Annual Report 1998-99
Shruti Synthetics imited
To The Members
Of Shruti Synthetics Limited
We have audited the attached Balance Sheet of M/s Shruti Synthetics Limited
as at 31st March, 1999 and the annexed Profit & Loss Account for the year
ended on that date 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 (4-A)
of the Companies Act, 1956, we enclose a statement of the matters specified
in paragraph 4 and 5 of the said order.
2. Further to our comments in annexure referred to in paragraph-1 above, we
report that subject to:
(i) Note no.7 regarding depreciation where the Company has considered the
Plant and Machinery of spinning plant as continuous plant and charged
depreciation for the period of 9 months instead of 12 months. This has
resulted in decrease in loss by Rs. 2730531.
(ii) Note no 8 regarding accounting of certain income/expenditure on
realisation/ payment basis.
(iii) Note no. 9 regarding non provision of retirement benefits on acturial
(iv) Note no.10 regarding accounting Export Incentives in respect of duty
free import entitlement and incentives from domestic suppliers and
valuation of such stock at domestic value instead of cost.
(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 it appears from our examination of such
(c) The Balance Sheet and Profit & Loss Account referred to in 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 mandatory Accounting standard,Specified by the Institute of
Chartered Accountants of India as referred to in Sub - section (3C) of
Section 211 of The Company Act except that AS-6 AS-9 and AS- 15, the
deviations are reported herein above.
(e) In our opinion and to the best of our information and according to the
explanations given to us, the said Balance Sheet and the Profit & Loss
Account read together with notes thereon, give the information required by
the Company's Act 1956 in the manner so required and subJect to the
comments affecting Loss for the year, relevant assets, liabilities and
reserves and surplus to the extent mentioned here in above give a true and
fair view :-
i) In the case of Balance Sheet of the state of affair of the Company as at
31st March,1999 and
ii) In case of Profit & Loss Account of the loss of the Company for the
year ended on that date
For A. Bafna & Company
PLACE: UDAIPUR (M. K. GUPTA)
DATE : 04.12.1999 PARTNER
ANNEXURE TO THE AUDITORS' REPORT:
Statement referred to in paragraph (1 ) of our report of even date to the
shareholders of SHRUTI SYNTHETICS LIMITED on the accounts for the year
ended 31st March, 1999.
1) The Company has maintained proper record to show full particulars,
including quantitative details and situation of fixed assets. The fixed
assets have been physically verified by the Management during the year in
phased manner and no material discrepancies between book records and the
physical inventory have been noticed.
2) The fixed assets have not been revalued during the year
3) The stocks of Raw Materials, Stores, Spares Parts and Finished Goods
have been physically verified during the year by the management. In our
opinion, the frequency of the 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 was found reasonable and adequate in relation to the size of the
Company and the nature of its business.
5) The discrepancies noticed on verification between the physical stocks
and book records were not material and the same have been properly dealt
with in the books of account.
6) In our opinion the valuation of stock and Stores, Spares Parts and Raw
Materials is fair and proper in accordance with the normally accepted
accounting principles subject to Note No.10 relating to valuation of stock
referred therein at domestic value instead of cost and the basis of
valuation is same as in the previous year.
7) In our opinion and explanation given to us the rate of interest and
other terms and conditions on which loans have been taken from Companies,
firms or other parties listed in Register maintained u/s 301 of the
Companies Act, 1956 are not prima-facie prejudicial to the interest of the
Company and no loan have been taken from companies under the same
8) The Company has not granted any loans, secured or unsecured to
Companies, firms or other parties listed in the Register maintained U/S 301
of the Companies Act, 1956 or to Companies under the same Management within
the meaning of Section 370 (1 B) of the Companies Act 1956.
9) There are no loans or advances in the nature of loans given by the
Company except interest free advances in the nature of loans have been made
to employees which are generally being repaid as stipulated.
10) In our opinion and according to the information's & explanations given
to us, there are adequate internal control procedures commensurate with the
size of the Company and the nature of its business with regard to the
purchases of Stores, Raw Material including components, Plant &
Machinery, Equipment s and other assets and for the sale of goods.
11) According to the information and explanations given to us, transactions
of purchase of goods and materials, and sale of goods, materials and
services, made in pursuance of contracts or arrangements entered in the
register maintained U/S 301 of the Companies Act, 1956 aggregating during
the year to Rs.50000/ - or more in respect of each party have been made at
price which are reasonable having regard to prevailing market prices for
such goods, materials and services or the prices at which transactions for
similar goods and services have been made with other parties.
12) As explained to us, the Company has 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.
13) The Company has complied with the provisions of section 58A of the
Companies Act,1956 and the rules framed thereunder except the acceptance of
deposits repayable for a period earlier than six months from the persons
other than the shareholders.
14) In our opinion, reasonable records have been maintained by the Company
for the sale and disposal of realisable scrap. As explained to us the
company's operations do not generate any by- products.
15) In our opinion, the Company has a reasonable internal audit system
commensurate with the size and nature of business of the company.
16) The Company has maintained Cost Accounts and records as prescribed by
the Central Government under Section 209 (1) (d) of the Companies Act,1956.
However, we have not made a detailed examination of such records with a
view to determine whether they are accurate or complete.
17) According to the records of the Company, Provident Fund and Employees
State Insurance dues have been regularly deposited during the year with the
18) According to the information and explanations given to us, there was no
undisputed amounts payable in respect of Income Tax, Sales Tax, Custom Duty
and Excise Duty which have remained outstanding as at 31S' March 1999 for a
period of more than six months from date they become payable.
19) 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.
20) The Company is not a Sick Industrial Company within the meaning of
Clause (O) of sub - section (1) of Section -3 of the Sick Industrial
Companies (Special provisions) Act, 1985.
21) There were no damaged goods in case of goods purchased by the Company
For A. BAFNA & CO.
Place: Udaipur (M. K. GUPTA)
Date : 04.12.1999 PARTNER