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Uma Maheshwari Mills Ltd.

BSE: 530463 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Uma Maheshwari Mills Ltd. (UMAMAHESHMILL) - Auditors Report

Company auditors report

UMA MAHESWARI MILLS LIMITED ANNUAL REPORT 1999-2000 AUDITORS' REPORT To the Members of Uma Maheswari Mills Limited, 1. We have audited the audited Balance Sheet of M/s. UMA MAHESWARI MILLS LIMITED, SALEM as at 31st March, 2000 and the relative Profit and Loss Account for the year ended that date, both signed by us under reference to this report and report that : 1.1 In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Balance Sheet and the Profit and Loss account read with statement on Significant Accounting Policies and the Notes to the Accounts, give the information required by the Companies Act, 1956 in the manner so required: Subject to : 1) Regarding non-reconciliation/confirmation of balances of financial institutions, sundry debtors, sundry creditors, loans and advances. (Refer Note No. 11) 2) Regarding non provision of Interest on interest, penal interest and other charges if any on financial institution (Refer Note No. 12) 3) Regarding non provision of diminution ire value of investments (Refer Note No. 13) 4) Regarding non provision of bad and doubtful debts amounting to Rs.3,10,69,632/- (Refer Note No. 14) 5) Non provision of Group Gratuity premium due to Life Insurance Corporation of India for the year ended 31.3.2000 amounting to Rs.5,00,778/-. (Refer Note No. 15) 6) Regarding non provision of minimum bonus amounting to Rs.14,96,027/-. (Refer Note No. 16) 7) Regarding non provision of interest on hire purchase loan amounting to Rs.34,06,646/-.(Refer - Note No. 17) 8) Regarding non provision of Bank and financial institutions interest amounting to Rs.2,62,87,931/-. (Refer Note No.18) 9) Regarding non provision of interest on companies loan, directors loan and trade deposit amounting to Rs.77,35,147/-. (Refer Note No. 19) 10) Regarding non provision of carrying charges and interest of Rs.75,96,348/-. (Refer Note No.20) 11) Regarding non payment of PF and ESI dues amounting to Rs.95,54,795/-. (Refer Note No.22) As referred to in "Notes forming part of Accounts", and the consequent effect of deviation as disclosed in the notes, the Balance Sheet gives a true and fair view of the state of affairs as at 31.03.2000, and the Profit and Loss Account gives a true and fair view of the loss of the company for the year ended on that date. 1.2 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. 1.3 In our opinion proper books of Accounts, as required by law, have been kept by the Company so far as appears from our examination of those books. 1.4 In our opinion the Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with books of Account. 1.5 In our opinion the aforesaid Balance Sheet and Profit and Loss Account comply in all material respects with the, Accounting Standards referred to in Sub-section (3C) of section 211 of the Companies Act 1956, subject to valuation of investments as specified in Accounting Standard No. 13 and non provision of gratuity liability as specified in Accounting Standard No. 15, issued by' the Institute of Chartered Accountants of India. 2. As required by the Manufacturing and other Companies (Auditor's Report) Order, 1988 issued by the Company Law Board and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that : 2.1 The Company has maintained proper records to show full particulars including quantitative details, and situation of Fixed Assets. The Fixed Assets of the Company have been physically verified by the management during the year and no serious discrepancies between the book records and the physical inventory have been noticed. 2.2 None of the Fixed Assets have been revalued during the year. 2.3 The stock-in-trade (including raw materials) and the stock of stores and spare parts of the Company at all its locations have been physically verified by the management during the year. In our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. The discrepancies between the physical stocks and the book stocks, which have been properly dealt with in the books of account, were not material. In our opinion and on the basis of our examination, the valuation of stocks is fair and proper and in accordance with the normally accepted accounting principles and is on the same basis as in the previous year, except as stated in Note No.21 to notes attached and forming part of accounts. 2.4 Loans secured or unsecured, have been taken by the Company, the terms and conditions of which are prima facie prejudicial to the interest of the Company from Companies, firms and other parties listed in the Register maintained under section 301 and from companies under the same management as defined under section 370(1-B) of the Companies Act, 1956. 2.5 The Company has not granted any loan, secured or unsecured to companies, Firms or other parties listed in the register maintained under section 301 and to companies under the same management as defined and under section 370 (1-B) of the Companies Act, 1956. 2.6 Employees to whom loans or advances in the nature of loans have been given by the company are repaying the Principal as stipulated or as scheduled. The loans are interest free. 2.7 In our opinion, there is adequate internal control procedure commensurate with the size of the company and the nature of its business for the purchase of stores, raw materials including components, plant and machinery equipments and other assets and for the sale of goods. 2.8 In our opinion, the transactions of purchase of goods and materials and sale of goods made in pursuance of contracts or arrangement 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 except the sale of goods and machinery to its wholly owned subsidiary were made at price which were reasonable having regard to prevalent market prices for such goods or materials or the prices at which transactions for similar goods or materials were made with other parties. 2.9 As explained to us, unserviceable or damaged stores, finished goods and raw material are determined by the company. Adequate, provisions has been made in the accounts for the loss arising on the items so determined. 2.10 In our opinion and according to the information and explanations given to us, the company has been complying with the provisions of section 58A of the Companies Act, 1956 and the rules framed thereunder. 2.11 In our opinion, reasonable records have been maintained by the Company for the sale and disposal of realisable scrap/by products where applicable and significant. 2.12 In our opinion, the Company has an internal audit system commensurate with its size and nature of its business. 2.13 On the basis of the records produced, we are of the opinion that prima facie, the cost records and accounts prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 have been maintained by the Company. However, we are not required to carry, out and have not carried out any detailed examination of such accounts & records. 2.14 According to the records maintained by the Company, Provident Fund and Employees State Insurance dues have not been regularly deposited with appropriate authorities amounting to Rs.40,59,492/- and Rs.11,47,408/- respectively for the year from April 1999 to March 2000. 2.15 According to the books and records examined by us and the information and explanations given to us, there was no undisputed amounts payable in respect of Income-Tax, Wealth-Tax, Customes Duty, Excise Duty and Sales Tax which have remained outstanding as at 31st March, 2000 for a period exceeding six months from the date they become payable. 2.16 According to the information and explanations given to us and the records of the company examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligations or in accordance with the generally accepted accounting business practice. 2.17 The Company is a Sick Industrial Company, within the meaning of Section 3(1)(o) of the "Sick Industrial Companies (Special Provisions) Act,1985". 2.18 In respect of the service activities of the Company :- a) There is a reasonable system of recording receipts, issues and consumption of materials and stores commensurate with the size and nature of service activities undertaken and such system provided for a reasonable allocation of the materials and stores consumed to the relative jobs. b) There is a reasonable system of allocating man hours utilised to the relative jobs commensurate with the size and nature of the Company. For S.V.VISVANATHAN & ASSOCIATES, M.J.VIJAYARAAGHAVAN Camp : Salem, Partner, Dated: 11th December, 2000. Chartered Accountants, Auditors