PENTAFOUR PRODUCTS LIMITED
ANNUAL REPORT 1999-2000
TO THE MEMBERS OF PENTAFOUR PRODUCTS LIMITED
We have audited the attached Balance Sheet of M/s. Pentafour Products
Limited as at 31st March 2000 and the Profit and Loss Account of the
Company for the year ended on that date and report that:
I. 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 of the books and
records of the Company as we considered appropriate and the information and
explanation given to us during the course of our audit, we state that in
A. In respect of manufacturing activity of the company:
(i) The company is maintaining proper records to show full particulars
including quantitative details and situation of fixed assets. The Company
has physically verified the assets and no material discrepancies were
noticed on such verification.
(ii) None of the fixed assets have been revalued during the period.
(iii) Physical verification was conducted by the management during the
period in respect of finished goods, stores, spare parts and raw materials.
In our opinion the frequency of verification is reasonable.
(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) Having regard to the size of operations of the Company, the
discrepancies noticed on verification as compared to book records were not
significant and these have been properly dealt with in the books of
(vi) In our opinion and on the basis of our examination of stock records,
the valuation of stocks is fair and proper in accordance with normally
accepted accounting principles and is on the same basis as in the preceding
(vii) During the period, the Company has neither taken nor granted any
loans, secured or unsecured from/ to Companies, firms or other parties
listed in the Register maintained under Section 301 of Companies Act 1956
(1 of 1956) or to other parties except employees to whom interest free
loans or advances in the nature of loans have been given by the Company who
are repaying the principal amounts as stipulated.
(viii) The Company has an adequate internal control procedure commensurate
with the size of the Company and the nature of its business for purchase
of stores, raw materials, including components, plant and machinery,
equipment and other assets and for sale of goods.
(ix) In our opinion and according to the information and explanation given
to us, the transactions of purchase of goods and materials and the sale of
goods, materials made in pursuance of contracts or arrangements entered in
the Register maintained under Section 301 of Companies Act, 1956 (1 of
1956) and aggregating to Rs. 50,000 or more during the period in respect of
each party have been made at prices which are reasonable having regard to
the market prices for such goods, materials or services or the prices at
which transactions for similar goads or services have been made with other
(x) As explained to us, unserviceable or damaged stores, raw materials and
finished goods wars determined by the management and adequate provision for
loss has been made in the accounts.
(xi) In our opinion the Company has 6n terms of the directives issued by
the Reserve Bank of India and provisions of Sec 58A of the Companies Act,
1956, accepted fixed deposits from the public. There has been delay and
non-payment of matured deposits and interest payments.
(xii) In our opinion the Company has an adequate internal Audit system
commensurate with the size and nature of its business.
(xiii) The Central Government under Section 209(1)(d) of the Companies Act,
1956 has prescribed the maintenance of cost accounts and records in respect
of, Certain products manufactured by the Company.' The Company has prima
facie made and maintained such accounts and records. We have broadly
reviewed the same, but have not made a detailed examination of these
accounts and records.
(xiv) According to the records produced, information and explanation given
to us there has been daisy and non-remittance of provident fund and
employees state insurance.
(xv) According to the information and explanation given to us, there were
no undisputed amounts payable in respect of Income tax, Wealth tax, Sales
tax, Customs duty and Excise duty which have remained outstanding as at
31st March 2000 ,for a period of more than 6 months from the date they
(xvi) During the course of our examination of books of account we have not
come across any personal expanses which have been charged to revenue
account other than those payable under contractual obligations or in
accordance with generally accepted business practice.
(xvii) The Company is not a Sick Industrial Company within the meaning of
clause (o) of sub-section (1) of Section 3 of Sick Industrial Companies
(Special Provisions) Act of 1985 (1 of 1986).
B) In respect of service activity of the company.
(i) The company has a reasonable system of recording receipts, issues and
consumption of materials and stores commensurate with its size and nature
of its business. Though allocation of materials consumed is not made to
relative jobs, in our opinion control is exercised on total materials
consumed on jobs.
(ii) Though allocation of man hours utilised is not made to relative jobs,
in our opinion, control is exercised on total labour utilised on jobs.
(iii) The company has a reasonable system of authorisation at proper
levels and an adequate system of internal control commensurate with the
size of the Company and nature of its business on issue of stores and as
stated in (i) and (ii) above though allocation of materials and labour is
not made to relative jobs, in our opinion, control is exercised on total
materials consumed and labour utilised on jobs.
C) In our opinion and according to the information and explanation given to
us the damaged goods in respect of toe trading activity are not
significant, having regard to the size of the activity and the company has
made adequate provisions for the loss.
II. further to the above, we report that :
a) we have obtained all the information and explanation which to the best
of our knowledge and belief were necessary for the purpose of our audit.
b) 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 those books.
c) The Balance Sheet and Profit and Loss Account deceit with by this report
are in agreement with the books of account.
d) In our opinion the accounts have been prepared in compliance with the
Accounting Standards issued by the Institute of Chartered Accountants of
India referred to in section 211 (3C) of the Companies Act, 1956 to the
e) In our opinion and to the best of our information and according to the
explanations given to us, the accounts read together with notes thereon
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 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 of the Company for
the year ended an that date.
for R. SWAMINATHAN & CO.