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Swastik Rubber Products Ltd.

BSE: 509260 Sector: Others
NSE: N.A. ISIN Code: N.A.
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Swastik Rubber Products Ltd. (SWASTIKRUBBER) - Auditors Report

Company auditors report

SWASTIK RUBBER PRODUCTS LIMITED ANNUAL REPORT 1999 - 2000 AUDITOR'S REPORT The Shareholders, Swastik Rubber Products Ltd., PUNE - 411 003. We have audited the attached Balance Sheet of Swastik Rubber Products Ltd., Khadki, Pune-411 003 as at 31st March, 2000 and Profit and Loss Account of the Company for the year ended on that date, annexed thereto. 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 (4A) of the Companies Act, 1956, we annex hereto statement on the matters specified in paragraphs 4 and 5 of the said order. 2. We further report that: (a) We have obtained all information and explanations which to the best of our knowledge and belief, were necessary for the purpose of audit. (b) In our opinion, subject to para (e) below, proper books of accounts as required by law, have been kept by the Company so far as appears from our examination of those books. (c) The Balance sheet and Profit and Loss Account dealt with by this report, are in agreement with the books of account. (d) In our opinion, subject to para (e) below, the Balance Sheet and the Profit and Loss Account dealt with by this report comply with the accounting standards referred to in section 211(3c) of the Companies Act. 1956. (e) Non-provision of actuarial liability for gratuity in respect of workers as of 31st March, 2000 of Rs. 227.34 Lakhs as mentioned in Note No.8. Had this provision been made, the loss for the year would have been less by Rs. 9.79 lakhs and liabilities and accumulated losses would have been more by Rs. 227.34 Lakhs. Cash basis now followed in respect of accounting of retirement benefits is in contravention of Section 209 of the Companies Act, 1956, and Accounting Standard AS 15 issued by The Institute of Chartered Accountants of India, which makes accruals basis of accounting mandatory. Subject to above, in our opinion and to the best of our information and according to explanations given to us, the said accounts read with the Schedules and Notes thereto, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view: (a) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2000 and (b) in the case of Profit and Loss Account of the loss of the Company for the year ended on that date. For G. D. APTE & CO. Chartered Accountants Place: Pune SHASHANK PATKI Date: 29th June, 2000 Partner ANNEXURE TO THE AUDITORS' REPORT As required by the manufacturing and other Companies (Auditor's Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 and in view of the information and explanations given to us and on the basis of checks we considered appropriate, we further report that 1. The Company has maintained registers in respect of Land and Buildings, Plant and Machinery, and Vehicles but the same were not up-to-date. We were informed that physical verification of the above stated assets was carried out by the management during the year. We were also informed that in respect of Plant and Machinery, reconciliation of verified item with records maintained could not be made for want of up-to-date record and as such discrepancies, if any, could not be ascertained . In respect of other verified assets, it was informed that no material discrepancies were noticed. 2. During the year, the Company has not revalued any of its fixed assets. 3. The stock of finished goods, scrap, stores and spare parts and raw materials, except those with outsiders and/or in transit have been physically verified periodically by the Management. 4. In our opinion and according to the information and explanations given to us, the procedures of physical verification of stock followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of it business. 5. As per information and explanations given to us, discrepancies noticed by the Management on physical verification a compared to book records were not material. 6. On the basis of our examination of stocks, valuation thereof is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in earlier years. 7. As per the scheme of rehabilitation sanctioned by B.I.F.R., the Associates of the Promoters viz., Fidelity Industries Ltd Chennai have infused an amount of Rs. 443.00 lakhs as interest-free unsecured loan. The terms and the conditions of the said loan are prima facie not prejudicial to the interest of the Company. Except for this, the Company has not taken any loans, secured or unsecured from Companies, firms or other parties listed in the register maintained under Section 301 (1B) of the Companies Act, 1956 and/or from the Companies under the same Management as defined under Section 370 (1B) of the Companies Act, 1956. 8. The Company has not granted any loan, secured or unsecured to Companies, firms or other parties listed in the registers maintained under Section 301 of the Companies Act, 1956 and/or to the Companies under the same Management as defined under Section 370 (1B) of the Companies Act, 1956. 9. Recovery of advances against agreement of Rs. 0.60 lakhs paid to employees in the year 1980-81 is not yet effected, as the said advances are recoverable at the time of concerned employees leaving the Company. In respect of other loans and advances in the nature of loans given by the Company and considered good, parties are repaying the principal amounts and have also been regular in the payment of interest wherever stipulated. 10. In our opinion and according to the information and explanations given to us, there is reasonable internal control procedure commensurate with the size of the Company and nature of its business, for the purchase of stores, raw materials including components, Plant and machinery, equipment and other assets and for the sale of goods. 11. There are transactions of purchase and sale of goods and materials made in pursuance of the few 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 party. As informed to us and on the basis of verification of record maintained by the Company, the prices are reasonable having regard to prevailing market prices for such goods or the prices at which transactions for similar goods have been made with other parties. 12. As explained to us, the Company has a regular procedure for determination of unserviceable or damaged stores, raw materials and finished goods and loss on the same is accounted for. 13. The Company is holding deposits from public in excess of limits prescribed under the provision of Section 58 A of the Companies Act, 1956 and the rules framed thereunder. As per the scheme of rehabilitation sanctioned by BIFR and consented by the deposit holders in their meeting dated 7th December, 1995 the deposits are to be repaid fully on or before 31st March, 1996. As stated in note no. 7, the deposits are being repaid to the deposit holders approaching the Company and fulfilling necessary formalities. 14. According to the information and explanations given to us, the company has no by-products. In our opinion, reasonable records have been maintained for the sale and disposal of scrap. 15. During the year an internal audit system was in existence. In our opinion, the scope of the systems need to be enlarged so as to be commensurate with the size and nature of the business of the Company. 16. The Central Government has not prescribed maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956. 17. According to the records, the Company has not been regular in depositing of the Provident Fund and Employees State Insurance dues with the appropriate authorities. Such dues in arrears as on 31-03-2000 were Rs. 14.15 lakhs. 18. According to the information and explanations given to us, there were no undisputed amounts payable in respect of income tax, wealth tax, customs duty and excise duty which were outstanding as at 31st March, 2000 for a period more than six months from the date they became payable. 19. According to the information and explanation given to us and the records examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with the generally accepted business practice. 20. The Company is sick Industrial Company within the meaning of clause (O) of Section 3 (1) of the Sick Industrial Companies (Special Provision) Act, 1985. In response to the reference made, B.I.F.R. has issued a fresh sanctioned scheme of rehabilitation dated 27th March, 1996. 21. In our opinion and according to the information and explanations given to us, in respect of its service activities, the Company has reasonable system of recording receipts, issues and consumption of material and stores and for allocation of the material to the relative jobs, commensurate with size and nature of its business. It was given to understand that due to smallness and variety of jobs, it was not feasible to maintain record for man-hours consumed for the relative jobs. In our opinion and as per information and explanations given to us, there is reasonable system of authorisation at proper levels with necessary control on issue of stores to jobs. For G. D. APTE & CO. Chartered Accountants Place: Pune SHASHANK PATKI Date 29th June, 2000 Partner