Auditors qualify Mukand balance sheet

Our Corporate Bureau

Mumbai, Aug 28: THE auditors have qualified Mukand Ltd’s balance sheet for 2000-2001, as the company has credited interest income aggregating Rs 6.50 crore on loans to its wholly-owned subsidiary, Nathani Steel (NSL), whose net worth has been completely eroded. The company has investments and loans aggregating Rs 45 crore and Rs 53.53 crore in the subsidiary.

The board of Mukand in its clarification in the notes to accounts states that though the net worth of NSL is eroded, the management does not consider it necessary to make any provision on account of the company’s investments in loans and advances due from the said subsidiary.

The auditor report states that the management relies on the valuable assets of the subsidiary for recovery of the value of their investment and the dues.

During the year under review, NSL resumed its operations from January 25 2001 and registered a turnover of Rs 16.9 lakh. NSL intends to expand the non-industrial operations such as warehousing and development of its assets, the directors’ report of NSL states.

However, the losses of Mukand at Rs 40.82 crore for 2000-01 would have been lower by another Rs 2.27 crore due to the loss incurred on sale of land in New Delhi along with change in the policy of amortisation of payment made under VRS, the qualified auditors’ report states.

It states that the consideration for sale of land and building resulted in a loss being lower by Rs 1.57 crore.