Asian Bearings Ltd.की ऑडीटर रिपोर्ट

Jun 30, 2009

1. We have audited the attached Balance Sheet of Asian Bearings Limited as at 30th June 2009 and also the annexed 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 Company's Management. Our responsibility is to express an opinion on these Financial Statements based on our audit.

2. We have conducted out 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 were as evaluating the overall financial statement presentation. We believe that audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we give in annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report 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 audit;

(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 books;

(c) The Balance Sheet and Profit & Loss Account and Cash flow Statement dealt with by this report are in agreement with the books of account;

(d) On the basis of written representations received from Directors as on 30th June 2004 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 30th June 2009 from being appointed as a Director in terms of clause (g) of Sub- Section (i) of Sec.274 of the Companies Act, 1956.

(e) In our opinion, the Balance Sheet and Profit & Loss Account and Cash flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3 (C) of Sec. 211 of the Companies Act, 1956, to the extent applicable except the following:

(f) Subject to the foregoing in our opinion and to the best of our information, and according to the explanations given to us, the said accounts statements read with the notes and schedules 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.

(1) In the case of the Balance Sheet, of the state of the affairs of the Company as at 30th June, 2009and

(2) In the case of Profit and Loss Account, of the Loss for the year ended on that date:

(3) In the case of the Cash flow Statement, of the Cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT (referred to in paragraph ((3) 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 Company has a policy of verifying Fixed Assets according to phased programme designated to cover all the items over a period of three years. Pursuant to the programme a physical verification was carried over during the year by the management and no material discrepancies have been noticed on such verification,

2. The Fixed Assets of the Company have not been revalued during the year.

3. The stock of finished goods, stores, spares parts and raw materials excluding materials in transit and lying with third parties, have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of the verification is reasonable.

4. In our opinion and according to the information and explanations given to us, the procedures of 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 between the physical stocks book records, which are not significant, have been properly dealt within the books of account.

6. In our opinion and on the basis of our examination of stock records, the valuation of stock is fair and proper in accordance with the normally accepted accounting principles and is on the basis as in the previous year.

7. Except for an interest tree unsecured loan from the promoters, 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 Companies under the same management within the meaning of Sec.370(lB) of the Companies Act, 1956 where the rate of interest and other term s and conditions are in our opinion, not prime facie prejudicial to the interest of the Company.

8. The parties to whom loans or advances in the nature of loans have been given by the company are repaying the amount as stipulated.

9. There are adequate internal control procedures commemorate with the size of the Company and the nature of its business for the purchase of stores, raw materials components, plant and machinery, equipment and other assets and for the sale of goods.

10. According to the information and the explanations given to us, the transactions of purchase of good and materials, and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956, and aggregating during the year to Rs.5,00,000/- or more in respect of each party, have been made at prices, which in our opinion, are reasonable having regard to prevailing market prices for such goods, materials or services the prices at which similar transactions have been made with other parties, and the Company's business needs and exigencies.

11. Unserviceable or damaged stores, raw materials or finished goods, are determined by the Company and provisions for loss wherever necessary, has been made in the accounts.

12. The company has not accepted deposits from the public hence the compliance of Reserve Bank of India directives and provisions of Section 58-A of the Companies Act, 1956 does not arise

13. In our opinion reasonable records have been maintained by the company for the sale and disposal of scraps. The company has no by products.

14. The Company has an internal audit system commemorate with its size and the nature of its business

15.We have reviewed the books of account maintained by the company pursuant to the rules prescribed by the Central Government for the maintained of cost records under Section 209(l)((d) of the Companies Act, 1956, in respect of manufacture of the products of the Company and are of the opinion that prescribed accounts and records have been made and maintained.

16.There was a delay in the remittance of provident fund employees' State Insurance dues to the authorities concerned. The company has not remitted Provident Fund dues of Rs.254.76 lacs and ESI dues of Rs.12.53 lacs and TDS dues of Rs.10.89 lacs to the respective authorities as on 30(h June 2009.

17. According to the information and explanations given to us and the Books and Records examined by us tier are not undisputed amounts, payable in respect of Income Tax, Sales Tax, Customs duty and Excise duty outstanding as at 30th June 2009 for a period exceeding six months from the date they become payable.

18. According to the information and explanations given to us and on the basis of books of account of the company examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practice.

19. The company is a Sick Industrial Company within the meaning of section 3(1)(0) of Sick Industrial companies (Special Provisions) Act, 1985. The modified scheme of BIFR vide its order dated 11-06-1997 could not be implemented by the company. As a result, the BIFR in its hearing held on 11th February 2003 has recommended for winding up of the Company. The company has gone on appeal with AAIFR on 22nd May 2003 against the said order of BIFR. AAIFR vide is order dated 7th August 2007 set aside the BIFR order dated 111 February 2003. The company is yet to submit a rehabilitation proposal to BIFR.

For Itta Parthasarathy & Co

ITTA PARTHASARATHY

Place : Chennai

Membership No.15021

Date : 18.09.2009 Partner

---

Jun 30, 2008

1. We have audited the attached Balance Sheet of Asian Bearings Limited as at 30th June 2008 and also the annexed 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 Company's Management. Our responsibility is to express an opinion on these Financial Statements based on our audit.

2. We have 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 also 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 were as evaluating the overall financial statement presentation. We believe that audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we give in annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report 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 audit;

(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 books;

(c) The Balance Sheet and Profit & Loss Account and Cash flow Statement dealt with by this report are in agreement with the books of account;

(d) On the basis of written representations received from Directors as on 30th June 2004 and taken on record by me Board of Directors, we report that none of the Directors is disqualified as on 30th June 2008 from being appointed as a Director in terms of clause (g) of Sub- Section (i) of Sec.274 of the Companies Act, 1956.

(e) In our opinion, the Balance Sheet and Profit & Loss Account and Cash flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section 3 (C) of Sec. 211 of the Companies Act, 1956, to the extent applicable except the following:

(f) Subject to the foregoing in our opinion and to the best of our information, and according to the explanations given to us, the said accounts statements read with the notes and schedules 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.

(1) In the case of the Balance Sheet, of the state of the affairs of the Company as at 30th June, 2008and

(2) In the case of Profit and Loss Account, of the Loss for the year ended on that date:

(3) In the case of the Cash flow Statement, of the Cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT (referred to in paragraph ((3) 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 Company has a policy of verifying Fixed Assets according to phased programme designated to cover all the items over a period of three years. Pursuant to the programme a physical verification was carried over during the year by the management and no material discrepancies have been noticed on such verification.

2. The Fixed Assets of the Company have not been revalued during the year.

3. The stock of finished goods, stores, spares parts and raw materials excluding materials in transit and tying with third parties, have been physically verified by the management at reasonable intervals during the year. In our opinion. the frequency of the verification is reasonable.

4. In our opinion and according to the information and explanations given to us, the procedures of 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 between the physical stocks book records, which are not significant, have been properly dealt within the books of account.

6. In our opinion and on the basis of our examination of stock records, the valuation of stock is fair and proper in accordance with the normally accepted accounting principles and is on the basis as in the previous year.

7. Except for an interest tree unsecured loan from the promoters, 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 Companies under the same management within the meaning of Sec.370(lB) of the Companies Act, 1956 where the rate of interest and other term s and conditions are in our opinion, not prime facie prejudicial to the interest of the Company.

8. The parties to whom loans or advances in the nature of loans have been given by the company are repaying the amount as stipulated.

9. There are adequate internal control procedures commemorate with the size of the Company and the nature of its business for the purchase of stores, raw materials components, plant and machinery, equipment and other assets and for the sale of goods.

10. According to the information and the explanations given to us, the transactions of purchase of good and materials, and said of goods, materials and services made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956, and aggregating during the year to Rs.5,00,000/- or more in respect of each party, have been made at prices, which in our opinion, are reasonable having regard to prevailing market prices for such goods, materials or services the prices at which similar transactions have been made with other parties, and the Company's business needs and exigencies.

11 Unserviceable or damaged stores, raw materials or finished goods, are determined by the Company and provisions for loss wherever necessary, has been made in the accounts.

12. The Company has not accepted deposits from the Public, hence tire compliance of Reserve Bank of India directives and provisions of Section 58-A of the Companies Act, 1956 does not arise.

13. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of scraps. The Company has no by -products.

14. The Company has an internal audit system commemorate with its size and the nature of its business.

15. We have reviewed the Books of Account maintained by the Company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under Section 209(1){(d) of the Companies Act, 1956, in respect of manufacture of the products of the Company and are of the opinion that prescribed accounts and records have been made and maintained.

16, There was a delay in the remittance of Provident Fund Employees' State Insurance dues to the authorities concerned. The company has not remitted Provident Fund dues of Rs.254.76 lacs and ESi dues of Rs. 12.53 lacs and TDS dues of Rs.10.69 lacs to the respective authorities as on 30th June 2006.

17. According to the information and explanations given to us and the Books and Records examined by us, there are not undisputed amounts, payable in respect of Income Tax, Sales Tax, Customs duty and Excise duty outstanding as at 30th June 2008 for a period exceeding six months from the date they become payable.

16. According to the information and explanations given to us and on the basis of books of account of the company examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practice.

19. The company is a Sick industrial Company within the meaning of section 3(1 ){0) of Sick Industrial companies (Special Provisions) Act, 1985. The modified scheme of BIFR vide its order dated 11-06-1997 could not be implemented by the company. As a result, the BIFR in its hearing held on 11th February 2003 has recommended for winding up of the Company. The company has gone on appeal with AAIFR on 22nd May 2003 against the said order of BIFR. AAIFR vide its order dated 7th August 2007 has at aside the BIFR order dated 11th February 2003. The company is vet to summer a Rehabilitation mensal to BIFR

For Itta Parthasarathy & Co.

ITTA PARTHASARATHY

Place :Chennai Membership No. 15021

Date : 21-10-2008 Partner