We have audited the attached Balance Sheet of M/s Rainbow Breweries
Ltd., as at 31st March, 2001 and also the Profit & Loss Account for the
year ended on that date and report as follows:
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 enclose in the annexure a
statement of matters specified in paragraph 4 & 5 of the said order,
2. Further to our comments in the Annexure referred to in Paragraph
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
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 the
iii. The Balance Sheet and Profit & Loss Account dealt with by this
report are in agreement with the books of Account.
iv. In our opinion, the Profit & Loss Account and Balance Sheet comply
with the accounting standards referred to in section 211 (3C) of the
Indian Companies Act, 1956, to the extent applicable.
v. On the basis of written representations received from the Directors
of the Company as at 1st June, 2001 and taken on record by the Board of
Directors, we report that no Director is disqualified from being
appointed as Director of the Company under clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956, and
vi. In our opinion, and to the best of our information and according
to the explanations given to us, the said accounts read together with
NOTES thereon, given the information as required and give a true and
a) In case of Balance Sheet, of the state of affairs of the Company as
at 31st March, 2001.
b) In case of Profit & Loss Account of the Loss for the year ended on
ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. As
explained to us, the assets have been physically varified by the
management during the year which in our opinion is reasonable having
regard to the size of the Company and the nature of its assets. No
material discrepancies were noticed on such verification.
2. None of the fixed assets were revalued during the year.
3. The stock of goods have been physically varified during the year by
the management. In our opinion, the frequency of verification is
4. In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stock foil owed
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 as compared to
the book records were not material and have been properly dealt with in
the books of accounts.
6. In our opinion on the basis of our examination of records the
valuation of stocks is fair and proper in accordance with the normally
accepted accounting principles.
7. The Company has not taken loan from Directors, Shareholders &
Relatives Companies, Firms or other parties listed in register
maintained under Section 301 of the Companies Act, 1956, or from the
companies under the same management as defined under Section 370 (1B)
of the Companies Act, 1956, except loans from Promoters/Directors
promoting Companies for Rs. 7,80,07,133.17 (Pr Yr Rs. 7,05,11,560.17)
and the same is free of interest. The terms & conditions of these free
of interest loans are prima facie not pre-judicial to the interest of
the Company and shareholders.
8. The Company has not granted loans, secured or unsecured, to
Companies, Firms or other parties as is evident from the register
maintained under section 301 of the Companies Act, 1956 or to Companies
under the same management as defined under section 370 (1 B) of the
Companies Act, 1956.
9. The Company has not given loans or advances in the nature of loans.
10. The Company has given interest free advances in the nature of loan
to its employees who are repaying the principal amount as stipulated.
11. In our opinion and according to the information and explanation
given to us, the transaction of purchase of goods and materials and
sale of goods, materials and services made in pursuances 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, have been made at prices which are
reasonable having regard to prevailing market price for such goods,
services or the price at which transaction for similar goods, materials
or services have been made with other parties.
12. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures commemorate
with the size of the Company and nature of its business with regard to
the purchase of store, Raw Materials, including components, Plant &
Machinery, Equipments and other assets and with regard to the sale of
13. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
14. The Company has a regular procedure for determination of damaged or
wastage packing materials. Adequate provisions has been made in the
accounts for the loss arising on the items so determined.
15. According to the information and explanations given to us ESI/Bonus
Acts are not applicable to the Company.
16. As explained to us no amount of Income Tax, Wealth Tax, Custom Duty
and Excise Duty were outstanding for a period of more than six months
at the last date of the accounting year except TDS Rs. 77,765.40 and
EPF Rs. 4,816.00.
17. According to the information and explanations given to us and
records examined by us no personal expenses have been charged to the
18. The Company is not a sick Industrial Company within the meaning of
Clause (O) of subsection (1) of section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985.
19. The Company has not accepted any deposits from the public.
20. The Central Govt. has not prescribed maintenance of cost records
under Sec. 209 (1) (d) of the Companies Act, 1956 for the Company.
21. The Company has reasonable system of the recording receipts, issues
and commensurate with its size and the nature of its business. However,
considering the nature of services rendered and the billing procedures,
management does not consider it necessary to have a system for
application of consumption of Materials, Store and Manhours, to the
22. In our opinion, there is reasonable system for authorisation at
proper levels with necessary control on the issue of stores and the
related system of internal control is commensurate with size of the
company and the nature of its business.
23. Investment of the Company are held in its own name and lodged with
For DINESH K. SHARMA & ASSOCIATES
Place: Delhi Dinesh K. Sharma
Date: 06th July, 2001 Proprietor