TRACKPARTS OF INDIA LIMITED
ANNUAL REPORT 1999-2000
TRACKPARTS OF INDIA LIMITED
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
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
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
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
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.
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
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
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
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
For B. C. JAIN & CO.
Place: Kanpur Partner
Dated: 14th March, 2001