MOHATTA AND HECKEL LIMITED
ANNUAL REPORT 2001-2002
the Members of
Mohatta & Heckel Limited
1. We report that we have audited the attached Balance Sheet of M/s.
Mohatta & Heckel Limited as at 3lst March, 2002 and also the Profit & Loss
Account for the year ended on that date annexed thereto both of which we
have signed under reference to this report. 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.
2. We conducted our audit in accordance with the 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 misstatements. 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 use 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.
3. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts together with the notes thefeon
and attached thereto and the Statement on Significant Accounting Policies
give in the prescribed manner the information required by the Companies
Act, 1956, of India (the Act), and also give respectively a true and fair
view in conformity with the accounting principles generally accepted in
India subject to following notes of Schedule M:
(i) Note no. 1(v): In respect of payment of gratuity.
(ii) Note no. 9: In respect of non provision of interest on
C.C. A/c., SBI Mutual fund (Debentures) &
Other deposit (amount not ascertained)
(iii) Note no. 10: In respect of non provision for power &
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2002 and
(b) in the case of the Profit and Loss Account, of the loss for the year
ended on that date.
4. 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.
In our opinion, proper books of account have been kept by the Company as
required by law so far as appears from our examination of these books and
the aforementioned Balance Sheet and Profit and Loss Account are In
5. In our opinion, these accounts have been prepared in compliance with the
applicable Accounting Standards referred to in section 211(3C) of the Act.
6. On the basis of written representations received from the director, as
on 31st March, 2002 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March, 2002
from being appointed as a director in terms of clause (g) of sub-section
(1) of Section 274 of the Act.
7. As required by the Manufacturing and Other Companies (Auditor's
Report) Order, 1988 dated 7th September 1988 issued by the Government of
India in terms of sub-section (4A) of Section 227 of the Act and on the
basis of such checks as we considered appropriate and according to the
information and explanations given to us, we further report that:
i. The fixed Assets register of the Company which shows the full
particulars including quantitative details & situation of Fixed Assets is
in the process of being updated. We have been informed that Fixed Assets
have been physically verified by the management at reasonable intervals and
no material discrepancies were noticed on such verification.
ii. None of the Fixed Assets have been revalued during the year.
iii. We have been informed that the Management has physically
verified the stock of Finished Goods, Stores, Spare Parts and Raw Materials
during the year.
iv. In our opinion and according to the information and explanation given
to us, the procedure followed by the management for such physical
verification are, reasonable and adequate in relation to the size of the
company and the nature of its business.
v. The discrepancies noticed on such verification between the physical
stock and books and records were not material in relation to the operations
of the Company and so have been properly dealt with in the books of
vi. In our opinion the valuation of stock is fair & proper and in
accordance with the normally accepted accounting principles and is on the
same basis as in the previous year.
vii. The Company has taken unsecured loans from companies listed in the
register maintained u/s 301 of the Companies Act., 1956 and from the
companies under the same management as defined under sub section (1B) of
section 370 of the Companies Act, 1956. In our opinion the terms and
conditions of such loans are prima facie not prejudicial to the interest of
viii. The Company has not granted any loans secured or unsecured to
companies, firm or other parties in which directors are interested.
ix. In respect of loans & advances in the nature of loans there are cases
where the principal amount & interest thereon have not been recovered as
stipulated & reasonable steps have been taken by the company for their
X. In our opinion and according to the information and explanations given
to us, there are inadequate internal control procedures commensurate with
the size of the company and the nature of its business for the purchase of
Plant & Machinery, Equipment and other assets and sale of goods.
xi. According to the information and explanation given to us, no
transactions of Purchase of goods, sale of goods and services, made in
pursuance of contracts and arrangements entered in the register maintained
under section 301 of the Companies Act, 1956 and aggregating during the
year to Rs. 50,000/-.
xii. According to the information and explanation given to us, the Company
has not determined damaged or unserviceable stores and raw materials during
xiii. The Company has accepted deposits from Share Holders. In our opinion
the directions issued by the Reserve Bank of India and the rules framed
thereunder have been complied with.
xiv. The company has maintained reasonable records for the sale and
disposal of realizable scrap. The Company has no by-products.
Xv. The Company did not have any formal Internal Audit system during the
period under review.
Xvi. As per the information given to us, maintenance of costs records has
not been prescribed by the Central Government under Section 209(1)(b) of
the Companies Act, 1956
xvii. According to the Information & explanation given to us the company
has not been regularly depositing Provident Fund dues & Employees state
Insurance dues with appropriate authorities.
xviii. According to the information and explanation given to us, the books
and records examined by us, there are no undisputed amounts payable in
respect of income-Tax , Sales-Tax, Customs Duty, and Excise. Duty
outstanding as at 31st March, 2002 for a period exceeding six months from
the date they become payable.
xix. On the basis the examination of (i) the books of accounts (ii) other
records, (iii) the explanations given to us on our inquiries, no personal
expenses have been charged to revenue account.
Xx. The Company has been declared as Sick Industrial Company within the
meaning of Sick Industrial Companies (Special Provisions) Act 1985, by the
Board for Industrial & Financial Reconstruction.
xxi. In respect of the trading activities, as per information &
explanations given to us no damaged goods have been determined by the
company and no provision for the loss have been made in the Books of
xxii. In respect of services rendered :
a. In our opinion the Company has a reasonable systems of recording
receipts, issues and consumption of materials and stores and allocating
materials and stores consumed to the relative jobs, commensurate with its
size and nature of its business.
b. Considering the nature of services rendered and the basis of billing, it
is not considered necessary to have a system of allocation of man-hours
utilized to the relative jobs.
c. In our opinion there is a reasonable system of authorization of proper
levels with necessary control on the issue of stores and allocation of
stores and standard labour cost to various jobs and the related system of
internal controls of the Company is commensurate with the size and the
nature of its business.
For M.V. KRISHNA MOORTHY
(M. V. KRISHNA MOORTHY)
Date : July 18th 2002