ANNUAL REPORT 1998-99
HIM CONTAINERS LTD
TO THE MEMBERS OF HIM CONTAINERS LIMITED
We have audited the attached Balance Sheet of HIM CONTAINERS LIMITED, as at
31st March,1999 and also the attached Profit & Loss Account of the Company
for the year ended on that date and report that, in our opinion and as per
the information and explanations furnished to us and the books and records
examined by us in the normal course of audit:--
i) The Company is stated to have maintained proper records of Fixed Assets
showing full particulars including quantitative details and situations
thereof. The fixed assets of the Company have not been physically verified
by the Management during the year and as such, we are unable to comment on
the discrepancies, if any, between the physical inventory and book records.
ii) The fixed assets of the Company have not been revalued during the year.
iii) The stocks of finished goods, raw materials, stores, spare parts etc.
have not been physically verified by the Management during the year. We are
unable to comment upon the extent of discrepancies, if any, between the
physical stocks and book records or its valuation as on date.
iv) As informed, the Company has not taken any loan from or given any loan
to companies, firms or other parties listed in the registers maintained
under Sections 301 and 370 (1 -B) of the Companies Act,1956.
v) Interest free advances in the nature of loans given to the employees,
have not been recovered as per stipulations.
vi) During the year under review, the Company did not purchase any stores,
raw materials including components, plant & machinery, equipment and other
assets and there was no sale of goods. Hence internal control procedures
regarding the above is not applicable.
vii) As far as we can ascertain and according to the information and
explanations given to us, there are no 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 to Rs. 50,000 or more
during the year in respect of each party.
viii) The stock of unserviceable or damaged stores, raw materials etc. as
on the Balance Sheet date has not been determined and we are unable to
comment upon the loss, if any, required to be provided.
ix) As informed, the Company has not accepted any deposit from the public
within the purview of Section 58A of the Companies Act,1956 and the
Companies (Acceptance of Deposits) Rules, 1975.
x) During the year under review, there was no production, sale and disposal
of realisable scraps.
xi) No internal audit has been carried out during the year and as such, the
present internal audit system is not commensurate with the size and nature
of the Company's business.
xii) As informed to us, the Company has not been required to maintain cost
records under Section 209 (1) (d) of the Companies Act,1956.
xiii) Provident Fund and Employees' State Insurance dues have not been
deposited with the appropriate authorities and as informed, there was no
arrear of such dues as on the Balance Sheet date except for dues, if any
(amount unascertainable) on account of unpaid salaries, wages etc. as
indicated in Note No. 4 on Schedule 16.
xiv) According to the information and explanations given to us and the
books and records examined by us, except for Rs.16,561/- there are no
undisputed amounts in respect of Income Tax, Sales Tax, Customs Duty and
Excise Duty outstanding as at 31 st March,1999 for a period exceeding six
months, from the date they became payable.
xv) No personal expenses have been charged to revenue account other than
those payable under contractual obligations or in accordance with generally
accepted business practices.
xvi) The Company was declared a 'Sick Industrial Company' within the
meaning of Section 3(1)(o) of the Sick Industrial Companies (Special
Provisions) Act,1985. It was recommended for winding up by the Board for
Industrial and Financial Reconstruction (BIFR) vide its Order dated 10th
September, 1996. The Company's appeal against aforesaid Order was dismissed
by the Appellate Authority for Industrial and Financial Reconstruction
(AAIFR) vide its Order dated 5th September, 1997.
Subject to and in terms of the above, we further report that:
(1) The AAIFR, vide its order dated 5th September, 1997 has confirmed the
BIFR order dated 10.9.1996 recommending the winding-up of the Company.
Accordingly, the Company's accounts ought to have been prepared on the
basis that it ceases to be a going concern. However in view of the non-
determination of the resultant loss arising out of the Company's inability
to continue as a going concern, particularly in relation to fixed assets,
inventories etc. adjustments required to be made due to the Company ceasing
to be a going concern are not presently ascertainable and we are,
therefore, not able to offer our comments thereon. Furthermore, the Company
has since received legal notice from State Bank of India recalling all its
(2) We have subject to Note Nos. 4, 5 and 7 to 9 on Schedule 16, obtained
all the information and explanations,which to the best of our knowledge and
belief,were necessary for the purpose of our audit.
(3) In our opinion,subject to Note Nos.1(i)b and 4 to 9 on Schedule
16,proper books of accounts as required by law, have been kept by the
Company so far as it appears from our examination of those books.
(4) The attached Balance Sheet and the Profit & Loss Account are in
agreement with the books of account as submitted to us
(5) Attention is drawn to the following Notes on Schedule 16 whose impact
on the Company's loss and assets liabilities is indicated in the respective
(a) Note No. 1(i)(b) regarding accounting of certain income/expenses on
(b) Note No. 4 regarding non-provision (amount unascertainable) of
liabilities towards employees which may arise due to the Company ceasing to
be a going concern.
(c) Note No. 5 regarding non-ascertainment and non-provision of loss
arising on the suspension of the expansion project against which expenses
aggregating to Rs. 2,95,26,009 have been incurred, till date.
(d) Note No. 6 regarding incorporation of book balances in respect of Loans
& Advances, Deposits (both debit and credit), Unsecured Loans, Sundry
Creditors etc. due to non-receipt of confirmations from the respective
(e) Note Nos. 7 to 9 regarding non-ascertainment and non-provision of the
loss arising on the inventory of finished goods, work-in-progress, raw
materials, stores etc. as on the Balance Sheet date for the reasons
f) Note No. 10 regarding non-ascertainment and non-provision of liabilities
for gratuity and leave encashment on retirement of employees, which are
accounted for on cash basis.
(g) Note No. 12 regarding accounting of lease rental income which is not in
conformity with the guidance note on "Accounting for Leases" issued by the
Institute of Chartered Accountants on India. Had the accounting of lease
rental income been done as per the above guidance note issued by the
Institute, the accumulated loss would have been higher by Rs. 2,31,49,532.
(h) Note No. 13 regarding non-forfeiture of Advances against Share Capital
of Rs. 37,50,000.
(i) Note No. 16 regarding non-provision of investment allowance reserve
aggregating to Rs. 1,74,199.
(j) Note No. 17 regarding term loans of Rs. 14,75,98,370 (including funded
interest thereon) from financial institutions which are subject to
confirmation from the respective institutions.
(k) Note No. 18 regarding non-deduction and non-deposit of tax at source
amounting to Rs. 2,96,676 on various contracts.
Subject to our qualifications (xiii),5(a),5(b),5(e) and 5(f) above, the
Balance Sheet and Profit and Loss Account comply with the Accounting
Standards prescribed under the provisions of Section 211 (3C) of the
In our opinion, and to the best of our information and according to the
explanations given to us, the Balance Sheet and Profit & Loss Account,
together with the Notes thereon and attached thereto and subject to and in
terms of the above qualifications 1 to 3 and 5(a) to 5(k) and also read
with the'Notes'appearing in Schedule 16 give the information required by
the Companies Act,1956 and also give respectively a true and fair view:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March,1999 and
(b) In the case of the Profit & Loss Account, of the loss of the Company
for the year ended on that date.
D.S.BASU & CO
ASHIS RANJAN MAITRA
10, Old Post Office Street,
Dated. the 5th October.1999.