ASIAN BEARING LIMITED
ANNUAL REPORT 2001-2002
the Members of
Asian Bearing Ltd
1. We have audited the attached Balance Sheet of Asian Bearing Ltd at 30th
June 2002 and also the annexed Profit & Loss Account for the year ended on
that date annexed thereto. Our responsibility is to express an opinion on
these Financial Statements based on our audit.
2. We have 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 statements are free of material misstatement. An audit includes
examining, on a test basis, evidence of 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 were as evaluating the overall financial statement
presentation. We believe that audit provides a reasonable basis for our
3. As required by the Manufacturing and other Companies (Auditors' Report)
Order, 1988 issued by the Company Law Board in terms of Sec.227 (4A) of the
Companies Act 1956, we give in annexure a statement on the matters
specified in paragraphs 4 & 5 of the said order.
4. Further to our comments in the Annexure referred to above, we report
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 these books;
c) The Balance Sheet and Profit & Loss Account dealt with by this report
are in agreement with the books of account;
d) On the basis of written representations received from Directors as on
30th June 2002 and taken on record by the Board of Directors, we report
that none of the Directors is disqualified as on 30th June, 2002 from being
appointed as a Director in terms of clause (g) of Sub-Section (I) of
Sec.274 of the Companies Act 1956.
e) In our opinion, the Balance Sheet & Profit & Loss Account dealt with by
this report comply with the Accounting Standards referred to in Sub-Section
(3C) of Sec.211 of the Companies Act 1956, to the extent applicable except
f) Interest on term loans, amounting to Rs.465.44 lacs (previous year
Rs.620.59 lacs)pertaining to the period after fixed assets are commissioned
has been capitalized instead of charging to revenue account which is not in
accordance with the accounting standard recommended by the Institute of
Chartered Accountants of India in the earlier year accounts. The company
has also not provided depreciation on fixed assets for the earlier years
amounting to Rs.367.66 lacs (previous year Rs.490.21 lacs). Consequent to
the above, the loss carried over to the balance sheet is less by Rs.833.10
lacs (previous year Rs.1110.80 lacs) and gross block of fixed assets is
more by Rs.833.10 lacs (previous year Rs.1110.80 lacs)
g) Subject to the forgoing in our opinion and to the best of our
information, and according to the explanations given to us, the said
accounts statements read with the notes and schedules give the information
required by the Companies Act 1956, in the manner so required and give a
true and fair view in confirmity with the accounting principles generally
accepted in India.
i) in case of the Balance Sheet, of the state of affairs of the company as
at 30th June, 2002, and
ii) in the case of Profit & Loss Account, of the Loss for the year ended on
For ITTA PARTHASARATHY & CO.
Date : 22.11.2002
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph (3) of our report of even date.)
1. The Company has maintained proper records to show full particulars
including quantitative details and situation of Fixed Assets. The Company
has a policy of verifying Fixed Assets according to phased programme
designated to cover all the items over a period of three years. Pursuant to
the programme a physical verification was carried over during the year by
the management and no material discrepancies have been noticed on such
2. The Fixed Assets of the Company have not been revalued during the year.
3. The stock of finished goods, stores, spare parts and raw materials
excluding materials in transit and lying with third parties, have been
physically verified by the management at reasonable intervals during the
year. In our opinion, the frequency of the verification is reasonable.
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. The discrepancies between the physical stocks and book records, which
are not significant, have been properly dealt within the books of account.
6. In our opinion and on the basis of our examination of the stock records,
the valuation of stocks is fair and proper in accordance with the normally
accepted accounting principles and is on the basis as in the previous year.
7. Except for interest free unsecured loan from the promoters, the company
has not taken any loans, secured or unsecured, from companies, firms or
other parties listed in the Register maintained under Sec.301 of the
Companies Act 1956, or from Companies under the same management within the
meaning of Sec.370 (1B) of the Companies Act 1956, where the rate of
interest and other terms and conditions are in our opinion, not prima facie
prejudicial to the interest of the company.
8. The Parties to whom loans or advances in the nature of loans have been
given by the company are repaying the amount as stipulated.
9. There are adequate internal control procedures commemorate with the size
of the company and the nature of its business for the purchase of stores,
raw materials, components, plant & machinery, equipment and other assets
and for the sale of goods.
10. According to the information and the explanations given to us, the
transactions of purchase of goods and materials, and 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.50000/- or more in respect of
the each party, have been made at prices, which in our opinion, are
reasonable having regard to prevailing market prices for such goods,
materials or services the prices at which similar transactions have been
made with other parties, and the Company's business needs and exigencies.
11. Unserviceable or damaged stores, raw materials or finished goods, are
determined by the Company and provisions for loss wherever necessary, has
been made in the accounts.
12. The Company has not accepted deposits from the Public, hence the
compliance of Reserve Bank of India directives and provisions of Sec.58-A
of the Companies Act, 1956 does not arise.
13. In our opinion, reasonable records have been maintained by the Company
for the sale and disposal of scraps. The Company has no by-products.
14. The company has an internal audit system commemorate with its size and
the nature of its business.
15. We have reviewed the Books of Account maintained by the Company
pursuant to the rules prescribed by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Companies Act,
1956, in respect of manufacture of the products of the company and are of
the opinion that prescribed Accounts and Records have been made and
16. There was a delay in the remittance of Provident Fund and Employees'
State Insurance dues to the authorities concerned. The company has not
remitted Provident Fund dues of Rs. 48.82 lacs, ESI dues of Rs. 7.44 lacs
and TDS dues of Rs.10.90 lacs to the respective authorities as on 30th June
17. According to the information and explanations given to us and the Books
and Records examined by us, there are no undisputed amounts, payable in
respect of Income Tax, Sales Tax, Customs duty and Excise duty outstanding
as at 30th June 2002 for a period exceeding six months from the date they
18. According to the information and explanations given to us and on the
basis of books of account of the company examined by us, no personal
expenses have been charged to revenue account other than those payable
under contractual obligations or in accordance with generally accepted
19. The company is a Sick Industrial Company within the meaning of section
3(1) (O) of Sick Industrial companies (Special Provisions) Act 1985. The
earlier sanctioned scheme of BIFR vide its order dated 11.6.97 offering OTS
could not be compiled with by the company. As a result, the BIFR in its
hearing held on 15th April, 2002 has directed the company that if Financial
institutions and promoters agree then revised comprehensive revival
proposal based on OTS of FIs dues with means of finance fully tied up may
be submitted to the operating agency for consideration. We are informed
that the company is working out the modalities in this direction and would
soon submit a revival proposal to the Operating Agency.
For ITTA PARATHASARATHY & Co
Date : 22.11.2002 ITTA PARTHASARATHY