ANNUAL REPORT 1998-99
Shell Mercantile Corporation Limited
(Formerly Shell Securities Limited)
AUDITOR'S REPORT TO THE SHAREHOLDERS
We have audited the attached Balance Sheet of M/s. Shell Mercantile
Corporation Limited as at 31st March, 1999 and also the Profit & 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 ( Auditor's Report)
Order, 1988 issued by the Company Law Board in terms of Section 227 (4-A)
of the Companies Act, 1956, we annex hereto a statement on the matters
specified in paragraphs 4 and 5 of,the said Order:
2. Further to our Comments in the Annexure referred to in paragraph 1
above, we report that:
(a) We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of the books;
(c) The Balance Sheet and Profit & Loss Account dealt with by this report
are in agreement with the books of account;
(d) In our opinion, the Profit Loss Account and the Balance Sheet comply
with the Accounting Standards referred to in sub section (3C) 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 said accounts, read with Significant
Accounting Policies and Notes to the Accounts, 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 31st March, 1999 and
(ii) in the case of the Profit & Loss Account, of the Loss of the Company
for the year ended on that date.
For P . D . DESAI & t:O.
Date : 4th October, 1999.
ANNEXURE TO THE AUDITOR'S REPORT REFERRED TO IN OUR REPORT OF EVEN DATE
1. The Company has maintained proper records to show full particulars
including quantitative details and situation ot fixed assets. The Fixed
assets have been physically verified, by the management at reasonable
intervals. We are informed that on examination by the management, no
serious discrepancies were noticed.
2. Fixed assets have not been revalued during the year.
3. We are informed that the Company has not accepted any loan from any
Company, firm or other parties listed in the register maintained under
section 301 and / or from the Companies under the same management as
defined under Sub-Section (I - B) of section 370 of the Companies Act,
4. The rate of interest or other terms & conditions of loans granted to the
Companies listed in the register maintained u/s. 301 and / or from the
Companies under the same management as defined under Sub- Section (I - B)
of section 370 of the Companies Act, 1956 are prima facie not prejudicial
to the Interest of the Company except interest free loan granted to the
wholly owned subsidiary Company.
5. We are informed that the loans and advances granted by the Company are
repayable on demand. The interest,on loan, where applicable, has been
generally recovered from the concerned parties regularly as stipulated,
except interest on non performing assets. According to information and
explanations furnished, reasonable steps have been taken by the Company for
recovery of dues.
6 The affairs of the Company are personally looked after by the directors.
No formal internal control procedures have been laid down for the purchase
of plant and machinery, equipment and other assets.
7. According to the information and explanations furnished, there are no
transactions of purchase of goods, materials or sale o goods, materials and
services made in pursuance ot contracts or arrangements entered in the
register maintained under Section 301 of the Companies Act, 1956
aggregating during the year to Rs 50,000/- or more in respect of each
8. According to the information and explanations given to us, the Company
has neither accepted nor holds any Public Deposits. In our opinion, the
Company has complied with the directives issued by the Reserve Bank of
India, to he extent applicable to it.
9. The Company does not have any internal audit system during the financial
year under reference.
10. We are informed that the Provident Fund Act and Employees State
Insurance Scheme is not applicable to the Company.
11. There were no undisputed amounts payable in respect of Income tax,
Wealth tax, Sales tax, Customs duty and Excise duty which were outstanding
as at the last day of the financial year for a period ot more than six
months from he date they became payable.
12. According to the information and explanations given to us and the
records of the Company examined by us, no personal expenses have been
charged to revenue account.
13. In respect of Company's dealing in shares, securities, debentures and
other investments, proper records have been maintained of these
transactions and contracts and generally timely entries have been made
therein. The investments are held by the Company in its own name or are in
the process ot being transferred in the name of the Company except to the
extent ot exemption granted under Section 49 ot the Companies Act, 1956.
14. Considering the nature ot activities carried out by the company, the
matters specified in paragraph 4 (A) (iii), (iv), (v), (vi), (xii), (xiv),
(xvi), (xx), and paragraph 4 (D) (ii) and (iii) are not applicable to the
For P . D . DESAI & CO.
P . D . DESAI
Date : 4th October, 1999.