ANNUAL REPORT 2005-2006
AMTEK AUTO LTD.
We have audited the attached Balance Sheet of Amtek Auto Ltd., as at 30th
June 2006, the Profit & Loss Account and also cash-flow statement for the
year ended on that date annexed thereto. These financial statements are the
responsibility of 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 statements presentation. We believe that our audit
provides a reasonable basis for our opinion. 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 accounts, as required by law, have been
kept by the Company so far as appears from our examination of the books.
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement,
dealt with by this report, are in agreement with the books of accounts.
iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement, dealt with by this report, comply with the accounting
standards referred to in sub-section (3C) of section 211 of the Companies
v) On the basis of written representations received from Directors as on
30th June 2006 and taken on record by the Board of Directors, we report
that none of the Directors is disqualified as on 30th June 2006 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 and to the best of our information and according to the
explanations given to us, the said accounts read with notes thereon, give
the information required by the Companies Act, 1956, in the manner so
required and also 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 30th June 2006.
b) In the case of the Profit & Loss Account, of the profit for the year
ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flow for the year
ended on that date
vii) As required by the Companies (Auditor's Report) Order, 2003, as
amended by the companies (Auditor's Report Amendment) order 2004 issued by
the central Government of India in terms of Section (4A) of section 227 of
the Companies Act, 1956, we report as under on the matter specified in
paragraphs 4 & 5 of the said order:
1. In respect of fixed assets:
a. The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed assets.
b. As explained to us, the fixed assets have been physically verified by
the management during the year in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the company and nature
of its assets. No material discrepancies were noticed on such physical
c. In our opinion, the company has not disposed off substantial part of
fixed assets during the year and the going concern status of the company is
2. In respect of its inventories:
a. As explained to us, inventories have been physically verified by the
management at reasonable intervals during the year.
b. In our opinion and according to the information and explanations given
to us, the procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of the
company and nature of its business.
c. The company has maintained proper records of inventories. As explained
to us, there were no material discrepancies noticed on physical
verification of inventories, as compared to book records.
3. In respect of loans, secured or unsecured, granted or taken by the
company to/from companies, firms or other parties covered in the register
maintained under section 301 of the companies Act, 1956:
a) The company has granted loans to group Companies aggregating to
Rs.6717.50 lacs. The maximum amount involved during the year was Rs.6717.50
b) In our opinion and according to the information and explanations given
to us, the rate of interest, wherever applicable and other terms and
conditions are not prima facie prejudicial to the interest of the company.
c) In respect of the loan granted to the subsidiaries of the company, the
loan is interest free and being repayable on demand are not overdue.
4. In our opinion and according to the information and explanations given
to us, there are adequate internal control procedure commensurate with the
size of the Company and nature of its business for the purchases,
inventory, fixed assets and for the sale of goods. During the course of our
audit, we have not observed any major weakness in internal controls.
5. In respect of transactions covered under section 301 of the Companies
a) In our opinion and according to the information and explanations given
to us, transactions made in pursuance of contracts or arrangements, that
needed to be entered into in the register maintained under section 301 of
the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations given
to us, there are transactions in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the Companies Act,
1956. We are of the opinion that the terms and conditions thereof are not
prime facie prejudicial to the interest of the company.
6. In our opinion and according to the information and explanation given to
us, the company has complied with the provision of section 58A, 58AA and
any other Provisions of the Companies Act, 1956 and the companies
(Acceptance of deposits) Rule, 1975 with regard to the deposits accepted
from the public. No order has been passed by the company law board or
Reserve Bank of India or national company law tribunal or any court or any
7. In our opinion, the internal audit system of the company is commensurate
with its size and nature of its business.
8. The Central Government has prescribed maintenance of Cost Records under
Section 209(1)(d) of the Companies Act, 1956 in respect of certain
machining activities of the company. We have broadly reviewed the accounts
and records of the company in this connection and are of the opinion, that
prime facie, the prescribed accounts and records have been properly
9. In respect of statutory dues:
a) According to the records of the company, undisputed statutory dues
including provident fund, Investor Education and Protection fund,
Employees' State Insurance, Income-Tax, Sales-Tax, Fringe Benefit Tax, VAT,
Wealth-Tax, Service Tax Customs Duty, Excise Duty, Cess and other statutory
dues have generally been deposited regularly with the appropriate
authorities. According to the information and explanations given to us, no
undisputed amounts payable in respect of the aforesaid dues were
outstanding as at 30th June 2006, for a period of more than six months from
the date of becoming payable.
b) The disputed statutory dues aggregating to Rs.14.21 Lacs, that have not
been deposited on account of matters pending before appropriate authorities
are as under:
Sr Name of the State Nature of Forum where dispute Amount
Dues is pending (Rs. lacs)
1. Haryana Sales Sales Tax Appellate Sales 10.62
Tax Act & Central Tax Tribunal
Sales Tax Act
2. Labour Act Labour Claim Labour Court, 3.59
Total Gurgoan 14.21
10. The company has no accumulated losses and has not incurred any cash
losses during the year ended 30th June 2006 covered by our audit or in the
immediately preceding financial period.
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 explanation given
to us, no loans and advances have been granted by the company on the basis
of security by way of pledge of shares, debentures and other securities.
13. In our opinion, the company not being a chit fund or a nidhi/mutual
benefit fund/society, the provision of clause 4(xiii) of the companies
(Auditor's Report) Order 2003 (Amendment 2004) are not applicable to the
14. The company is not engaged in trading of securities, debentures and
other investments. However, proper records of transactions and contracts
in respect of long term investments in its subsidiaries and others have
been maintained and timely entries have been made therein. All Securities
including shares, debentures and other investments have been held by the
company in its own name.
15. The company has not given guarantees for loans taken by others from
banks or financial institutions according, to the information and
explanations given to us, we are of the opinion that the terms and
condition thereof are not prime facie prejudicial to the interest of the
16. The Company has not raised term loans from Financial Institutions/Banks
during the year.
17. According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we report that
funds raised on short term basis have not been used for long term
investment and long term funds have not been used to finance short term
assets except for the purpose of meeting the long term working capital.
18. During the year ended 30th June 2006, the company has made preferential
allotment of 53,00,000 equity shares of Rs. 2/- each to parties and
companies covered in the Register maintained under section 301 of the
Companies Act, 1956. In our opinion, the price on which shares have been
issued, is not prejudicial to the interest of the company.
19. The company has raised money through FCCB issue during the year and
used the same for the purposes, for which it has been issued except an
amount of Rs. 1,18,666.89 Lacs, which, pending utilisation, is lying in
short term fixed deposits in foreign currency.
20. During the year, the Company raised 0% Foreign Currency Convertible
Bonds 2011 (FCCB) of USD 250 million for setting up new manufacturing
facilities, expanding existing capacities, acquisitions on new businesses.
21. In our opinion and according to the information and explanation given
to us, no fraud on or by the company has been noticed or reported during
the year ended 30th June 2006, that causes the financial statements
For Manoj Mohan & Associates
Place : New Delhi (M. K. Aggarwal)
Dated : 30th October 2006 PARTNER
Membership No.: 76980