DATAR SWITCHGEAR LIMITED
ANNUAL REPORT 2001-2002
I have audited the attached Balance Sheet of Datar Switchgear Limited, as
on 31st March 2002 and also the profit & Loss Account for the year ended on
that date, annexed thereto. These financial Statements are the
responsibility of the Company's Management. My responsibility is to express
an opinion on these Financial Statements based on my audit.
I conducted my audit in accordance with the Auditing Standards generally
accepted in India. Those Standards require that I 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 estimates made by the management, as well as
evaluating the overall financial statements presentation, i believe that my
audit provides a reasonable basis for my opinion.
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, I enclose in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of the
Further to my comments in the Annexure referred to above, I report that;
(i) I have obtained all the information and explanations which to the best
of my knowledge and belief were necessary for the purpose of my audit.
(ii) In my opinion, proper books of accounts as required by law have been
kept by the company so far as it appears from my examination of the books.
(iii) The balance sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of accounts.
(iv) In my opinion the Balance Sheet and the Profit & Loss Account, dealt
with by this report comply with 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 as
on 31st March, 2002 and taken on record by the Board of Directors, I report
that none of the directors is disqualified as on 31st March, 2002 from
being appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956;
In my opinion and to the best of my information and according to the
explanations given to me, and subject to the comments and qualification
made as under:-
a) As on 31.03.2002, the company has accumulated balance of Rs. 123.37
crores under the head "LTLMS" project capitalised" classified under fixed
assets schedule. The said project / contract with Maharashtra state
Electricity Board is in dispute and subjudice and the profit / loss if any
arising on these projects has not been considered by the company for its
profit & Loss Account.
b) Company has failed to pay dividend to some shareholders for the year
1996-97 and 1997-98 Rs. 21.79 lacs and Rs. 25.43 lacs respectively. However
this does not affect the profitability of the company.
c) Company has failed to pay interest on OFCD of IFCI Ltd. and interest to
Bankers / Financial Institutions of Rs. 40.01 Crores during the financial
year 2001-2002. However, sufficient provision for the above interest has
been made in the profitability of the company. The Company has also not
provided for Dividend during the year on preference Shares, otherwise loss
would have been higher by Rs. 22 lacs.
Subject to above said accounts read together with the significant
accounting policies and notes to accounts as per schedule "O" give the
information required and give a true and fair view, in conformity with the
accounting principles generally accepted in India:
a) In the case of Balance Sheet of the state of affairs of the company as
at 31st March 2002; and
b) In the case of the Profit & Loss Account of the Loss for the year ended
on that date.
Place : Nasik S.S. Dharde
Date : 29-08-2002 Chartered Accountant
Membership No. 35954
ANNEXURE TO THE AUDITORS REPORT ON THE ACCOUNTS OF SWITCHGEAR LIMITED FOR
THE YEAR ENDED MARCH 31ST 2002 REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF
As required by the Manufacturing and other Companies (Auditors Report)
order 1988 issued by the Central Government in terms of Section 227 (4A) of
the Companies Act, 1956 and to the best of my knowledge and belief and on
the basis of such checks as considered appropriate I state as under;
1) The company is maintaining proper records to show full particulars
including quantitative details and situation of fixed assets. I am informed
that the Company has formulated a programme of physical verification of all
the fixed assets, over a period of one year, which in my opinion is
reasonable Accordingly the physical verification of the fixed assets has
been carried out by the management during the year and no material
discrepancies were noticed on such verification.
2. None of the Fixed Assets have been revalued during the year.
3) Physical verification have been conducted twice during the year by the
Management in respect of Finished Goods, Raw Materials and Stores and
Spares. No serious discrepancies were reported on such verification, except
while checking the stock physically out of total stock, Raw material worth
Rs. 39,56,954/- and Finished Goods of Rs. 19,58,700/- were found totally
unusable / unsaleable due to expiry of shelf life. After considering scrap
value of 5% the Balance amount is written off from the stock as on
31.03.2002 totaling to Rs. 56,19,871/-. This is not attributable to the
current years consumption I have totally relied on the management for
cirtieria of usable shelf life.
4) In my examination of stocks the valuation of stock of finished goods,
raw materials stores and spares has been fair and proper in accordance with
the normally accepted accounting principles and is on the same basis as in
the previous year.
5)In my opinion the internal control procedure followed by the Management
is adequate and commensurate with size of the company and the nature of its
business with regards of the purchase of stores, raw materials including
components. Plant and Machinery Equipment and other assets and for the sale
of the goods.
6) There are unserviceable or damaged stocks which are properly dealt with
in the books of accounts as referred in clause (3)
7. The company has taken loan/(s) secured or unsecured from companies,
firms or other parties listed in the register maintained under, Section 301
of the Companies Act, 1956 and/or from the Companies under the same
Management as defined under sub-section (1B) of Section 370 of the
Companies therefore, prima facie the terms and conditions are not
prejudicial to the interest of the Company.
8. The company has not granted loans and advances secured or unsecured to
companies Firms or other parties in the register maintained under Section
301 and/or to the Companies under the same Management as defined under sub-
section (1B) of Section 370 of the Companies Act, 1956.
9. The Company has given advances in the nature of temporary loans. These
short term loans are in the nature of regular advances.
10. In my opinion, according to the information and explanations given to
me and having regard to the explanations that certain items purchased are
of a special nature for which alternative quotations are not available, the
transactions of purchase of goods 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 to Rs. 50,000/- or more per annum in respect of each
party have been made at prices for such goods, materials or services or the
prices at which transactions for similar or services or the prices at which
transactions for similar goods or services have been made with other
11. In my opinion the Companies present internal audit system is
commensurate with its size and nature of business. However for Balance
transactions, internal audit system needs to be strengthened.
12. The company has not accepted any deposits from public.
13. There are no realizable by-products however scrap has been sold during
the year and the receipts are properly accounted for.
14. The central government has not prescribed maintained of cost accounting
records under section 209(i)(d) of the Companies, act, 1956 for any the
products of the Company.
15. The Company has not been regular during the year in depositing
provided fund and Employees State insurance dues with the appropriate
authorities wherever applicable.
16. Following undisputed amounts were payable in respect of Income Tax,
Wealth Tax, Sales Tax, Custom Tax, Custom duty and Excise Duty as at the
last date of financial year concerned. Income Tax amount of Rs. 11,73,569/-
Sales Tax Rs. 33,32,005/- Deferred Sales Tax Rs. 34,38,416/- Professional
Tax Rs. 9,32,171 which were unpaid as on the date of Balance Sheet.
The Income Tax Assessment Demand of Rs. 10,18,75,986/- for Demand of Rs.
17,92,224/- for the financial year 1998-99 on the last date of the
financial year concerned are disputed by the Company and the appeals have
been filed with the respective authorities.
17. According to the information and explanations given to me, and the
records of the Company examined by me, no personal expenses have been
charged to revenue account other than those payable under contractual
obligations or in accordance with the generally accepted business
18. As per the meaning of the clause (O) of sub-section (1) of the section
3 of the sick Industrial Companies (Special provision) Act, 1985, the
company is a sick Industrial company. The company has not referred to the
Honorable Register of Board for Industrial and Financial Reconstruction
(BIFR) and the same is registered under. case number 260/2001 w.e.f. 03-07-
19. In respect of service trading activities there are no damaged goods in
the procession of the company as at March 31st 2002.
20. The SSI undertakings to whom amount outstanding for more than 30 days:-
The management has not supplied the required information regarding the SSI
Place : Nasik Chartered Accountant
Date : 20-08-02 Membership No. 35954