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STARVOX ELECTRONICS LIMITED
AUDITORS' REPORT
To,
The Members of
STARVOX ELECTRONICS LIMITED
We have audited the Balance Sheet of STARVOX ELECTRONICS LIMITED as at 31st
March, 1999 and the Profit and Loss Account of the Company for the year
ended on that date annexed thereto and report as under :-
1. We have obtained all the information and explanations which to the best
our knowledge and belief were necessary for the purpose of audit.
2. In our opinion and to the best of our information the Balance Sheet and
Profit & Loss Account comply with the Accounting Standards referred to in
Section 211 (3C) of the Companies Act, 1956.
3. As per Management the Computer Systems of the Company are compliant with
Year 2000 (Y2K) related issues. We are unable to comment on this issue.
4. Subject to clause (i) and (ii) of paragraph No. 6 below relating to non
provision of expenses/income for the year on accrual of accounting,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 these books.
5. The Balance Sheet and Profit & Loss Account are in agreement with the
books of accounts of the Company.
6. In our opinion and to the best of our information and according to the
explanations given to us, the accounts subject to :-
(i) Note No. 9 (a) to (d) relating to non provision of:
[a] Custom Duty on Capital goods Rs. 89,606
[b] Custom Duty on Raw Materials Rs. 42,411
[c] Disputed demand in respect of royalty claims by NRDC Rs. 85,000
[d] Claims of Ex-employees Unascertainable
(ii) Note No. 11 relating to non provision of inter corporate deposit
placed with M/S Advanced Energy Systems P. Ltd.
and read alongwith our notes thereon give the informations required by the
Companies Act, 1956 in the manner so required and gives true and fair view.
(i) In the case of Balance Sheet of the State of affairs of the Company as
at 31st March, 1999 and
(ii) In the case of Profit & Loss Account of the Loss for the year ended on
that date.
7. As required by manufacturing and other companies (Auditors Report) 1988,
and on the basis of such examination of the Books and records of the
company as we considered appropriate and the information and explanations
given to us during the course of our audit, we further report that :-
(1) The Company is maintaining proper records showing full particulars
including quantitative details and situation of fixed assets. The fixed
assets of the Company have been physically verified by the management at
the end of the year and no discrepancies between book record and physical
inventory were noticed.
2) The Company has not revalued any of its fixed assets during the year.
(3) The Management has conducted physical verification of finished goods,
stores, and raw materials and component other than goods in transit and
stocks Iying with third parties at the end of the year.
(4) The procedures of physical verification of stocks as followed by the
management are reasonable and adequate in relation to the size of the
Company and nature of its business.
(5) Discrepancies noticed on physical verification of stock as compared to
book records were not material and the same have been properly dealt with
in the books of the accounts.
(6) The valuation of inventory is fair and proper and in accordance with
the normally accepted accounting principles and is on the same basis as in
the preceding year.
(7) We are informed that the company has not taken any loans Secured or
Unsecured, from 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 as defined under
section 370(1 B) of the Companies Act 1956.
(8) The Company has not granted any loans to Companies, or other parties
listed in the register maintained under section 301 of the Companies Act,
1956.
(9) The Company has given interest free loans to its employees who are
repaying the principal amount as stipulated. Company with whom inter
corporate deposits are placed is considered doubtful for interest and
principal amount.
(10) In our opinion and according to the information and explanabons given
to us, there are adequate internal control procedures commensurate with
size of the company and nature of its business with regard to the purchase
of stores, raw material including components, plants and machinery,
equipment and other assets and for the sale of goods.
(11) In our opinion and according to the information and explanations given
to us and having regard to the explanations that some of the items
purchased are of a special nature for which comparable alternative
quotations are not available, the transactions of purchase/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
prevailing market prices for such goods, materials or services.
(12) The Company has procedure to determine unservicable or damaged stores,
raw materials and finished goods. The company does not have any
unservicable or damaged stores, raw materials and finished goods.
(13) The Company has not accepted any deposits from the public during the
year.
(14) As informed to us the Company's manufacturing process does not
generate any by-product or scrap.
(15) The Company has an internal audit system commensurate with its size
and nature of its business.
(16) The Central Government has not prescribed maintenance of cost record
under section 209(i)(d) of Companies Act, 1956 for any of the products of
the company.
(17) The Company is regular in depositing provident fund dues with
appropriate authorities. We are informed by the management that provisions
of Employees State Insurance Act are not applicable to the Company.
(18) As on 31st March, 1999 no undisputed amount payable are outstanding
for a period of more than six months from due date in respect of Income
Tax, Sales Tax, Custom Duty, Central Excise Duty etc.
(19) During the course of our examination of the books of accounts carried
out in accordance with the generally accepted auditing practices, we have
not come across any personal expenses, other than those payable under
contractual obligation or in accordance with generally accepted business
practice, which have been charged to Profit & Loss Account nor have been
informed on such case by the management.
(20) We are informed by the management that the company being a Small Scale
Industry the provisions of Sick Industrial Companies (special provisions)
Act, 1985 are not applicable.
(21) (a) The Company has a reasonable system of recording receipts, issues,
and consumption of materials and stores commensurate with the size of the
company and nature of its business.
(b) The Company has a reasonable system of determining manhours utilised
for relative jobs, commensurate with size of the company and nature of
business.
(c) The Company has reasonable system of authorisation at proper levels and
an adequate system of internal control commensurate with size of the
company and nature of its business on issue of stores and materials etc.
However, there is no allocation of store and material and labour to
relative jobs, though in our opinion an adequate system for control of
material and manhour utilised for relative job and for determination of
cost of individual job exists.
for B. M. VASHI
CHARTERED ACCOUNTANTS
Place: Ahmedabad
Date : 22nd July, 1999 PROPRIETOR
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