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Orient Abrasives
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« Mar 13
Auditor's Report (Orient Abrasives) Year End : Mar '14
We have audited the accompanying financial statements of Orient
 Abrasives Limited (''the Company''), which comprise the balance sheet as
 at March 31, 2014, the statement of profit and loss and cash flow
 statement for the year then ended, and a summary of significant
 accounting policies and other explanatory information.
 
 MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
 
 Management is responsible for the preparation of these financial
 statements that give a true and fair view of the financial position,
 financial performance and cash flows of the Company in accordance with
 accounting principles generally accepted in India, including the
 Accounting Standards notified under the Companies Act, 1956, read with
 General Circular 8/2014 dated April 4, 2014 issued by the Ministry of
 Corporate Affairs. This responsibility includes the design,
 implementation and maintenance of internal control relevant to the
 preparation and presentation of the financial statements that give a
 true and fair view and are free from material misstatement, whether due
 to fraud or error.
 
 AUDITOR''S RESPONSIBILITY
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosures in the financial statements. The procedures
 selected depend on the auditor''s judgment, including the assessment of
 the risks of material misstatement of the financial statements, whether
 due to fraud or error. In making those risk assessments, the auditor
 considers internal control relevant to the Company''s preparation and
 fair presentation of the financial statements in order to design audit
 procedures that are appropriate in the circumstances but not for the
 purpose of expressing an opinion on the effectiveness of the entity''s
 internal control. An audit also includes evaluating the appropriateness
 of accounting policies used and the reasonableness of the accounting
 estimates made by management, as well as evaluating the overall
 presentation of the financial statements. We believe that the audit
 evidence we have obtained is sufficient and appropriate to provide a
 basis for our audit opinion.
 
 OPINION
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the financial statements give the information
 required by the Companies Act, 1956 (the Act) in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 (a) In the case of the balance sheet, of the state of affairs of the
 company as at March 31, 2014,
 
 (b) In the case of the statement of profit and loss, of the profit for
 the year ended on that date, and
 
 (c) in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Act, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 2.  As required by section 227(3) of the Act, 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 account as required by law have been
 kept by the company so far as appears from our examination of those
 books.
 
 (c) The balance sheet, statement of profit and loss and cash flow
 statement dealt with by this report are in agreement with the books of
 account.
 
 (d) In our opinion, the Balance Sheet, the Statement of Profit and
 Loss, and the Cash Flow Statement comply with the Accounting Standards
 notified under the Companies Act, 1956, read with General Circular
 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs.
 
 (e) On the basis of written representations received from the directors
 as on March 31, 2014, and taken on record by the Board of Directors,
 none of the directors is disqualified as on March 31, 2014, from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of the Companies Act, 1956.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING REPORT ON OTHER
 LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE
 Re: Orient Abrasives Limited (''the Company'')
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) All fixed assets have not been physically verified by the
 management during the year but there is a regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification.
 
 (c) There was no disposal of a substantial part of fixed assets during
 the year.
 
 (ii) (a) The management has conducted physical verification of
 inventory at reasonable intervals during the year.
 
 (b) The procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory and no
 material discrepancies were noticed on physical verification.
 
 (iii) (a) According to the information and explanation given to us, the
 Company has not granted any loans, secured or unsecured to companies,
 firms or other parties covered in the register maintained under section
 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4
 (iii) (a) to (d) of Order are not applicable to the Company and hence
 not commented upon.
 
 (b) The Company had taken loan from four parties covered in the
 register maintained under section 301 of the Companies Act, 1956. The
 maximum amount involved during the year was Rs. 479.82 lacs and the
 year-end balance of loans taken from such parties was Rs. 479.82 lacs.
 
 (c) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not prima facie prejudicial to the interest of the
 Company.
 
 (d) The Company has repaid the loan to the extent demanded and as
 informed, the lenders have not demanded repayment of the balance loans
 during the year and thus, there has been no default on the part of the
 Company. The payments of interest have been regular.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business, for the
 purchase of inventory and fixed assets and for the sale of goods. The
 activities of the Company do not involve the sale of services. During
 the course of our audit, we have not observed any major weakness or
 continuing failure to correct any major weakness in the internal
 control system of the company in respect of these areas.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Companies Act, 1956 that
 need to be entered into the register maintained under section 301 have
 been so entered.  (b) In our opinion and according to the information
 and explanations given to us, the transactions made in pursuance of
 such contracts or arrangements and exceeding the value of Rupees five
 lacs have been entered into during the financial year at prices which
 are reasonable having regard to the prevailing market prices at the
 relevant time.
 
 (vi) In respect of deposits accepted, in our opinion and according to
 the information and explanations given to us, directives issued by the
 Reserve Bank of India and the provisions of sections 58A, 58AA or any
 other relevant provisions of the Companies Act, 1956, and the rules
 framed there under, to the extent applicable, have been complied with.
 We are informed by the management that no order has been passed by the
 Company Law Board, National Company Law Tribunal or Reserve Bank of
 India or any Court or any other Tribunal.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and nature of its business.
 
 (viii) We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under section 209(1)(d) of the Companies
 Act, 1956, related to the manufacture of aluminium oxide grains and
 calcined products and the generation of power, and are of the opinion
 that prima facie, the prescribed accounts and records have been made
 and maintained. We have not, however, made a detailed examination of
 the same.
 
 (ix) (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education and protection fund, employees'' state insurance,
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty, cess and other material statutory dues applicable to it.  (b)
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investors
 education and protection fund, employee''s state insurance, sales tax,
 custom duty, excise duty, income-tax, service tax,cess and other
 material statutory dues were outstanding, at the year end, for a period
 of more than six months from the date they became payable.
 
 (c) According to the records of the Company, the dues outstanding of
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty and cess on account of any dispute, are as follows:
 
 Name of the           Nature of dues      Amount  Forum where dispute
 Statue                                  (in lacs) is pending
 
 West Bengal Sales Sales tax and Interest 
                    demand for              3.75   Sales Tax Commissioner
 Tax Act, 1994     non- submission of 
                   sales tax declaration 
                   forms                               (Appeal)
                   for the year 1993-94
 
 Sales Tax Act,    Entry tax demand for 
                   entry of goods in        36.06   Hon''ble High Court of
 1944              Rajasthan for the year 
                   2006-07                          Rajasthan
 Service Tax Act,  Service tax demand for 
                   input tax credit availed 85.48   Joint Commissioner 
                                                    Excise,
 1994              on foreign business 
                   auxiliary services and           Jaipur
                   other consulting 
                   services
 
 Income Tax Act,   Disallowance of various 
                   expenses/deductions     1,874.95 High Court, Delhi
 1961              (under section 80IA) 
                   claimed by the Company
                   for the year 2001-02 to 
                   2008-09.
 
 Income Tax Act,   Disallowance of 
                   depreciation u/s 32 for  312.78
                   the                             Commissioner of Income
 1961              assessment year 2010-11          Tax (Appeal)
 
 
 (x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current and immediately
 preceding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to banks. The Company
 did not have any outstanding dues in respect of a financial institution
 or debentures during the year.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced before us, the Company has
 not granted loans and advances on the basis of security by way of
 pledge of shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi /
 mutual benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
 are not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (xvi) Based on the information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that no funds raised on short-term basis have been used for long term
 investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 (xix) The company did not have any outstanding debentures during the
 year.
 
 (xx) The company has not raised any money through a public issue during
 the year.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the year.
 
 
 For S. R. Batliboi & Co. LLP
 Chartered Accountants
 ICAI Firm Registration Number: 301003E
 
 Sd/-
 per Vikas Mehra
 Partner
 Membership No.: 94421
 
 Place : New Delhi 
 Date : May 27, 2014
Source : Dion Global Solutions Limited
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