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Movilex Irrigation Ltd.

BSE: 526411 Sector: Industrials
NSE: N.A. ISIN Code: INE857A01015
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Movilex Irrigation Ltd. (MOVILEXIRRIGATN) - Auditors Report

Company auditors report

MOVILEX IRRIGATION LIMITED ANNUAL REPORT 2002-2003 AUDITORS' REPORT TO THE MEMBERS OF MOVILEX IRRIGATION LIMITED We have audited the attached Balance Sheet of Movilex Irrigation Limited as at 31st March, 2003 and also the Profit & Loss Account and the cash flow statement of the Company for the year ended on that date annexed thereto. 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. 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 misstatement. 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 used 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. 1. As required by the manufacturing and other Companies (Auditor's Report) order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate, we enclose in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the said order. 2. Further to our comments in the Annexure referred to in paragraph 1 above, we state that : a) 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. b) In our opinion, proper Books of Accounts as required by Law have been kept by the Company so far as appears from our examination of these books. c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the Books of Accounts of the Company. d) In our opinion, the Balance Sheet, the profit & Loss Account dealt with the by this report comply accounting standards referred to in Section 211 (3C) of the Companies Act, 1956; e) On the basis of written representations received from the Directors and taken on records by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2003 from being appointed as a Director in terms of Section 274 (1)(g) of the Companies Act, 1956. f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts subject to : 1. Note 3 regarding contingent liability in respect of disputed demands of Central Sales Tax Rs. 9.30 lacs and Excise Duty Rs. 67.42 lacs not provided for. 2. Note 4 regarding erosion of the net worth of the Company due to continued losses and going concern concept. The Company incurred a net loss of Rs. 724.16 lacs during the year ended 31st March, 2003 and as of that date, the Company's current liabilities exceeded its current assets by Rs. 11.12 lacs and its total liabilities exceeded its total assets by Rs. 1738.14 lacs. The Company is trying to renegotiate its borrowings from its bankers. Consequently on finalisation adjustments may be required to the recorded asset amounts and classification of liabilities. Without such financial support, along with other matters as set forth in Note 4, raise substantial doubt that the Company will be able to immediately restart, its operations and continue as going concern. 3. note 7 regarding non confirmation of sundry debtors, creditors and deposits the balances of which have been taken as per the books of accounts. In the absence of the confirmation we are unable to ascertain nature of adjustment that may be required on account of pending court cases with debtors and the resultant effect thereof on the accounts, and read together with other notes thereon, give the information required by the Companies aCt, 1956 in the manner so required and give true and fair view in conformity with the accounting principles generally accepted in India. i) In the case of Balance Sheet of the state of affairs of the Company as at 31st March, 2003; and ii) In the case of PRofit & Loss Account of the loss for the year ended on that date. iii) In the case of Cash Flow Statement, of the cash flow for the year ended on that date. For PRAKASH S. DOSHI & COMPANY Chartered Accountants Sd/- Place: Mumbai Prakash S. Doshi Date: 23.06.2003 Proprietor Membership No. 11532 ANNEXURE TO THE AUDITORS' REPORT On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we state that:- 1. The Company has maintained proper records to show full particulars including quantitative details and situation of fixed assets. As explained to us all the assets have been physically verified by the management at reasonable interval during the year and we are informed that no significant discrepancy was noticed on such verification. 2. None of the fixed assets have been revalued during the year. 3. The stock of finished goods spare parts and raw materials have been physically verified by the management at reasonable intervals during the year. In our opinion the frequency of such verification is reasonable. 4. As explained to us the procedures of physical verification of stocks followed by the size of the Company and the nature of its business. 5. No material discrepancies were noticed on physical verification of stocks as compared to book records. 6. In our opinion on the basis of our examination of the stock records, 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. 7. The Company has not taken loans from Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. The Company has not taken any loan from the Companies under the same management as defined under section 370(1B) of the Companies Act, 1956. 8. The Company has not granted any loans to Companies firms or other parties listed in the register maintained under section 301 and/or to the Companies under the same management as defined under section 370 (1B) of the Companies Act, 1956. 9. The Company has not given loans or advances in the nature of loans except interest free loans and advances to employees where in few cases, recoveries are not regular, however management is hopeful of recovery. 10. 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 the nature of its business with regard to purchases of stores, raw materials including components, plant and machinery, equipment and other assets and with regards to the sale of goods. 11. In our opinion and according to the information and explanations given to us the transactions of purchases 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 and aggregating during the year to Rs. 50000/- or more in respect of each party have made at prices which are reasonable having regard to prevailing market price for such goods, materials or services have been made with other parties. 12. As explained to us the Company has a regular procedures for the determination of unserviceable or damaged stores, raw materials and finished goods. Adequate provision has been made in the accounts for the loss arising on the items so determined. 13. The Company has not accepted deposits from the public. 14. In our opinion reasonable records have been maintained by the Company for the sale and disposal of realisable scrap. The Company does not have any by-products. 15. In our opinion the Company has an internal audit system commensurate with the size and nature of its business. 16. We are informed that the Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 for any of the products of the Company. 17. According to the information and explanations given to us, Provident Fund dues have been regularly deposited with the appropriate authorities. We are informed that the provisions of Employees State Insurance Act are not applicable to the Company. 18. According to the information and explanations given to us no undisputed amounts payable in respect of income-tax wealth tax sales tax customs duty and excise duty were outstanding as at 31st March, 2003 for a period of more than six months from the date they became 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 practice. 20. The Company is a sick industrial Company within the meaning of clause (O) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. The Company has filed reference to the Board for Industrial and Financial Reconstruction under Section 15 of the said Act. For PRAKASH S. DOSHI & COMPANY Chartered Accountants Sd/- Place: Mumbai Prakash S. Doshi Date : 23.06.2003 Proprietor Membership No. 11532