DOWELL'S ELEKTRO WERKE LIMITED
ANNUAL REPORT 1999-2000
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
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
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
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
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
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
MUMBAI: 4TH September, 2000.