EQUIPMENT CONDUCTORS & CABLES LIMITED
ANNUAL REPORT 1999-2000
TO THE MEMBERS OF EQUIPMENT CONDUCTORS AND CABLES LIMITED, NEW DELHI
We have examined the attached Balance Sheet of M/s EQUIPMENT CONDUCTORS AND
CABLE LIMITED as at 30th June 2000 and also the Profit and Loss Account of
the Company for the year ended on that date annexed thereto and report
1. As required by the Manufacturing and other Companies (Auditor's Report)
Order, 1988 issued by the Company Law Board in terms of Section 227(4a) of
the Companies Act, 1956 we enclose in the Annuxure a statement on matters
specified in paragraph 4 and 5 of the said order.
2. Further to our comments in Annexure referred to in paragraph '1' above,
we state that;
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 audit.
b) In our opinion proper books of accounts as required by yaw have been
kept by the Company, so far as it appears from our examination of such
c) The Balance Sheet and Profit and Loss Account referred to in this report
are in agreement with the books of Accounts.
d) In our opinion, the Profit and Loss Account and Balance Sheet comply
with the Accounting Standards referred to in sub sec. (3C) of sec. 211 of
the Act, except as regards the following:
i) Finished Goods, Raw Materials and Stores & Spare parts have been valued
inclusive of duties and taxes, which are subsequently recoverable from the
taxing authorities, to comply with the provisions of section 145A of Income
Tax Act, 1961 which is contrary to the requirements of the Accounting
Standard-2 given by the Institute of Chartered Accountants of India.
ii) Non-Provision of Gratuity liability (Rs.8.15 Lacs) and Leave
Encashment as required by the Accounting Standard - 15 given by the
Institute of Chartered Accountants of India.
e) In our opinion and to the best of our information and according to the
explanations given to us the said accounts subject to, the valuation of
finished goods as referred to in para d.1) herein above as well as under
Note 1.B) of Notes to Accounts, as a result of which the profits of the
company are reduced by Rs.12.22 lakhs and subject to non provision of
Gratuity Liability and leave encashment as referred to in para d.ii) herein
above as welt as Note 3(a) & 3(c) of Notes to Accounts give the information
required by the Companies Act, 1956 in the manner so required and give a
true and fair view.
i) in the case of the Balance Sheet, of the state of affairs of the company
as at 30th June, 2000 and
ii) in the case of the Profit & Loss Account of the loss for the year ended
on that date.
FOR R. KHATTAR & ASSOCIATES
Date : 29.12.2000 R. Khattar
Place : New Delhi Partner.
ANNEXURE TO THE AUDITOR'S REPORT
Referred to in paragraph 1 of our report of even date:
1. The company for the current year has maintained proper records to show
full particulars of fixed assets. The fixed assets have been physically
verified by the management and no material discrepancies between book
records and the physical record were noticed.
2. None of the Fixed Assets of the company have been revalued during the
3. As per the information given to us, the stocks of Finished Goods,
Stores, Spare Parts and Raw Materials have been physically verified by the
management at the year-end.
4. The procedure of physical verification of stocks followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of the business.
5. The discrepancies noticed on verification of stocks as compared to book
records, which in our opinion were not material, have been properly dealt
with in the company's books.
6. In our opinion and on the basis of our examination the valuation of
stock is fair and proper and also in accordance with the accounting
standard laid down by the Institute of chartered Accountants of India and
is on the same basis as in the previous year subject to point 1.B) of
Schedule R, of Notes forming part of the Balance Sheet as at 30'" June
7. A sum of Rs. 80.85 lakhs is recoverable from the suppliers of Raw
Materials as referred to at point no. 12 of the Notes to the Accounts.
Apart from the above, interest free loans have been provided to the staff
members which are being recovered as stipulated.
8. In our opinion there is an adequate internal control procedure
Commensurate with the size of the company and the nature of the business
for the purchase of stores, spares and materials including components,
plant and machinery equipment and other assets and with regard to sale of
9. In our opinion and according to the information and explanations given
to us, the company has not entered into any transaction of purchase of
goods and raw 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 during the
year to Rs. 50,000 or more in respect of each party.
10. As explained to us, the company has a regular procedure for the
determination and provision of damaged or unserviceable Raw materials and
Finished goods and Store. Further provision for the loss wherever necessary
has been made in the accounts.
11. In our opinion and according to the information and explanation given
to us, the company has not accepted and deposits from public under section
58A of the Companies Act, 1975 and Deposit Rules, 1975.
12. As explained to us, the Company has no by-products. However, reasonable
records have been maintained for the sale and disposal of realisable scrap.
13. As per information and explanations given to us, the company is not
having an independent Internal Audit system. However, in our opinion the
internal controls are adequate and commensurate with the size and the
nature of the business of the company.
14. According to information and explanation given to us, maintenance of
cost records under Section 209(1)(d) of the Companies Act, 1956 have not
been prescribed for the company.
15. The Company is not regular in depositing provident fund dues with the
appropriate authorities. Such Provident Fund Dues outstanding as on 30th
June 2000 amounting to Rs.2,42,186/- has been subsequently deposited.
However in respect of Employees State Insurance dues the company is
generally regular in making deposits with the appropriate authorities.
16. According to information and explanation given to us there was no
undisputed amounts payable in respect of income tax, wealth tax, sales tax,
custom duty and excise duty which have remained outstanding as at 30th June
2000 for a period of more than six months from the date they become
17. According to information and explanation given to us and as certified
by the management, no personal expenses have been charged to the revenue
account by the company other than those payable under contractual
obligation or in accordance with generally accepted business practices have
been charged to the revenue accounts.
18. The company is not a Sick industrial company within the meaning of
clause (O) of Sub-Section 3 of the Sick Industrial Companies (Special
Provisions) Act, 1956.
FOR R.KHATTAR & ASSOCIATES
Dated : 29.12.2000 (R. Khattar)
Place : New Delhi Partner