1. We have audited the attached balance sheet of M/s. OM METALS INFRA
PROJECTS LIMITED, (Formerly known as Om Metals Limited) as at
31.03.2006, the profit and loss account for the year ended on that date
and also the cash flow statement of the company for the year ended on
that date annexed thereto. The accounts of branches/division i.e.
Engineering, Multiplex and Hotel divisions audited by other auditors
are incorporated in the said balance sheet and profit and loss account
and cash flow statement which have been forwarded to us and have
considered the same in preparing this report. These financial statement
are the responsibility of the companys management. Our responsibility
is to express an opinion on these financial statements based on our
2. We conducted our audit in accordance with the 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 principal 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 subsection (4A) of
section 227 of the Companies Act, 1956, we enclose in the annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
4. Further to our comments in the annexure referred to in paragraph 3
above, we report that:
(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 accounts as required by law have
been kept by the company so far as appears from our examination of
those books and proper returns adequate for the purposes of our audit
have been received from the Engineering, Multiplex and Hotel
divisions/branches not visited by us. The branch/division Auditors
report has been forwarded to us and appropriately dealt with.
c) The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account
and with the audited returns, audited by other auditors of the
Engineering, Multiplex and Hotel divisions of the company.
d) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the applicable
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act 1956
e) On the basis of written representations received from the directors,
as on 31.03.2006 and taken on record by the Board of Directors, we
report that none of the directors of the company is disqualified as on
31.03.2006 from being appointed as a director in terms of clause (g) of
Sub-section (1) of section 274 of the Companies Act, 1956.
f) To bring accounting policy regarding valuation of finished goods of
Engg. division, provision of AS-2, the company has changed the method
of valuation of the above referred stocks from net selling/contract
price to cost or market price which ever is lower, this has effect on
profit and stocks to the extent referred in note no.-12 of schedule
g) In our opinion and to the best our information and according to the
explanations given to us, the accounts give the information required by
the Companies Act. 1956, in the manner so required subject to non
disclosure of quantitative details in hotel division give a true and
fair view in conformity with the accounting principles generally
accepted in India.
i) in the case of the balance sheet, of the State of affairs of the
Company as at 31.03.2006 and.
(ii) in the case of the profit and Loss account, of the profit for the
year ended on that date and
(iii) In the case of the cash flow statement, of the cash flows for the
year ended on that date.
For M.C. BHANDARI & CO.
Place: 38 Shopping Centre, Kota (Raj.)
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS REPORT TO THE MEMBERS
OF M/S OM METALS INFRAPROJECTS LIMITED, KOTA (FORMELY KNOWN AS OM
METALS LIMITED) ON THE ACCOUNTS FOR THE YEAR ENDED ON 31ST MARCH, 2006
On the basis of the information and explanations given to us and on the
basis of such checks as we considered appropriate, our statement on the
matters specified in para 3 and 4 of the said order is given below. In
preparing the report, we have considered the report made under the
aforesaid order by other auditors, who have audited the accounts of the
Divisions of Engg., Multiplex and Hotel of the Company.
1. IN RESPECT OF ITS FIXED ASSETS.
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of its fixed assets.
b) The management has carried out a physical verification of most of
its fixed assets during the year. In our opinion, the frequency of
verification is reasonable having regard to the size of the company and
the nature of its fixed assets. The discrepancies noticed on such
verification were not material and have been properly dealt with in the
books of accounts.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute substantial part of the fixed assets of the company and
such disposal has, in our opinion, not affected the going concern
status of the company.
2(a) The inventory of the company has been physically verified during
the year by the Management. In our opinion, the frequency of
verification is reasonable according to the nature of the business.
(b) In our opinion and according to the information and explanation
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 the nature of its business.
(c) On the basis of our examination of records of inventory, we are of
the opinion that the company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material, having
regard to the size or the operations of the Company and have been
properly dealt within the books of account.
3. According to the information and explanations given to us, the
company has neither granted nor taken any loans, secured or unsecured
to/from companies, firms or other parties covered in the register
maintained under section 301 of the companies Act, 1956. In view of
above paragraphs 4(iii) (a), (b), (c), (d), (e), (f) and (g) of the
order are not applicable.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased/job work are of special nature and suitable alternative
sources do not exist for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
company and the nature of its business with regard to the purchase of
inventories and fixed assets and with regard to the sale of goods and
services. Further, on the basis of our examination and according to
the information and explanations give to us, we have not observed any
continuing failure to correct major weaknesses in such internal control
5. In respect of contracts or arrangements entered in the register
maintained in pursuance of section 301 of the Companies Act, 1956 to
the best of our knowledge and belief and according to the information
and explanations given to us :-
a) The particulars of contracts or arrangements referred to in section
301 that needed to be entered into the register, maintained under the
said section have been so entered.
(b) In our opinion and having regard to our comments in Para (4) above
and according to the informations and explanations given to us, the
transactions [excluding loans reported under paragraph 3 above]
exceeding the value of rupees five lakhs in respect of any party during
the year have been made at prices which are prima facie reasonable
having regard to the prevailing market prices at the relevant time
where such prices are available.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from the Public. Therefore the
provisions of clause (vi) of the Companies (Auditors report) order,
2003 are not applicable to the company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. According to the information land explanation given to us,
maintenance of cost records have not been prescribed by the central
Govt. under section 209 (1) (d) of the Companies Act, 1956 to any
product of the company.
9(a) According to the information and explanations given to us and the
records of the company, examined by us, the company has been generally
regular except for few delays depositing undisputed statutory dues
including income tax, sales Tax, PF, ESI, Excise Duty, Cess, Customs
Duty, wealth Tax, service tax, investor education protection fund and
other material statutory dues applicable to it with the appropriate
authorities during the year. According to the information and
explanations given to us, no undisputed amounts payable in respect of
the aforesaid dues were outstanding as at 31.03.2006 for a period of
more than six months from the date of becoming payable except a sum of
Rs. 7.82 lacs in respect of Investor education and protection fund.
b) According to the information and explanations given to us and the
records of the company examined by us, there are no dues of income tax,
customs duty and cess maters which have not been deposited.
According to the information and explanations given to us and the
records of the company examined by us, the details of disputed dues not
paid on account of sales tax, excise duty and service tax are as
Nature of Nature of Forum where Net demand Period to which the
the Statute the Dues pending amount after deposit of
(Rs. in Lacs.) tax amount relates
Sales Tax Sales Tax Commissioner 116.14* 1984-85, 1985-86
Laws (Appeal/Tribunal 1990-91 to 1994-95,
High court 7.19 1986-87
Central Excise Excise Duty Commissioner 97.42 1987 to 1990,
(Appeal) 1997-98, 2001-02
Income Tax Income Tax CIT Appeal/ITAT 84.62* 1991-92,
* Against it, the company paid Rs. 109.08 lacs.
A general show cause notice of service tax received by the company that
service tax is payable on erection receipts in engg. division for the
period from 01.04.2004 to on ward. The company replied suitably
10. The Company does not have accumulated losses at the end of the
financial year March 31, 2006. Further, the company has not incurred
any cash losses during the financial year ended March 31, 2006 and in
the immediately preceding financial year ended March 31, 2005.
11. According to the records of the company examined by us and the
information and explanations given to us, the Company, has not
defaulted in repayment of dues to financial institutions and banks
during the year.
12. In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities, Paragraph 4 (xii) of the order is not applicable.
13. 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 are not applicable to the
14. In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments, Paragraph 4 (xiv)
of the order is not applicable to the company.
15. The company has given bank guarantees for advance taken/security
deposit for tendering by other (Joint venture) from project
authorities. According to the information & explanations given to us,
we are of the opinion that the terms & conditions there of are not
prima facie prejudicial to the interest of the company.
16. To the best our knowledge and belief and according to the
informations and explanations given to us, in our opinion, the term
loans taken by the company during the year have been applied by the
company for the purposes for which the loans were obtained.
17. According to the information and explanations given to us, and on
an over all examinations of the balance sheet of the company, we report
that funds raised on short term basis have prima facia not been used
during the year for long term investment.
18. As the company has not made any preferential allotment of shares
during the year, paragraph 4 (xviii) of the order is not applicable.
19. In our opinion and according to the information and explanations
given to us, the company has not issued any debentures, paragraph 4
(xix) of the order is not applicable.
20. Since the company has not raised any money by way of Public issue
during the year, Paragraph 4 (xx) of the order is not applicable.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no material fraud
on or by the company has been noticed or reported during the course of
our audit for the year ended March 31, 2006
For M.C. BHANDARI & CO.
M. N0. 70366
Place : Kota
Dated : 30-6-2006