We have audited the attached Balance Sheet of M/s. ARYAN PESTICIDES
LIMITED as at 31st March, 2003 and also the Profit and Loss Account for
the year ended on that date annexed thereto and the cash flow statement
for the year ended on that date. 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.
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
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
As required by the Manufacturing and Other Companies (Auditors Report)
Order, 1988, issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the annexure, a statement on the matters specified in paragraphs 4
and 5 of the said Order.
Further to our comments in the annexure referred to above, we report
(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
(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
(c) the Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account;
(d) in our opinion, the Balance Sheet and Profit and Loss Account dealt
with in this report comply with the Accounting Standards referred to in
sub-section [3c] of section 211 of the Companies Act, 1956 to the
(e) on the basis of written representations received from the Directors
as on 31st March, 2003 and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on 31st March,
2003 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 information and explanations given to us, the said accounts read
together with the notes thereon, give the information required by the
Companies Act, 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
(i) in case of the Balance Sheet, of the state of the Companys affairs
as at 31st March, 2003;
(ii) in the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date and
(iii) in the case of Cash Flow statement, of the Cash Flows for the
year ended on that date.
For A. L. KAPANI & CO.,
Place: Mumbai A. L. KAPANI
Dated: 27th May, 2003 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. The fixed
assets of the Company have been physically verified by the management
during the year.
2. None of the fixed assets have been revalued during the year.
3. The stocks of finished goods, stores, spare parts and raw materials
(other than stocks held by third parties) have been physically verified
by the management during the year. In our opinion the frequency of
verification is reasonable.
4. In our opinion, the procedure for 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 verification of physical stock and
book records were not material in relation to the operations of Company
and the same have been dealt with in the books of accounts.
6. On the basis of our examination of stocks and other relevant
records, we are of the opinion that the valuation of stocks are 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, secured or unsecured from the
Companies listed in the register maintained under section 301 of the
Companies Act, 1956 and/or from the Companies under the same management
as defined under Section 370 (1 B) of the Companies Act, 1956 on terms
and conditions which are prima facie prejudicial to the interest of the
8. The Company has not granted any-loans, secured or unsecured to the
Companies, firms or other parties listed in the register maintained
under section 301 and or to the Companies under the same management as
defined under Section 370 (1 B) of the Companies Act, 1956, where the
rate of interest and other terms and conditions of such loan are prima
facie prejudicial to the interest of the Company.
9. The parties to whom loans and advances in the nature of loans have
been given by the Company are repaying the principal amounts as
stipulated and generally regular in the payment of interest wherever
10. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business with regard to the purchase of stores, raw materials including
component, plant and machinery, equipment and other assets and with
regard to the sale of goods.
11. In our opinion and according to the information and explanations
given to us, the transactions of purchases of goods and materials and
sale of goods, materials and services made in pursuance of contracts or
arrangements entered in the register maintained u/s 301 and aggregating
during the year to Rs. 50,000/- or more in respect of each party have
been made at prices which are reasonable having regard to prevailing
market prices and volumes of sale of such goods, materials or services
or the price at which transactions for similar goods, materials or
services have been made with other parties.
12. As explained to us, the Company has a regular procedure for
determination of unserviceable or damaged stores, raw materials and
finished goods. Adequate provisions have been made in accounts for the
loss arising on the items so determined.
13. The Company has not accepted any deposits from Public.
14. In our opinion, reasonable records have been maintained by the
Company for the sale and disposal of scrap and by-products.
15. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
16. We are informed that 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. Provident Fund/Employees state Insurance dues have generally been
deposited with the appropriate authorities though there has been a
slight delay in few cases.
18. According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty and excise duty were outstanding as at 31st March2003
for a period of six months from the date they become payable.
19. According to the information and explanations given to 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 practice.
20. The Company is not a Sick Industrial Company within the meaning of
Clause (0) of sub-section (1) of section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985.
21. The Company has reasonable system of recording receipts, issues and
consumption of materials and stores and allocating materials consumed
to the relative job commensurate with size and nature of its business.
22. As explained to us there are no damaged stores, raw materials or
finished goods in case of trading goods.
For A. L. KAPANI & CO.,
Place: Mumbai A. L. KAPANI
Dated: 27th May, 2003 Partner