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Trackparts of India Ltd.

BSE: 530373 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Trackparts of India Ltd. (TRACKPARTSOFI) - Auditors Report

Company auditors report

TRACKPARTS OF INDIA LIMITED ANNUAL REPORT 1999-2000 AUDITORS' REPORT TO THE MEMBERS, TRACKPARTS OF INDIA LIMITED KANPUR (U.P.) We have audited the attached Balance Sheet of Trackparts of India Limited as at 31st March, 2000 annexed Profit & Loss Account for the year ended on that date and report as under: 1. As required by the Manufacturing and other Companies (Auditors Report) Order 1988 issued by the Company Law Board in terms of Section 227 (4A) of Companies Act, 1956, and on the basis of such checks and records of the Company, as we considered appropriate and the information and explanation given to us during the course of our audit, we enclose in the Annexure, a statement on the matters specified in paragraph 4 and 5 of the said order, to extent applicable. 2. The attention of the members is invited on note no. 20 given under Schedule-K on notes to Accounts regarding preparation of Accounts on 'going concern' basis. 3.Further to our comments in Annexure referred to in paragraph 1 and above we further report that:- 3.1 Interest amounting to Rs. 27,43,750/- on inter corporate loans/deposits has not been provided in accounts (Refer Note No. 24 (i) under Schedule X). 3.2 Accounts for the year under review are subject to adoption of Accounts for the previous year 1997-98 and 1998-99 by the Members in Annual General Meeting Which could not be held due to restraint order dated 30.11.1999 passed by the Company Law Board read with order dated 10. 10.2000 passed by Allahabad High Court (Refer Note No. 21 under Schedule X) 3.3 Certain entries aggregating to Rs. 39,07,189/- are appearing in reconciliations of State Bank of India, Commercial Branch Mumbai, the details whereof were not provided by the said Bank (Refer note no.25 under Schedule 'K'). 3.4 Accounting of Forge Division has been done in terms of Company Law Board order dated 30.11.1999 which is subject to implementation (Refer Note No. 29 (a) & (b) of Notes under Schedule 'X'). 3.5 Liability in addition to already provided, if any, in respect of closed unit (Plastic Division) and hived off unit (Forge Division) is not known and ascertainable and hence will be provided for as and when the same arises (Note no. 27 of Schedule 'K'). 3.6 Certain balances as referred to in note no. 28 are subject to confirmation. 3.7 The matters referred in Note No. 22, 24 (ii), 29 (a) & (b), 30, 31, 32 and 34 of Schedule 'K' are subjudice and hence we are unable to express our opinion on such matters. 4. The overall impact of para 3.3 to 3.7 as above on Balance Sheet and Profit & Loss Account is not ascertainable and regarding para 3.1 Loss for the year and current liability are understated to the extent of Rs.27,43,750/-. 5. We further report that: (a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. (b) 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 those books; (c) The Balance Sheet and the Profit & Loss Account dealt with this report are in agreement with the books of account; (d) In our opinion, the Profit & Loss Account and the Balance Sheet comply with the Accounting standards referred to in sub-section (3c) of Section 211 of the Companies Act, 1956. 6. Subject to our observations referred in Para 1,2,3 and 4 above and their consequential effect on accounts, in our opinion, and accordindly to the best of our information and accordingly to the best of our information and accordingly to the explanations given to us, the said accounts read with Accounting Policies and other notes thereon in Schedule 'K' give the information required by the Companies Act, 1956 in the manner so required to give a true and fair view: (i) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2000 and (ii) in the case of Profit & Loss Account, of the loss for the year ended on that date. For B. C. JAIN & CO. Chartered Accountants Place: Kanpur K.M. GUPTA Dated: 14th March, 2001 Partner ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 1 of our Report of even date) 1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. Fixed Assets of Plastic Division Mumbai alongwith other assets of the said division are attached by Cosmos Co-operative Bank and entire assets of Forge Division are to be hived off to erstwhile directors pending implementation of final order of Company Law Board U/s 402 of the Companies Act (Refer Note No.29(a) to (b) under Schedule W). Hence we are unable to express any opinion in respect of fixed assets of Plastic Division of the Company. As informed to us fixed assets of other divisions of the Company have been physically verified during the year and no material discrepancies between the book records and physical inventory was noticed by the management. 2. None of the Fixed Assets have been revalued during the year. 3. As informed to us, Stocks of finished goods, Stores and Spares and Raw Material of Plastic Division as on 03-06.1998 (date of closure of unit) could not be physically verified by the management due to attachment of said stocks by Cosmos Co-operative Bank subsequently Stocks of finished goods, stores and spares and raw material as on 31.12.1998 of Forge Division as per book records of Head Office is considered to arrive at investment in Forge Division as per Hiving off order of Company Law Board. Which is subject to implementation we are unable to express any opinion on stocks of aforesaid divisions considered in accounts under review. As informed to us, stocks of finished goods, stores and spares and raw material as on 31.03.2000 of other divisions of the Company have been physically verified by the management during the year. 4. In our opinion and as per information and explanations given to us, the procedures of physical verification of stocks followed by the management as aforesaid para 3 are reasonable and adequate in relation to the size of the Company and the nature of its business. 5. The discrepancies noticed between physical stocks as stated in para 3 above and book records were not material and the same have been property dealt with in the books of account. 6. On the basis of our examination of the valuation of stocks of T.R.D. and T.C.D. division, we are of the opinion that such valuation is fair and proper in accordance with the normally accepted accounting principles. The basis of valuation of closing stocks is revised as per Accounting standard 2. However, there is no material effect on accounts due to such revision. Stocks of Plastic Division are carried forward as per book records. 7. In respect of unsecured loan from shareholders / promoters there are no terms and conditions in writing in respect thereof. However, no interest has been paid/provided on such loans. There are no other loan secured or unsecured from firms, companies or other parties listed in the register maintained under section 301 of the Companies Act 1956. There is no company under the same management as defined under Section 370(1B) of the Companies Act, 1956. 8. The Company has not granted any loans, secured or unsecured to companies, finns or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. There is no Company under the same management as defined in Section 370(1B) of the Companies Act, 1956. 9. The parties to whom loan or advances in the nature of loans have been given by the Company are generally repaying the principal amounts as stipulated and are also regular in payment of interest wherever applicable except ICD given to M/s Savlani Trading Co. (P) Ltd. of Rs. 12.00 Lacs where Interest and principal are not forthcoming. The Company has also given Interest free advances to employees, which are being recovered as stipulated. 10. In our opinion and according to the information and explanations 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 the purchase of stores, raw materials, plant and machinery, equipment and other assets, and with regard to sale of goods. 11. In our opinion and according to the information and explanations given to us, there are no transactions for purchase and sale of goods and materials made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and aggregating to Rs. 50,000/- or more in respect of each party. 12. As explained to us, the Company has a regular procedure for the determination of unserviceable or damaged stores and raw materials. However no such items were determined during the year. 13. The Company has not accepted deposits from public during the year. 14. In our opinion, the Company has maintained reasonable records for the sale and disposal of realisable scrap as explained to us, the Company has no by-product. 15. in our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 16. The Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company. 17. According to the records of the Company, Employees' Provident Fund and Employees'State Insurance dues have been deposited late with the appropriate authorities. Arrears of P.F. dues as on 31.03.2000 amounting to Rs. 1.32 Lacs has since been deposited. Arrears of E.S.I. dues as on 31.03- 2000 of Rs. 1.64 Lacs remained unpaid. 18. An per Information and explanation given to us and books and records examined by us there are no undisputed amounts payable in respect of Sales Tax, Custom Duty and Excise Duty except Income Tax amounting to Rs.2,62 Lacs its at 31st March 2000, which are outstanding for a period of more than six. months from the date they became payable, 19. According to the information and explanaions given to us and Company's records examined by us, no personal expenses of employees or directors have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practices. 20. The Company is a sick industrial company within the meaning of Clause (O) subsection (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. However, reference is yet to be made to BIFR as per section 15 of the SICA Act, 1985. 21. The Company has a reasonable system of recording receipts, issue and consumption of customer's materials in respect of processing jobs, which it undertakes. These processing jobs are carried out together with the overall process of manufacture of the Company's products. We are informed that specific authorisation and allocation of man-hours and stores to individual jobs is, therefore, not practicable. The system of internal control is, in our opinion, commensurate with the size of the Company and nature of its business. For B. C. JAIN & CO. Chartered Accountants K.M. GUPTA Place: Kanpur Partner Dated: 14th March, 2001