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R S Corporation Ltd.

BSE: 531700 Sector: IT
NSE: N.A. ISIN Code: INE246G01018
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R S Corporation Ltd. (RSCORP) - Auditors Report

Company auditors report

R.S. CORPORATION LIMITED ANNUAL REPORT 2003-2004 AUDITORS' REPORT To The Members of R.S. CORPORATION LIMITED, INDORE. We have audited the attached balance sheet of M/S R.S. CORPORATION LTD., INDORE, as at 31st March 2004, Profit & Loss Account and also Cashflow Statement 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 auditing standards generally accepted in India. These 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor's Report) order 2003, issued by the Central Government of India in term of section 227 (4A) of the Companies Act, 1956, we have enclosed in the annexure a statement on the matter as specified in paragraph 4 & 5 of the said order. Further to our comments in the annexure referred to 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 the audit. b) In our opinion, proper book of account as required by law have been kept by the company so for as appears from examination of books of the company. c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account of the company. d) In our opinion, the balance sheet and the profit and loss account comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except compliance with the Accounting Standard-6 'Depreciation Accounting' in the preceding financial year 2002-2003, in respect of which company had not charged depreciation on all depreciable assets for the whole year. Had the company charged depreciation on all assets for whole of the year, the depreciation would have been Rs.4052086/- (if calculated on opening W.D.V. appearing in books and at the rates prescribed in Companies Act) in place of Rs.20,01,345.71/- actually charged in books. Accordingly the Accumulated Losses of the Company would have increased and the Net Block of Fixed Assets appearing in the books would have reduced by the difference of Rs.20,50,740.29. Due to non- provision of depreciation of Rs.20,50,740.29 in the preceding financial year 2002-2003, the accumulated losses are understated and net block of assets are overstated by the like amount. (also refer note no.2 of notes to accounts). e) On the basis of written declarations as on 31st March 2004 received from the directors, who are eligible for reappointment at the ensuing general meeting of the company and taken on record by the Board of Directors, we report that no such director is disqualified from being appointed as director of the company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. f) In our opinion and to the best of our information and according to explanation given to us, the accounts read together with notes thereon, give the information required under companies Act 1956 in to manner so required subject to our comments in para d above, give a fair view: i) In the case of the balance sheet, of the state of affair of the company as at 31st March, 2004. ii) In the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date; and iii) In the case of Cash Flow Statement, of the cash flows during the year ending on 31st March 2004. For TRILOK JAIN & COMPANY Chartered Accountants T C Jain Partner M. No.12712 Place : Indore Date : 15-07-2004 The Annexure referred to in the Auditors Report to the members of M/S R.S.CORPORATION LTD., INDORE on the accounts for the year ended 31st March, 2004. On the basis of such checks as we considered appropriate and in terms of the information and explanation given to us, we state that :- 1. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The management during the year at reasonable intervals physically verified the fixed assets. To the best of our knowledge, no material discrepancies have been noticed on such verification. Substantial part of the fixed assets has not been disposed off during the year, and therefore, does not affect the going concern status of the company. 2. Inventory has been physically verified by the management and we have relied on it. 3. The company has taken unsecured loans from companies, firms and other parties mentioned in register maintained under section 301 of the companies Act, 1956. The loans have been taken from 2 (two) directors and the amount outstanding as on 31.03.2004 is of Rs.746100.00. 4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its activities with regard to purchase of inventory, fixed assets and for the sale of goods. 5. As explained and informed to us, during the year company has not entered into any such transaction which need to be entered into a register in pursuance of Section 301 of the Act. 6. According to the information and explanations given to us, the company has not accepted any deposit from the public and so question of compliance with the directives issued by the Reserve Bank of India and provisions of Section 58A of the Companies Act, 1956 and Acceptance of Deposit Rules 1975 does not arise. 7. In our opinion, the company has an internal audit system commensurate with the size and nature of its business. 8. We have been informed that maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Act. 9. According to the information and explanations given to us and on the basis of examination of books and records, the company has been regular in depositing undisputed statutory dues including Provident fund, Employees' State Insurance, Investor Protection Funds, Income-tax, Sales-tax, Wealth- tax, Custom duty, Excise Duty, cess and any other statutory dues with the appropriate authorities except Professional Tax of Rs.1000/- which is not deposited for a period of more than 6 months. As informed to us, there is no dispute regarding dues in case of sales tax / income tax / custom tax / wealth tax / excise duty / cess. 10. The company is having substantial amount of accumulated losses amounting to Rs.93,84,621.83 at the end of the financial year. However total accumulated losses are not more than fifty percent of its net worth. The company has not incurred cash losses in this financial year as well as in the immediately preceding financial year. 11. As informed and explained to us, the company had availed working capital limit from State Bank of Indore, Siyaganj Branch, Indore and since the company had defaulted, it was under litigation with Debt Recovery Tribunal (DRT), Jabalpur. In the Balance Sheet, company has shown outstanding balance of Rs.18,11,424.79 previous year Rs.23,84,424.79), without making any provision of interest since beginning of default i.e. 7 years. However, we have been informed that now company has entered into compromise with bank, under the OTS Scheme and has made payment of Rs.5,73,000.00 during the financial year out of total settlement amount of Rs.22,73,000.00. 12. The company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities hence, this clause (xii) of the order is not applicable. 13. According to the information and explanations given to us, the provisions of any special statute applicable to chit fund are not applicable to the company. 14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments. 15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions. 16. According to the information and explanations given to us and on the basis of our examination of books and records, the company has not availed any term loan during the year. 17. According to the information and explanations given to us and on the basis of our examinations of books and records, the company has not used funds raised on short-term basis for long term investments and vice-versa. 18. According to the information and explanations given to us and on the basis of our examination of books and records, the company has not made any preferential allotment of shares during the year under audit. 19. The company has not issued any debentures during the year under audit. 20. The company has not raised any money by way of public issue during the year under audit. 21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year. For TRILOK JAIN & COMPANY Chartered Accountants T C Jain Partner M. No.:12712 Place : Indore Date : 15-07-2004