USHA MICROPROCESS CONTROLS LIMITED
ANNUAL REPORT 2006-2007
USHA MICROPROCESS CONTROL LIMITED
1. We have audited the attached Balance Sheet of Usha Micro process Control
Limited as at 31st March, 2007 and the Profit and Loss Account and Cash
flow statement for the year ended 31st March, 2007, ended on that date
annexed thereto. 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.
2. We have 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 overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003(Order),
issued by the Central Government under 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 the information and
explanations given to us during the course of audit, we report in the
annexure a statement on the matters specified in paragraphs 4 and 5 of the
said Order, to the extent applicable to the company.
4. We drew attention re Note in schedule ' I ' on the Notes to the Accounts
in the financial statements that these accounts have been drawn on the
assumption that company will continue as a going concern. The company
incurred net loss of Its. 3,61,796/- during the year. The current assets
of the company exceeds its current liabilities by Rs 46,942/-and its Total
liabilities exceed total assets by Rs 19,71,54,743/-. Further, company has
been unable to renegotiate its borrowings from ins financial institutions
and bankers. Without such financial support, them is substantial doubt that
it will be able to continue as a going concern. Consequently, adjustments
may be required to the recorded assets amounts and classification of
liabilities .The financial statements (and notes thereto) do not disclose
the fact and we drew your attention on Notes on Accounts Schedule ' 1
'point no.3. The company become a sick industrial unit in terms of
provisions of the Sick Industrial Companies (Special Provision) Act, 1985
in the year1989. The Board for Industrial and Finance Reconstruction (BIFR)
ordered that the company to be wound up order dated 9th April 1996 which
was held up by BIFR vide dated 28e October, 1996. The Company went in
appeal against the orders before the Delhi High Court who has stay the
above orders of winding.
5. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) In our opinion, proper books of account as required bylaw have been
kept by the company so far as appears from our examination of those books.
(b) The Balance Sheet and the Profit and Loss Account dealt with by this
report are in agreement with the books of account;
(c) In our opinion, the Balance Sheet and the Profit and Loss Account
comply with the Accounting Standards referred to in Section 211(3C) of the
Companies Act 1956, to the extent applicable .
(d) All the Director's of the company, have not produced written
representation as to whether the company in which they are Director's as on
31 March,2007 had not defaulted in terms of section 274 (i)(g) of the
companies Act, 1956. In the absence of the representation we are unable to
comment whether the Directors are disqualified from being appointed as
Director under clause (g) of subsection (i) of section 274 of the Companies
(e)(i) Non confirmation and non reconciliation of secured loans ,therefore,
we are not able to comment over fire consequential impact thereof on
financial statements,if any;
(ii) Non Confirmation and non reconciliation of bank balances of
Rs.49,037/- and their consequential impact on the financial statements, if
any could not be ascertained;
(iii) Non-provision of interest on debentures of Rs.45,90,000/-
(27,54,00,000/-) resulting under statement of loss by Rs.45,90,000/-
(2,754,00,000/-) understatement of liabilities by the same amount.
(iv) Non-provision of interest on Bank loan of Bank of India and Canon Bank
amounting to Rs. 24,31,572/- (RS.1,21,57,852/-) as calculated on loan of
Rs.1,87,04,400/- @ 13% p.a f&4 resulting understatement of loss and under
statement of liabilities by the same amount.
(v) Loan of Its. 1058.77 lacs as secured against the assets of the company,
the value of which is not sufficient, to the extent of short fall in the
value of assets and non registration of charge, these loans are unsecured.
(vi) Transfer of flatted area of 8889.98 sq in the name of the company
which is under dispute as explain in the notes no.2 of Schedule 'D' Fixed
Assets. Now amount debited to the party's.
(vii) Statutory Records required to be maintained under the companies
Act, 1956, not maintained property.
(viii) During the year the company has sold its investment.
In our opinion and to the best of our information and according to
explanations given to us, because of the effects of the matters discussed
in the preceding paragraphs, the financial statements do not give a true
and fair view in conformity with accounting principles generally accepted
In the case of Balance Sheet, of the state of affairs of the company as at
31st March, 2007;
In the case of Profit and Loss Account, of the loss of the company for year
ended on that date; and
In the Cash flow statement, of the cash flows of the company for the years
ended on that date.
For RAKESH CHAND AGGARWAL & ASSOCIATES
(Rakesh Chand Aggarwal)
Place: New Delhi
Date : 17.08.2007
ANNEXURE TO THE AUDITORS' REPORT
REFERRED TO IN PARAGRAPH 3 OF AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS
OF USHA MICROPROCESS CONTROL LIMITED ON THE ACCOUNTS FOR YEAR ENDED ON 31st
(i)(a) The Company has not maintained proper records to show full
particulate, Including quantitative details and situation of Its fixed
(b) The physical verification of fixed assets has not been carried out by
tire management during the year, as such, discrepancies between the book
records and physical assets hew not been ascertained.
(c) There was no disposal of fixed assets during the year, though Going
Concern Assumption has been dealt with in Auditors' Report paragraph 4(a)
(ii) The company does not have any opening stock, purchase I sold of Raw
Material, Inventory of finished goods,Hence the Pare for maintains of
inventory records, in our opinion does not arise.
(iii) The Company has not taken or granted any loans ,secured or unsecured
to or from any company, firm or other party falling within the purview of
Section 301 of the Companies Act.
(iv) Internal control procedures does not required as there is no purchase
and sale of inventory , raw materials, plant 6 machinery and other assets
and the company has already gone for BIRF in the year 1996, hence the
clause is not applicable.
(v) Based on the audit procedures applied by us and according to the
information and explanation given to us, we are of the opinion that there
is no transaction during the year that need to be entered into the register
maintained under section 301 of the Companies Act, 1958. Therefore, the sub
Clause(b) is not applicable.
(vi) The Company has not accepted any deposits from the public during the
year; therefore, the provisions of section 58A of the Companies Act, 1958
are not applicable.
(vii) The company has not an internal audit system because of no business
activity during the year.
(viii) Maintenance of cost records has not been prescribed by the Central
Government under section 209(1)(d) of the Companies Act, 1956 in respect of
Products manufactured by the company.
(ix) According to the records of the company, the company is regular in
depositing undisputed statutory dues including income tax, provident fund,
investors' education and protection fund and any other statutory dues.
According to the information and explanations given to us, no undisputed
amount is payable in respect of above for a period of more than six months
from the date they become payable as details given balm:-
1) Income Tax Rs.1,33,51,000/- *
2) Excise Duty Rs.25,83,000/- *
3) Sale Tax: 1.Faridabad Rs.20,33,000/- *
2. Delhi Rs.35,000/- *
* On the basis of information provided to us, company has filed an appeal
against Ms order but no information or document with regard to Forum where
the case has bean filed by the company, has been produced to us.
(x) The company has accumulated losses of more than fifty percent of its
net worth as at the end of the financial year 31' March,2007 and the
company has incurred cash losses in the current financial year Rs.362796/-
and in immediately preceding financial year Re 36,490% respectively. In
arriving of Accumulated losses and net worth as above, we have considered
the qualification, which are quantificable in the audit report of the year
to which these losses pertain.
(xi) The company has defaulted in repayment of dues to Banks. Following are
the particulars of the amount and period of default.
Name of the
Institutions/Bank Amount of Default Period of Default
1) Canara Bank Principal-Rs. 6217400/-* From 1st April 2000 onwards
Interest -Rs 1190315/-* From 1st April 2001 onwards
2) Bank of India Principal-Rs.12487000/-* From 1st April 2000 onwards
Interest -Rs. 2390623/-* From 1st April 2001 onwards
* Non provision of Interest @13% Flat on principal amount since April 2001
(xii) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the company is not a chit fund or a nidhi or mutual
benefit fund or society, therefore, the provision of clause 4(xiii) in the
Order is not applicable to the company.
(xiv) In our opinion, the company is not dealing or trading in shares,
securities, debenture and other investment, therefore provision of clause
4(xiv) of the Order is not applicable to the company.
(xv) As per explanation given by the management,the company has not given
any guarantee for loans taken by others from Bank or Financial Institutions
hence clause4 (xv) of the Order is not applicable
(xvi) As per record the company has obtain secured loan of Rs.10.58 crore
including interest by way of issue of debenture Rs.3.06 crore principal and
accrued interest of Rs.5.30 store and from Bank Rs.1,87 crone principal and
accrued interest of Rs.35.80 lacs upto 2001. Further the term and condition
has not known to us, hence we are unable to comments for the same.
(xvii) According to the information and explanation given to us and on an
overall examination of the balance sheet of the company, we report that no
funds raised on long tern basis have been used for short term purposes and
(xviii) The company has not made preferential allotment of shares to
parties and companies covered in the registered maintained under section
301 of the Companies Act, 1956 during the year.
xix) The Company has issued debentures in the writer years against secures
of company assets. The value of assets is not sufficient and non
registration of charge these are unsecured.
(xx) No money has been raised by the company by public issue during the
year and therefore, the provision of clause 4(xx) of the Order is not
applicable to the company.
(xxi) During the course of our examination of the books of account carried
out in accordance with the generally accepted auditing practices in India,
and according to the information and explanations given to us, we have
neither come across any instance of fraud on or by the company, noticed or
reported during the year, nor have we been informed of such case by the
For RAKESH CHAND AGGARWAL & ASSOCIATES
Date : 17.08.2007