SI Group India Ltd has informed that in the limited review report of the Company for the quarter ended December 31, 2007, the Auditors of the Company have made the following observations:
1. As pointed out in the Auditors Report for the year ended March 31, 2007:
(i) The capitalisation of Rs 990 lakhs for the Butyl Phenol Plant (the Plant) was not in accordance with the generally accepted accounting principles in India and in terms of the Expert Advisory Opinion 39 - Volume X issued by The Institute of Chartered Accountants of India, Accounting Standard (AS) 10 on Accounting for Fixed Assets and AS 26 on Intangible Assets. Accordingly as at March 31, 2007, gross fixed assets had been overstated by Rs 820 lakhs depreciation charge had been overstated by Rs 42 lakhs. Consequently, the profit for the year had been understated by Rs 42 lakhs and reserves for the year ended March 31, 2007 had been overstated by Rs 767 lakhs. For the quarter and nine months ended December 31, 2007, depreciation charge is overstated by Rs 10 lakhs and Rs 30 lakhs respectively and consequently, the profit for the quarter and nine months is understated by Rs 10 lakhs and Rs 30 lakhs respectively; and
(ii) The Company has applied for approval to the authorities in respect of remuneration paid to the Managing Director which is in excess of the limits prescribed under The Companies Act, 1956. As at March 31, 2007, the remuneration paid in excess of the limits amounted to Rs 47 lakhs.
2. As more fully explained in note 1(iii) of the accompanying statement of un-audited financial results regarding insurance claim receivable amounting to Rs 449 lakhs, the Company has initiated arbitration proceedings. The Auditors are unable to assess adjustments, if any, which would be required on settlement of the claim with the insurance company.
1. As pointed out in the Auditors Report for the year ended March 31, 2007:
(i) The capitalisation of Rs 990 lakhs for the Butyl Phenol Plant (the Plant) was not in accordance with the generally accepted accounting principles in India and in terms of the Expert Advisory Opinion 39 - Volume X issued by The Institute of Chartered Accountants of India, Accounting Standard (AS) 10 on Accounting for Fixed Assets and AS 26 on Intangible Assets. Accordingly as at March 31, 2007, gross fixed assets had been overstated by Rs 820 lakhs depreciation charge had been overstated by Rs 42 lakhs. Consequently, the profit for the year had been understated by Rs 42 lakhs and reserves for the year ended March 31, 2007 had been overstated by Rs 767 lakhs. For the quarter and nine months ended December 31, 2007, depreciation charge is overstated by Rs 10 lakhs and Rs 30 lakhs respectively and consequently, the profit for the quarter and nine months is understated by Rs 10 lakhs and Rs 30 lakhs respectively; and
(ii) The Company has applied for approval to the authorities in respect of remuneration paid to the Managing Director which is in excess of the limits prescribed under The Companies Act, 1956. As at March 31, 2007, the remuneration paid in excess of the limits amounted to Rs 47 lakhs.
2. As more fully explained in note 1(iii) of the accompanying statement of un-audited financial results regarding insurance claim receivable amounting to Rs 449 lakhs, the Company has initiated arbitration proceedings. The Auditors are unable to assess adjustments, if any, which would be required on settlement of the claim with the insurance company.
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