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Goodearth Industries Ltd.

BSE: 526929 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Goodearth Industries Ltd. (GOODEARTHINDS) - Auditors Report

Company auditors report

GOODEARTH INDUSTRIES LTD AUDITORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2002. 1. We have audited the attached Balance Sheet of WEIGHBIRD (INDIA) LIMITED as at 31st March, 2002 and the relative Profit and Loss Account for the year ended on that date both of which we have signed under reference to this report. These financial statements are the responsibility of the management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We 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 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 well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Manufacturing and Other Companies (Auditors' Report) Order, 1988 issued by the Central Government under section 227 (4A) of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that : a) In view of the permission obtained from Govt. of India u/s.25.0 of Industrial dispute Act, 1947 vide letter no. F.No.L-42024/10/200-IR(Misc) Dated 27/12/2000. to close Weighbird (India) Ltd., Going concern assumption is no more valid. Consequently, adjustments may be required to the recorded Assets amounts & classification of Liabilities. b) 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; c) 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; d) The Balance Sheet and Profit and loss Account dealt with by this report are in agreement with the books of account; e) In our opinion, these financial statements have been prepared in compliance with the applicable accounting standards referred to in Section 211 (3C) of the Act. f) Based on the representations made by all the Directors of the company as on March 31, 2002 and taken on record by the Board of Directors of the Company and in accordance with the information and explanations as made available, the Directors of the Company do not, prima facie, have any disqualification as referred to in Clause(g) of subsection (1) to Section 274 of the Act. g) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and Profit and Loss Account subject to our observation No. 1 to 9 attached herewith, read together with the Notes thereon give in the prescribed manner the information required by the 'Act' and also give respectively, a true and fair view in conformity with the accounting principles generally accepted in India : (i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2002; and (ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date. ANNEXURE TO THE AUDITOR'S REPORT : 1. The Company has maintained proper records to show full particulars including quantitative details and situation of fixed assets. Those Assets have been physically verified by management, during the last year. However, the assets are under the close supervision of the Holding Company. 2. The fixed Assets of the company have not been revalued during the year. 3. The stock of finished goods, spare parts, loose tools, components and raw material of the company have not been physically verified at the end of the year by the management, since the unit is closed. The physical verticiation has been carried out during the last year. However the stocks are under the close supervision of the holding Company. 4. The entire value of the stock has been provided due to obsolescence during the Current year. 5. Provision for obsolesces has been made for entire stocks. 6. The Company has raised in their books an interest bearing loan Rs. 4.65 lakhs from its holding company by removing a non-interest bearing outstanding of the same value by merely affecting a book entry in an earlier year and thereby Company has been subjected to an interest liability of Rs.8.38 lakhs in its books of accounts in our opinion the aforesaid loan is prejudicial to the interest of the company. 7. The company has not given any loans secured or unsecured to companies, firms or Other parties listed in the register maintained u/s 301 of the Companies ACT 1956. 8. The Company has not given loans except for the cases referred to in Note No.9 of Schedule 26. 9. The transactions of the Company are monitored by the Holding Company and as such the internal Control is viewed as adequate in commensurate with the present scenario of the company. 10. No transaction of purchase or sale of goods, materials and service aggregating to Rs. 50,000/- or more in value have been made with parties listed in the register maintained under Section 301 of the Companies Act, 1956 except for the consideration for services (Rent etc.) booked by the Company against which comparable prices were not available for our verification. 11. The unservicable and damaged stores, raw materials and components had been written off. 12. The Company has not received any deposit from the Public under Section 58A of the Companies Act, 1956 and rules framed there under. 13. There is no question of records for the sale and disposal of scrap and by product, since the unit is closed. 14. The Company has an in built system of internal audit as transactions are closely monitored by Holding Company. 15. The Central Government has not prescribed the maintenance of cost records by the Company under section 209(i)(d) of the Companies Act, 1956 for any of its products. 16. Provident Fund and other related dues have been deposited. However the accumulated arrears of Provident and Employees State Insurance dues as on 31st March, 2002 were Rs. 51,95,003/-and Rs.7,79,020/- respectively. 17. The undisputed amount in respect of Sales Tax, Income Tax and Professional Tax, which remained outstanding as on 31st March, 2002 Rs. 2,72,734/-, Rs. 46,913/- and Rs. 1,37,310/- respectively. 18. On the basis of checks out by us in accordance with generally accepted auditing procedures and as per explanations given to us no personal expenses have been charged to the Profit and Loss Account. 19. The Company is a sick Company within the meaning of clause (o) of sub-section (1) of section 3 of the Sick, Industrial Companies (Special Provisions) Act 1985 (1 of 1986) and registered with B.I.F.R., B.I.F.R. Bench confirmed winding up under Section 20(1) of the Act vide order dated 17.2.97. Workers union submitted an appeal to AAIFR., AAIFR after two hearings rejected the appeal vide order dated 15.9.97. Govt. of India has granted permission for closure of Weighbird (India) Ltd. u/s. 25.o of I.D. Act, 1947, vide letter no. F.No.L-42024/10/2000-IR(Misc) Dated 27/12/2000. However this is subject to orders/directions of the High Court in the matter and also the out come of any of the court cases relevant to the subject pending in any court.