NATURAL STONE EXPORTS LIMITED
ANNUAL REPORT 2003-2004
The Members of
NATURAL STONE EXPORTS LIMITED
We have audited the Balance Sheet of NATURAL STONE EXPORTS LIMITED as on
31st, March 2004 and also the Profit and Loss Account for the year ended
on that date annexed thereto. These financial statements are the
responsibility of the Company's management our responsibility is to express
our opinion on these financial statements based on our audit:
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are tree of material misstatements .An audit Includes examination, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by the management, as well
as evaluating the overall financial statements presentation. We believe
that our audit provides a reasonable basis for our opinion.
In accordance with provision of Section 227 of the Companies Act, 1956, we
report as under:
1. We have obtained all the information & explanations, which to the best
of our Knowledge & belief were necessary for the purpose of our audit.
2. In our opinion, proper books of accounts as required by the law, have
been kept by the company so far as it appears from our examination of the
3. The Balance Sheet & Profit & Loss Account dealt by this report are in
agreement with the books of account.
4. Subject to the note no.11 & note no.15 of Schedule O (Accounting
Policies and Notes on Accounts) The Company, contrary to the Accounting
standard 19 (Accounting for effect of changes in Foreign Exchange rates),
has stated export receivables amounting to Rs.1,62,42,689.45 at the
historical cost Instead of recording at the exchange rate prevailing at the
Balance Sheet date and to that extent has overstated its net loss In the
Profit & Loss Account. In our opinion, the Balance Sheet and Prod & Loss
Account comply with the accounting standards referred in sub-section 3 (C)
of section 211 of the Companies Act, 1956 extent applicable.
5. On the basis of the written representation received from the Directors
and taken on record by the Board of Directors, We report that none of the
Directors is disqualified as on 31st March, 2004 from being appointed as a
director in terms of clause (g) of sub section (1) of Section 274 of the
Companies Act, 1956.
6. In our opinion and to the best of our Information and according to the
explanation given to us, the said accounts together with the notes and
Schedule thereon give the information required by the Companies Act, 1956
In the manner so required and give a true & fair view in conformity with
the accounting principles general accepted In India.
(i) In case of Balance Sheet, of the state of affairs of the Company as at
31st March, 2004.
(ii) In the Case of Profit & loss accounts, of the loss for the year ended
an that date.
7. As required by the Companies' (Auditor's Report) Order, 2003 and
according to the Information and explanation given to us during the course
of the audit and on the basis of such checks as were considered
appropriate, We report that;
1. (a) The company has maintained proper records shoring full particulars
including quantitative details and situations of fixed assets ;
(b) We have been informed that consequent upon the possession of the
Factory, taken by the Karnataka State Financial Corporation & The Income
Tax department, no physical verification could be conducted by the
management hence discrepancies, if any, could not be ascertained.
(c) During the year, the Company has not disposed of any substantial/major
part of fixed assets.
2. (a) We have been informed that the Karnataka State Financial Corporation
& the Income Tax department has taken the possession of the Factory at
16(B), Tamaka Indl. Area, Kolar to recover their dues. Consequently, no
stock of work in progress, finished goods, spare parts, and raw-materials
have been verified by the management and therefore the question of
examining, reasonableness, adequacy of procedures of physical verification
of stock does not arise. However, the stock as appearing in the `Mahazar
Report' dated 2.2.01 of The Karnataka State Financial Corporation has been
taken in to books and accordingly considered for valuation.
(b) The Company has not maintained any records of inventories. The value of
the stocks is taken on the basis of information gathered by the management
from different sources, the shell life of the stores and the appropriate
realizable / residual values.
3. (a) As per the information furnished, the Company has not granted or
taken any loans secured or unsecured to/from companies, firms or other
parties covered in the Register, maintained under Section 301 of the
Companies Act, 1956 ;
(b) The rate of interest and other terms and conditions in respect of
unsecured loans given by the Company to its employees and others, are in
our opinion, prima facie not prejudicial to the interest of the Company;
(c) In respect of such loans given by the Company, where stipulations have
been made, they have generally repaid the principal amounts as stipulated
and have been regular in payment of Interest, where applicable;
(c) In respect of such loans given by the Company, there are no overdue
amounts more than Rs.1,00,000.
4. In our opinion and according to the Information and explanation 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 inventories, fixed assets and for sate of goods. Though there are no
such activities are carried oft during the year under report:
5. (a) Based on the procedures applied by us and according to the
information and explanation provided by the management, we are of the
opinion that the transactions made in pursuance of contracts or
arrangements, that need to be entered in to the register maintained under
Section 301 of the Companies Act, 1956 have been recorded in the register ;
(b) In our opinion and according to the Information and explanations given
to us, there are no transactions of purchase 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
aggregating during the year to Rs.5,00,000 or more in respect of each
6. The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Sections 58A and 58AA of the
Companies Act, 1958 and the Companies (Acceptance of Deposits) Rules, 1975
Hence Clause (vi) of the order is not applicable.
7. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
8. The Company is not covered under Section 209(1)(d) of the Companies Act,
1956, hence not required to maintain cost records.
9. (a) According to the Information and explanation given to us and the
records examined by us, the Company is regular in depositing undisputed
statutory dues including Provident Fund, Investor Education and Protection
Fund, Employees' State Insurance Fund, Income-tax, Sales-tax, Custom Duty,
Excise Duty, Cess and other statutory dues with appropriate authorities.
According to the information and explanations given to us, there are no
undisputed amounts payable in respect of such statutory dues which have
remained outstanding as at 31st March, 2004 for a period of more than six
months from the date they become payable.
(b) According to the records of the Company, disputed dues of Income Tax
have been disclosed in note 21(c) under the head Contingent Liabilities,
not provided for In the accounts.
10. The Company has accumulated book losses of Rs.9985245/- as on 31st
March, 2003, and has incurred cash losses in the current financial year
covered by our audit and in the immediately preceding financial year.
11. The Company has defaulted in repayment of its dues to Karnataka State
Financial Corporation Ltd. For Rs.6814761/- since last many years.
12. Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans or advances
on the basis of security by way of pledge of shares, debentures or other
13. The provisions of any Special Statute applicable to Chit Fund, Nidhi or
Mutual Benefit Fund/Societies are not applicable to the Company.
14. The Company has maintained proper records of transactions and contracts
In respect of dealing and trading in shares, securities, debentures and
other investments and timely entries have generally been made therein. All
shares, debentures and other securities have been held by the Company in
its own name, except to the extent of the exemption granted under Section
49 of the Companies Act, 1956 and save for certain shares which are either
lodged for transfer or held with valid transfer forms.
15. According to the information and explanation given to us, the Company
has not given any guarantee for loans taken by others from banks and
16. The Company has not taken any term loan during the year.
17. On the basis of our examination of the Cash Flow statement, the fund
raised on short term basis have not been used for long term investments; as
they have been financed out of internal accruals. The Company has not
raised long term funds during the year and hence, the use of such funds for
short term investments does not arise.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section 301
of the Companies Act, 1956 during the year.
19. The Company has not issued any Debentures hence this clause is not
20. The Company has not raised any money by way of public issue during the
21. On the basis of our examination and according to the information and
explanations given to us, no fraud, on or by the Company, has been noticed
or reported during the year.
For Jayesh R. Shah & Co.
Place : Mumbai
Date : 28th June, 2004