SUNKU AUTO LIMITED
We have audited the attached Balance Sheet of M/S. SUNKU AUTO LIMITED, as
at 30-09-1998 and Profit & Loss account for the period ended as on that
date annexed thereto and report that:
1. As required by the Manufacturing and other Com-panies (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 paragraph 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 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 examination of the books.
c) The balance sheet and the profit and loss account referred to in this
report are in agreement with the books of account.
d) 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 and loss
account 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 our comments and on the basis of relevant papers
furnished by the Company:
a) The Company had declared Income under VDIS 1 997 (under IT Act)
amounting to Rs.1,60,00,000 and paid taxes Rs. 59 36 000A thereon and shown
as net off under Income group.
b) The company has not provided for depreciation on the redundant assets
disclosed in the sl. no. 3 of Notes on Accounts .
i) in so far as it relates to the Balance Sheet of the state of affairs of
the company as at 30-09-1998 (12 months) and:
ii) in so far as it relates to the profit and loss account, of the Profit
of the company for the year- ended on that date.
FOR B. NARSING RAO & CO.
PLACE : HYDERABAD
DATE : 26-11-98 B. NARSING RAO
ANNEXURE TO AUDITOR'S 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 fixed assets. All the
assets have been physically verified by the management during the year but
there is a regular program of verification 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 verifiction
2. None of the fixed assets have been revalued during the year.
3. The stocks of finished goods, spare parts and raw material have been
physically verified the management during the year. 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 nature of its business.
5. The discrepancies noticed on verification between the physical stock and
book records were not material.
6. On the basis of our examinations 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 the explanations given to us the company has not accepted
loans, from companies, firms or other parties listed in the register u/s.
301 and from the companies under the same management as defined under Sec.
370 of the Companies Act, 1956 where the rate of interest, or the terms and
conditions are prima facie prejutical to the interest of the company.
8 According to the explanations given to us the company has not granted
loans to companies, firms or other parties required to be listed in the
register under the section 301 and to the companies under the same
management as defined u/s 370 of the Companies Act, 1956.
9. According to the explanations given to us, the company has not granted
loans or advances to employees of the company or any other parties .
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 the nature of its business with regard to purchase
of stores, spares parts including components, plant and machinery,
equipment and other assets and with regard to the sale of goods
11. In our opinion and according to the information and explanation given
to us, the company has entered into contracts or agreements which are
required to be entered in Register maintained under section 301 of the
Companies Act, 1956 and also, has effected purchases/sales from the said
parties, which are reasonable having regard to prevailing market prices for
such goods, materials or services of the prices at which transactions for
similar goods or services have been made with other parties.
12. According to the explanations given to us, the company has no
unserviceable goods or damaged stores, raw materials or finished goods.
13. In our opinion. and according to the information and explanations given
to us, the company has accepted deposits from the public and under the
provisions of Sec. 58A of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rule 1975, and the rules framed thereunder, and
complying with the provisions.
14. In our opinion and according to the information and explanations given
to us the company has no realisable by products or scrap
15. In our opinion, the company has an internal audit system commensurate
with the size and nature of its business
16. In our opinion and according to the explanations given to us,
maintenance of cost records under section 209 (1) (d) of the Companies Act,
1956 has not prescribed .
17. According to the explanations given to us the company is regular in
depositing Provident Fund and Employees State Insurance dues with the
18. The Company has opted for VDIS 1997 under l.T. Act and declared income
amounting Rs.1,60,000/- and paid taxes to Rs.59,36,000 thereon, during the
month of December 1997.
19. According to the information and explanations given to us, no personal
expenses of the 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 with in the meaning of
clause (O) of Sub- section (1) Section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1985.
FOR B. NARSING RAO & CO.
B. Narsing Rao
Date : 26-11-98