Dravya Industrial Chemicals Limited
To the Members of
DRAVYA INDUSTRIAL CHEMICALS LIMITED
We have audited the attached Balance Sheet of DRAWA INDUSTRIAL CHEMICALS
LIMITED, as at 31st March,1998 and also the Profit and Loss Account of the
Company for the year ended on that date annexed thereto and report that:
1 . We have obtained all the information and explanations which, to the
best of our knowledge and belief were necessary for the purpose of our
2.In our opinion, proper books of account as required by law have been kept
by the Company so far as appears from our examination of such books.
3.The Balance Sheet and Profit Loss Account are in agreement with the
books of accounts.
4.In our opinion and to the best of our information and according to the
explanations given to us, the said accounts subject to Note No. 3 regarding
non provision for diminution in the value of long term investments
amounting to Rs.8,73,27,856, Note No.2 regarding confirmation of balances
from debtors,creditors and others, give the information required by the
Companies Act, 1956, in the manner so required and give a true and fair
a) in the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 1998 and
b) in the case of the Profit and Loss Account, of the loss of the Company
for the year ended on that date.
5.As required by the Manufacturing and Other Companies (Auditors' Report)
Order, 1988 issued by the Central Government in terms of Section 227(4A) of
the Companies Act,1956 we further report that:
i) The Company has maintained proper records showing full particulars,
including quantitative details and the situation of fixed assets, The fixed
assets have been physically verified by the Management during the year. No
serious discrepancies were noticed by the management on such verification
as compared with the records of fixed assets.
ii) None of the fixed assets of the company has been revalued during the
iii) The stock of finished goods, stores, spare parts of the Company have
been physically verified at reasonable intervals during the year by the
Management. In our opinion, the frequency of verification is reasonable and
adequate in relation to the size of the Company and the nature of its
iv) In our opinion and according to the information and explanation given
to us, the procedures of physical verification is reasonable and adequate
in relation to the size of the Company and the nature of its
v) The discrepancies noticed on physical verification of stocks as compared
to book records were not material and have been properly dealt with in
books of accounts.
vi) In our opinion and on the basis of our examination, the valuation of
stock is fair and proper and in accordance with the normally accepted
accounting principles. The valuation of stock is on the same basis as in
the previous year.
vii) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties in the Register maintained under Section
301 and Section 370(1C) of the Companies Act,1956.
viii) No loans have been granted to the companies, firms or other parties
listed in the Register maintained under section 301 of the Companies,
Act,1956. We are informed that there are no Companies under the same
management within the meaning of Section 370 (IB) of the Companies
ix) In respect of loans and advances in the nature of loans given by the
Company, no stipulations have been made regarding interest and repayment of
x) In our opinion and according to the information and explanations given
to us, there is adequate internal control procedure commensurate with the
size of the Company and the nature of its business with regards to
purchases of stores, raw materials including components, plant and
machinery, equipment and other assets and for sale of goods .
xi) According to the information and explanations given to us, the
transaction 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 under Section 301 of the Companies Act,1956 and
aggregating during the year to Rs.50,000/- or more in respect of each party
have been made at prices which are reasonable having regard to the
prevailing market prices of such goods, materials and services or at prices
at which transaction for similar goods, materials or services have been
made with other parties.
xii) As explained to us the Company has a regular system for determination
of unserviceable or damaged stores and material. Adequate provision has
been made in the accounts for the loss arising on the items so determined.
xiii) The Company has complied with the directives issued by Reserve Bank
of India and the provisions of Section 58 A of the Companies Act, 1956 and
the Rules framed thereunder for the deposits accepted from the Public .
xiv) In our opinion, reasonable records have been maintained by the Company
for the sale and disposal of realisable by-products and scraps.
xv) In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
xvi) The Central Government has not prescribed maintenance of cost records
under Section 209(1)(d)of the Companies Act, 1956 for any of its products.
xvii) Except minor delays on certain occasions, the Company has been
generally regular in depositing the Provident Fund and Employee State
Insurance dues, with appropriate authorities.
xviii) According to the information and explanation given to us, except Rs.
1,83,918 due in respect of Income tax, 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 31st March, 1998 for a period of
more than six months from the date they became payable.
xix) The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other similar
xx) Provisions of any special statute are not applicable to the Company.
xxi) In respect of the transactions of the Purchase and Sale of Shares,
proper records have been maintained and timely entries have been made
therein and the respective investments were held by the Company in its own
xxii) According to the information and explanation given to us, no personal
expenses of employees or directors have been charged to revenue account,
other than those payable under contractual obligation or in accordance with
the generally accepted business practice.
xxiii) The Company is not a Sick Industrial Company within the meaning of
Clause (o) of Subsection (1) of section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1 985.
xxiv) In respect of the service activities of the Company, namely
conversion of materials:
a) The Company has reasonable system of recording receipts, issue and
consumption of materials and stores commensurate with the size and nature
of its business. Though allocation of materials and man hours consumed is
not made in respect of relative jobs, in our opinion, control is excerised
on the total material and labour consumed on the jobs.
b) The Company has reasonable systems for authorisation at proper levels
with necessary control on the issue of the stores as stated in (a) above.
Though the allocation of the stores and labour to jobs is not made but in
our opinion control is exercised on the total material and labour consumed
on the jobs. The Company has a system of internal control commensurate with
its size and nature of its business.
xxv) In respect of trading activity of the Company, there were, as
explained to us, no damaged goods noticed during the year.
For A. C. Matalia & Co.
PLACE : MUMBAI Ashwin C. Matalia
DATE : 27th NOVEMBER,1998 Proprietor