We have audited the accompanying financial statements of AD-MANUM
FINANCE LIMITED (the Company), which comprise the Balance Sheet as at
March 31st, 2014, and 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
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance & cash Flows of the Company in
accordance with the Accounting Standards referred to in sub-section
(3C) of section 211 of the Companies Act, 1956 (the Act) read with
the General Circular 15/2013 dated 13 September 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013
and in accordance with the accounting principles generally accepted in
India. 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.
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 misstatements.
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 company''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.
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements read with
notes on accounts as per note 18 give the information required by the
Act in the manner so required and give a true an d 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; an d
b) In the case of the statement of Profit and Loss, of the profit for
the year ended on that date.
c) In the case of 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 said
2. As required by section 227(3) of the Act, we report that:
In our opinion and to the best of our information and according to the
explanation given to us, the said accounts subject to the provision of
doubtful debt of Rs.11.98 Crores (previous year Rs.3.95 Crores) and
there against made NPA provision of Rs .157.64 Lacs (Previous Year
Rs.53.35 Lacs) as per prudential norms of RBI Act and rules made
thereunder read with Note 18 gives the information required by the
Companies Act,1956 in the manner so required and gives true & fair view
in conformity with the accounting principles generally accepted in
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
b) In our opinion proper books of account as required by law have been
kept by the Company on computer so far as appears from our examination
of those books.
c) The Balance Sheet, the Statement of Profit and Loss, and the cash
flow state ment 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
referred to in sub-section (3C) of section 211 of the Companies Act,
1956 read with the General Circular 15/2013 dated 13 September 2013 of
the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013.
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 TO INDEPENDENT AUDITORS REPORT REFERRED TO IN PARAGRAPH 1
UNDER THE HEADING OF ''REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS'' OF OUR REPORT OF EVEN DATE :
1) FIXED ASSETS:
a) The Company has maintained adequate records showing full particulars
including quantitative details and situation of fixed assets.
b) The Company has verified its fixed assets at the end of the year,
which in our opinion is reasonable having regard to the size of the
Company and nature of its assets. We have been informed that no
material discrepancies were noticed on such verification as compared to
b ook records.
c) The Company has not disposed of any substantial part of its fixed
assets during the year so as to affect its going concern status.
As the Company is carrying on the business of loan finance, therefore,
the requirement of clause 4 (ii) is not applicable to the Company.
39) LOANS AND ADVANCES:
During the year, the Company has granted/taken unsecured loans from
company covered by Section 301 of the Companies Act, 1956 therefore the
requirement of clause, 4(iii) (b), (c), (d), (f) and (g) of the said
order are not applicable to the company.
4) INTERNAL CONTROLS:
In our opinion and according to the information and explanations given
to us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business for the purchase
of fixed asset The services rendered subject to a fraud noticed by the
Company, except this, we have not been informed of any major weakness
in the internal control system of the Company.
5) TRANSACTION WITH PARTIES UNDER SECTION 301 OF THE COMPANIES ACT,
a) According to the information and explanations given to us by the
management, we are of the opinion that the transactions required to be
entered under section 301 of the Companies Act 1956 have been so
a) In our opinion and according to the information and explanations
given to us the transactions made in pursuance of contracts or
arrangements entered in the register maintained u/s 301 of the
Companies Act 1956 exceeding the value of Rupees Five Lacs or more in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
6) FIXED DEPOSITS:
The Company has not accepted any deposits from the public to which the
directives issued by Reserve Bank of India and the provisions of
section 58A. 58AA and any other relevant provisions of the Companies
Act, 1956 and the rules framed thereunder apply.
7) INTERNAL AUDIT:
The Company has an Internal Audit system which is, in our opinion needs
to be strengthened according to the nature of business and size of
operations of the Company.
8) COST AUDIT:
The Company is carrying on the business of finance, hence no cost
records are required to be maintained by the Company under section
209(1)(d) of the Companies Act, 1956.
a) According to the records of the Company and according to the
information and explanations provided to us the Company is generally
regular in depositing undisputed statutory dues including Provident
Fund, Income Tax, Investor Education and Protection Fund and any other
statutory dues with the appropriate authorities.
b) According to the information and explanations given to us, no
undisputed amount payable in respect of Provident Fund, Investor
Education and Protection Fund, Employees State Insurance, Income Tax
and any other statutory dues were outstanding as at 31st March 2014 for
a period of more than six months from the date they became payable.
c) According to the information and explanations given to us and as
certified by the management there are dues of Income Tax which have not
been deposited on account of dispute and the forum where the dispute is
pending are given below:-
S. Statute Demand in Period of Forum
No. Rs. (Lacs) Dispute
01 Income Tax 11.07 2001-02 ITAT, Indore
02 Incom e Tax 282.28 2007-08 CIT, Indore
03 Income Tax 0.83 2008-09 CIT, Indore
04 Income Tax 56.15 2009-10 CIT , Indore
05 Income Tax 46.21 2009-10 CIT , Indore
06 Income Tax 29.38 2010-11 CIT , Indore
10) POTENTIALLY SICK COMPANY:
There are no accumulated losses as at 31st March, 2014. The Company has
not incurred any cash losses during the financial year covered by our
audit and the immediately preceding financial year.
11) REPAYMENT OF DUES:
According to the records of the Company examined by us and information
and explanation given to us, the Company has not defaulted in repayment
of dues to any financial institution or bank as at the balance sheet
12) LOANS AND ADVANCES GRANTED ON THE BASIS OF SECURITIES:
According to the records of the Company and according to the
information and explanations provided to us, the Company has not
granted loans and advances on basis of security by way of pledge of
shares, debentures & other securities.
13) CHIT FUND / NIDHI / MUTUAL BENEFIT SOCIETY:
We are informed that the provisions of any special statute applicable
to Chit Funds, Nidhi or Mutual Benefits Society do not apply to the
Company is not dealing in any shares and securities. All the
investments of the Company are held by the Company in its own name and
reasonable records have been maintained.
15) GUARANTEES GIVEN:
According to the information and explanations provided to us, the
Company has not given any guarantee or corporate guarantee for loan
taken by other from banks or financial institutions.
16) TERM LOANS:
The company has not taken any Term Loan during the year.
17) SOURCES AND APPLICATION OF FUNDS:
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 the purpose of
long term investment and no long term funds have been used to finance
short term assets (excludes permanent working capital).
18) PREFERENTIAL ALLOTMENT:
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.
The Company has not issued any debenture during the year.
20) PUBLIC ISSUE:
The Company has not raised any money through a public issue during the
According to the information''s obtained by us and explanations given to
us the company has detected fraud by its employees in collusion with
borrowers at certain locations involving an amount of 60.21 Lacs. The
investigations at the end of the company are in progress and the
company has been able to recover an amount of Rs. 16.73 Lacs up to the
date of the balance sheet and is hopeful to receive the balance amount
within a stipulated time from the culprits. Though the FIR has been
made at a location but since the company is pursuing the matter
amicably with the related persons therefore no material progress in the
legal actions has been noticed by us.
FOR: MAHENDRA BADJATYA & CO
DATE: 30-05-2014 CA M.K BADJATYA
PLACE: INDORE PARTNER