DEWAN RUBBER INDUSTRIES LIMITED
ANNUAL REPORT 2001-2002
The Members of
DEWAN RUBBER INDUSTRIES LTD.
1. We have audited the attached Balance Sheet of DEWAN RUBBER INDUSTRIES
LTD., as at 31st March, 2002 and also the Profit and Loss Account 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 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 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.
3. As required by the Manufacturing and Other Companies (Auditor's 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 a statement on the matters specified in paragraphs 4 and 5 of the
4. Further to our comments in the Annexure referred to in paragraph (3)
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
(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 the Profit and Loss Account dealt with by this
report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet and Profit and 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;
(e) None of1the Directors of the Company have produced written
representations as to whether they have not defaulted in terms of Section
274(1)g of the Companies Act, 1956 In the absence a of these
representations, we are Unable to comment whether any of these directors is
disqualified from being appointed as a Director under clause(g) of sub-
section (1) of Section 274 of the Companies Act, 1956, and
(f) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read in conjunction with the
Schedules annexed therewith and; subject to the remarks as contained in
Note No. 3 of schedule "P" regarding Provision for obsolescence in the
value of raw materials, Note No 5 of schedule "P" regarding Non-Provision
of interest on NCDs' and others, Note No. 8, 9 & 10 regarding Non-
Provisions of doubtful recovery of loans & advances and doubtful debts,
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 affairs of the
Company as at 31st March, 2002; and
(ii) In the case of the Profit and Loss Account of the Loss of the Company
for the year ended on that date.
For Gupta Pramod & Co.,
PLACE : MEERUT (P.K. GUPTA)
DATED : 30.10.2002 PARTNER
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR AUDITORS' REPORT OF EVEN DATE ON
THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2002 OF DEWAN RUBBER INDUSTRIES
1 The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets. The Foxed
Assets of the Company have been physically verified by the management
during the year and no material discrepancies between the book records and
physical inventory have been noticed.
2. None of the Fixed Assets of the Company have been revalued during the
3. The stocks of finished goods, semi finished goods, stores, spare parts
and raw materials of the Company have been physically verified by the
management during the year/at the end of accounting period. In our opinion,
the frequency of. verification is reasonable.
4. In our opinion, the procedures of physical verification of stocks
followed by the management are reasonable and adequate in relation to the
size of the Company and nature of its business.
5. The discrepancies noticed on physical verification of stocks as compared
to book records, which in our opinion, were not material, have been
property dealt with in the books of accounts.
6. In our opinion and on the basis of our examination of the valuation of
stocks, such valuation is fair and proper in accordance with the normally
accepted accounting principles and is on the same basis as in the preceding
7. The Company has not taken any loans, secured or unsecured from
Companies, Firms or other parties listed in the register maintained under
Section 301 of the Companies Act, 1956, or from the Companies under the
same management as defined under sub-section (1B) of Section 370 of the
Companies Act, 1956.
8. According to the information and explanation given to us, the company
has granted unsecured loans to a group companies under the same Management,
and other parties as listed in the register maintained under section 301 &
370 (1B) of the Companies Act, 1956. The Company has not provided interest
on the same.
9. We are unable to comment on the repayment of principal amount or
interest if any by the companies to whom the unsecured loans have been
10. The company has given Loans and Advances in the nature of loans have
been given to employees, who are repaying the amount as stipulated and such
loans are not subject to any interest.
11. In our opinion, there is an adequate internal control procedure which
commensurate with the size of the Company and the nature of its business
for the purchase of stores, raw materials including component, plant and
machinery, equipment and other assets and for the sale of goods.
12. The company has not purchased goods and materials and sold goods,
materials and services aggregating Rs.50,000/- or more in value from / to
any of the parties listed in the register maintained under Section 301 of
the Companies Act, 1956.
13. As explained to us, the Company has a regular procedure for the
determination of unservicable or damaged stores, raw materials and finished
goods and in our opinion adequate provisions has been made in the accounts
for the loss arising on the items so determined.
14. The Company has not adequately complied with the provisions of Section
58-A of the Company Act, 1956 and Companies (acceptance of deposits) Rules,
1975 with regard to the repayment of principal and interest on deposit
accepted from the public.
15. In our opinion, reasonable records have been maintained by the Company
for the sale and disposal of realisable scrap. The Company has no by-
16. In our opinion, the Company has an internal audit system which
commensurate with its size and the nature of its business.
17. The Company is required to maintain cost records under Section 209
(1)(d) of the Companies Act, 1956 and as explained to us such records have
been maintained by the Company. We have, however, not made a detailed
examination of the records.
18. The company has not deposited Provident Fund & Employees State
Insurance dues with the appropriate authorities regularly. Provident Fund &
Employees State Insurance relating to the period from March, 2000 to March,
2002 aggregating to Rs.41.93 lakhs had not been deposited with the
appropriate authorities till 31.03.2002.
19. In our opinion and according to information and explanation given to
us, there are no undisputed amount payable in respect of income tax, wealth
tax, sales tax, customs duty and excise duty as at 31st March, 2002 which
are outstanding for a period of more than six months from the date these
20. During the course of our examination of the books of account carried
out in accordance with the generally accepted auditing practices, we have
not come across of any personal expenses, other than expenses under
contractual obligations and/or generally accepted business practices which
have been charged to Profit and Loss Account nor we have been informed of
such case by the management.
21. The Company is a Sick Industrial Company within the meaning of clause
(0) of Sub Section (1) of Section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1985, and reference under section 15(1) of the
Act has been made by the company to the Board for Industrial and Financial
For GUPTA PRAMOD & CO.,
PLACE : MEERUT (P.K. GUPTA)
DATED : 30.10.2002 PARTNER