The company's auditors have pointed out that GKW has partly covered its gratuity liability but not the fuel surcharge liability. The auditors were unable to inspect certain documents at the Bhandup plant near Mumbai, where a lockout was declared on February 5 this year.

The company, which has interests in metal fasteners, cement, electrical pumps and steel, has been grappling with high interest costs, according to the director's report. GKW experienced an all-round slowdown and cut-throat competition, leading to heavy losses at its Bhandup plant.

Turnover fell by 22 per cent to Rs 251.79 crore from Rs 323.35 crore in 1996-97. The turnover for 1997-98 included other income of Rs 12.69 crore against Rs 11.14 crore in theprevious year.

The company showed a profit before taxes, interest and depreciation amounting to Rs 9.80 crore. Total expenditure was Rs 277.09 crore against a total income of Rs 251.79 crore including other income.

GKW's interest payout was Rs 25.60 crore against Rs 21.93 crore last year. The total loan component is Rs 206.56 crore, of which Rs 176.10 crore is secured and the balance Rs 30.45 crore is unsecured.

According to the profit & loss accounts, the company netted a profit of Rs 8.27 crore from the sale of investments. This includes offloading 1.54 lakh equity shares of ICICI for Rs 35.19 lakh.

Auditors Lodha & Co have pointed out that the balance sheet gives a fair view, subject to the facts that the company made lower provisioning of gratuity liability and leave encashment benefits, did not provide for fuel surcharge and that certain documents at the Bhandup unit were not available.The gratuity liability, in line with actuarial valuation as on March 31, 1998, was Rs 12.26 crore. However, thecompany has provided Rs 3.93 crore and has said that the balance as also the amount remaining to the fund will be paid and charged over the next two years.

Accrued leave encashment benefit, according to the company, amounted to Rs 1.86 crore as on March 31, 1998, of which Rs 60 lakh has been provided and the balance will be provided over the next two years.

The arrears fuel surcharge bill outstanding to RPG power utility CESC Ltd is estimated at Rs 1.20 crore. Though the company has received a communication from CESC in April this year for the earlier years, the GKW management has noted that it will be accounted for on receipt of the actual bills during 1998-99.

Export turnover declined to Rs 19.70 crore from Rs 22.69 crore in the previous year.

GKW provided Rs 5.56 crore towards doubtful advances in 1997-98 against Rs 4.51 crore in the previous year. Claims not acknowledged amounted to Rs 11.79 crore.

Confusion over AGM date

GKW has given two different dates for its forthcoming 68thannual general meeting. While the notice containing the0 resolution says that the AGM will be held on September 21, the attendance slip for the shareholders says September 23.

Also, the notice lists a deceased man for re-appointment. Resolution 6 deals with the re-appointment of JC Khanna as deputy managing director. Khanna's term had expired on April 6 this year, and the board met on March 26 to re-appoint him for another three-year term from April 7. However, Khanna himself expired on July 12 this year, according to the list containing the names of board of directors. The resolution notice as well as the accounts were signed on June 29, 1998.