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Gujarat Telephone Cables Ltd.

BSE: 500175 Sector: Engineering
NSE: GUJRATTELE ISIN Code: INE261B01018
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Gujarat Telephone Cables Ltd. (GUJRATTELE) - Auditors Report

Company auditors report

GUJARAT TELEPHONE CABLES LIMITED ANNUAL REPORT 2002-2003 AUDITORS' REPORT TO THE MEMBERS OF GUJARAT TELEPHONE CABLES LIMITED We have audited the attached Balance Sheet, of Gujarat Telephone Cables Ltd. as at 30th June, 2003 and also the Profit & Loss Account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date. 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. 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. We report as follows : 1. 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, we enclose in the Annexure a statement of the matters specified in the paragraphs 4 & 5 in the said order. 2. Further to our comments in the Annexure referred to in paragraph 1 above we report that: a) Wa 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 the law have been kept by the Company so far as it appears from our examination of those books. c) The Balance Sheet and the Profit & Loss Account dealt with by this report are in agreement with the books of accounts; d) In our opinion, the attached Balance Sheet and Profit & Loss Account comply with the mandatory accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable except. non provision of Gratuity, Super Annuation Fund and Leave Encashment as mentioned in Note No.4 of Schedule 16 which is contrary to the practice recommended in Accounting Standard AS-15 "Accounting for Retirement Benefits In the Financial Statement of Employers", the amount of which is not ascertained and therefore the effect of this on loss for the year and liabilities could not be quantified. e) On the basis of written representations received from the directors, as on 30th June,2003, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June, 2003 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. I) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts 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 subject to the remarks mentioned in clauses 1 to 4 below: (1) non-disclosure of dues to SSI Units and ancillary undertakings as mentioned in note No: 13 in Schedule 16. (2) as mentioned in note No.3 in Schedule 16, stock of inventories valued of Rs.7539.90 Lacs is written off for the reasons stated in the said note. (a) in the case of Balance Sheet, of the state of affairs of the Company as an 30th June, 2003; and (b) in the case of Profit & Loss Account, of the loss for the year ended on that date. (c) in the case of cash flaw statement, of the cash flows for the year ended on that date. For Nitin K. Shah & Co. Chartered Accountants Nitin K.Shah Proprietor Address : 36,38, 3rd Floor, Empire Towers, Near Associated Petrol Pump, Nr. C.G.Road, Ahmedabad-380006. Date : 30th December,2003 ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph (1) of our Report of even date on accounts of Gujarat Telephone Cables Ltd. for year ended 30th June, 2003) (i) The fixed Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. However the fixed assets have been physically verified by the management at the end of the year. No discrepancies were noticed on such verification. (ii) The fixed assets of the Company have not been revealed during the year. (iii) The stock of finished goods, stores, spareparts and raw materials have been physically verified by the management at reasonable intervals. (iv) In our opinion, the procedures of physical verification of the stocks followed by the management were found inadequate in relation to the size of the Company and nature of its business since the stock is not verified at definite intervals. (v) According to the information given to us, no material discrepancies were noticed on physical verification of stocks of material in process and the same have been properly adjusted as mentioned in note 3 in schedule 16 as compared to book records. (vi) In our opinion and on the basis of our examination, the valuation of stocks is fair and proper in accordance with the normally accepted accounting principles. The basis of valuation of stocks is same as in the preceding year. (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 and or from Companies under the same management as defined under Section 370 (1B) of the Companies Act, 1956. (viii) The Company has granted any loans, secured or unsecured, to companies, firm or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and / or Companies under the same management as defined under Section 370 (1B) of the Companies Act, 1956. (ix) Parties to whom loans and advances in the nature of loans have been given are repaying the principal amounts as stipulated, and are also regular in payment of interest, where applicable. (x) In our opinion, there exist internal control procedures commensurate with the size of the Company however the same requires to be improved with regard to consumption of the Raw materials & stores on account of discrepancies noticed & given effect too. However with regard to purchase of stores, raw materials including components, plant and machinery equipments and other assets and for the sale of goods. (xi) The transactions of purchase of goods and materials made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 as aggregating during the year to Rs 50,000 (Rupees Fifty thousand only) or more in respect of each party, have been made at prices which are reasonable having regard to prevailing market prices for such goods and materials or services where such market prices are available with the company or the prices at which transaction for similar goods, materials or services have been made with other parties. (xii) According to information and explanations given to us, there are no significant unserviceable or damaged items of stores, raw materials and finished goods in the Company as at the end of the year. (xiii) The Company has not accepted any deposits covered U/s 58 A of the Companies Act, 1956 (xiv) In our opinion, reasonable records have been maintained by the Company for the sale and disposal of realizable scraps, Mich are inadequate & incomplete. The Company has no by-products. (xv) In our opinion, the Company has an adequate internal audit system commensurate with its size and nature of its business (xvi) We could not reviewed the books of account if any maintained by the company pursuant to the rules made by the Central Govt, for the maintenance of cost records Under Section 209(1)(d) of the Companies Act, 1956 it respect of cables and therefore we could not opined thereon. (xvii) The Company has regularly deposited Provident Fund during the year with appropriate authorities. The Company is not required to make the deposit under the Employees State Insurance Act,. (xviii) According to the information and explanations given to us on the basis of reports examined by us, no personal expenses of the employees or directors have been charged to revenue account, other than those payable under contractual obligations or in accordance wits generally accepted business practice. (xix) There are no undisputed amounts payable it respect of Income Tax, Wealth Tax Sales Tax. Customs Duty and Excise Duty as at the last day of the financial year, which are outstanding for a period of more than six months from the date they became payable. (xx) The Company is a sick industrial company as defined under the Sick Industrial Companies (Special Provisions) Act, 1985. For Nitin K. Shah & Co. Chartered Accountants Nitin K.Shah Date : 30th December, 2003 Proprietor