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Dowells Elektro Werke Ltd.

BSE: 532157 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Dowells Elektro Werke Ltd. (DOWELLSELEKTRO) - Auditors Report

Company auditors report

DOWELL'S ELEKTRO WERKE LIMITED ANNUAL REPORT 1999-2000 AUDITORS' REPORT We have audited the Balance Sheet of DOWELL'S ELEKTRO WERKE LIMITED, as at 31st March 2000 and also the Profit & Loss Account for the year ended on that date and report that: A) We have obtained all the explanations and informations which to the best of our knowledge and belief were necessary for the purpose of our audit. B) In our opinion, proper books of accounts, as required by law, have been kept by the Company as far as it appears from our examination of the books. C) The Balance Sheet & Profit & Loss Account, dealt with by the report, are in agreement with books of accounts. D) In our opinion, the Balance Sheet and Profit & Loss Account comply with the Accounting Standard referred to in section 211 (3C) of the Companies Act, 1956, to the extent applicable subject to our remarks in "E'' below. E) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with & subject to notes therein, more particularly: i) Note No. 09(a) regarding non provision of interest of Rs.975000/- on unsecured loans from friends & relatives, ii) Note No. 10 regarding non provision of interest of Rs. 41080 upto 30.11.99 by E.S.I.C. department vide their Notice of Demand dt. 21.01.2000 & also non provision of further interest upto 31.03.2000, iii) Note No. 14 (b) regarding non provision of Sales Tax of Rs.1757352.21 due to i), ii) and iii) above the loss for the year, accumulated loss as on 31st March, 2000 and total liabilities as on 31st March, 2000 have been understated to the extent of Rs. 2773432.21 and iv) Note No. 11 regarding non provision of interest in respect of delayed payment made to suppliers, v) Note No. 13 regarding the recall of entire working capital by Canara Bank and vi) Note No.15 regarding advances and deposits to Companies and Firms in which Directors are interested as Directors/Partners/Proprietor & our comment in clause F(6), give the information required by the Companies Act,1956 in the manner so required and give a true & fair view : a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2000. and b) In the case of Profit and Loss Account of the LOSS of the Company for the year ended on that date. F) As required by the Manufacturing and other Companies(Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of books and records of the Company as we considered appropriate and according to informations and explanations given to us during the course of our audit, we further report as under on such matter of said order as are in our opinion applicable to the Company for the period under review. 1. The Company has maintained proper records to show full particulars including quantitative details and situation of fixed assets. The management has carried out the physical verification of all fixed assets during the period under audit and no material discrepancies were noticed between book records and physical inventory. 2. None of the fixed assets has been revalued during the year. 3. The Stock of Finished Goods, Raw Materials, Work in Progress, Stores and Spare Parts have been physically verified by the management during the year at reasonable intervals. The discrepancies noticed on such verification between the physical stock and book records were not material and the same have been properly dealt with in the books of accounts. 4. The procedure of physical verification of stock followed by the management are in our opinion reasonable and adequate in relation to the size of the company and the nature of business. 5. In our opinion on the basis of our examination of the Stock Records, the valuation of stock is fair and proper and subject to the Note No. 12 regarding valuation of stocks the same is in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year. 6. The company has granted loans to firms/parties listed in the Register maintained under section 301 of the Companies Act, 1956. The said loans are interest free & its repayments is not stipulated for which no provision is made in Accounts. 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 Companies under the same management as defined under section 370 (1B) of the Companies Act, 1956. 8. In our opinion and according to the information and explanations given to us there are adequate internal procedure commensurate with the size of the company and nature of its business with regard to purchase of stores, raw materials including components and other assets and for sale of goods. 9. According to the information and explanation given to us stores, spares, raw materials, components or services exceeding Rs. 50000/- in value for each type therefore were purchased during the year from Firms or Companies or other parties in which Directors are interested as listed in the register maintained under section 301 of the Companies Act, 1956. However, the said transactions, in our opinion as per explanations given to us, have been made at prevailing market prices. 10. As explained to us the company has regular procedure for determination of unserviceable or damaged stores, finished goods and raw materials. Provision is not required for loss arising on unserviceable stores of raw materials as there are no unserviceable stores, finished goods or raw materials during the year under audit. 11. In our opinion, the Company has not complied with the directives issued by the Reserve Bank Of India and the provision of Section 58A of the Companies Act, 1956 with regard to deposits accepted from public due to non repayment of public fixed deposits of Rs.65 Lacs and interest of Rs.9.75 Lacs on maturity. 12. In our opinion reasonable records have been maintained by the company for the sale of disposal or reprocess of scrap. As informed to us the company has no by-products 13. The Central Government has not prescribed maintenance of cost records under section 209 (I) (d) of the Companies Act, 1956 for any of he company's products. 14. According to the information and explanation given to us there has been regular delay in payment of Provident Fund and ESIC dues to the appropriate authorities. 15. According to the information and explanation given to us the following undisputed Statutory Dues were outstanding for a period of more than six months as on 31st March, 2000. from the respective dates they became payable. a) Sales Tax : 6575199.95 b) Provident Fund : 39301.00 c) T.D.S. : 928253.00 d) E.S.I.C. : 105771.00 f) Professional Tax : 24115.00 There were no other undisputed amounts payable in respect Custom Duty and Excise Duty were outstanding as on 31st March 2000 for a period of more than six months from the date they became payable. 16. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to the revenue account other than those payable under contractual obligations. 17. In our opinion, the company is a potential sick industrial company within the meaning of clause (o) of section (1) of sections 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 18. The existing internal audit system of the Company needs to be strengthened and its scope enhanced commensurate with its size and nature of its business. FOR ARVIND RAMAN & VIJAY CHARTERED ACCOUNTANTS A.B.PATEL (PARTNER) MUMBAI: 4TH September, 2000.