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GUJARAT OPTICAL COMMUNICATION LIMITED
ANNUAL REPORT 2002-2003
AUDITORS' REPORT
To,
The Shareholders of
Gujarat Optical Communication Limited
We have audited the attached Balance Sheet of Gujarat Optical Communication
Limited as on 30th June, 2003 and also the Profit & Loss Account for the
year ended on that date annexed thereto. These financial statements are the
responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
We report as follows:
1. As required by the Manufacturing and Other Companies (Auditors' report)
Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of
the Companies Act, 1956, we give in the Annexure a statement of the matters
specified in the paragraphs 4 & 5 in the said order.
2. Further to our comments in the Annexure referred to in paragraph 1 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:
b) In our opinion, proper books of accounts as required by the Law have
been kept by the Company so far as it appears from our examination of those
books;
c) The Balance Sheet and the Profit & Loss Account dealt with by this
report are in agreement with the books of accounts;
d) In our opinion, the attached Balance Sheet and Profit & Loss Account,
comply with the mandatory accounting standards referred to in Section
211(3C) of the Companies Act,1956 to the extent applicable except regarding
non provision of gratuity and leave encashment as mentioned in Note No. 7
of Schedule 12 which is contrary to the practice recommended in Accounting
Standard AS - 15 "Accounting for Retirement Benefits In the Financial
Statement of Employers", the amount of which is not ascertained and
therefore the effect of this on loss for the year and liabilities could not
be quantified
e) On the basis of the written representations received from the Directors
and taken or record by Board of Directors and legal opinion obtained by the
company. we report that none of the Directors is disqualified as on 30th
June, 2003 from being appointed as a Director in terms of clause (g) of Sub
section (1) of Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to the
explanations given to us and said accounts read with accounting policies
and other notes thereon, subject to the following remarks:
(i) The company has not disclosed particulars of dues to SSI Units and
ancillary undertakings as mentioned in note No : 17 in Schedule 12.
(ii) the company has not made provision of interest on secured loans and
debenture from 1-7-2002 onwards amounting to Rs. 1790.87 lacs as a result
of which the loss has been understated to that extent.
(iii) as mentioned in note No 2 in Schedule 12 stock of material in process
value of Rs. 877.23 Lacs is written off for the reasons stated in the said
note.
(iv) we are unable to form an opinion about realisablity, of Sundry Debtors
of Rs. 203.87 Lacs which are considered good by the management.
give the information required by the Company Act, 1956 in the manner so
required and give a true and fair view in conformity with the accounting
principles generally accepted in India.
(i) in the case of Balance Sheet of the state of affairs of the Company as
on 30th June, 2003; and
(ii) in the case of Profit & Loss Account the Loss for the year ended on
the date.
(iii) in the case of the cash flow statement of the cash flows for the year
ended on that date.
For MANUBHAI & CO.
Chartered Accountants
Place : Ahmedabad KSHITIJ M. PATEL
Date : 29th November 2003. PARTNER
ANNEXURE TO THE AUDITORS REPORT:
(Referred to in paragraph (1) of our Report of even date on the accounts of
Gujarat Optical Communication Ltd. for the Yom ended 30th ,June, 2003]
(i) The Company has maintained proper records showing full particulars
including quantitative details arid situation of fixed assets. However the
same is required to be updated since 1999. The fixed assets have been
physically verified by the management at reasonable intervals during the
year. No material discrepancies were noticed on such verification.
(ii) The fixed assets of the Company have not been revalued during the
year.
(iii) The stock of finished goods, stores, spare parts and raw materials
have been physically verified by the management at reasonable intervals.
(iv) In our opinion, the procedures of physical verification of the stocks
followed by the management were found reasonable and adequate in relation
to the size of the Company and nature of its business.
(v) According to the information given to us, no material discrepancies
were noticed on physical verification of stocks of material in process and
the same have been properly adjusted as mentioned in note 2 in schedule 12
as compared to book records. Attention is invited to note no.2 in Schedule
12.
(vi) In our opinion and on the basis of our examination, the valuation of
stocks is fair and proper in accordance with the normally accepted
accounting principles. The basis of valuation of stocks is same as in the
preceding year.
(vii) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties listed in the register maintained under
Section 301 of the Companies Act, 1956. As explained to us there is no
Company under the same management as defined under Section 370 (1B) of the
Companies Act, 1956.
(viii) The Company has not granted any loans secured or unsecured to
Companies, firms or other parties listed in the register maintained under
section 301 of the Companies Act, 1956. As explained to,us, there is no
Company under the same management as defined under section 370 (1B) of the
Companies Act. 1956.
(ix) In the respect of the loans and advances in the nature of loans given
by the company to the parties there are no stipulations regarding re-
payment of the principal amount. In the case of interest free loans given
to staff, which is outstanding since long time, we are informed that the
management has taken steps for recovery / adjustment of the same.
(x) In our opinion there are adequate Internal control procedures
commensurate with size of the Company and the nature of its business with
regard to purchase of stores, raw materials including components, plant and
machinery, equipment and other assets and for the sale of goods.
(xi) The transactions of purchase and sales of goods and materials made in
pursuance of contracts or arrangements entered in the register maintained
under section 301 of the Companies Act, 1956 as aggregating during the year
to Rs. 50,000/- (Rupees Fifty thousand only) or more in the respect of each
party have been made at price which are reasonable, having regard to the
prevailing market prices for such goods or materials.
(xii) As explained to us, the Company has a regular procedure for the
determination of unserviceable or damaged stores and raw materials. We are
informed that there are no unserviceable or damaged stores, raw materials
and finished goods as at the end of the year.
(xiii) The Company has not accepted any deposits from the Public.
(xiv) In our opinion, reasonable records have been maintained by the
Company for the sale and disposal of realisable scrap. The Company has no
by-products.
(xv) The company did not have any formal internal audit system during the
year under review.
(xvi) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Govt. for the maintenAnce
of cost records Under section 209 (1)(d) of the Companies Act, 1956 in
respect of cables and are of the opinion that prima facie, the prescribed
accounts and records have been maintained. We have, however, not made a
detailed examination of these records.
(xvii) According to the records of the Company has regularly deposited the
provident fund dues with the appropriate authorities and there were no
arrears of such dues as on the date of this report. According to the
information and explanations given to us, provisions of Employees' State
Insurance Act, 1948 are not applicable to the Company.
(xviii) According to the information and explanations given to us and on
the basis of records examined by us, no personal expenses of the employees
or directors, other than those payable under contractual obligations or in
accordance with generally accepted business practice have been charged to
revenue account.
(xix) According to the information and explanations given to us, no
undisputed amount payable in respect of Income-Tax. Wealth Tax, Sales Tax,
Custom Duty and Excise Duty were outstanding as on 30th June,2003 for a
period of more than six months from the date they become payable.
(xx) As per the legal opinion obtained by the Company, the provisions of
Sick Industrial Companies (Special Provisions) Act, 1985, do not apply to
the Company. However the Company informed us. the Board of the company have
opinion that the net worth of the company has totally eroded, therefore for
abundant caution it is decided to make reference to the Board for
Industrial and Financial Reconstruction (BIFR) pursuant to the provision of
Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985.
(xxi) In respect of trading activities of the Company, we are informed that
there were no damaged goods during the year.
For, MANUBHAI & CO.
Chartered Accountants
Plcae : Ahmedabad KSHITIJ M. PATEL
Date : 29th November 2003. PARTNER
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