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Madras Hi-Tech Circuits Ltd.

BSE: 517304 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Madras Hi-Tech Circuits Ltd. (MADRASHITECH) - Auditors Report

Company auditors report

ANNUAL REPORT 1998-99 MADRAS HI-TECH CIRCUITS LIMITED AUDITOR'S REPORT We have audited the attached Balance Sheet of the MADRAS HI-TECH CIRCUITS LIMITED as at 30th June 1999 and also the Profit and loss Account for the period ended on that date. We report that: 1. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of audit. 2. In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of the books. 3. The Balance Sheet and the Profit and Loss Account referred to in this report are drawn up in accordance with sub-section (3C) of section 211 of the Companies Act,1956. 4. The Balance Sheet and the Profit and Loss Account dealt with by the report are in agreement with the books of accounts. Attention is drawn to the significant loss on sale of assets as anticipated by the Company, the quantum of which is not ascertainable and for which no adjustment has been made (Note # 1 of Schedule 16), non provision of depreciation on plant and machinery (Note # 2 (a) of Schedule 16) and non provision of interest on secured loans and unsecured loans from financial institutions (Note # 4 of Schedule 16). Subject to the above, in our opinion, and to the best of our information and according to the explanations given to us, the said accounts together with the accounting policies and notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view: (a) In the case of the Balance Sheet, of the sate of affairs of the Company as at 30th June, 1999; (b) In the case of the Profit and Loss Account, of the Loss for the period ended on that date. In accordance with the Manufacturing and other Companies (Auditor's Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4 A) of the Companies Act, 1956 we report as follows: 1. The company has maintained proper records showing full particulars including location and quantitative details of fixed assets. We are informed that the management has physically verified the assets during the period. No material discrepancies were noticed on such verification. 2. None of the fixed assets of the Company have been revalued during the year. However the Company has become sick and non viable and it anticipates significant loss on sale of assets the quantum of which is no ascertainable. (Refer note 1 of Schedule 16). Also refer para 4 of our main report. 3. The stocks of raw materials and spare parts are being physically verified during the period by the management. 4. The procedure of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. 5. No discrepancies were noticed on such verification between physical stock and book records. 6. On the basis of our examination of stock records, we are of the opinion that the valuation of the stock is fair and proper, and in accordance with the normally accepted accounting principles. There is no change in the basis of valuation as compared to the previous year. 7. The company has not taken any loans from Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 and from Companies under the same management during the year. 8. In our opinion, the Company has not granted any loans secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 and to the companies under the same management as defined under section 370 (1B) of the Companies Act, 1956. 9. As there were no transactions involving purchase of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under section 301, clause 4 A (ix) is not aPPlicable 10. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business. However there were no transactions involving purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to the sale of goods during the year. 11. As there was no production during the period clause 4 A (xi) does not arise. 12. As explained to us, the Company has a regular procedure for determination of unserviceable or damaged stores, raw materials. Adequate provision has been made in the accounts for the loss arising on the items so determined. 13. The company did not accept any fixed deposits during the period. 14. In our opinion, the Company has maintained reasonable records for the sale and disposal of scrap. The company has nc by products. 15. The company has no formal internal audit system. 16. Maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 in respect of the products. 17. The provisions of Provident Fund and Employees State Insurance Act are not relevant to the Company for the period. 18. According to the information and explanations given to us, as undisputed Income-tax of Rs. 45.81 lakhs has not yet been paid. No undisputed amounts payable in respect of Customs duty, Excise duty were outstanding as at 30.06.1999 for a period of more than six months from the date they become payable. 19. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practices. 20. The company has been declared as a sick industrial Company under section 3(1) (o) of the Sick Industrial companies (Special Provisions) Act, 1985 and the BIFR has appointed ICICI as the operating Agency. R. SIVAKUMAR Partner For KARRA & CO., Chartered Accountants. Place: Chennai Date : 28.09.1999