GANESH FOUNDRY & CASTINGS LIMITED
TO THE MEMBERS OF GANESH FOUNDRY AND CASTINGS LIMITED
1. We report that we have audited the Balance Sheet of GANESH FOUNDRY AND
CASTINGS LIMITED AS AT 31ST MARCH, 1998 and the relative Profit and Loss
Account for the year ended 31st March, 1998 and both of which we have
signed under reference to this report.
2. We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for our Audit. In our opinion,
proper books of accounts have been kept as required by law so far as
appears from our examination of the books and the above mentioned accounts
are in agreement therewith.
3. Company has not provided for the bill of additional energy charges
during financial year 1990 to 1995 amounting to Rs. 39.41 crores, raised by
Bihar State Electricity Board, Patna during 1995-96. Company has not
acknowledged liability in this regard. Under interim award given by the
Arbitrator, power supply had been restored on 01.01.1998 on depositing a
sum of Rs. 23.09 lacs in terms of the interim award of Arbitrators in the
dispute. Final arbitration award is awaited. In our opinion, it has greatly
affected the financial position of the company.
4. In our opinion and to the best of our information and according to
explanations given to us, and subJect to comments made herein before and
after, the Balance Sheet and the Profit and Loss Account read with the
significant accounting Policies in Schedule 20 and Notes on Accounts in
Schedule 19 attached thereto give in the prescribed manner, the information
required by the Companies Act, 1956 and also give respectively a true and
fair view of the state of the company's affairs as at 31st March, 1998 and
its loss for the year ended on that date.
5. Company has provided depreciation on Plant and Machinery on Pro rata
basis for 3 months only on straight line method on the ground that plant
had remained closed for 9 months, resulting in reduction of deficit by Rs.
13.75 lacs. Less depreciation provided on assets other than Plant &
Machinery during Last Year has also been provided and added with current
year depreciation, Due to this deficit of the year has gone up by Rs. 1.96
6. As required by the Manufacturing and Other Companies (Auditor's Report)
Order, 1988 issued by the Central Government in terms of Section 227(4A) of
the Companies Act, 1956 and according to the information and explanations
given to us, we further report that
i. (a) The Company has maintained proper record to show particulars
including quantitative details of its fixed assets.
(b) We have been informed that the fixed assets of the Company were not
physically verified during the year by the management and therefore
detection of any discrepancies, if any, were not possible during the year.
ii. The fixed assets of the Company have not been revalued during the year.
iii. As explained to us, stocks of finished goods, stores, spare parts,
consumable and raw materials of the Company at all its locations have been
physically verified by the management at the end of the year.
iv. As per information given to us, the procedure of physical verification
of stocks followed by the management are, in our opinion, reasonable and
adequate in relation to the size of the Company and nature of its business.
v. There were no material discrepancies between the physical stocks and the
books. Minor differences, if any, have been properly dealt with in the
vi. On the basis of our examination of stock records, we are of the opinion
that the valuation of stocks is fair and proper in accordance with the
normally accepted accounting principles. As per practice followed
consistently, excise duty payable on unsold finished goods lying in factory
is not included in valuation of such goods. Company had kept excise
component of raw materials purchase cost in excise duty paid account and
had been claiming set off against finished goods released. The valuation of
Raw Materials have been made without taking proportionate Excise component
in to it. The valuation of stock is on the same basis as in the preceding
vii. 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. There is no Company under the same
management as a Company as defined under Subsection (1 B) of Section 370 of
the Companies Act,1956.
viii. The Company has not granted loans, secured or unsecured, to
Companies, firms or other parties listed in the register maintained under
Section 301 of the Companies Act,1956 and the Company does not have any
Company under the same management as defined under Section 370(1-B) of the
ix. The Company has not granted any loans, or advances in the Nature of
loans to any party, as such no comment is needed in this regard.
x. In our opinion and according to the information and explanations given
to us, there is an adequate internal control procedure commensurate with
the size of the Company and the nature of its business, for purchases of
stores, raw materials including components, plant and machinery, equipment
and similar assets and for the sale of goods.
xi. According to the information and explanations given to us, purchase of
goods, materials and services 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 value in respect of each party
have been made at prices which are reasonable having regard to the
prevailing market prices for such goods, materials and services or the
prices at which the transactions for similar goods, materials or services
have been made with other parties.
xii. As explained to us, the company has formulated a system of determining
unserviceable or damaged stores, raw materials and finished goods on the
basis of technical evaluation and on that basis during the year proper
accounting treatment has been given to such stocks wherever applicable.
xiii. In our opinion and according to the information and explanations
submitted to us, the Company has not accepted loans which are in the nature
of deposit in contravention of the provisions of the Companies (Acceptance
of Deposit) Rules,1975.
xiv, As explained to us the Company has maintained reasonable records for
the sale and disposal of realisable by-products and scrap.
xv. The Company has implemented internal audit system, which commensurate
with its size and nature of business.
xvi. The Central Government has not prescribed the maintenance of cost
records by the Company under Section 209(1)(d) of the Companies Act,1956,
for any of its products.
xvii. In the opinion of the Management provisions of the ESI laws are not
applicable to the Company during the accounting year, as such no deduction
in this regard has been made from salaries, etc. paid to employees/job
xviii. At the last day of the financial year there was no amount
outstanding in respect of undisputed Income Tax, Wealth Tax, Sales Tax,
Customs duty and Excise duty which were due for more than six months from
the date they became payable.
xix. During the course of our examination of the books of account carried
out in accordance with generally accepted auditing practices, we have
neither come across any personal expenses which have been charged to the
Profit & Loss Account, nor we have been informed of any such case by the
xx. The Company is not a sick industrial company within the meaning of
clause (o) of Section 3(1) of the Sick Industrial Companies (Special
For A. K. JALAN & ASSOCIATES
PLACE: MUZAFFARPUR- 1 (A. K. JALAN)
DATED: 31.10.1998 PARTNER