R.S. CORPORATION LIMITED
ANNUAL REPORT 2003-2004
The Members of
R.S. CORPORATION LIMITED,
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
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
T C Jain
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,
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
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
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
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
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
T C Jain
Place : Indore
Date : 15-07-2004