Wimco

The company has made an investment of Rs 9.38 crore in its associate firm, Wimco Seedlings, seemingly only to bail it out. Wimco has sold fixed assets, inventories, sundry debtors and certain loans and advances net of liabilities of its agro-farm and forestry division to Wimco Seedlings at a net book value of Rs 8.39 crore. This amount was to be received over a period of 12 months, effective from January 1995.

However, it has subscribed for 96,00,024 15% cumulative redeemable preference shares. This amount has been adjusted against the money receivable from Wimco Seedlings. Sales grew 27.51 per cent in 1995-9. However, a 48 per cent drop in other income and a substantially higher tax burden has resulted in net profit dipping 45 per cent.

Here again, if one were to take a look at the auditors' qualifications, the actual net profit figure may be lower. There has been no provision for diminishing market value of investments in subsidiary/group companies shown at cost aggregating Rs 14.01 crore and debtors and loans aggregating Rs 10.97 crore due from subsidiaries/associates.