SHREE ACIDS AND CHEMICALS LIMITED
ANNUAL REPORT 1999-2000
SHREE ACIDS AND CHEMICALS LTD.
We have audited the attached Balance Sheet of Shree Acids and Chemicals
Ltd. as at 30th June, 2000 and the Profit and Loss Account of the Company
for the year ended on that date annexed thereto and 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 on the
matters specified in the paragraphs 4 and 5 of the said order.
2. Further to our comments in the Annexure referred to in paragraph 1
above, we state that:
a) 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.
b) In our opinion, proper books of account as required by Law have been
kept by the Company so far as appears from examination of books.
c) The Balance Sheet and Profit & Loss Account dealt with by the report are
in agreement with the Books of Account.
d) In our opinion, the Balance Sheet and Profit & Loss Account complies
with the Mandatory Accounting Standards referred to in Sub-section 3(c) of
Section 211 of the Companies Act, 1956.
e) In our opinion and to the best of our information and according to the
explanations given to us, the accounts subject to following Notes of
Note No. 4 : relating to non-provision of accruing liabilities for future
payment of gratuity amounting to Rs.58.28 lacs;
Note No. 10: relating to change in the basis of accounting of Excise Duty
in respect of Closing Stock of goods manufactured by the Company, pursuant
to revised guidance note on "Accounting treatment of Excise Duty" issued by
the Institute of Chartered Accountants of India, having no impact on the
loss for the year;
Note No. 13: relating to no provision being made for the amounts considered
doubtful of recovery for Rs.492.04 lacs of Sundry Debtors/Loans & Advances
and for Rs. 341.49 Lacs of stocks lying with other parties.
and read together with other notes thereof and schedules thereto 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 30th June, 2000 and
ii) In the case of Profit & Loss Account of the Loss for the year ended
30th June, 2000.
for K. L. Chandak & Co.
Place : Delhi Punit Jain
Dated : 15.11.2000 Partner
ANNEXURE TO THE AUDITORS' REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT
OF EVEN DATE
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets. We have
been informed that the fixed assets of the Company have been physically
verified by the Management at reasonable intervals and no serious
discrepancy has been noticed on such verification as compared to the
information available with the Company.
2. None of the Fixed Assets have been revalued during the year.
3. The Stocks of Finished Goods, Stores, Spare Parts and Raw Materials of
the Company at all its locations including those lying with the third
parties and in transit have been physically verified by the management at
reasonable intervals over which we have relied upon.
4. As explained to us, the procedure of physical verification of stocks
followed by the Management is reasonable and adequate in relation to the
size of the Company and nature of its business.
5. The discrepancies between physical stocks and book stocks have been
properly dealt with in the books of account.
6. As explained to us, the valuation of stocks is fair and proper and by
and large in accordance with normally accepted accounting principles and is
on the same basis as in the preceding year.
7. The Company has not taken any loans from companies, firms and other
parties listed in the Register maintained under Section 301 of the
Companies Act, 1956, and/or from the companies under the same Management.
8. The Company has not given any loan to companies, firms and other parties
listed in the register maintained under Section 301 of the Companies Act,
1956 and/or to the Companies under the same management.
9. Advances in the nature of Loans given to employees and included in
advances are being repaid as stipulated and no interest is charged on such
10. 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 accounting of
purchase of Stores, Raw Materials including components, plant and
machinery, equipment and for sale of goods.
11. In our opinion and according to the information and explanations given
to us, the transactions of purchase of goods and sale of goods, materials
and services, made in pursuance of contracts or arrangements entered in the
Registers maintained under Section 301 and aggregating during the year of
Rs.50,000/- or more in respect of each party have been made at prices which
are generally reasonable having regard to prevailing market prices for such
goods, materials or services or the prices at which transactions for
similar goods, materials or services have been made with other parties.
12. As explained to us, the Company has regular procedure for determination
of unserviceable or damaged stores and raw materials. Adequate provision
has been made in the accounts for the loss arising on the items so
13. In our opinion and according to the information and explanations given
to us, the Company has complied with provisions of Section 58A of the
Companies Act, 1956 and the rules made thereunder with regard to deposits
accepted from public.
14. In our opinion, reasonable records have been maintained by the Company
for the sale and disposal of by-products and scrap.
15. It was explained to us that the Company has adequate staff commensurate
with the size and nature of its business to carry out internal audit.
However reports of such internal audit have not been provided to us.
16. We have broadly reviewed the books of account maintained by the Company
pursuant to the order made by the Central Govt. 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 records have been maintained.
17. The Company has been generally regular in depositing Provident Fund
dues statutorily payable under the provision of the Provident Fund Act and
the rules made thereunder during the period. However there had been some
delay in depositing with appropriate authority in some cases.
18. According to the information and explanations given to us, there were
no undisputed amounts payable in respect of Income Tax, Sales Tax, Custom
Duty and Excise Duty which have remained outstanding as at 30th June, 2000
for a period of more than six months from the date they become payable.
19. According to the information and explanations given to us, no personal
expenses have been charged to revenue account other than those payable
under contractual obligations or in accordance with generally accepted
20. The Company is 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.
for K. L. Chandak & Co.
Place : Delhi Punit Jain
Dated : 15.11.2000 Partner