1. We have audited the attached Balance Sheet of JOHN FOWLER (INDIA)
LIMITED as at 31st March, 2003 and also the Profit & Loss Account and
the Cash Flow statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
management. Our responsibility is to express opinion on the financial
statements based on our audit.
2. We conducted the audit in accordance with the 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 from material misstatement. An audit
includes examining, on a test check 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 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 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 on the matters specified in paragraphs 4 and 5 of the said
order, to the extent applicable to this Company.
4. Further to our comments in the annexure referred to in paragraph 3
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. Attention is invited to accounting policy no. C (ii) and D (ii).
As explained therein we have relied upon the certificate issued by a
firm of Chartered Accountants in respect of income and expenses and
stock of agricultural activities of the company.
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 those
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
maintained by the Company.
d) In our opinion the Balance Sheet, Profit & 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.
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 at
their meeting, we report that none of the directors is disqualified as
on 31.3.2003 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
explanations given to us, the said accounts read together with the
notes thereon and the significant accounting policies 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 policies generally accepted in India -
i) in case of the Balance Sheet, of the State of Affairs of the Company
as at 31st March, 2003;
ii) in case of the Profit and Loss account, of the Profit for the year
ended on that date; and
iii) in the case of the Cash Flow statement, of the Cash Flows for the
year ended on that date.
For HARIBHAKTI & CO.,
Place : Mumbai (CHETAN DESAI)
Date : 9th June, 2003 Partner
Membership No. 17000
ANNEXURE TO AUDITORS REPORT
(referred to in Paragraph 3 of our Report of even date on the Accounts
of JOHN FOWLER (INDIA) LIMITED for the year ended 31st March, 2003)
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. We are
informed that certain items of plant and machinery and buildings have
been physically verified by the management during the year and that no
material discrepancies were noticed on such verification.
2. None of the fixed assets has been revalued during the year.
3. The stocks of finished goods, stores, spare parts and raw materials
including components have been physically verified by • the management
during the year. In our opinion, the frequency of verification is
reasonable. In the case of stocks lying with the third parties,
certificates for such stocks have been obtained from many of the
4. The procedures of physical verification of stocks followed by the
management are reasonable and adequate in relation to the size of the
Company and nature of its business.
5. The discrepancies noticed on physical verification of stocks as
compared to the book records are being adjusted in the books of
6. 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 previous year.
7. The Company had borrowed funds from a company in which one of the
Directors of the Company is interested and the terms and conditions of
which were prima-facie not prejudicial to the interests of the Company.
8. The Company had granted unsecured loans to companies, listed in the
register maintained under Section 301. The terms and conditions of such
loans were prima-facie not prejudicial to the interests of the Company.
In respect of loans and advances in the nature of loans given by the
Company, the principal and interest amounts have been recovered as
9. In our opinion and according to the information and explanations
given to us, and having regard to the explanation that some of the
items purchased/sold are of a special nature for which comparable
alternative prices are not available, there are 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.
10. In our opinion and according to the information and explanations
given to us, and having regard to our comments in item 9 above, the
transactions of purchase of goods and materials and sale of goods,
materials and services, made in pursuance of contracts or arrangements
entered/to be entered in the register maintained under section 301 of
the Companies Act, 1956, aggregating during the year to Rs.50,000 or
more in respect of each party have been made at the prices which are
reasonable, having regard to prevailing market prices as available with
the Company for such goods, materials, or services or the prices at
which transactions for similar goods or services have been made with
11. As explained to us, the Company has a regular procedure for the
determination of unserviceable or damaged stores, raw materials
including components and finished goods. Adequate provision has been
made in the accounts for the loss arising on the items so determined.
12. The Company does not have any deposits as defined under Section 58A
of the Companies Act, 1956, and the Companies (Acceptance of Deposits)
13. Reasonable records have been maintained by the Company for the sale
and disposal of realizable scrap, except for the value of scrap
consumed internally. We are informed that the Companys manufacturing
processes do not generate any realizable by-products.
14. The Company has an adequate internal audit system commensurate with
the size and nature of its business.
15. We are informed that the Central Government has prescribed
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956, for automotive parts and accessories manufactured by the
Company and that the Company has maintained such records as are
16. According to the records of the Company, provident fund and
Employees State Insurance dues have been deposited regularly during
the year with the appropriate authorities. There are no overdue amounts
outstanding as at the end of the year.
17. According to the information and explanations given to us, there
are no material undisputed amounts payable in respect of Income Tax,
Wealth Tax, Sales Tax, Customs duty and Excise duty which are
outstanding as on 31st March, 2003 for a period of more than six months
from the date they became payable.
18. On the basis of examination of books of account 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 obligations or
in accordance with the generally accepted business practice.
19. The Company is not as 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.
For HARIBHAKTI & CO.,
Place: Mumbai (CHETAN DESAI)
Date: 9th June, 2003 Partner
Membership No. 17000