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Besco Ltd.

BSE: 530447 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Besco Ltd. (BESCO) - Auditors Report

Company auditors report

BESCO LIMITED ANNUAL REPORT 2002-2003 AUDITOR'S REPORT TO THE SHAREHOLDERS We have audited the attached Balance Sheet of M/s. Besco Limited as at 30th September, 2003 and the Profit loss A/c for the year ended on that date annexed there to and cash flow statement for the year 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. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan ft perform the audit to obtain reasonable assurance about whether the financial statement are free of material mis-statement. An audit includes examining on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement 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 Section 227(4A) of the Companies Act,1956 we enclose in the Annexure a statement of tile matters specified in the paragraphs 4 & 5 of the said order. Further to our comments in the annexure referred to above, we report that: i. 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. ii. 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. iii. The Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report are in agreement with the Books of Account. iv. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, except as stated in paragraph 4(vi) below. v. On the basis of written representations received from the Directors as on 30th September, 2003 and taken on record by the Board of Directors we report that none of the Directors is disqualified as on 30th September-2003 from being appointed as a Director in terms of clause (g) of subsection (1) of section 274 of the Companies Act,1956. vi. We report as follows:- i. No provision has been made in respect of accruing gratuity Ft leave liabilities of the employers and non ascertainment thereof as required by Accounting standard 15 (Accounting for Retirement benefits) (Refer to Note No.3 of Schedule 12). ii. Compensation paid to a customer for shortage of material supplied by them for conversion amounting to Rs.75.25 lakhs has been carried forward as stock. In absence of physical verification such value has been considered in stock based on representation by the management (Refer Note No.10 of Schedule 12). iii. Value of closing stock of finished goods and Work in Progress has been taken as certified by management. iv. Deferred tax assets have been accounted for Rs.137.55 Lakhs in relation to long term capital loss on land & shares based on management representation regarding its recoverability as the management is assured of recovering the same. (Refer note no. 16(C) of Schedule 12). Subject to above observation the effect of which is not ascertained we report that in our opinion and to the best of our information and according to the explanations give to us, the annexed accounts read with other notes thereon in schedule 12 give the information, required by the Companies Act, 1956 and in the manner so require and give the true and fair view in conformity with the accounting principles generally accepted in. India. a) In case of Balance Sheet of the state of affairs of the Company as at 30th September, 2003 and b) In case of Profit & Loss Account, of the profit of the Company for the year ended on that date, subject to the effect of the above note. c) In case of cash flow statement, of the cash flows of the company for the year ended on that date. 8, Old Post Office Street, For Singhi & Co. Kolkata, 4th day of June, 2004 PRADEEP K. SINGHI Partner Chartered Accountants Annexure to the Auditors' Report (Referred to in paragraph (1) of our Report of even date to the members of BESCO LTD. for the year ended 31.09.2003. 1. (a) As explained to us the Company has maintained proper records showing full particulars including quantitative details and situation of fixed asset. However no such register was made available to us for verification. (b) The Company has adopted the practice of physical verification of fixed Assets once in period of three year. Accordingly physical verification was carried out for major items of Assets during last year. Hence no physical verification was conducted during the current year. (c) In our opinion, the company has not disposed off substantial part of fixed assets during the year and the going concern status is not affected. 2. (a) As explained to us the stock of Finished Goods, Stores, Spare parts and Raw material have been physically verified by the management during the year. However no evidence of physical verification nor any report of short/ excess was made available to us, in the absence of which we are unable to comment upon the authority of the same. (b) In the absence of any physical verification report showing short/excess, if any we are unable to comment upon the reasonability of the physical verification. (c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. However no entries were found in the books of accounts as regards any adjustment of shortage/excess of the inventory. 3. The Company has neither granted nor taken any loans to and from companies, firms or other parties covered in the register, maintained under section 301 of the Companies Act, 1956. Accordingly, the clause 4(iii)(b) to (d) of the order are not applicable. 4. 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, for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit we have not observed any major weakness in internal controls. 5. (a) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion and according to the information and explanations given to us, there are no transactions in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,00.0/- (Rupees Five Lacs Only) or more in respect of any party. 6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956, and the rules framed thereunder. 7. In our opinion the company has an internal audit system commensurate with the size and nature of business. 8. The Company has maintained cost records pursuant to the order passed by the Central Government under section 209(1)(d) of the companies Act, 1956. We have not, however, made detailed examination of the said records to ascertain as to whether they are accurate 13 complete. 9. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees' State Insurance, income-tax, sales tax, wealth tax, custom duty, excise duty, cess and other statutory applicable to it. According to. the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues except sales tax of Rs.11.32 Lacs, E.S.I. of Rs.0.64 Lacs and Provident fund of Rs:0.48 Lacs which have remain outstanding as at 30th of September, 2003 for a period of six months from the date of becoming payable. (b) According to the records of the company, the statutory dues of sales tax, income tax, customs,wealth tax, excise ,duty, cess which have not been deposited on account of disputes and the forum where the dispute is pending are as given below Name of the Nature of (Rs. in Forurnwhere Statute the Dues Lacs) dispute is pending Central Sales Sales Tax 15.06 Dy.Commissioner Tax Act Commercial Taxes (A) West Bengal Sales Tax 3.93 Appellate & Revisioner Sales Tax Act Board Sales Tax 50.20 Dy. Commissioner Commercial Taxes (A) Income Tax Income Tax 7.02 Income Tax Appellate Act, 1961 Tribunal. The company has no accumulated losses and has not incurred cash losses in the current financial year and in the immediately preceding financial year. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has riot defaulted in repayment of dues to financial institutions or banks. There were no dues to financial institution or debenture holders during the year. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion, the Company is not a chit fund Company or nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies (Auditors Report) order 2003 is not applicable to the company. 14. In our opinion, the Company is not dealing in or trading in shares, securities. debentures and other investments. 15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks and financial institutions. 16. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained. 17. Based on examination of documents and records made available and on the basis of information and explanations given to us, the company has not used funds raised on short term basis for long term investments and vice versa. 18. During the year The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 during the year. 19. No debentures has been issued by way of the Company during the year. 20. The Company has not raised money by public issues during the year. 21. Based on the audit procedures per formed and information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit. For Singhi & Co. PRADEEP K. SINGHI Old post office street Partner Kolkala, 4th day of June, 2004 Chartered Accountants

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