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Montari Leather Ltd.

BSE: 526337 Sector: Others
NSE: N.A. ISIN Code: N.A.
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Montari Leather Ltd. (MONTARILEATHER) - Auditors Report

Company auditors report

ANNUAL REPORT 1999-2000 MONTARI LEATHER LIMITED AUDITORS' REPORT To the shareholders We have audited the attached balance sheet of Montari Leather Limited as at 31st March 2000 and the relative profit and loss account of the Company for the year ended on that date and 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 our audit. 2. 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 the books. 3. The balance sheet and the profit and loss account dealt with by this report are in agreement with the books of account. 4. As required by the Manufacturing and Other Companies (Auditors' Report) Order, 1988 issued by the Central Government in terms of section 227(4A) of Companies Act, 1956 and on the basis of such checks as we considered appropriate, we further report that: (i) The Company maintains records showing particulars including quantitative details and situation of the fixed assets. The assets having significant value have been physically verified by the management during the year and no differences were observed when compared with the book records. In our opinion the frequency of physical verification is reasonable; (ii) There has been no revaluation of fixed assets during the year; (iii) The stocks of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals during the year; (iv) The procedures 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; (v) The valuation of physical stock has been incorporated in the accounts and as such the differences between physical count and book records stand adjusted in the consumption for the year; (vi) In our opinion, the valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year; (vii) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. It is certified by the management that there is no body corporate under the same management as defined under sub-section (1 B) of section 370 of the Companies Act, 1956; (viii) The Company has not granted any loans, secured or unsecured to any companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. It is certified by the management that there is no body corporate under the same management as defined under sub-section (1 B) of section 370 of the Companies Act, 1956; (ix) The Company has made interest free loans of Rs. 28.72 lacs to bodies corporates without any stipulation as to repayment for which provision for doubtfulness has been made in the accounts; (x) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for sale of goods; (xi) As per the records of the Company, there were no transactions for the 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 during the year to Rs. 50,000 (Rupees fifty thousand) or more in respect of each party; (xii) As explained to us, unserviceable or damaged stores have been determined by the management and, where required, adequate provision has been made in the accounts for the loss arising on items so determined. There were no unserviceable or damaged raw materials and finished goods included in the closing stocks; (xiii) The Company is maintaining reasonable records for sale and disposal of realisable scrap; (xiv) The Company does not have a formal internal audit system commensurate with its size and nature of business; (xv) In respect of deposit of provident fund and employees' state insurance dues with appropriate authorities generally there is a delay and as at 31 st March 2000 there were arrears of Rs. 14.31 lacs for provident fund and Rs. 6.05 lacs for employees' state insurance dues; (xvi) According to the records of the Company, there were no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty which were outstanding as at 31st March 2000 for a period of more than six months from the date same became payable except amounts aggregating to Rs. 0.31 lacs in respect of income tax deducted at source and Rs. 0.34 lacs in respect of wealth tax; (xvii) On the basis of our examination of the books of account carried out in accordance with the generally accepted auditing practices and according to the information and explanations given to us, no personal expenses of employees or directors have been charged to the revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice: (xviii) The Company is a sick industrial company within the meaning of clause (0) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. Reference has been made to the Board for Industrial and Financial Reconstruction under section 15 of the Act; (xix) The nature of job work carried out by the Company does not require material, stores and allocation of man hours on the job; (xx) The other clauses of the order are not applicable/required to be reported. 5. (a) As stated in note 1 (a) in schedule 20, though the Company is a sick industrial company as per the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 the accounts have been prepared on the concept that the Company will continue as a going concern. (b) As stated in note 7 in schedule 20 no provisions for technical know how fees amounting to Rs. 60.17 lacs approx. has been made in the accounts and consequent thereto there is undercharge of depreciation amounting to Rs. 17.39 lacs (Rs. 2.76 lacs for current year). (c) As stated in note 8 in schedule 20, pending finalisation of negotiation with the lessor, no provision for lease rent of the Tannery amounting to Rs.144 lacs has been made in the accounts in view of the waiver of lease rent expected for earlier years. Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the accounts read together with the notes thereon comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 and give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view: i) in the case of the balance sheet, of the state of affairs of the Company as at 31st March 2000: and ii) in the case of profit and loss account, of the loss for the year ended on that date. For Walker Chandiok & Co., Chartered Accountants New Delhi Vinod Chandiok 1st December, 2000 Partner