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U P Lime Chem Ltd.

BSE: 524677 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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U P Lime Chem Ltd. (UPLIMECHEM) - Auditors Report

Company auditors report

U. P. Lime Chem Ltd. Annual Report 1998-99 AUDITORS' REPORT 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. Chartered Accountants 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 assets. 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 Act, 1956. 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 accounts. xiii) The Company has not accepted deposits from the public during the year. 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 Company. 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 that:- 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. Chartered Accountants Place: Lucknow (Puneet Kapoor) Date : 2nd September,1999 Partner