| We have audited the attached Balance Sheet of M/s. LAN ESEDA INDUSTRIES
LIMITED as at 30th June, 2003 and the Profit and Loss Account for the
year ended on that date annexed thereto and Cash Flow Statement for the
period ended on that date. These 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.
1. We conducted our audit in accordance with the 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 material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing 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.
2. As required by the Manufacturing and Other Companies (Auditor's
Report) Order, 1988 issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Companies Act, 1956, we
enclose in the Annexure hereto a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
3. Further to our comments in the Annexure referred to in paragraph 2
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 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 from our examination of
those books;
c) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account;
d) In our opinion the Balance Sheet and Profit and Loss Account dealt
with by the report comply with the mandatory Accounting Standards
referred in sub-section (3C) of section 211 of the Companies Act, 1956;
e) In our opinion, and based on information and explanations given to
us, none of the directors are disqualified as on 30th June, 2003 from
being appointed as directors in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956;
f) In our opinion and to the beast of our information and according to
the explanations given to us, the said financial statements read
together with the Significant Accounting Policies and other notes
thereon give the information required by the Companies Act, 1956, In
the manner so required, and present a true and fair view in conformity
with the accounting principles generally accepted in India:
(i) In so far as it relates to Balance Sheet, of the state of affairs
of the Company as at 30th June, 2003;
(ii) In so far as it relates to the Profit and Loss Account, of the
profit of the Company for the year ended on that date; and
(iii) In so far as It relates to the Cash Flow Statement, of the cash
flows of the company for the year ended on that date.
For Y K Tolia & Associates.,
Chartered Accountants
Y.K. Tolia
Proprietor.
Place : Mumbai
Dated: 6th November, 2003
ANNUXURE TO AUDITOR'S REPORT
(Refer paragraph (1) of our report of even date)
1. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of information available. According to information and
explanations given to us, the fixed assets have been physically
verified by the management during the year In a phased periodical
manner which in our opinion is reasonable, having regard the size of
the company and nature of the assets. No material discrepancies were
notices on such verification.
2. None of the Fixed Assets have been revalued during the year.
3. As explained to us, the stock of stores, spare parts, raw materials
and finished goods have been physically verified by the management at
regular intervals during the year. In our opinion the frequency of such
verification is reasonable having regard to the size of the Company and
nature of its business.
4. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of stocks followed
by the management are reasonable and adequate In relation to the size
of the Company and the nature of its business.
5. As explained to us there were no material discrepancies noticed on
physical of the stocks of raw materials, stores and spare parts and
finished goods, having regard to the size of the operations of the
Company.
6. The valuation of stocks is fair and proper and is in accordance with
the normally accepted accounting principles and is on the same basis as
in the preceding year.
7. The company has not taken any loans, secured or unsecured, from
companies, firms or other parties as listed In the register maintained
under Section 301 of the Companies Act, 1956, or from companies under
the same management as defined under sub-section (1B) of section 370 of
the Companies Act, 1956.
8. The company has not given any loans, secured or un-secured, to
companies, firms or other parties as listed in the register maintained
under section 301 of the Companies Act, 1956, or to the companies under
the same management as defined under sub-section (1B) of the section
370 of the Companies Act, 1956. In respect interest free loans given to
subsidiaries where there are no stipulations regarding repayment, in
our opinion, having to the long term Involvement with these companies
and considering the explanations given to us in this regard, the terms
and conditions of the above are not, prima fade, prejudicial to the
Interests of the Company.
9. In respect of outstanding loans and advances in the nature of loans
given by the Company to parties other than subsidiaries as referred to
in paragraph 8 above where stipulated, they are generally repaying the
principal amounts as stipulated and are also generally regular In the
payment of Interest, where applicable.
10. In our 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 stores, raw materials Including
components, plant and machinery, equipment and other assets and for
the sale of goods.
11. In our opinion and according to the information and explanations
given to us, there are no transactions of purchase of goods and
materials and of sale of goods, materials and services made In
pursuance of contracts or arrangements entered In the register
maintained under section 301 of the Companies Act, 1956 and aggregating
during the year to Rs. 50,000/- (Rupees fifty thousand only) or more in
respect of any party.
12. According to the information and explanations given to us, the
Company has a regular procedure for the determination of unserviceable
or damaged stores, raw materials and finished goods. Adequate provision
has been made in the accounts for the loss arising on the Items so
determined.
13. The company has not accepted any deposits from public.
14. In our opinion, reasonable records have been maintained by the
Company for the sale and disposal of realizable by-products and scrap,
wherever significant.
15. We are of the opinion that the company has an Internal audit system
commensurate with It size and the nature of its business.
16. The company has maintained proper records and made timely entries
of the transactions in shares. As informed to us, the company has held
the shares held as investment in its own name.
17. Provisions relating to Provident Fund and Employee's State
Insurance are not applicable.
18. According to the information and explanations given to us, there
are no undisputed amounts payable in respect of income tax, wealth tax,
sales tax, customs duty and excise duty which were outstanding as at
the last day of the financial year for a period of more than six months
from the date they become payable by the company.
19. In our opinion and according to the information and explanation
given to us, no personal expenses have been charged to revenue account
during the year other than those payable under contractual obligation
or in accordance with generally accepted business practice.
20. We are informed that the provisions of status applicable to chit
fund, Nidhi or mutual benefit society do not apply to the company.
21. The company is not a sick industrial company (subject to Notes I
(g) of Schedule K) within the meaning of Clause (O) of Sub-section (1)
of Section 3 of the Sick Industrial Companies (Special Provisions) Act,
1985.
22. In respect of the trading activity of the company, damaged goods
have been determined and adequate provisions has been made in the
accounts for the loss arising on the items so determined.
For Y K Tolia & Associates.,
Chartered Accountants,
Y K Tolia
Proprietor
Place : Mumbai
Dated : 6th November, 2003.
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