We have audited the attached Balance Sheet of ADHUNIK METALIKS LIMITED
as at 31st March, 2006 and also the Profit & Loss Account and the Cash
Flow Statement 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2003 (as
amended), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4 &
5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that :-
(i) 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;
(ii) 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 such
books;
(iii) the Balance Sheet, Profit & Loss Account and Cash Flow Statement
referred to in this report are in agreement with the books of account
as submitted to us;
(iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement have been drawn up in accordance with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
(v) On the basis of written representations received from the directors
as on 31st March, 2006, and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31 st March,
2006 from being appointed as director in terms of Clause (g) of
sub-section(1) of Section 274 of the Companies Act, 1956.
In our opinion and to the best of our information and according to the
explanations given to us, the said Statements of Account and read
together with the Notes appearing on Schedule 24, give the information
required by the Companies Act, 1956 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 Balance Sheet, of the state of affairs of the Company
as at 31st March, 2006;
b) in the case of Profit & Loss Account, of the profit of the Company
for the year ended on that date; and
c) in the case of Cash Flow statement, of the cash flows for the year
ended on that date.
S. R. Batliboi & Company
Chartered Accountants
22, Camac Street
Block `C' 3rd Floor Per R. K. Agrawal
Kolkata - 700016 Partner
Date: 29 May, 2006 Membership No. 16667
ANNEXURE TO THE AUDITORS' REPORT
(REFERRED TO IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF ADHUNIK
METALIKS LIMITED AS AT AND FOR THE YEAR ENDED 31ST MARCH, 2006)
(i) (a) The Company has engaged an external firm of chartered
accountants to update the fixed assets records showing full
particulars, including quantitative details and situation of fixed
assets, which is under progress.
(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. Pending updating of
records as noted above, discrepancies if any could not be determined.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable interval during the year. As regards material
lying with outside parties, confirmation certificates have been
obtained in most of the cases.
(b) The procedures of physical verification of inventory followed by
the management were reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company maintains proper records of inventory and no material
discrepancies were noticed on such physical verification.
(iii) As informed to us, the Company has not given any loan, secured or
unsecured, to companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Therefore, the
provisions of clauses (iii) (a) to (d) of the Companies (Auditor's
Report) Order, 2003 (as amended) are not applicable. However, the
Company has made payments to parties covered in the register maintained
under Section 301 of the Companies Act, 1956 on behalf and as per
direction of a non related party.
As informed to us, the Company has not taken any loan, secured or
unsecured, from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Therefore, the provisions of Clauses (iii) (e) to (g) of the Companies
(Auditor's Report) Order, 2003 (as amended) are not applicable.
However, the Company has received payments from parties covered in the
register maintained under Section 301 of the Companies Act, 1956 on
behalf and as per direction of a non related party.
(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
sale of goods/services. However, the internal control system for
purchases of inventory needs to be further strengthened by formalising
documentation and system related to procurement and indenting.
(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 Act 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 exceeding value of Rupees five lacs have been entered into
during the year at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
(c) There are two contracts of supply of Raw Materials pertaining to
two directors against which there have been transactions amounting to
Rs 1,31,307 during the year which has not been entered into the 301
register.
The aforesaid transactions with the directors have been verified and
the prices at which such transactions have been made are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) As informed, no deposits have been accepted by the management
during the year.
(vii) In our opinion, the Company has an internal audit system which is
commensurate with the size 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 and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, or employees' state insurance,
income-tax, sales-tax, wealth-tax, service tax custom duty, excise
duty, cess have been deposited with the appropriate authorities thought
in general there have been delays other than payment of customs and
excise duties.
(b) According to the information and explanations given to us, no
undisputed amounts dues in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other statutory dues were outstanding, at the Balance Sheet date, 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, custom duty, excise
duty and cess on account of any dispute, are as follows:
Name of Nature of dues Amount (Rs)
the statute
Orissa Entry Tax Act Entry tax on machinery & 611,700
spares @ 2% taken as scrap
materials @1%.
The Central Excise Disputed Cenvat Credit 36,929
Act, 1944
Central Sales Tax (Orissa) Demand against transfer 23,039,187
Rules 57 of stock to branches and
consignment agents.
Central Sales Tax (Orissa)
Rules 57 Demand against CST purchase 1,903,761
Period to which Forum where
the amount relates dispute is pending
2002-03 Asst. Commissioner
of commercial taxes
2003-04 Joint Commissioner
2003-04 Asst. Commissioner of commercial taxes
2003-04 Asst. Commissioner of commercial taxes
(x) The Company has been registered for a period of less than five
years and hence we are not required to comment on whether or not the
accumulated losses at the end of the financial year is fifty per cent
or more of its net worth and whether it has incurred cash losses in
such financial year and in the immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, the Company has not defaulted in
repayment of dues to banks.
(xii) According to the information and explanations given to us and
based on the documents and records produced to 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 given guarantee for loans taken by others from a bank, the
terms and conditions whereof in our opinion are not prima-facie
prejudicial to the interest of the Company.
(xvi) Based on 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, we
report that the Company has raised short term funds in the nature of
unsecured loans amounting to Rs 354,761,317 from banks which has been
utilised for long term investment (purchase of fixed assets).
(xviii) The Company has made preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act. In our opinion the price at which shares have been
issued to such parties is not prejudicial to the interest of the
Company.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) We have verified that the end use of money raised by public issues
is as disclosed in the notes to the financial statements.
(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 course of our audit.
S. R. Batliboi & Company
Chartered Accountants
22, Camac Street
Block `C' 3rd Floor Per R. K. Agrawal
Kolkata - 700 016 Partner
Date: 29 May, 2006 Membership No. 16667
