ANNUAL REPORT 1998-99
ASSOCIATED BUSINESS CREDITS LIMITED
The Members of ASSOCIATED BUSINESS CREDITS LIMITED.
We have audited the attached Balance sheet of ASSOCIATED BUSINESS CREDITS
LIMITED as at 30th September 1999, and also the Profit and Loss Account for
the period ended on that date, annexed thereto 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 enclose in the Annexure a statement on the
matters specified in paragraphs 4 & 5 of the said order.
2. Further to our comments in the Annexure referred to in paragraph 1
a) We have obtained Subject to Clause 1(6)(h) of Notes forming part of
Accounts, 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, Subject to Clause 1(6)(g) of Notes forming part of
Accounts regarding certain reconciliation to be made proper books of
accounts have been maintained so far as appears from our examination of the
e) The Balance Sheet and Profit and Loss Account dealt by this report are
in agreement with the books of accounts, subject to clause (a) and (b) as
d) In our opinion and subject to:
i) Clause No.1 (2) of Notes forming part of Accounts regarding non
provision for depreciation as per Accounting Standard 6 (AS-6).
ii) Clause 1 (4) of Notes forming part of accounts, regarding non provision
of Retirement benefits as per Accounting Standard 15 (AS 15).
iii) Clause No. 1 (6) of Notes forming part of Accounts regarding in
consistency in following Accounting Policies as per Accounting Standard 1
iv) Clause No.1 6(a) relating to the Leased Assets that are not transferred
and eliminated from the financial statement even after completion of the
contracts as per accounting standard 10 (AS 10) (Accounting for Fixed
v) Clause No.1 (6) (b) of Notes forming part of Accounts, regarding events
occurring after the Balance Sheet date, as per Accounting Standard 4 (AS
the Profit and Loss Account, and the Balance Sheet comply with the
Accounting Standards referred to in sub-section (3c) of Section 211 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 accounts, read with Schedules attached
thereto, and subject to our comments in the notes thereon, give the
information required by the Companies Act, 1956 in the manner so required
and subject to:
i) Note No. 1 (2) regarding non provision depreciation in respect of the
assets transferred during the period, and consequent change in the method
of accounting, as per Accounting Standard 6 (AS 6).
ii) Note No.1 (4) regarding non provision in respect of Gratuity payable to
the employees as per Accounting Standard 15 (AS 15).
iii) Note No.1 5(f) regarding additional provision of Rs.55,28,735/- in
respect of Lease Equalisation relating to earlier,years and additional
lease equalisation charge amounting to Rs.98,21,058/- relating to previous
years, as per accounting Standard (AS 5).
iv) Note No.1 6(a) regarding the leased assets of Rs.67,76,135/- relating
to Lease Contracts which have already been completed but not transferred to
the respective lessees, as per accounting standard 10 (AS 10).
v) Note No.1 6 (b) regarding non-provision in respect of Income Tax
liability for the Assessment year 1996-97 in accordance with accounting
standard 4(AS 4) contingencies and events occurring after the Balance Sheet
vi) Note No.1 6 regarding certain accounting policies which are not in
confirmity with Accounting Standard, and are not consistently followed by
the company, as per Accounting Standard (AS 1) .
(a) Non provision of interest accrued on public deposits for the period
(b) Non provision towards interest payable of Rs.14,06,250/- in respect of
the Inter Corporate Deposits.
(c) Non payment of Rs.7,02,722/- in respect of interest Tax collected as on
(d) Non provision towards interest payable on public deposits matured and
not paid as on 30.09.1999.
vii) Note No.1 6(f) regarding non compliance of the directive issued by the
Reserve Bank of India and the provisions of section 58-A, of the Companies
Act, 1956, with regard to the Public Deposits which have matured and
claimed as on 30.09.1999, and not repaid by the company.
(viii) Note No.1 6(h) regarding balances in the parties accounts including
Sundry Debtors, Lease Rental Debtors, Stock on Hire, Other Debts and Sundry
give a true and fair:
i) in the case of Balance Sheet of the state of affairs of the Company as
at 30th September, 1999 and
ii) in the case of Profit and Loss Account, of the Loss of the Company for
the period ended on that date.
Place : Chennai for SELVAM & SUKU
Date : 18-02-2000 Chartered Accountants.
ANNEXURE REFERRED TO IN PARAGRAPH (1) OF THE AUDIT REPORT OF EVEN DATE TO
THE SHAREHOLDERS OF ASSOCIATED BUSINESS CREDITS LIMITED ON THE ACCOUNTS FOR
THE PERIOD ENDED 30TH SEPTEMBER, 1999.
1. The Company as per information provided to us has maintained proper
records showing full particulars including quantitative details and
situation of fixed assets during the period. As explained to us the
management has not physically verified the fixed assets during the period.
In the absence of such physical verification of the fixed assets by the
management, we are unable to give our comments on any discrepancy or
valuation of such fixed assets as shown in the Balance Sheet.
2. None of the fixed assets have been revalued during the year.
3. The Company being the Finance Company, has no stock of raw materials,
stores, spare parts and finished goods and as such paragraphs 4(A), (iii),
(iv), (v) (vi) are not applicable.
4. 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 and the terms and conditions of such
loans are not prima facie prejudicial to the interest of the Company.
5. The Company has granted loans secured or unsecured to the companies,
firms or other parties listed in the register maintained under section 301
of the Companies Act, 1956 and / or to companies under the same management
as defined under sub section(1B) of Section 370 of the Companies Act, 1956
and subject to our comments in the Clause III(2) of the Notes forming port
of Accounts, the terms and conditions of such loans are not prima facie
prejudicial to the interest of the Company.
6. In respect of loans and advAnces in the nature of loans have been given
to employees, the parties are generally repaying the principal amount as
stipulated and are regular in payment of interest, wherever applicable.
7. In our opinion, there is adequate internal control procedures
commensurate with the size of the company and the nature of its business
for the purchase of plant and machinery, equipment and other fixed assets.
8. According to the information and explanations given to us, and subject
to Clause III(3) (i) and III(3)(ii) of the Notes forming part of Accounts,
there are no transaction of purchase of goods and materials and sale of
goods, materials and services valuing in excess of Rs.50,000 for each type
from firms or companies or other parties in which directors are interested
in pursuance of contracts or arrangements as listed in the register
maintained under Section 301 of the Companies Act, 1956.
9. The Company has no stock of stores, raw materials etc. Hence the
question of determining unserviceable or damaged stores does not arise.
10. In our opinion and according to the information and explanations given
to us the Company has not complied with directives issued by the Reserve
Bank of India and rules framed thereunder and the provisions of Sec.58-A of
the Companies Act, 1956 with regard to deposits accepted from the public.
The Company has also not repaid deposits accepted from the public,
amounting to Rs.2,40,11,662/- which have became matured as on 30.09.1999.
11. The Company being a Finance Company has no records for sale and
disposal of scraps.
12. In our opinion, the company has no adequate internal audit system
commensurate with its size and nature of its business.
13. The Central Government had not prescribed the maintenance of Cost
records under Section 209 (1) (d) of the Companies Act, 1956.
14. According to the records of the Company, Provident Fund dues amounting
to Rs.61,177/- has not been remitted as on 30.09.1999 has not been remitted
with the appropriate authorities within the stipulated time.
15. As explained to us and information provided to us and the records made
available to us, and subject to Clause II(16) (c) of the Notes forming part
of Accounts regarding non-payment of Interest tax collected amounting to
Rs.7,02,722/-, there are no undisputed amounts payable in respect of Income
Tax, which were outstanding as at 30th September, 1999 for the period of
more than six months from the date they became payable.
16. According to the information and explanations given to us and the
records examined by us, no personal expenses other than those payable under
contractual obligations or in accordance with generally accepted business
practices, have been charged to revenue account.
17. In our opinion the Company has kept proper records of transactions and
contracts of their dealing or trading in shares or debentures and other
investments. The Shares and Debentures and other investments have been held
by the Company in its own name except in the case of shares which are as
stated by the Company in the process of being transferred to the Company's
18. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities and as
such clause (ii) of paragraph 4(D) of the Report in our opinion is not
19. The provisions of Sick Industrial Companies (Special Provisions) Act
1985 not applicable to the Company.
20. The Company being a Finance Company the paragraph 4(B), 4(C) and clause
(iii) of paragraph 4(D) of the report, in our opinion, are not applicable.
Place : Chennai for SELVAM & SUKU
Date : 18-02-2000 Chartered Accountants.