We have audited the attached Balance Sheet of ADHUNIK METALIKS LIMITED
as at 31st March, 2007 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 Companys
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 (Auditors 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
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, except for certain documents destroyed by fire as referred to in
note no.7 on Schedule 24):
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
iii) the Balance Sheet, Profit ft 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 Et Loss Account and Cash
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 March 31, 2007, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March,
2007 from being appointed as director in terms of clause (g) of sub-
section(l) of section 274 of the Companies Act, 1956.
vi) Without qualifying our opinion, attention is drawn to note no. 6(b)
on Schedule 24 regarding utilisation of Securities Premium Account
towards meeting the net deferred tax liability arising during the year.
Except for our inability to examine certain documents referred to in
Paragraph (i) above, in our opinion and to the best of our information
and according to the explanations given to us, the said Statements of
Account 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, 2007;
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.
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, 2007)
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
b) All the 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 (Auditors
Report) Order, 2003 (as amended) are not applicable. However, the
Company has made payments to certain parties covered in the register
maintained under Section 301 of the Companies Act, 1956 on behalf of
and as per the 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
(Auditors Report) Order, 2003 (as amended) are not applicable.
However, the Company has received payments from certain parties covered
in the register maintained under Section 301 of the Companies Act, 1956
on behalf of and as per the 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 and for purchase of fixed assets. Weakness in
internal control system for purchase of inventory referred to in our
report for the previous year is being addressed with effect from the
last quarter of the current year, pursuant to implementation of the SAP
software ( ERP package) for accounting.
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
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.
vi) As informed, no deposits have been accepted by the Company during
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, income-tax,
sales-tax, wealth-tax, service tax custom duty, excise duty, cess have
been deposited with the appropriate authorities though in general there
have been delays in payments of dues other than customs and excise
duties. As explained, Employees State Insurance is not applicable to
the Company and there is no amount due for deposit to Investor
Education 8t Protection Fund.
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 the statute Nature of dues Amount
(Rs in lacs)
Orissa Entry Tax Act Entry tax on 6.12
machinery ft spares.
Orissa Entry Tax Act Entry tax on 8.39
Central Sales Tax Demand against transfer 230.39
(Orissa) Rules 57 of stock to branches and
Orissa Sales Tax Dispute on Gross turnover 10.48
vis-a-vis taxable turnover
Central Excise Act Dispute on account of 10.90
classification / Cenvat credit
Central Excise Act Excise duty on job work 18.09
Punjab VAT Act 2005 CST/VAT on sales 7.87
Period to which Forum where dispute
the amount relates is pending
2002-03 Asst. Commissioner of
2003-04 Asst. Commissioner of
2003-04 Commissioner of
2003-04 Asst. Commissioner of
2003-04 Cestat (Kolkata)
2004-05 Cestat (Kolkata)
2005-06 Asst. Excise & Taxation
Commissioner - cum
Deputy Director (Investigator)
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, the Company has not defaulted in
repayment of dues to banks. There are no dues to the financial
institutions and debenture holders.
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 (Auditors 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 (Auditors 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. The Company has not given
any guarantee for loans taken by others from a financial institution.
xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
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
xviii) The Company has not made preferential allotment of shares during
the year to parties and companies covered in the register maintained
under section 301 of the Act.
xix) The Company did not have any outstanding debentures during the
xx) During the current year, the Company has not raised any money by
public issue. Details of utilisation during the year of unutilised
portion of the money raised in the previous year have been provided by
the management vide note no 23 on Schedule 24.
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 & Co.
Per Rahul Roy
Place: Kolkata a Partner
Date : 29th May, 2007 Membership No. 53956