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UNITED WIRE ROPES LIMITED
REPORT OF THE AUDITORS TO THE MEMBERS OF UNITED WIRE
ROPES LIMITED
We have audited the attached Balance Sheet of United Wire Ropes Limited as
at 31st March, 1998 and also the annexed Profit and Loss Account of the
Company for the year ended on that date, and report that:
1. 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.
2. In our opinion, proper books of accounts as required by the law have
been kept by the Company so far as appears from our examinations of the
books.
3. The Balance Sheet and Profit & Loss Account dealt with by the Report are
in agreement with the Books of accounts.
4. In our opinion and best of our information and according to the
explanation given to us, the said accounts, subject to Note No. 2 (i), in
respect of non provision of accrued Gratuity Liabilities of Rs. 56,57,697/-
, Note No. 2 (ii) in respect of non provision of accrued leave salary
amounting to Rs. 7,17,463/- . The resultant effect of which would have been
there would have been a Loss of Rs. 16,84,549/- instead of profit of Rs.
46,90,611/- for the year and the amount carried forward to Balance Sheet
been higher by Rs. 63,75,160/- and further to Note No. 3 (i) regarding
recoverability of the Sundry Debtors, read together with the other Notes
thereon give the information as required by the Companies Act, 1956 in the
manner required and give a true and fair view:
(a) in the case of the Balance Sheet of the state of affairs of the Company
as at 31 st March, 1998.
(b) in the case of the Profit & Loss Account of the Profit of the Company
for the year ended on that date.
5. As required by the manufacturing and other companies (Auditors Report)
order 1988, issued by the Central Government and on the basis of such
checks we considered appropriate, we further report that:
(i) The Company has maintained proper records showing quantitative details
and situations of its Fixed Assets. The Fixed Assets have been physically
verified by the Management during the year. We are informed that no
material discrepancies were noticed on such verification as compared with
the book records.
(ii) None of the Fixed Assets have been revalued during the year.
(iii) The Stock of Finished Goods, Stores, Spares Parts and Raw Material
have been physically verified by the Management at reasonable interval
during the year. We are informed that no material discrepancies were
noticed on such verification as compared with book records.
(iv) The procedure of physical verification of stocks followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business.
(v) The discrepancies noticed on such physical verification of stocks as
compared to book records were not material.
(vi) In our opinion, the valuation of these stocks is fair and proper and
in accordance with the normally accepted accounting principles, and is on
the same basis as in earlier year.
(vii) The company had obtained interest free loans from Directors. The
terms and conditions on which these loans are obtained are not prima facie
prejudicial to the interest of the company.
(viii) The company has not granted any loans to Companies Firms or other
parties as listed in the register maintained under Section 301, or to the
Companies under the same management as defined under subsection (1B) of
Section 370.
(ix) The company has not advanced any other loans during the year.
(x) In our opinion and according to the information and explanation given
to us, there are adequate internal control procedures commensurate with the
size of the Company and the nature of its business for the purpose of
stores, raw materials, plant and machinery, equipment and other assets and
for sale of goods.
(xi) According to the information and explanation given to us the Company
has not purchased any stores, raw materials or components in excess of Rs.
50,000/- in value for each type from Firms or Companies or other parties in
which the Directors are interested as listed in the Register maintained
under Section 301.
(xii) According to the information given to us, the Company has a procedure
for determination of unservicable or damaged stores and raw materials.
Provision for the loss in respect thereof has been made in accounts.
(xiii) The Company has not accepted any deposits from the Public.
(xvi) In our opinion, reasonable records have been maintained by the
Company for the sale and disposal of scrap. The Company has no by product.
(xv) The Company did not have any Internal Audit System during the year.
(xvi) The Central Government has not prescribed maintenance of cost records
under Section 209 (1) (d) of the Companies Act, 1956, for the Company's
product.
(xvii) According to the records of the company the Provident Fund dues and
E.S.I.C. dues have not been regularly deposited with the appropriate
authorities and there have been serious delay in depositing the same.
Overdue amount as at end of 31 st March, 1998 amounts to Rs. 3,30,034/- for
P.F. and Rs. 3,41,333/- for E.S.I.C.
(xviii) According to the information and explanation given to us, no
undisputed amount payable in respect of Income Tax, Customs Duty were
outstanding as at the last day of the financial year, for a period of more
than six months, from the date they became payable. As regards Sales Tax
the undisputed amount of Rs. 52,47,179/- is outstanding as at the last date
of the financial year for a period of more than six months from the date
they became payable. An amount of Rs. 5,42,289/- being undisputed Central
Excise duty is also outstanding as at last date of financial year for a
period of more than six months from the date they became payable.
(xix) During the course of our examination of Books of accounts carried out
in accordance with the generally accepted practices, we have not come
across any personal expenses other than expenses under contractual
obligations with the Company's employees and / or generally accepted
business practices, which have been charged to Revenue Account.
(xx) The company is a Sick Industrial Company within the meaning of Clause
(O) of the Sub-section 1 of Section 3 of the Sick Industrial Companies
(Special provision) Act, 1985. We are informed that the reference has been
made under Section 15 (1) of the Sick Industrial Companies (special
provision) Act 1985.
For GONDALIA & MANDIVIWALLA
Chartered Accountants
Mumbai, DILIP G. GONDALIA
Dated : 17th October, 1998. Partner
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