Mar 31, 2009
1. We have audited the attached Balance Sheet of Brushman (India)
Limited as at March 31, 2009 and also the Profit and Loss Account and
the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India.
Those Standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosure in the financial
statement. An audit also includes assessing the accounting principles
used and significant estimates made by the management, as well as
evaluating the overall financial statement presentation .We believe
that our audit provides a reasonable basis for our opinion.
3. As required by Companies (Auditors Report) Order, 2003 issued by
the Central Government in terms of Sub Section (4A) of section 227 of
the Companies Act, 1956, we annex hereto a statement on the matters
specified in paragraphs 4 and 5 of the said order.
4. We report and invite attention towards:
(a) Capital work in progress includes an advance of Rs.50,33 crores
given to Mr. Rajinder Singh for the purchase of moulds, plant &
machinery etc. out of the proceeds of Foreign Currency Convertible
Bonds (FCCB) and Global Depository Receipts (GDR). As per the
information, records and explanations given to us, the company has not
received the aforesaid capital items and the company has sought for the
refund of such advance from Sir. Rajinder Singh. (Refer Note No..25 of
Schedule 22).
(b) That the company has incurred Rs. 17.28 crores on account of issue
of Foreign Currency Convertible Bonds (FCCB) and Global Depository
Receipts (GDR) which are in excess of the limits prescribed by the
statutory authorities.
(c) That the balances of Sundry Debtors, Sundry Creditors, loans and
advances, Unsecured Loan from others, Security Deposits are subject to
confirmation with the respective parties. The consequential impact
thereof due to adjustments, provisions etc. on the financial statements
is not ascertainable.
(d) That the company has not filled the returns with the statutory
authorities for External Commercial Borrowings (ECBs) and also
statutory returns for sales tax, VAT, Service tax for part of the year.
The consequential impact thereof due to penalty etc. on the financial
statements is not ascertainable.
(e) That the company is not regular in deposit of statutory dues of
Income Tax, TDS, Provident Fund, ESI etc. with statutory authorities.
The interest and penalties (if any) on account of delay in payments
have not been provided in the accounts and is not ascertainable. To the
extent the loss for the year is understated.
5, Further to our comments in the annexure referred to in paragraph (3)
and (4) above, we 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 account as required by law have
been kept by the Company, so far as appears from our examination of the
books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act 1956 except as stated in paragraph 4 above.
(e) On the basis of the written representations received from the
Directors, as on March 31, 2009, and taken on record by the Board of
Directors, we report that none of the Directors of the Company are
disqualified as on March 31,2009 from being appointed as a director, in
terms of clause (g) of sub section (1) of section 274 of the Companies
Act, 1956;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the notes on
accounts give the information required by the Companies Act, 1956, in
the manner so required and subject to our observation in paragraph 4
and 5 above, the cumulative impact of the same on the accounts are not
ascertainable gives a true and fair view in conformity with the
accounting principles generally accepted in India;
(i) in case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2009;
(ii) in case of the Profit and Loss Account, of the loss of the Company
for the year ended on that date, and
(iii) in case of the Cash Flow Statement, of the cash flows of the
company for the year ended on that date.
Annexure to Auditors Report Referred to in paragraph 3 of our Report
of even date on the financial statements for the year ended 31st March
2009 of Brushman (India) Limited
(i) (a) The company has generally maintained proper records showing
relevant particulars including quantitative details and situation of
fixed assets.
(b)We have been informed that the fixed assets of the company have been
physically verified by the management during the year in a phased
periodical manner which in our opinion is reasonable. As informed no
material discrepancies were noticed on such verification.
(c) Assets disposed off during the year are not substantial and
therefore does not affect the going concern assumption.
(ii) (a)We have been informed that the inventories have been physically
verified by the management at the end of the year. In our opinion the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c)ln our opinion the Company is maintaining proper records of
inventories. It has been informed to us that there were no material
discrepancies noticed on physical verification of inventory as compared
to the book records.
(iii)(a)In our opinion and according to the information and
explanations given to us, the Company has not granted any loan, secured
or unsecured to parties covered in the register maintained under
section 301 of the Companies Act, 1956.
(b) In our opinion and according to the information and explanations
given to us, the Company has taken unsecured loan from the parties
covered in the register maintained under section 301 of the Companies
Act, 1956 amounting to Rs.49.50 Lacs and the year end balance thereof
is Rs.32.21 Lacs. As per information and explanation given to us the
loan is repayable on demand and has not been demanded back by the
lenders and therefore there is no overdue of loan. It was further
explained that the loan is interest free and is not prejudicial to the
interest of the company.
(iv) In our opinion and according to the information and explanations
given to us, the existing internal control procedures for the purchase
of inventory, fixed assets and for the sale of goods and services needs
to be strengthened to commensurate with the size of the Company and the
nature of its business.
(v) In respect of particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956;
(a)In our opinion and according to the information and explanations
given to us, particulars of such contracts or arrangements which were
required to be entered into the register maintained under section 301
of the Companies Act 1956 have been so entered.
(b)In our opinion and according to the information and explanations
given to us, these contracts or arrangements have been generally made
at prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us the Company has not accepted any deposits from the public.
(vii) The internal audit of the company is being conducted by engaging
an outside agency i.e. a Chartered Accountants firm. However
considering the size and nature of the business, the scope of internal
audit needs to be extended.
(viii) We have been informed that the Central Government has not
prescribed the maintenance of Cost Records under Section 209 (l)(d) of
the Companies Act, 1956 in respect of the Company.
(ix) (a) According to the records, information and explanations
provided to us, the company is not regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees State
Insurance, Income Tax, Sales-Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty, Cess and other statutory dues applicable to it.
According to the information and explanations given to us, fallowings
are the undisputed amounts payable in respect of these statutory dues
in arrears as at march 31, 2009 for a period of more than six months
from the date they became payable: -
S.
No. Particulars Amount Rs. in Lacs
1. Employees State Insurance 0.52
2. Professional Tax 0.24
3. Provident Fund 5.39
4. Tax Deduction at Source 52.17
5. Income Tax 161.87
6. Fringe Benefit Tax 26.33
Total 246.52
(b) As per the information and explanations given to us there are no
disputed statutory dues.
(x) The Company has accumulated losses and has incurred cash losses
during the financial year covered by our audit. However it has not
incurred any cash losses in the immediately preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
defaulted in repayment of dues to financial institutions and banks
towards term loan and working loans. There are no debentures and
therefore there is no question of default thereon. However in absence
of relevant information we are unable to comment on the amount and
period of default.
(xii) In our opinion and according to the information and explanations
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi/ mutual benefit
fund/ society. Therefore, clause 4 (xiii) of the Companies (Auditors
Report) Order 2003 is not applicable to the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing or trading in shares,
securities, debentures & other investments.
(xv) The Company has given guarantee amounting Rs. 550 Lacs (previous
year Rs. 175 Lacs) for loan taken by its subsidiary companies from
banks. In our opinion and according to the information and explanations
given to us, the terms and conditions of the same are not prima facie
prejudicial to the interest of the company,
(xvi) In our opinion and according to the information and explanations
given to us, the term loans were applied for the purposes for which
they were raised.
(xvii) According to the information and explanations given to us and on
the basis of an overall examination of the Balance Sheet of the
Company, we are of the opinion that the funds raised on short term
basis have, prima facie, not been used for long term investment.
(xviii) According to the information and explanations given to us,
during the year, the Company has not made any preferential allotment of
shares to parties and companies covered in the register maintained
under Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures; hence question of
creation of security or charge in respect of debentures issued does not
arise.
(xx) During the year the Company has raised money by public issues
through Global Depository Receipts (GDRs) and Foreign Currency
Convertible Bonds (FCCBs) for which the management has disclosed the
end use in the notes to accounts and the same has been verified.
(xxi) In our opinion and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year.
For SAXENA & SAXENA
Chartered Accountants
Place: - New Delhi
Date: - 1st September 2009
D. K. Saxena
Partner
M. No. 82118
Mar 31, 2000
We have audited the attached Balance Sheet of BRUSHMAN (INDIA) LIMITED
as at 31st March, 2000 and the Profit and Loss Account for the year
ended on that date annexed thereto and report that :-
a) 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;
b) 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 the
books;
c) The Balance Sheet and Profit and Loss Account dealt with in this
report are in agreement with the books of accounts;
d) In our opinion, the said Balance Sheet and Profit & Loss Account
comply with the accounting standards referred to in Section 211 (3C) of
the Companies Act, 1956 to the extent applicable.
e) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts read with the notes
forming part of accounts and documents annexed thereto give the
information required by the Companies Act, 1956 in the manner so
required and subject to Note No. 1 (f) regarding non-provision of
certain expenditure items and Note No. II (1) regarding non- provision
in respect of diminution in the value of quoted investments in Schedule
20, give a true and fair view:-
i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2000, and
ii) in the case of the Profit and Loss Account of the profit for the
year ended on that date.
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 hereto a statement on the
matters in paragraph 4 and 5 of the said order :-
1. The company is maintaining proper records showing full particulars
including quantitative details and situation of its fixed assets. The
fixed assets have been physically verified by the management during the
year. We are informed by the management that no material discrepancies
were noticed on such verification.
2. None of the fixed assets have been revalued during the year.
3. The stock of finished goods, stores, spare parts and raw materials
have been physically verified by the management at reasonable
intervals.
4. In our opinion and according to the information and explanation
given to us, the procedures of physical verification of stocks followed
by the management are reasonable and adequate in relation to the size
of the company and the nature of its business.
5. The discrepancies noticed on physical verification of stocks as
compared to book records were not material and the same have been
properly dealt with in the books of account.
6. In our opinion, the valuation of stocks is fair and proper in
accordance with the normally accepted accounting principles and is on
the same basis as in the preceding year.
7. The company has not taken any loans, whether secured or unsecured,
from companies, firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956 and/or from
companies under the same management as defined under sub-section (1B)
of section 370 of the Companies Act, 1956
8. The company has not granted any loans, secured or unsecured, to
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956 and/or to companies under
the same management as defined under sub-section (1B) of section 370 of
the Companies Act, 1956
9. The company has not granted any loans or advances in the nature of
loans to any party other than its employees. These loans are non
interest bearing and recovery is generally regular.
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 nature of its business,
for the purchase of stores, raw materials including components, plant
and machinery, equipment and other assets and for the sale of goods.
11. The company has purchased goods aggregating during the year to
more than Rs. 50,000 from a firm in which the Managing Director and one
of the Directors are interested as partners. As explained to us by the
management, there is no organised market of such raw materials or
components. In view of the difficulty in obtaining data in respect
thereof, we are unable to comment as to whether prices paid for such
raw materials or components are comparable to the prices of similar
items supplied by other parties.
The company has also sold goods aggregating during the year to more
than Rs. 50,000 to a company in which the Managing Director is
interested as a Director and member. In the absence of any comparative
transactions, we are unable to comment on the reasonableness of the
prices realised by the company.
12. As explained to us, the company has not determined any
unserviceable and damaged stores, raw- materials and finished goods at
the end of the year and hence, no adjustment in respect of the same has
been made in the accounts for the loss.
13. The company has not accepted any deposit covered under section 58A
of the Companies Act, 1956.
14. As the value of the realisable, scrap generated during the year is
not considered to be significant, no detailed quantitative records have
been maintained therefor. The Company does not have any by-products.
15. In our opinion, the Companys present internal audit system is
commensurate with its size and nature of its business.
16. As informed to us, the company is not required to maintain cost
records under section 209(1) (d) of the Companies Act, 1956 for any of
its products.
17. The Company has been generally regular in depositing Employees
State Insurance dues with the appropriate authorities. However,
Provident Fund dues have not been deposited regularly during the year
with the appropriate authorities. At the end of the year, sum of Rs.
244,563 was payable in respect of PF, which has since been paid.
18. No undisputed amounts payable in respect of income tax, wealth
tax, sales tax, customs duty and excise duty were outstanding as at the
year end for the period of more than six months from the date they
became payable.
19. On the basis of examination of books of accounts carried out by us
in accordance with the generally accepted auditing practices and
according to the information and explanations given to us, no personal
expenses of employees or directors have been charged to the profit and
loss account, other than those payable under contractual obligation or
in accordance with generally accepted business practices.
20. 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 Processions) Act, 1985.
21. In respect of trading activity, no damaged goods have been
determined and therefore, the question of provision therefore does not
arise.
For MEHRA WADHWA & CO.
Chartered Accountants
Sd/-
RAKESH MEHRA,
Partner
Place : New Delhi
Dated : 1st September 2000
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