RUSHABH PRECISION BEARINGS LIMITED
TO THE MEMBERS OF RUSHABH PRECISION BEARINGS LIMITED
We have audited the attached Balance Sheet of M/s. RUSHABH PRECISION
BEARINGS LIMITED, as at 31st March, 1998 and also the Profit and Loss
Account of the Company for the Year ended on that date, annexed thereto,
and we report as follows:
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 on the
matters specified in the paragraph 4 and 5 of the said order, on the basis
of such checks of the books and records of the company as we considered
appropriate and the informations and explanations given to us during the
course of audit.
2. Further to our comments in the annexure referred to in the paragraph (1)
(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 Accounts as required by law have been
kept by the company so far as appears from our examinations of the books
(C) In our opinion and to the best of our information and according to the
explanation given to us, the said accounts read together with the notes
thereon, give the information required by the Companies Act, 1956, in the
manner so required and give a true and fair view subject to:
(i) Due to heavy recession prevailing in the bearing industry the company
has not provided interest on working capital loan from Industrial
Development Bank of India, Cash Credit Limit from Union Bank of India, Hire
Purchase Finance from Gujarat State Finance Corporation as the company has
made application to these Institutions for waiver of interest and for grant
of Concessional rate of Interest as per R.B.I. guidelines.
(ii) No Tax has been deducted for interest on Bill Discounting facility and
Security Deposits from Licencee as the company is advised by leading Tax
Consultant that no tax is deducted at sources on such interest payments.
(a) In the case of the Balance Sheet, of the State of affairs of the
company as at 31st March, 1998 and
(b) In the case of the Profit and Loss Account, of the Profit of the
Company for the period ended on that date.
For S.M.BHAT & ASSOCIATES
ANNEXURE TO THE AUDITOR'S REPORT
Referred to in paragraph 1 of the our Report of even date on the accounts
of RUSHABH PRECISION BEARINGS LIMITED for the year ended March 31,1998.
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of the fixed assets. The Fixed
Assets have been physically verified by the management during the year and
no significant discrepancy was noticed on such verification.
2. None of the Fixed Assets have been revalued during the year.
3. The stocks of finished goods, stores, spare parts and raw materials have
been physically verified during the year by the management. In our opinion,
the frequency of verification is reasonable.
4. 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. No material discrepancies have been noticed on physical verification of
stocks as compared to books/ record.
6. On the basis of our examination of stock records, we are of the opinion
that the valuation of stocks is fair and proper in accordance with the
normally accepted accounting principles and is on the same basis as in the
7. According to information and explanations given to us, the company has
taken loans from Directors and Companies in which the Directors are
interested and in our opinion the rate of interest and other terms and
conditions are not prima facie prejudicial to the interest of the Company.
8. The Company has not given any loan to companies in which Directors are
9. In respect of other loans given the Company is recovering the Principal
amount and interest wherever stipulated, regularly.
10. In our opinion and according to the information and explanations given
to us, there are adequate internal control procedure commensurate with the
size of the company and the nature of its business with regard to purchases
of stores, raw materials including components, plant and machinery,
equipment and other assets and with regard to the sale of goods.
11. As explained to us, the company has a regular procedure for the
determination of unserviceable or damaged stores, raw materials and
finished goods. Adequate provision has been made in the accounts for the
loss arising on the items so determined.
12. In our opinion and according to the information and explanations, given
to us, the company has not accepted fixed deposits within the meaning of
section 58 A of the Companies Act, 1956 and the Companies (Acceptance of
Deposits), Rules 1975.
13. In our opinion reasonable records have been maintained by the Company
for the sale and disposal of realisable by products and scraps if any.
14. Though the company does not have an Internal Auditor, in our opinion
there is adequate internal check and control commensurate with the size of
15. We have broadly reviewed the books of account maintained by the Company
pursuant to the order made by the Central Government for the maintenance of
cost records under Section 209(1)(d) of the Companies Act. 1956 and are of
the opinion that prima facie the prescribed accounts and records have been
maintained and the cost statements are being made up. We have not, however,
made a detailed examination of the records, with a view to determining
whether they are accurate or complete
16. According to the records of the company the Provident Fund and
Employees State Insurance dues have not been regularly deposited during the
year with the appropriate authorities.
17. According to the information and explanations given to us the
undisputed amounts payable in respect of income tax, wealth tax, sales tax,
custom duty and excise duty outstanding as at 31st. March, 1998 for a
period of more than six months from the date they became payable are as
a) Tax deducted at Source: Rs.2,62,688.00 (excluding interest)
b) West Bengal Sales Tax : Rs. 6,951.00 (excluding interest)
18. According to the information and explanations given to us, no personal
expenses of employees or directors have been charged to revenue account,
other than those payable under contractual obligations or in accordance
with generally accepted business practice.
19. The company is not a sick industrial company within the meaning of
clause (0) of sub-section (1) of section 3 of the Sick Industrial Companies
(Special Provisions) Act. 1985.
20. In respect of trading activities no damaged goods have been determined
by the company during the year.
For S.M.BHAT & ASSOCIATES
Date : 8th October,1998.