicable to the company.
xix) As explained to us, management has disclosed on the end use of money
raised by Public issues in the past and the same has not been verified by
us as the information Pertaining to such issue is not verifiable at this
stage.
xx) According to the information and explanations given to us, a fraud on
or by the Company has not been noticed or reported during the year.
For Divyakant Zaveri & Co.,
Chartered Accountants
Place : Vadodara [D. R. Zaveri]
Date : 05/05/2006 Proprietor |