EVEREST ORGANICS LIMITED
P.S.J.RAVI SHANKER & ASSOCIATES
Flat No. 205 Floor
B-Block, Kushal Towers
Khairatabad. HYDERABAD - 500 004
M/s. Everest Organics Limited
Srinagar Colony Road,
We have audited the attached Balance Sheet of M/s. Everest Organics Limited
as at 31s March 1999, the Profit and Loss Account for the year ended on
that date annexed thereto and report that:
1. As required by the Manufacturing and other Companies (Auditor's Report)
order, 1998, issued by the Company Law Board in terms of Section 27 (4-A)
of the Companies Act, 1956, we have enclosed a Statement on the matters
specified in paragraphs 4 and 5 of the said order
II. Further to our statement referred to in paragraph I above
a) We have obtained all the information and explanations which to the best
our knowledge and belief were necessary or the purpose of our audit.
b) ln our opinion proper books of accounts as referred by law have been
kept by the Company so far as it appears from the examination of such
c) The Balance Sheet and Profit and Loss Account referred to in the report
are in agreement with the books of accounts.
d) In our opinion and to the best of our information and according, to the
explanation given to us, the said Balance Sheet, Profit and Loss Account
read together with the notes annexed to and forming part of the accounts,
give the information required by the Companies Act, 1956 in the manner so
required and give a true and fair view
i) In so far as it relates to the Balance Sheet of the state of affairs of
the company as at 31 st March, 1999.
ii) In so far as it relates to the Profit & Loss Account of the Profit for
the year ended on that date.
for P.S.N. RAVI SHANKER & ASSOCIATES
Place: Hyderahad, Partner
Date : 19.05.1999. P. RAVI SHANKER
STATEMENT REFERRED TO IN THE AUDIT REPORT
1. The Company has maintained proper records to show full particulars
including quantitative details and situation in respect of the assets but
the fixed assets register is to be updated. The fixed assets of the company
have been broadly verified during the year by the management and we are
informed that no material discrepancies between the book records and the
physical inventory have been noticed.
2. The fixed assets of the company have not been revalued during the year.
3. The management has conducted the physical verification of finished
goods, stores, spare parts and raw materials during the year and in our
opinion, the frequency of such verification is reasonable.
4. The procedure of physical verification of stocks followed by the
Management is generally reasonable and adequate in relation to the size of
the company and nature of its business.
5. We are informed that the discrepancies noticed on verification between
the physical stocks and book records were not significant in relation to
the size and nature of operations of the company and the same have been
properly dealt with in the books of accounts of the Company.
6. On the basis of our examination of stock records, we are of the opinion
that the valuation of the stocks done by the management is fair and proper
and is in accordance with the normally accepted accounting principles and
is on the same basis as in the previous year.
7. The company has taken interest free unsecured loans from the parties and
the Companies coming under the provisions of Sec.301 of the Companies Act,
1956 under obligation to the financial institutions and the terms and
conditions of such loans do not, primafacie, appear to be prejudicial to
the interests of the company. The company under the same management as
defined under Sub-Section 1-B of Sec.370 of the Companies Act, 1956.
8. As per the information and explanations furnished to us, the Company has
not granted any loans, secured or unsecured, either to the parties and
firms coming under the provisions of Sec.301 of the Companies Act, 1956 or
to the Companies under the same management as defined under Sub-Section l-B
of Sec.370 of the Companies Act, 1956.
9. The interest and principal totally amounting to Rs.2.30 lakhs (previous
year Rs.8.45 lakhs)on account of the inter corporate deposits with other
corporate bodies placed by the company in the earlier years has become over
10. In our opinion and according to the information and explanations given
to us, the internal control procedures existing in the company with regard
to purchase of stores, raw materials,including components, plant and
machinery, equipment and other assets and for the sale of goods needs to be
further strengthened to be commensurate with the size of the company and
the nature of its business.
11. As per the information and explanations furnished to us, no
transactions of purchase of goods materials and services have been made
with the parties coming under the provisions of Section 301 of the
Companies Act, 1956 aggregating during the year Rs.50,000/- or more.
12. As explained to us, the company has a procedure for the determination
of unservicable / damaged stores, raw materials and finished goods and we
are informed that adequate provision has been made in the accounts for the
loss arising on the items so determined.
13. As per the information and explanations furnished to us, the Company
has not accepted any deposits from the Public during the year to which the
provision of Sec.58A of the Companies Act, 1956, and the Companies
(Acceptance of Deposits) Rules 1975 apply other than the unsecured loans
from the promoters brought in under the obligation to the financial
institutions and banks.
14. As per the informations and explanations furnished to us, the company
does not get any realisable by-product and significant scrap.
15. The scope of the Internal Audit System existing in the company is to be
further improved to be commensurate with the nature and size of the
business of the Company.
16. In our opinion and as per the information and explanations given to us
the stock records maintained by the company meet the specifications given
by the Central Government U/s.209( 1 )(d) of the Companies Act, 1956.
However, the contents of these accounts and records have not been examined
17 According to the records of the company provident fund and Employees
State Insurance dues have been regularly deposited during the year with the
appropriate authorities except for some occational delays.
18. According to the information and explanations given to us no undisputed
amounts payable by the company in respect of Income-Tax, Wealth-Tax, Sales
Tax, customs Duty and Excise Duty were outstanding as at 31 st March, 1999
for a period of more than 6 months from the date they became payable.
19. According to the information and explanations given to us/and during
the course of our examination of the books of the accounts carried out in
accordance with the generally accepted auditing practices. we have not come
across any personal expenses which have been charged to the profit and loss
account nor have we been informed of such cases by the management.
2O. According to the explanations furnished to us, the company is not a
sick industry with in the meaning of Sec.3(1) (O) of sick Industrial
Companies (Special provisions) Act. 1985.
For P.S.N.RAVI SHANKER & ASSOCIATES
Place : Hyderabad, P. RAVI SHANKER
Date : 19.05.1999. Partner