UMA MAHESWARI MILLS LIMITED
ANNUAL REPORT 1999-2000
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
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
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
2.17 The Company is a Sick Industrial Company, within the meaning of
Section 3(1)(o) of the "Sick Industrial Companies (Special Provisions)
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,
Camp : Salem, Partner,
Dated: 11th December, 2000. Chartered Accountants, Auditors