ANNUAL REPORT 1998-99
WESTERN ORISSA SUGAR LIMITED
To the Members of
Western Orissa Sugar Limited
I. We have examined the attached Balance sheet of WESTERN ORISSA SUGAR
LIMITED, as at 31st March,1999 and the annexed Profit and Loss Account for
the year ended on that which are in agreement with the books of account.
II. In our opinion the Profit and Loss Account and Balance sheet comply
with the requirements of the Accounting Standard referred to in sub section
(3C) of section 211 of the Companies Act-1956 except to the extent
indicated in VI (d) below.
III. As required by the Manufacturing and Other Companies (Auditors'
Report) Order, 1988 and on the basis of such examination of the books and
records of the Company as we considered appropriate and the information and
explanations given to us during the course of our audit, we enclose in the
'Annexure' a statement on the matters specified in paragraphs 4 and 5 of
the said order.
IV. Our observations on various matters are set out in para VI below, of
which, those against paras VI- (b)(d) and (e) are in respect of certain
expense and for losses, which would have had effect on the years loss, and
consequently, on the net worth position as at the end of the year under
V. Further to the above, we report that:
(a) 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,
subject to our observations in paras VI-(b) (d) and (e).
(b) Subject to our observations set out in para V-(b), (d) and (e) in our
opinion, proper books of account as required by law have been maintained by
the Company, so far as appears from our examination of those books, and
(c) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts, subject to our observations in
paras VI and read in conjunction with the notes thereon, give the
information required by the Companies Act, 1956 in the manner so required,
and give, subject to our observations in para VI below, a true and fair
(i) In the case of the Balance Sheet,of the State of affairs of the Company
as at 31st March,1999, and
(ii) In the case of Profit and Loss Account, of the loss for the year ended
on that date.
VI. Attention is drawn to our following observations, together with the
notes on Schedule Q:
(a) The continuation of the company as going concern is dependent upon the
availability of the adequate finance and future profitability of the
Company [Note: 2 (c)].
(b) Additional liabilities, if any, on overdue payments for secured &
unsecured loans, including interest, have neither been ascertained nor
provided for in the accounts.
(c) Necessary charges required to be created with respect to the zero
interest Secured Redeemable Non Convertible Debenture, [Note: 2(e)(V)].
(d) Cash basis of accounting, instead of the accrual method has been
followed in the case of:
Interest on Loans other than SDF Loans and Bank Borrowings, the amount
Certain Portion of disputed Lease rent amounting to Rs. 192.00 lacs.
Receipt of Insurance claim and subsidy .
(e) Extent of recoverability of certain advances as indicated in Annexure,
point (8) here in after has neither been ascertained nor provided for in
For and on behalf of
N.N.Das & Co
Place: Nandanvan, Orissa
Date : 27 November,1999.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in Paragraph III of our Report of even date)
1. Records showing full particulars including quantitative details and
situation for fixed assets acquired at Company's Project division in
Nandanvan, Thasil Dharamgarh, Dist Kalahandi is maintained. However such
records need to be improved to fulfil the requirements. The records for
assets acquired and physically transferred by other closed units/ divisions
are still under compilation. We are informed that the physical verification
has been conducted by the Management during the year and no material
discrepancies were noticed between such physical verification and records
to the extent built up. We are also informed that adjustment can only be
done when the combined Register is constructed.
2. The Fixed assets of the Company have not been revalued during the year.
3. We are informed that the stock of finished goods, stores, spare parts
and raw materials of the Company have been physically verified by the
management during the year.
4. In our opinion, the procedure of physical verification of stocks
followed by the management were found to be reasonable and adequate in
relation to the size of the Company and nature of its business.
5. The discrepancies between the physical and the book stocks, to the
extent ascertained, were, in our opinion, no material, and have been
properly dealt with in the books of accounts.
6. In our opinion, the valuation of stocks is fair and proper, in
accordance with the normally accepted accounting principles, and is on the
same basis as in the earlier year.
7. The Company has during the year neither taken nor granted any secured or
unsecured loans from/to the Companies, firms and other parties listed in
the Register maintained under Section 301 of the Companies Act, 1956 or
from/to the Companies under same management as defined under sub section
(1B) of Section 370 of the Companies Act, 1956.
8. Loans, and advances in the nature of loans, given to employees, farmers,
and other parties by the Company's Project Division at Nandanvan are
generally being recovered as stipulated restipulated, where such
stipulations/ restipulations exist, except principal amount of loans and
interest thereon from farmers and others amounting to Rs 383 lacs for which
we are given to understand that reasonable steps are being taken to
recover/adjust such loans.
9. In our opinion, and according to the information and explanations given
to us, the internal control procedures are generally adequate and
commensurate with the size of the Company and nature of its business for
purchase of stores and raw materials, including components, plant and
machinery, equipments, and other similar assets and for the sale of goods.
10. According to the information and explanations given to us, the Company
has not entered into transactions of purchase of goods, materials and
services, and sale of goods, materials and services, in pursuance of
contracts or arrangements 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 value in respect of each party.
11. As explained to us, there were no unserviceable or damaged stores, raw
materials, or finished goods at the end of the year requiring provision for
12. In regard to the deposits accepted from public the Company has complied
with the provisions of Section 58 A of the Companies Act,1956 except as
indicated in note 2(h) of Schedule Q.
13. In our opinion, the Company has maintained reasonable records for sale
14. The Company has an internal audit system commensurate with its size and
nature of its business.
15. The Central Government has not been prescribed under Section 209 (i)
(d) of the Companies Act, 1956 the maintenance of cost records of the
product of the Company.
16. Provident Fund dues have generally been regularly deposited during the
year with the appropriate authorities. We have been informed that employees
of the Company are not covered under the Employees State Insurance Scheme.
17. In our opinion and according to information and explanations given to
us, there ae no disputed amounts payable in respect of income tax, sales
tax, custom duty and excise duty outstanding as at 31st March, 1999 which
are outstanding for a period of more than six months from the date they
18. During the course of our examination of the books of accounts, we have
not come across any personal expenses which have not been charged to the
profit and Loss Account, other than those payable under contractual
obligation or in accordance with generally accepted business practice.
19. The Company is not a Sick Industrial Company within the meaning of
Clause (O) of Sub-Section (1) of Section 3 of the Sick Industrial Companies
(Special Provision) Act, 1985.
For and on behalf of
N.N.Das & Co.
Date : 27 November,1999.