We have audited the annexed Balance Sheet of M/S. NALIN CHEMICALS
LIMITED, as at 31st March 2002 also Profit & Loss Account 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.
1. We conducted our audit in accordance with auditing standards
genereally 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
2. As required by manufacturing and other companies (Auditors Report)
order 1988 issued by the Central Govt. of India 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 & 5 of the said order.
3. Further to put our comments in annexure referred to in paragraph 2
above we state 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
(b) In our opinion, proper books of accounts, as required by Law, have
been kept by the Company so far as appears from our examination of
(c) The Balance Sheet and Profit & Loss Account dealt with by this
report are in agreement with the books of accounts.
(d) In our opinion the Balance Sheet and Profit & Loss A/c dealt with
by this report wherever applicable comply with the accounting standards
wherever applicable, referred to in Sub Section 3(c) of Section 211 of
the Companies Act, 1956.
(e) On the basis of written representation received from the Director
as on 31st March, 2002 and taken on record by the Board of Directors,
we reports that none of the directors is disqualified as on 31st March,
2002 from being appointed as a director in terms of Section 274(1) (g)
of the Companies Act, 1956.
(f) i) Subjected note No. 1 of the schedule `O regarding going concern
ii) Note No. 8 of the schedule `O providing interest on NPA account
and earlier year expenses in our option and to the best of our
information and according to the explanation given to us, the said
accounts read together with the notes on accounts there on 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 India.
i) In the case of the Balance Sheet of the state of affair of the
company as at 31st March, 2002.
ii) In the case of the profit and loss account of the Loss of the
Company for the year ending on 31st March, 2002.
As required by the manufacturing and other companies (Auditors Report)
order, issued by the Company Law Board in term of section 227 (4A) of
the Companies Act, 1956, we further report that:
1. The Company has maintained proper records but not updated during
the year showing full particulars including quantitative details and
situation of remaining fixed assets. All the year and no material
discrepancies were noticed on such verification. However insurance of
Fixed Assets have not got renewed.
2. None of the fixed Assets have been revalued during the year.
3. There is no production activities in the Company during the year
under reference due to which notes on point no. 4 A (iii), (iv), (v),
(vi), (x), (iv) and (xvi) are not applicable. The Stock of other Raw
Material laying since earlier year in physically semi finished by the
management & valued at realizable calue due to lost of its basic in tri
4. In our opinion the terms and conditions on which loans have been
taken from & out standing to companies, firms or other parties listed
in the register maintained under Section 301 of the Companies Act, 1956
wherever applicable are not prima-facie prejudicial to the interest of
the company. As informed to us the company has not taken any Loans from
the companies under the same management with in the, meaning of Section
370 (B) of the Companies Act. 1956 (Not applicable w.e.f. 31.10.1998).
5. No loans have been granted to companies, firm or other parties
listed in the register maintained under section 301 of the Companies
6. The Company has not given any advance in the nature of loan hence
point no. 4 A(ix) not been given.
7. According to the information and explanations given to us, no
transaction of purchase of goods and material and sale of goods,
material and services made in pursuance of contract or arrangement
entered in the register maintained under Section 301 of the Companies
Act, 1956 and aggregating during the period Rs. 50,000/- or more in
respect to each party have been made.
8. In our opinion and according to the information and explanation
given to us the company has not accepted any deposits as defined under
section 58A the Companies Act, 1956 and the Companies (Acceptance of
deposits) Rule 1975.
9. The company has internal audit system commensurate with the size
and nature of its business. However no formal internal auditor has been
10. As informed by the management, the employees provident fund Act,
and the Employees State Insurance Act. are not applicable during the
11. According to information and explanations given to as no undisputed
amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom
Duty and Excise Duty were outstanding as at 31.3.2002 for a period of
more than six months from the date they become payable.
12. According to the information and explanation given to us, no
personal expenses have been charged to the revenue accounts other than
those payable under Contractual obligation or in accordance with
generally accepted business practices.
13. The company is a sick industrial Company within the meeting of
clause (D) of sub section (I) of section (3) of the sick Industrial
companies (Special Provisions) Act, 1985 in previous year. But
intimation to BIFR is pending.
For S. SINGHAL & CO.
PLACE: BHIWADI (S. K. SINGHAL)
DATE: 20.6.2002 Partner