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Rainbow Breweries Ltd.

BSE: 507520 Sector: Consumer
NSE: N.A. ISIN Code: N.A.
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Rainbow Breweries Ltd. (RAINBOWBREW) - Auditors Report

Company auditors report

RAIN BREWERIES LIMITED ANNUAL REPORT 2002-2003 AUDITORS' REPORT To, The Shareholders. Sir(s), We have audited the attached Balance Sheet of M/s Rainbow Breweries Limited as at 31.3.2003 and also the annexed Profit & Loss Account of the Company for the year ended on that date, both of which we have signed under reference of this report. 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. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statement. 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 and we report that: 1. As required by the manufacturing and other Companies (Auditors Report) Order 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act. 1956, we enclose in the annexure a statement of matters specified in paragraph 4 &5 of the said order, appropriate. 2. Further to our comments in the Annexure referred to in Paragraph (1) above: i. 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. ii. 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 the books. iii. The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the Books of Account. iv. In our opinion, the Profit & Loss Account and Balance Sheet comply with the accounting standards referred to in section 211 (3C) of the Indian Companies Act. 1956, to the extent applicable. v. On the basis of written representations received from the Directors of the Company as at 31st March, 2003 and taken on record by the Board of Directors, we report that no 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, and vi. In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with NOTES thereon particularly notes to the accounts No. 2& 3, give the information as required and give a true and fair view. a) In case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2003. b) In case of Profit & Loss Account of the Loss for the year ended on that date. For DINESH K. SHARMA & ASSOCIATES Chartered Accountants Sd/- Place : New Delhi Dinesh K. Sharma Date : 06.5.2003 Proprietor ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. As explained to us, the assets have been physically verified by the management during the year which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. 2. None of the fixed assets were revalued during the year. 3. The stock of goods have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. 4. In our opinion and according to the information and explanations given to us, the procedure 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. 5. The discrepancies noticed on physical verification as compared to the book records were not material and have been properly dealt with in the books of accounts. 6. In our opinion, on the basis of our examination of records,the valuation of stocks is fair and proper in accordance with the normally accepted accounting principles. 7. The Company has not taken loan from Directors, Shareholders & Relative's Companies, Firms or other parties listed in register maintained under Section 301 of the Companies Act, 1956, or from the companies under the same management as defined under Section 370 (1B) of the Companies Act,1956, except loans from Promoters/Directors, promoting companies for Rs.7,78,24,023.17 (Pr Yr Rs.7,93,79,434.17) and most of them are free of interest. The terms & conditions of these free of interest loans and interest bearing loans are prima facie not pre-judicial to the interest of the Company and shareholders. Further, in terms of Subsection 6 of Section 370 of the Companies Act, 1956, the provisions of section 370(1B) of the Act are not applicable to a Company on or after 31st October, 1998. 8. The Company has not granted loans, secured or unsecured, to Companies, Firms or other Parties as is evident from the register maintained under section 301 of the Companies Act, 1956 or to Companies under the same management as defined under section 370 (1B) of the Companies Act, 1956. Further, in terms of Subsection 6 of Section 370 of the Companies Act, 1956, the provisions of section 370(1B) of the Act are not applicable to a Company on or after 31st October, 1998, 9. The Company has not given loans or advances in the nature of loans. 10. The Company 'has given interest free advances in the nature of loan to its employees who are repaying the principal amount as stipulated. 11. In our opinion and according to the information and explanation given to us, the transaction of purchase of goods and materials and sale of goods, materials and services made in persuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rs.50,000/- or more in respect of each party, have been made at prices which are reasonable, having regard to prevailing market price for such goods, services or the price at which transaction for similar goods, materials or services have been made with other parties. 12. 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 nature of its business with regard to the purchase of store, raw materials, including components. Plant & Machinery, Equipments and other assets and with regard to the sale of products. 13. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 14. The Company has a regular procedure for determination of damaged or wastage packing materials. Adequate provision has been made in the accounts for the loss arising on the items os determined. 15. According to the information and explanations given to us ESI/Bonus Acts are not applicable to the Company. 16. As explained to us no amount of Income Tax, Wealth Tax, and Custom Duty were outstanding for a period of more than six months at the last date of the accounting year except TDS Rs.3,69,505.40 including for the year preceeding the current financial year (Pr Year Rs 2,48,381/-), in case of Excise Dues the duty paid within the stipulated period is only taken in the books of accounts (Pr Year 8,82,201.5/-) and the Company is not complying with the provisions of the EPF Act (Pr Year 71189/-). 17. According to the information and explanations given to us and records examined by us, no personal expenses have been charged to the revenue account 18. The Company has not accepted any deposits from the public. 19. The Central Govt. has not prescribed maintenance of cost records under Sec 209 (1) (d) of the Companies Act, 1956 for the Company 20. The Company has reasonable system of recording receipts issues and commensurate with its size and the nature of its business. However, considering the nature of services rendered and the billing procedures, management does not consider it necessary to have a system for application of consumption of Materials, Store and Manhours, to the relative jobs. 21. In our opinion, there is reasonable system for authorisation at proper levels with necessary control on the issue of stores and the related system of internal control commensurate with size of the company and the nature of its business. 22. Investment of the Company are held in its own name and lodged with Govt. Deptt. 23. The Company has become a Sick Industrial Company within the meaning of Clause (O) of subsection (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and till the date of finalisation of our report,the Company has not made any reference or application to the Board for Industrial & Financial Reconstruction under Section 15 of that Act. For DINESH K. SHARMA & ASSOCIATES CHARTERED ACCOUNTANTS Sd/- Place : Delhi Dinesh K. Sharma Date : 06.05.2003 Proprietor