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Him Containers Ltd.

BSE: 523535 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Him Containers Ltd. (HIMCONTAINERS) - Auditors Report

Company auditors report

ANNUAL REPORT 1998-99 HIM CONTAINERS LTD AUDITORS' REPORT 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 dues. (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 notes below:-- (a) Note No. 1(i)(b) regarding accounting of certain income/expenses on cash basis. (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 parties. (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 mentioned therein 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 Companies Act,1956. 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 Chartered Accountants ASHIS RANJAN MAITRA Partner 10, Old Post Office Street, Calcutta 700001. Dated. the 5th October.1999.