| Report on the Financial Statements
We have audited the accompanying financial statements of ADITYA FORGE
LIMITED ('the Company) which comprise the Balance Sheet as at March 31,
2014, the Statement of Profit and Loss for the year ended, and a
summary of significant accounting policies and other explanatory
information.
Management's Responsibility for the Financial Statements Management is
responsible for the preparation of these financial statements that give
a true and fair view of the financial position, financial performance
of the Company in accordance with the Accounting Standards notified
under the Companies Act, 1956 ("the Act) read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies act, 2013. 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.
Auditor's Responsibility
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 misstatement.
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 companies
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 andappropriate to provide a
basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and 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 March 31, 2014;
(ii) in the case of the Statement of Profit and Loss, of the 'LOSS' for
the year ended on that date;
(iii) In the case of the 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"), as amended, 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 Order.
As required by section 227(3) of the Act, 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
audit;
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,
c. the Balance Sheet, Statement of Profit and Loss and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account,
d. in our opinion, the Balance sheet, statement of profit and loss and
the Cash Flow Statement comply with Accounting Standards notified under
the Companies Act, 1956 ("the Act") read with General Circular 15/2013
dated 13th September, 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of 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 referred to in paragraph titled as 'Report on Other Legal and
Regulatory Requirements' of Independent Auditors Report to the members
of ADITYA FORGE LIMITED for the year ended 31st March 2014.
1. In respect of its fixed assets:
(a) The company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) As explained to us, all the fixed assets have been physically
verified by the management during the year in accordance with a phased
programmed of verification adopted by the Company. In our opinion, the
frequency of verification is reasonable having regard to the size of
the company & nature of its assets. As informed to us, no material
discrepancies were noticed on such physical verification.
(c) As explained to us, the company has not made disposal of
substantial part of fixed assets during the year under review and has
not affected the going concern.
2. In respect of its inventories:
(a) Physical verification of inventory has been conducted at reasonable
intervals by the management.
(b) Procedures for physical verification of inventory followed by the
management needs to improve to make it adequate in relation to the size
of the company and the nature of its business.
(c) In Our Opinion, the Company is maintaining proper records of
Inventory. Discrepancies noticed on Physical verification of Inventory
as compared to book records were not material and have been properly
dealt with in the books of accounts.
3. In respect of loans granted and taken to / from parties covered in
the register maintained u/s 301 of the Companies Act, 1956.
(a) The company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, clause (iii)(b) to (iii)(d)
of paragraph 4 of the Order are not applicable to the Company for the
Current year.
(b) The Company has taken loans, secured or unsecured, from companies,
firms or other parties covered in the register maintained under Section
301 of the Act.
(c) In our opinion and according to the information and explanation
given to us, barring the nil rate of interest and other terms and
conditions for such loans are not prima facie prejudicial to the
interest of the company.
(d) The loans taken are re-payable on demand.
4. In respect of internal control
In our opinion and according to the information and explanations given
to us there is adequate internal control system commensurate with the
size of the company and the nature of its business, for the purchase of
inventory and fixed assets and for the sale of goods and services.
During the course of audit, we have not observed continuing failure to
correct major weaknesses in internal control system.
5. In respect of contracts or arrangements need to be entered into a
register maintained u/s 301 of the Companies Act, 1956
(a) According to the information and explanation given to us, we are of
the opinion that the particulars of contracts or arrangements referred
to in section 301 of the companies Act 1956 have been entered in the
register required to be maintained under that section.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the companies Act 1956 are made at price which are reasonable having
regard to prevailing market prices at the relevant time.
6. In respect of deposits from public
No deposits within the meaning of Sections 58A and 58AA or any other
relevant provision of the Act and rules farmed there under have been
accepted by the Company.
7. In respect of internal audit system
In our opinion the Company has an in house internal audit system,
commensurate with the size of the Company and nature of its business,
however the same is required to be strengthened with regard to the
scope, reporting and its compliance.
8. In respect of maintenance of cost records
We have broadly reviewed the books of account maintained by the Company
pursuant to the rules made by the Central Government for Maintenance of
cost records under section 209(l)(d) of the Companies Act, 1956 in
respect of Company's product to which the said rules are made
applicable and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have, however
not made a detailed examination of the records with a view to determine
whether they are accurate.
9. In respect of statutory dues
(a) The company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
protection fund, employees' state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, Cess and other material statutory
dues applicable to it except Excise Duty amounting to Rs. 18,08,267/- &
Professional Tax amounting to Rs.89590/-
(b) According to the records of the Company, there are no dues of Sales
tax, Customs duty, Wealth tax, service tax and cess that have not been
deposited on amount of any dispute. There were disputed statutory dues
of the company that have not been deposited on account of matters
pending before appropriate authorities. The same are as below;
Sr Name of the Nature of Amount (Rs. Period to Forum
No. Statue the Due In Lakhs) which the where
amount dispute
is
relates pending
1 Income Tax Tax & 10,59,470/- F.Y2009-10 CIT(A)
Interest
2 Income Tax Tax & 77,51,550/- F.Y2010-11 CIT(A)
Interest
10. In respect of accumulated losses and cash losses
There are accumulated losses of Rs.483.76 Lacs [Previous Year Rs.454.78
Lacs] of the Company at the end of the financial year. There are no
cash losses during the financial year. In the current year company's
Net-Worth has exceeded Accumulated Losses. The Company has become Sick
Industrial Company within the meaning of Sick Industrial Company
(Special Provisions) Act, 1985 as the accumulated losses were more than
net worth of the Company. A reference to BIFR is recommended by the
Board.
11. In respect of dues to financial institution / banks / debentures
The company is not making payments to the Madhavpura Mercantile Co-op
Bank Limited(MMCB). The bank has filed a case against the company in
the Court of Board of Nominees. The company has provided for Interest
of Rs.1,92,11,140 to arrive at the figure for which case is filed by
the Bank with the Court of Board of Nominees as per the Notice No.
MMCB/HO/44/229/2011-12 dated 4th January, 2012 issued to the company
by MMCB. Interest from the date of decree on the outstanding amount of
the suit is yet to be charged to the Profit and loss account. The
Company had shown their willingness to settle the account as per OTS
offered to them by the Bank (MMCB) vide their letter No. MMCB/SHB
/43/10/11 DatedlO/06/2010. The request of Company is pending.
12. In respect of loans and advances granted on the basis of security
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.
13. In respect of provisions applicable to Chit fund
In our opinion and according to information and explanations given to
us the company is not chit fund or a nidhi or mutual benefit
fund/society. Accordingly, the provisions of clause 4(xiii) of the
Order are not applicable to the company.
14. In respect of dealing or trading in shares, securities, debentures
and other investment
According to the information and explanation given to us the company is
not dealing in or trading in shares, securities, debentures and other
investments. Accordingly the provision of clause 4(xiv) of the
Companies (Auditors Report) order 2003 are not applicable to the
company.
15. In respect of guarantee given for loans taken by others
According to the information and explanations given to us, the company
has not given any guarantee for loans taken by others from bank or
financial institutions.
16. In respect of application of term loans
According to the information and explanations given to us, in our
opinion, the terms loans were applied for the purpose for which they
were obtained.
17. In respect of fund used
According to the information and explanations given to us and on
overall examination of the balance sheet and cash flow statement of the
company, we report that no funds raised on short-term basis have been
used for long-term investment.
18. In respect of preferential allotment of shares
The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained u/s 301 of the
Act, during the year.
19. In respect of securities created for debentures
The company has not issued any debentures during the year. Therefore
provisions of clause 4(xix) of the Order are not applicable to the
company.
20. In respect of end use of money raised by public issues
The company has not raised any money from the public during the year
under audit.
21. In respect of fraud
Based upon the audit procedures performed for the purpose of recording
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 or by the company has been noticed or reported during the course
of our audit.
For, K.J.Shah & Co.,
Chartered Accountants
Registration No.132369W
Date: 24th August 2014
Place: Vadodara
(kamlesh J Shah)
Proprietor
Membership No.042390 |