U. P. Lime Chem Ltd.
Annual Report 1998-99
TO THE MEMBERS OF U.P. LIME CHEM LIMITED, BlJNOR, U.P.
We have audited the attached Balance Sheet of U.P. Lime Chem Limited as at
31st March, 1999 and the Profit & Loss Account of the Company for the year
then ended and annexed thereto and report that:
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 the Companies Act 1956, we give in the Annexure hereto a statement on
the matters specified in paragraph 4 and 5 of the said Order.
2. The Balance Sheet and Profit & Loss Account referred to in this Report
are in agreement with the books of account .
3. Further to our comments in and subject to para A(i) and (ix) of the
Annexure referred to in para 1 above, further subject to Note No. 13 of
Schedule ;U' regarding non-confirmation/reconciliation of balances in
personal account and in a bank account and read in particular with Note No
20 of Schedule 'U' regarding status of installation of cogeneration plant
on which we have relied upon, being of technical matter, we report that:--
i) 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:
ii) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of such books:
iii) The Balance Sheet and Profit & Loss Account referred to in this Report
comply with the Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956, to the extent applicable
iv) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts; read together with the notes
thereon and annexed thereto, give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view:
a) in the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 1999; and
b) in the case of the Profit & Loss Account, of the Loss for the year ended
on that date.
for R.M. Lall & Co.
Place: Lucknow (Puneet Kapoor)
Date : 2nd September, 1999 Partner
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 1 of our Report of even date)
On the basis of such tests as we considered appropriate to apply and
according to the information and explanations given to us in the course of
our audit, we state that:
A. i) The Company has maintained proper records showing particulars
including quantitative details and situation of its fixed assets. However,
the said records are not updated. The Company has a programme of physically
verifying the fixed assets designed to cover all the items over a period of
three years. During the year, fixed assets were physically verified by the
Management in accordance with the programme and we are informed that no
material discrepancies were noticed by the Management on such verification
as compared to the fixed assets records to the extent maintained and/or the
financial records. In our opinion, the frequency of verification is
reasonable having regard to the size of the Company and the nature of its
ii) None of the fixed assets have been revalued during the year.
iii) The Management has physically verified the stocks of finished goods,
stores and spares, raw materials, fuel and packing materials at reasonable
intervals during the year.
iv) In our opinion, the procedures of physical verification of above-
mentioned stocks followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
v) No material discrepancies were noticed by the Management on physical
verification of above mentioned stocks as compared to book records.
vi) Examination of the stocks has not been done by us On the basis of stock
records produced before us and the assistance provided by the technical and
commercial staff of the Company, in our opinion, the valuation of stocks is
fair and proper in accordance with normally accepted accounting principles
and is on the same basis as in the preceding year.
vii) In case of unsecured loans taken by the Company from companies, firms
and other parties listed in the register maintained under Section 301 of
the Companies Act, 1956, the terms and conditions on which the loans have
been taken are not, in our opinion, prima facie, prejudicial to the
interests of the Company. We have been informed that there are no companies
under the same management as defined in Section 370 (1 B) of the Companies
viii) The Company has not granted loans, secured or unsecured, to
companies, firms and other parties listed in the register maintained under
Section 301 of the Companies Act, 1956.
ix) The parties to whom loans or advances in the nature of loans have been
given are generally repaying the principal amounts/interest as per
stipulations. However, certain advances given to employees (past and
present) and to other parties for meeting the expenses of the Company and
outstanding for a considerable period of time have neither been adjusted
for want of details nor have been repaid. The Management has initiated
steps for adjustment/ recovery of such advances
x) In our opinion, there are generally adequate internal control procedures
commensurate with the size of the Company and the nature of its business
with regard to purchase of stores, raw materials including components,
plant and machinery, equipment and other assets and for the sale of goods.
xi) No transactions of purchase of goods and materials and for 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 were entered by the Company.
xii) The Company has a regular procedure for determination of unserviceable
or damaged stores, raw materials and finished goods and adequate provision
for loss arising on the item(s) so determined has been made in the
xiii) The Company has not accepted deposits from the public during the
xiv) The Company has not made any sale/disposal of scrap during the year.
The Company has no by-products.
xv) Presently, the internal audit system is carried by the officers and
staff of the Company However, considering the growing size and nature of
the business of the Company, we are of the opinion that the internal audit
should be done by independent Internal Auditors.
xvi) To the best of our knowledge and belief, maintenance of cost records
has not been prescribed by the Central Government under Section 209 (1) (d)
of the Companies Act,1956, in respect of any of the activities of the
xvii) The Company was generally irregular in depositing Provident Funds due
with appropriate authorities. Balance outstanding as at the end of the year
amounted to Rs.2,25,111/- (previous year Rs.1,69,814/-). We are informed
that the provisions of Employees State Insurance Act, 1948 were not
applicable to the Company.
xviii) No undisputed amounts payable in respect of Income tax, Wealth tax,
Sales tax, Customs duty and Excise duty were outstanding as at the last day
of the financial year concerned for a period of more than six months from
the date they became payable, except Income Tax Rs. 7,181 (previous year
Rs.2,50,000) and Sales Tax Rs.25,093 (previous year Rs.6,542).
xix) According to the records examined by us, no personal expenses have
been charged to Revenue Account other than those payable under contractual
obligations or in accordance with generally accepted business practices.
xx) The Company is not a sick industrial company within the meaning of
Clause (o) of sub- section (1) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985.
B. In the case of the Company's service activities, we further report
i) In our opinion, the Company has a reasonable system of recording
receipts, issues and consumption of material and stores and allocating
materials consumed to the relative jobs commensurate with its size and
nature of its business.
ii) The system of allocating man-hours utilised to the relative jobs needs
to be Strengthened and formalised commensurate to the size and the nature
of the business of the Company.
iii) In our opinion and read with para (ii) above, there is a reasonable
system of authorisation at proper levels and an adequate system of internal
control commensurate with the size of the Company and nature of its
business with respect to issue of stores and allocation of stores and
labour to jobs.
for R.M. Lall & Co.
Place: Lucknow (Puneet Kapoor)
Date : 2nd September,1999 Partner