We have audited the attached Balance Sheet of SARDA INFORMATION
TECHNOLOGY LIMITED, as at 31st March, 2002 and also the Profit and
Loss Account of the Company 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.
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 misstatements. 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 our opinion.
1) 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 statement on the matters specified in paras
4 and 5 of the said Order.
2) Further to our Comments in Annexure referred to in paragraph 1
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 accounts, as required by law have
been kept by the Company, so far as It appears from our examination of
iii) The Balance Sheet and Profit & Loss Account referred to in this
report are in agreement with the books of account
iv) In our opinion, SUBJECT TO NOTE No. 5, 10 AND 12 OF SCHEDULE -19,
the Balance sheet and the Profit & Loss Account dealt with by this
report comply with the accounting standards referred to in sub-
section (3C) of section 211 of the Companies Act, 1956;
v) On the basis of written representations received from the directors
of the company, and taken on the record by the Board Of Directors we
report that none of the director is disqualified as at 31st MARCH,
2002 from being appointed as a director in terms of clause (g) of sub
section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said Balance Sheet and Profit and
Loss Account read together with the Significant Accounting Policies
and other notes thereon, SUBJECT TO NOTE No. I (b) OF SCHEDULE -19
give the information required by the Companies Act, 1956 in the manner
so required and give a true and fair view :
(a) In so far as it relates to Balance Sheet, of the state of affairs
of the Company as at 31st March, 2002 and
(b) In so far as it relates to the Profit and Loss Account, of the
Loss of the Company for the year ended on that date.
ANNEXTURE 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.
According to the information and explanations given to us the fixed
assets have been physically verified by the management during the year
in a phased periodical manner, which in our opinion is reasonable,
having regard to the size of the Company and nature of the assets. No
material discrepancies were noticed on such verification.
2) None of the fixed assets have been revalued during the year.
3) As explained to us, the stock of finished goods, raw materials,
consumables, stores and spares and trading of cloth have been
physically verified by the Management at reasonable intervals during
the year. In our opinion, the frequency of such Verification is
reasonable having regard to the size of the Company and the nature of
its business. Production and consumption are taken as certified by
4) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of stock followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
5) As explained to us, there were no material discrepancies noticed on
physical verification to the stocks of raw materials, stores and
spares and finished goods and trading of cloth having regard to the
size of the operations of the Company.
6) The valuation of stock is fair and proper and is in accordance with
the normally accepted accounting principles and is on same basis as in
the preceding year.
7) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties listed in the register maintained
under Sec. 301 of the Companies Act, 1956 or from the Companies under
the same management within the meaning of Section 370 (1B) of the
Companies Act, 1956, where the rate of interest and other terms and
conditions of such loans are prima facie prejudicial to the interest
of the company.
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, or to Companies under
same management within the meaning of section 370 (1B) of the
companies Act 1956, where the rate of interest and other terms and
condition of such loans are prima facie prejudicial to the interest of
9) In respect of loans and advances given by the company, the parties
have repaid the principal amounts and interest as stipulated, wherever
stipulations have been made or as rescheduled.
10) In our opinion and according to information and explanations given
to us, 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 consumable
parts, plant and sale of goods.
11) In our opinion and according to the information and explanations
given to us, the transaction of purchase of goods, material and
service, made in pursuance of contracts or arrangements entered in the
register maintained u/s 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 to prices which are reasonable having regard to prevailing
market prices as available with the Company for such goods, materials
or services or transactions made with other parties.
12) According to the information and explanations given to us, the
Company has a regular procedure for the determination of unserviceable
or damaged stores, raw materials and finished goods, adequate
provision has been made in the accounts for the loss arising on the
items so determined.
13) According to the information and explanations given to us, the
Company has not accepted any deposits during the year from the public
within the meaning of the provisions of Section 58A of the Companies
Act, 1956 and rules made thereunder are not applicable.
14) In our opinion, reasonable records have been maintained by the
company for the sale and disposal of realisable scrap. The Company has
15) In our opinion, the internal audit system of the Company is
commensurate with its size and nature of its business.
16) As informed to us, the Central Govt. has not prescribed
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956 in respect of Companys products.
17) According to the records of the Company the provident fund and
employees state insurance scheme dues were generally been regularly
deposited during the year with appropriate authorities.
18) According to the information and explanations given to us, there
are no undisputed amounts payable in the respect of Income Tax, Sales
Tax, Customs Duty and Excise Duty, except custom duty Rs. 1133345/- &
excise cess Rs. 217562/- were outstanding as on 31 March, 2002 for a
period of more than six months from the date they become payable.
19) According to the information and explanations given to us, and
records examined by us, no personal expenses have been charged to
Revenue Accounts other than those payable under contractual
obligations or in accordance with generally accepted business
20) The Company has become a sick industrial unit within the meaning
of clause (O) of Sub Section (I) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985.
21) In respect of trading activities, we are informed that there were
no damaged goods during the year.
For N. B. MUNDADA&CO.
N. B. MUNDADA Place : Ahmednagar
Proprietor Date : 06/5/2002.