1. We have audited the attached Balance Sheet of AHMEDABAD STEELCRAFT
LIMITED as at March 31, 2007 and also the Profit and Loss account and
the cash flow statement for the year ended on that date annexed there
to. 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.
2. 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditors Report) Order, 2003 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 Anncxure a
statement on the matters specified in paragraphs 4 and 5 of the said
4. Further to our comments in the Annexure referred to above, subject
to Note No. 5 regarding depreciation on rolling mill rolls due to which
the loss for the year is under staled by an amount of Rs. 15,26,717/-,
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 purposes of our
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
iii) The Balance Sheet, Profit and Loss account and Cash flow statement
dealt with by this report are in agreement with the books of account.
(iv) In our opinion, the Profit and Loss account and Balance Sheet
comply with the Accounting Standards referred to in Subsection (3C) of
Section 211 of the Companies Act, 1956 except valuation of current
investments. Had the Accounting Standard 13 been followed in respect
of current investments the value of investments would have been lower
by an amount of Rs. 10,39,310/- and the loss would have been higher by
the same amount.
(v) On the basis of the 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 are disqualified as on
March 31, 2007 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion the said accounts to the best of our information
and according to the explanations given to us, give the information
required by the Companies Act, 1956, in the manner so required and give
a tme 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 , 2007.
b) In the case of the Profit and Loss account, of the loss for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE Ref:
Ahmedabad Steelcraft Limited
1) a. The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
b. All the assets have been physically verified by the management
during the year as per the 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
c. There was no substantial disposal of fixed assets during the year
so as to affect its going concern status.
2) a. The management has conducted physical verification of inventory
at reasonable intervals.
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.
3) The Company has not granted any loans, secured or unsecured to
companies, firms or other perties covered in the register maintained
u/s. 301 of the Act during the year. Accordingly, clauses (iii) (b) to
(iii) (d) of paragraph 4 of the Order are not applicable to the Company
for the current year.
The Company has not taken any loans, secured or unsercured from
companies, firms or other parties covered in the register maintained
u/s. 301 of the Companies Act, 1956 during the year. Accordingly,
clasues (iii) (f) and (iii)(g) of paragraph 4 of the Order are not
applicable to the company for the current year.
4) 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, with regard to purchases of inventory, fixed assets and with
regard to sale of goods and services. During the course of our audit,
no major weakness has been noticed in internal control system.
5) Based on the audit procedures applied by us and according to
information and explanation provided by the management, we are of the
opinion that there are no contracts or arrangements that need to be
entered into the register maintained under section 301 of the Companies
Act, 1956. Accordingly, clause (v) (b) of Paragraph 4 of the Order are
not applicable to the Company for the current year.
6) Subject to Note No. 8 of Schedule T, the Company has not accepted
any deposit during the year in contravention of provisions of section
58A of the Companies Act, 1956 and Companies (Acceptance of Deposit)
7) The internal audit functions carried out during the year by a firm
of Chartered Accountants appointed by the management have been
commensurate with the size of the Company and nature of its business.
8) We are informed that the Central Government has not prescribed
maintenance of cost records under section 209(l)(d) of the Companies
Act, 1956 for any products of the Company.
9) (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including Provident fund,
Investor Education and Protection Fund, Employees State Insurance,
Incometax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, Service
tax, Cess and other material statutory dues applicable to it with the
appropriate authorities except in depositing Income tax deducted at
Source in respect of payment to Contractors and payment of interest and
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income-tax, Wealth tax, Sales
tax, Service tax, Customs duty and Excise Duty, Cess were outstanding
as at 31st March, 2007 for a period of more than six months from the
date they became payable. The following disputed amounts are
Name of the statute Nature of dues Amount Forum where dispute is
The Income-tax Income - tax (Rs.) 9,10,162 Commissioner of
Act, 1961 A.Y. 2004-05 Income-tax
10) In our opinion, the Company has accumulated losses and the Company
has incurred cash losses during the financial year covered by the
audit. In the immediately preceding financial year also, there were
11) Based on our audit procedures and according to the information and
explanation given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions, banks, or
12) In our opinion and according to the information and explanations
given to us, no loans or ad varices have been granted by the company on
the basis of security by way of pledge of shares, debentures and other
13) In our opinion the Company is not a chit fund or a nidhi/mutual
benefit funds/society. Therefore, clause 4 (xiii) of the Companies
(Auditors Report) Order 2003 is not applicable to the Company.
14) In our opinion, the Company is not dealing in shares securities,
debentures and other investments. Accordingly, the provision of clause
4(xiv) of the Companies (Auditors Report) Order 2003 is not applicable
to the Company.
15) According to the information and explanations given to us, the
Company has not given any gurantee for loans taken by its subsidiaries
and associates from bank of financial institutions.
16) The Company did not have any terms loan outstanding during the
current financial year or in the immediately preceding financial year.
17) According the 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. No long term funds have used to finance short term assets
except for working capital.
18) During the year, 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.
19) The Company did not have any outstanding debentures during the
20) The Company has not raised any money through a public issue during
21) Based upon the audit procedures performed and 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 out audit
that causes the financial statements to be materially misstated.
For DHIREN SHAH & Co.,
PLACE : Ahmedabad (DHIREN SHAH)
DATED : 18-06-2007 PROPRIETOR
Membership No. 35822