ANNUAL REPORT 1998-99
GAYLORD INDUSTRIES LIMITED
AUDITORS REPORT TO THE MEMBERS OF
GAYLORD INDUSTRIES LIMITED
We have audited the attached Balance Sheet of GAYLORD INDUSTRIES LIMITED as
on 31st March,1999 together with the Profit and loss Account of the
company for the year ended on that date annexed thereto and report that:
1) As required by the Manufacturing and other Companies (Auditor's Report)
Order,1988 issued by the Central Government in terms of Section 227(4A) of
the Companies Act,1956 we give in the Annexure a statement on the the
matter specified in paragraphs 4 and 5 of the said order.
2) Further to our comments in the Annexure referred to in Paragraph (1) of
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.
b) 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 the Books.
c) The Balance Sheet and Profit and loss Account comply with the
accounting standards referred to in sub-section (3C) of section 211 the
Companies Act, 1956.
d) The Balance Sheet and Profit and loss Account dealt with by this report
are in agreement with the books of Account.
e) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts together with the annexed
Schedules and notes there on give the information required by the Companies
Act,1956 in the manner so required and give a true and fair view.
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 the Profit and loss Account of the loss for the year
ended on that date.
For ASHIT . N. SHAH & CO
Date : 01.09.99.
ANNEXURE TO THE AUDITORS REPORT
TO THE MEMBERS OF GAYLORD INDUSTRIES LIMITED
(Referred to in paragraph (1) thereof)
(1) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. As explained
to us a physical verification of fixed assets was conducted by management
during the year. No discrepancy has between the book records and the
physical inventory has been the book records and the physical inventory has
been noticed in respect of assets physically verified.
(2) None of the fixed assets have been revalued during the year.
(3) As explained to us the Stock of Finished goods,Stores and Spare parts,
Raw materials and Goods traded have been physically verified by the
Management during the year.
(4) In our opinion and according to the information and explanation given
to us,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.
(5) The discrepancies noticed on 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.
(6) In our opinion, the valuation of stocks has been fair and proper in
accordance with the normally accepted accounting principles and is on the
same basis as in the preceeding year.
(7) The Company has not taken any loans secured or unsecured from
companies, firms and other parties listed in the register maintained under
section 301 of the companies Act,1956 and/or from companies under the same
management within the meaning of section 370(1B) of the companies act,1956.
(8) The company has not granted any loans secured or unsecured to
companies,firms and other parties listed in the register maintained under
section 301 and/or to the companies under the same management as defined
under sub-section (1B) of section 370 of the companies Act,1956.
(9) In respect of loans given to Dynamic Share Security PVT. LTD of Rs.
1,17,23,589 and the Pvinjal Finance P. Ltd. of Rs. 45,68,377.45, In absence
of any stipulation or both , we are not in a position to make any comment
about the same. Prior to this year interest on these loans was debited to
the loan account and no separate recovery was being made. During the year
under review, no interest has been charged on the loans. We are informed
that no steps have been taken for the recovery of the principal and
In respect of advances it has been explained to us by the management that
advances of Rs. 58,68,000 to M/s Machwell Machinery Mfg Co. of Rs.2,50,000
to Prithvi Reality Ltd, of Rs. 50,28,000 to Dynamic Share Security P. Ltd,
of Rs. 17,60,000 to Mode Tech Machinery Pvt. Ltd, of Rs. 17,60,000 to Mode
Tech Machinery Pvt. Ltd. of Rs. 13,58,068.50 of Rs. 31,85,997 to AMA
Fininvest P. Ltd, to Rohit Amritlal and of Rs.16,18,520.00 to Boren J. Shah
was given by the company in an earlier year to enable them to take delivery
of the machines. The said company failed to give delivery of the absence of
any stipulation regarding repayment of loan or the repayment of interest
or both,we are not in a position to make any comment about the same.
On the basis of information and explanation given to us it appears that in
certain cases, interest free loans & advances to staff are not being repaid
(10) In our opinion and according to the information and explanations given
to us,the company has an internal control procedure in general commensurate
with the size of the company and nature of its business for the purchase
of Raw materials and other assets and for sales of the goods.
(11) In our opinion and from the information supplied to us, no transaction
of purchase of goods and materials and sale of goods and materials and
services have been made in pursuance or contracts entered in the register
maintained U/s 301 of the Companies Act,1956 from any party exceeding
Rs.50,000/- where the price paid for such items can be considered
unreasonable as compared to the prices of similar items supplied by others
transactions for similar goods or labour charges have been made with other
(12) As informed to us there were no unserviceable or damaged stores and
(13) According to information and explanations given to us the company has
not accepted any deposit from the public.
(14) In our opinion reasonable records have been maintained by the company
for the sale and disposal of realisable scraps, where applicable and
significant, maintaining records of opening and closing stocks traded.
(15) In our opinion the company's present internal audit system is
commensurate with its size and the nature of business.
(16) The Central Government has not prescribed the maintenance of the cost
records under section 209(1)(d) of the companies act,1956 for the products
manufactured by the company.
(17) According to the records of the company, the provident fund
dues,Employees State Insurance dues and Professional Tax have not been
regularly deposited during the year with the appropriate authorities. There
are arrears of Professional tax dues of Rs. 7,920.00 on 31st March,1999.
(18) According to the information and explanations given to us, there were
no undisputed amounts payable in respect of Income Tax , Wealth Tax,Sales
Tax,Custom Duty and Excise Duty which have remained outstanding as at
31st March,1999 for a period of more than six months from the date they
became payable except Rs. 3,84,300 of Income Tax, Rs.1,35,330 of Income Tax
Deducted at Source Rs. 2,72,450.38 of Sales Tax, Rs. 4,395.38 of Central
Sales Tax and Rs. 7,920.00 of Professional Tax.
(19) During the course of our examination of the books of accounts, we have
not come across any personal expenses which have been charged to profit and
loss account, nor have been informed of such cases by the management.
(20) The company is not a sick industrial company within the meaning of
clause(O) of sub-section (I) of section 3 of the sick Industrial companies
(Special Provision) act,1985.
(21) In respect of trading activities, damaged goods have been determined
at the time of physical verification consequential adjustments, which are
not significant, have been made in the accounts.
For ASIT .N. SHAH & CO.
Date : 01.09.99.