ACE LABORATORIES LIMITED.
TO THE MEMBERS OF
ACE LABORATORIES LIMITED
We have audited the attached Balance Sheet of ACE LABORATORIES LIMITED as
on June 30, 1998, and also the annexed Profit & Loss Account for the year
ended on that date and report that :-
1. As required by the Manufacturing and Other Companies (Auditor's Report)
Order, 1988, issued by the Company Law Board in terms of Section 227(4A) of
the Companies Act, 1956, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
2. Subject to and in terms of our comments in the Annexure referred to in
paragraph 1 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
maintained by the Company, so far as it appears from our examination of
(c) The Balance Sheet and Profit & Loss Account dealt with by this report
are in agreement with the books of accounts produced before us.
d) In our opinion and to the best of our information and according to the
explanations given to us, the said Balance Sheet and Profit & Loss Account,
together with other notes appearing in Schedule (19) gives the information
required by the Companies Act, 1956, in the manner so required & give a
true and fair view :-
i) in the case of Balance Sheet, of the state of Affairs of the Company as
at June 30,1998.
ii) in the case of Profit & Loss Account, of the PROFIT for the year ended
on that date.
for GYAN CHANDRA & CO.,
Place : New Delhi (G.C. Mehrotra)
Dated : 28th July, 1998 Partner
ANNEXURE TO THE AUDITORS' REPORT
[REFER TO PARAGRAPH 1 OF OUR REPORT OF EVEN DATE:]
i. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. The assets
have been physically verified by the management during the year as per a
programme of verification which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its asset. No material
discrepancies were noticed on verification.
ii. None of the fixed assets of the company have been revalued during the
iii. As per information and explanation given to us, the stock of Finished
Goods, Raw Materials, Packing Materials and other stores have been
physically verified by the Management at reasonable intervals during the
year. The stocks in possession of the third parties have been verified by
the Management with reference to documents obtained from them. The company
is yet to introduce perpetual system with necessary documentation.
iv. The procedures followed by the Management for such physical
verification in our opinion, are reasonable and adequate in relation to the
size of the company and the nature of its business.
v. According to explanation given to us, the discrepancies on the
verification between physical stocks and the book records were not material
in relation to the operation of the Company and the same have been properly
dealt within the books of account.
vi. In our opinion, the valuation of stock is fair and proper in accordance
with normally accepted accounting principle and is on the same basis as in
the previous year.
vii. The company has not taken Unsecured Loans from Companies, firms or
other parties listed in the register maintained under Section 301 of the
companies Act, 1956 and/or from the Companies under the same management as
defined under Section 370 (1B) of the Companies Act, 1956.
viii. The Company has not granted any loans,secured or unsecured to
companies,firms or other parties listed, in the register maintained under
Section 301 and 370(1B) of the companies Act, 1956.
ix. Loans and/or Advances in the nature of interest free given by the
company to its employees are being repaid as stipulated.
x. In our opinion and according to the information and explanations given
to us, there are adequate internal control procedure commensurate with the
size of the Company and the nature of its business with regard to purchase
of Raw Materials, Packing Materials and other stores, Plant & Machinery,
equipment and other assets and with regard to sale of goods.
xi. In our opinion and on the basis of test checking and as per explanation
given to us, the transaction of purchased goods and materials and sale of
goods, materials and services in course of the business activities
aggregating during the year of Rs.50,000/- or more in value of each party
entered in the register maintained under Section 301 of the companies Act,
1956 have been made on the prices which appears to be reasonable as
compared to the prices or services on similar items supplied by the other
xii. As explained to us, the Company has a regular procedure for
determination of unserviceable or damaged stores and spares, Raw Materials
and finished goods and an adequate provision has been made in the accounts
for the loss arising on the items so determined.
xiii. In the case of Public deposits, the directions issued by the Reserve
Bank of India and the provisions of Section 58A of the Companies Act, 1956
and the applicable rules framed there under has been complied with.
xiv. As explained to us, the Company has no by-products and the Company's
operation do not generate any significant realisable scraps.
xv. In our opinion the Company has an internal audit system which required
to further strengthen to commensurate with its present size and nature of
xvi. We have broadly reviewed the accounts and records maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of Companies Act, 1956,
and are of the opinion that prima facie the prescribed accounts and records
have been made and maintained. We have not, however, made a detailed
examination of the records of the Company with a view to determine whether
they are accurate or complete.
xvii. According to the records, the Company is regularly depositing
`Provident Fund and Employees 'State insurance dues with Appropriate
xviii. According to information and explanations given to us, no undisputed
amounts payable in respect of Income Tax, Wealth Tax, Customs Duty and
Excise Duty, were outstanding as on June 30, 1998, for period of more than
six months from the date they became payable.
xix. In our opinion and according to the information and explanations given
to us, no personal expenses of employees or Directors have been charged to
Revenue Account, other than those payable under the contractual obligations
or in accordance with generally accepted business practices.
xx. The Company is not a Sick Industrial Company within the meaning of
Clause (O) of Sub-Section (1) of Section 3 of Sick Industrial Companies
[Special Provisions] Act, 1985.
xxi. In respect of trading activities of the company, there was no damaged
goods during the year
for GYAN CHANDRA & CO.
Place : New Delhi (G. C. Mehrotra)
Dated : 28th July, 1998. Partner