ANNUAL REPORT 1998-99 NOBLE BROTHERS IMPEX LIMITED AUDITOR'S REPORT The Shareholders, M/s Noble Brothers Impex Ltd. 5, Community Centre, Mezzanine Floor Naraina Industrial Estate, Phase-I New Delhi 110028. We have audited the attached Balance Sheet of M/s NOBLE BROTHERS IMPEX LTD. as at 31st March,1999 and also the Trading & Profit and Loss Account of the company for the year ended on that date annexed hereto 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 audit. 2. In our opinion proper books of accounts as required by the law have been kept by the Company so far as appears from our examination of those books. 3. The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account, and comply with the accounting standards as specified by the Institute of Chartered Accountants of India. 4. In our opinion and to the best of our information and according to explanations given to us the said accounts give the information required, by the companies Act, 1956 in the manner so required subject to Notes on Accounts as per Schedule XX and give a true and fair view. a) In the case of the Balance Sheet of the Company's State of affairs as at 31st March, 1999. b) In the case of the Profit and Loss Account, of the loss for the year ended 31st March, 1999. 5. As required by the Manufacturing and Other Companies (Auditor's Reports) Order, 1988, issued in terms of Section 227 (4A) of the Companies Act, 1956, we give in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order. For MOHINDRA ARORA & COMPANY Chartered Accountants Sd/- Place : New Delhi (M. G. ARORA) Date : July 12,1999. Partner ANNEXURE ANNEXURE TO THE AUDITOR'S REPORT REFERRED TO IN PARAGRAPH 5 OF OUR REPORT OF EVEN DATE. a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. As informed to us, the assets have been physically verified by the management at the year end which is considered reasonable and no material discrepancies have been noted on such verification. b) None of the fixed assets have been revalued during the year. c) The stock of finished goods, stores, spare parts and raw materials have been physically verified by the management except stock in transit, stock lying with fabricators and processors. d) In our opinion, the procedures for physical verification of stocks followed by the management are not reasonable and adequate in relation to the size of the Company and nature of its business. e) We are not certain whether there were any discrepancies noticed on physical verification of stocks as stock records were not available for our verification. f) The valuation of stock is fair and proper in accordance with normally accepted accounting principles and on the same basis as in the preceding year. g) The company has taken unsecured loans from parties listed in the register(s) maintained under Section 301 of the Companies Act 1956 or from the Companies under the same Management as defined in Section 370 (IB) of the said Act. The terms & conditions of such loans are not prima facie prejudicial to the interest of the company. h) The company has given advances in the nature of loans to the company's under the same management as defined in Section 370 (IB) of the Companies Act 1956, No terms & conditions or agreements were shown to us therefore we are unable to comment on the reasonableness of such loans/advances. i) In our opinion and according to the information and explanations given to us internal control procedures are not commensurate with the size of the company and the nature of business with regard to purchase of stores raw materials including components, plants and machinery, equipment and other assets and the same needs strengthening. (j) According to the information and explanation given to us, the transaction of purchase of goods and materials and sale of goods and materials and services made in pursuance of contract or arrangements enter in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rs. 50,000.00 or more in respect of each party have been made at the then prevailing market price however, in certain cases we are unable to comment in the absence of sufficient information. k) As informed to us, there are no unserviceable or damaged stores, raw materials or finished goods as on the Balance Sheet date. l) The company has not accepted any deposits from the public within the meaning of Section 58A of Companies Act, 1956 and the rules framed thereunder. m) As informed to us the company does not have any realisable by-Products and scraps. n) As informed to us the Central government has not prescribed for the maintenance of cost records by the company under section 209 (1) (d) of the companies Act, 1956. o) The company is irregular in depositing provident fund, E.S.I. and Pension dues with the appropriate authorities. p) There is no internal auditors of the company. Fresh appointment of internal auditors were not made during the year .The company is required to appoint an Internal auditor as per the provision of Section 227 of the Companies Act, 1956 covered by the Manufacturing and other Companies (Auditor's Report) Order, 1988. q) According to the information and explanations given to us and records examined by us no undisputed amount payable in respect of income tax, wealth tax, sales tax, custom duty and excise duty were outstanding as at 31st March, 1999 for a period exceeding six months from the date they became payable. r) According to the information and explanations given to us and the records of the company examined by us no personal expenses have been charged to Profit & Loss Account, except those payable under contractual obligations or in accordance with generally accepted business practices. s) In respect of trading items according to the information & explanations given to us there were no damaged goods. t) The Company is a potentially Sick industrial Company with in the meaning of Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985, as more than 50% of the peak net worth (preceeding four Financial Year) of the company has been eroded. For MOHINDRA ARORA & COMPANY Chartered Accountants Sd/- Place: New Delhi (M. G. ARORA) Date : July 12,1999. Partner