Mar 31, 2023
ORIENT ABRASIVES LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Orient Abrasives Limited (âthe Companyâ) which comprise the balance sheet as at 31st March 2023, the statement of profit and loss including other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (''Ind ASâ) and the other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2023, its profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (âthe ICAIâ) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters which, in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in our forming our opinion thereon, and we do not provide a separate opinion on these matters. We have the matters described below to be the key audit matters to be communicated in our report:
Key audit matters |
How our audit addressed the key audit matter |
1. Overdue statutory payables - Royalty, contribution to District Mineral Fund (DMF) and Contribution to |
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National Mineral Exploration Trust (NMET) |
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The Company is liable to pay royalty liability on dispatch of extracted material from its mines. The Company is also required to make contribution to District Mineral Fund (DMF) and National Mineral Exploration Trust (NMET) as per various government notification in this regard. The Company has received demand letter dated August 16, 2018 from the Office of DMF and the Geology and Mining Department (District Mineral Foundation (Cell)) against the unpaid contribution and interest thereof with respect to the dispatch of bauxite ores from mines. The Company has filed petition against such demand which is pending in the Honorable Gujarat High Court and the management believes that the decision will come in favor of the Company. The Company has also received orders from department of Udyog and Khan, Gandhinagar up to March, 2018 with respect to LME based royalty refund (net of payable) of Rs. 129 lakhs. The refund is not yet received by the Company. As at year end, the Company is carrying liability in its books of Rs. 216.26 lakhs in respect of royalty and other contributions against which there is an advance payment ofRs. 128.21 lakhs as at March 31,2023. The liability amount includes contribution payable for past 1-5 years as per the books. |
⢠We have verified the relevant records of the Company''s obligation with respect of Royalty, NMET and DMF; ⢠We have discussed the Company''s policy regarding deposit of Royalty, NMET and DMF dues and as per management representation, the royalty is deposited in advance at the rate prescribed by Commissioner of Geology and Mining (CGM), whereas the royalty payable in the books of accounts is on account of difference between the rates prescribed by CGM and Indian Bureau of Mines (IBM). ⢠The management informed that the Company has also filed petition with honorable High Court of Gujarat against the demand letter from the Office of District Mineral Foundation and the Geology and Mining Department (District Mineral Foundation (Cell)) as the Company is of the view that the contribution is on production of bauxite ores after applicability of law w.e.f. September 16, 2015 instead of dispatch of bauxite ores from mines which were extracted before September 16, 2015. ⢠With respect to net refund orders received from department of Udyog and Khan, Gandhinagar, the Company will account for the same on receipt of such amount on the principles of prudence. ⢠We have ensured completeness of liabilities and relied on management representation as regards compliance of the Acts/notifications. |
2. Advance given to mining contractors pending adjustment |
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The Company extracts raw bauxite from its mines which are taken on lease. The company get the raw bauxite extracted through various sub-contractors which includes extraction, sizing, sorting, truck loading activities, etc. at various mines. The Company accounts for the inventories of raw bauxite in the books when all the activities of the subcontractors get completed and material is readily usable. As at March 31, 2023, the extracted stock of raw bauxite which remain to be sorted and weighment thereof is not recorded in the books. Against the contracted activities which are currently in progress, the Company has outstanding advance of Rs. 897.07 lakhs as at reporting date paid to subcontractors towards various activities at mines. Treatment of amount paid to sub-contractor as an advance pending adjustment, was determined to be key matter in our audit of the standalone financial statements. |
⢠We have reviewed the Company''s internal control as regards accounting of advance to sub-contractors and accounting of purchase of material. ⢠As per contractors'' confirmation and management representation, at the reporting year end, as mining activities are in progress and hence, the amount paid to the contractors are treated as advances since the mining services obligations are not yet completed. ⢠We have also verified the amount of advance settled during the year based on receipt of raw bauxite and details of additional advance paid during the year |
3. Impairment of manufacturing plant at Porbandar |
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The Company''s operations have been affected by nonavailability of core raw material - specialized grade raw bauxite. The Company has partially suspended the plant operations in respect of products manufactured from specialized grade raw bauxite at its Porbandar manufacturing plant. The management is taking care of plant equipment health through periodic maintenance activities to keep the plant in working condition. The net block of the property, plant and equipment at Porbandar plant is Rs. 6,694.68 lakhs as at March 31, 2023. |
Our audit procedures in relation to evaluation of impairment testing of the manufacturing plant at Porbandar included the following: ⢠Performing test of controls over key financial controls related to accounting, valuation and recoverability of assets through inspection of evidence. ⢠Performing substantive audit procedures including: - Obtaining the management''s impairment assessment; - Evaluating the key assumptions including projected revenue, weighted average cost of capital by comparing them with external data, where available; - Obtaining and evaluating the sensitivity analysis. |
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Board''s Report including Annexures to Board''s Report, Management Discussion and Analysis, Corporate Governance Report, Shareholder''s Information, but does not include the standalone financial statements and auditor''s report thereon. The Board''s Report and other information are expected to be made available to us after the date of this auditor''s report.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
When we read the aforesaid reports and information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concerns and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditors'' Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is high level of assurance, but is not a guarantee that audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatements of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofthe internal control.
⢠Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosure, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit ofthe standalone financial statements ofthe current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of
India terms of sub-section (11) of section 143 of the Act, we give in the Annexure - A, a statement on the matters
specified in clause 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) ofthe Act, we report that:
a) We have sought and 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 account as required by law have been kept by the Company so far as it appears from our examination ofthose books;
c) The balance sheet, the statement of profit and loss including other comprehensive income, statement of changes in equity and the cash flow statement dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 ofthe Act, read with Rule 7 ofthe Companies (Accounts) Rules, 2015;
e) On the basis of written representations received from the directors as on 31st March 2023, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2023, from being appointed as a director in terms section 164(2) ofthe Act;
f) With respect to the adequacy of internal financial controls over financial reporting of the Company and operating effectiveness of such controls, our separate report in annexure - B may be referred;
g) In our opinion and to the best of our information and according to the explanations given to us, remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 ofthe Act read with Schedule V ofthe Act.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanation given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements;
ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring the amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. a. The Management has represented that, to the best of its knowledge and belief, as disclosed in
the note no, 40(h) to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf ofthe Ultimate Beneficiaries;
b. The Management has represented, that, to the best of its knowledge and belief, as disclosed in
the note no. 40(i) to the accounts, no funds have been received by the Company from any person or entity, including foreign entities (âFunding Partiesâ), with the understanding,
whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
c. Based on such audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) above, contain any material misstatement.
v. The dividend declared or paid during the year by the Company is in compliance with section 123 ofthe Act.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.
For SANGHAVI & COMPANY Chartered Accountants FRN: 109099WMumbai MANOJ GANATRA
May 22, 2023 Partner
Membership No. 043485 UDIN: 23043485BGVZJS3842
Mar 31, 2018
INDEPENDENT AUDITORS'' REPORT
To
The Members of
ORIENT ABRASIVES LIMITED Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Orient Abrasives Limited (âthe Companyâ) which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in the equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules 2015 under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. We have taken into account the provisions of the Act and the rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143(11) of the Act.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether these Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal financial control relevant to the Company''s preparation of the Ind AS financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS 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, of the state of affairs of the Company as at 31st March 2018 and of the profit (including other comprehensive income), its cash flows and changes in equity for the year ended on that date.
Other Matters
The financial information of the Company for the year ended 31st March, 2017 and the transition date opening balance sheet as at 1st April, 2016 included in these Ind AS financial statements are based on the previously issued financial statements for the years ended 31st March, 2017 and 31st March, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, as applicable, which were audited by the predecessor auditors, on which they had expressed their unmodified opinion dated 3041 May, 2017 and unmodified opinion dated 26th May, 2016 respectively. The adjustments to those financial statements for the differences in the accounting principles adopted by the Company on transition to the Ind AS have been audited by us. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India terms of sub section (11) of section 143 of the Act, we give in the Annexure - A, a statement on the matters specified in clause 3 and 4 of the Order, to the extent possible.
2. As required by section 143(3) of the Act, we report that:
a) We have sought and 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 account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Act;
e) On the basis of written representations received from the directors as on 31st March 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018, from being appointed as a director in terms section 164(2) of the Act;
f) With respect to the adequacy of internal financial controls over financial reporting of the Company and operating effectiveness of such controls, our separate report in annexure - B may be referred;
g) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanation given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements under note no. 28;
ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.
On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we state that:
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. The fixed assets were physically verified by the management at reasonable intervals in a phased manner in accordance with a programme of physical verification. No discrepancies were noticed on such verification.
c. The title deeds of immovable properties are held in the name of the Company.
2 The inventories were physically verified by the management at reasonable intervals during the year. No material discrepancies were noticed on such physical verification carried out by the Company.
3 The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act.
4 The Company has complied with provisions of Section 185 and 186 of the Act in respect of loans, investments, guarantees and security, to the extent applicable.
5 The Company has not accepted any deposits within the meaning of the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.
6 We have broadly reviewed the cost records maintained by the Company pursuant to Section 148(1) of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
7 In respect of statutory and other dues:
a. The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess, GST and other statutory dues, to the extent applicable, with the appropriate authorities during the year. There are no undisputed statutory dues outstanding for a period of more than six months from the date they became payable.
b. There are no statutory dues, which have not been deposited on account of dispute except for the followings:
Name of the statute |
Nature of dues |
Amount (ill lakh s) |
Forum where dispute is pending |
Customs Act, 1962 |
Differential custom duty on account of misclassification on import of coal. |
54.51 |
Commissioner of Customs (Appeals) |
Customs Act, 1962 |
Redemption fine in lieu of confiscation u/s 125 of the Act |
1.59 |
Additional Commissioner of Customs |
Income Tax Act, 1961 |
Penalty proceedings for error made in the return filed by the Company for the assessment year 2009-10 |
47.49 |
Commissioner of Income Tax (Appeals) |
Income Tax Act, 1961 |
Disallowance of various expenses/deductions (under section 80IA) claimed by the Company for the year 2008-09, 2010-11, 2011-12, 2012-13 and 2013-14 along with the penalty proceedings of the same for the year 2008-09 |
775.38 |
Commissioner of Income Tax (Appeals) |
Income Tax Act, 1961 |
Disallowance of various deductions (under section 80IA) claimed by the Company for the year 2014-15 |
76.28 |
Assessing Officer |
8 The Company has not defaulted in repayment of loans or borrowing to banks. The Company has not obtained any borrowings from any financial institutions or government or by way of debentures.
9 Term loans obtained by the Company have been applied for the purpose for which they were obtained. The Company has not raised any money, during the year, by way of public offer (including debt instruments).
10 To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company or on the Company by its officers or employees was noticed or reported during the year.
11 Managerial remuneration paid or provided by the Company during the year is in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
12 Since the Company is not a Nidhi Company, the provisions of clause 3 (xii) of the Order are not applicable to the Company.
13 All transactions with the related parties are in compliance with Section 177 and 188 of the Act and the details have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.
14 The Company has complied with provisions of section 42 of the Companies Act, 2013 in respect of the preferential allotment of share warrants issued during the year. (refer note no. 41) The amounts so raised have been used for the purposes for which it was raised.
15 The Company has not entered into any non-cash transactions during the year with directors or persons concerned with him.
16 The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
We have audited the internal financial controls over financial reporting of Orient Abrasives Limited (âthe Companyâ) as of 31st March, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for the Internal Financial Statements
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that -
(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For SANGHAVI & COMPANY
Chartered Accountants FRN: 109099W
Sd/-
MANOJGANATRA
Partner
Membership No. 043485
Mumbai May 22, 2018
Mar 31, 2016
INDEPENDENT AUDITOR''S REPORT
To the Members of Orient Abrasives Limited Report on the Financial Statements
We have audited the accompanying financial statements of Orient Abrasives Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, 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.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. 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 auditorâs 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 financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, 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 on the financial statements.
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 of the state of affairs of the Company as at March 31, 2016, its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and 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 account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 38 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material forseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
ANNEXURE REFERRED TO IN PARAGRAPH ON REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE
Re: Orient Abrasives Limited (âthe Companyâ)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a 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 such verification.
(c) According to information and explanations given by the management, the title deeds of immovable properties are held in the name of the company.
(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31, 2016 and no material discrepancies were noticed in respect of such confirmations.
(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable and hence not commented upon.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of aluminum oxide grains, calcined products and monolithics, and generation of power, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities though the delays in deposit of income tax, provident fund and service tax have not been serious.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, duty of custom , value added tax and cess on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (in Rs. lacs) |
Forum where dispute is pending |
Customs Act, 1962 |
Differential custom duty on account of misclassification on import of coal. |
37.68 |
Commissioner of Customs (Appeals) |
Customs Act, 1962 |
Differential custom duty on account of misclassification on import of coal. |
16.83 |
Commissioner of Customs (Appeals) |
Customs Act, 1962 |
Redemption fine in lieu of confiscation u/s 125 of the Act |
1.59 |
Additional Commissioner of Customs |
Gujarat Value Added Tax Act, 2003 |
Demand against non-submission of C-Form |
22.01 |
Commissioner Appeals, Junagadh |
Income Tax Act, 1961 |
Penalty proceedings for error made in the return filed by the Company for the assessment year 2006-07 |
10.64 |
Commissioner of Income Tax (Appeal) |
Income Tax Act, 1961 |
Disallowance of various expenses/deductions (under section 80IA) claimed by the Company for the year 2008-09 along with the penalty proceedings of the same |
367.12 |
Commissioner of Income Tax (Appeal) |
Income Tax Act, 1961 |
Penalty proceedings for error made in the return filed by the Company for the assessment year 2009-10 |
36.85 |
Commissioner of Income Tax (Appeal) |
Income Tax Act, 1961 |
Disallowance of various expenses/deductions (under section 80IA) claimed by the Company for the year 2010-11 |
133.17 |
Commissioner of Income Tax (Appeal) |
Income Tax Act, 1961 |
Disallowance of various expenses/deductions (under section 80IA) claimed by the Company for the year 2011-12 |
195.11 |
Commissioner of Income Tax (Appeal) |
Income Tax Act, 1961 |
Disallowance of various expenses/deductions (under section 80IA) claimed by the Company for the year 2012-13 |
49.92 |
Commissioner of Income Tax (Appeal) |
Income Tax Act, 1961 |
Disallowance of deductions (under section 80IA) claimed by the Company for the year 2014-15 |
76.28 |
Assessing Officer |
(viii) According to information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks. The Company did not have any outstanding dues in respect of a financial institution or debentures during the year.
(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud on or by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the Balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
Sd/-
per Arpit K Patel
Partner
Membership Number: 34032
Place of Signature: Ahmedabad
Date: May 26, 2016
Mar 31, 2015
We have audited the accompanying financial statements of Orient
Abrasives Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2015, and the Statement of Profit and Loss and Cash
Flow Statement for the year ended, and a summary of significant
accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, 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 have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. 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 the 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 financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, 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 on the financial
statements.
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, of the state of affairs of the Company as at March 31, 2015, its
profit and its cash flows for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor's report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure 1 a
statement on the matters specified in paragraphs 3 and 4 of the Order.
As required by section 143(3) of the Act, we report that:
(a) We have sought and 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 account 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 Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
(d) In our opinion, the aforesaid stand alone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us.
(i) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 27 and 28
to the financial statements;
(ii) The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
(iii) There has been no delay in transferring amounts to the Investor
Education and Protection Fund by the Company.
ANNEXURE REFERRED TO IN PARAGRAPH ON REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE Re: Orient
Abrasives Limited ('the Company')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a 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 such verification.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(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 except that instructions for
physical verification of inventory were issued orally and not
documented.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act, 2013. Accordingly, the
provisions of clause 3(iii)(a) and (b) of the Order are not applicable
to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an 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.
During the course of our audit, we have not observed any major weakness
or continuing failure to correct any major weakness in the internal
control system of the company in respect of these areas.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 148(1) of the Companies Act,
2013, related to the manufacture of aluminium oxide grains and calcined
products, and generation of power, and are of the opinion that prima
facie, the specified accounts and records have been made and
maintained. We have not however, made a detailed examination of the
same.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, employees' state insurance, income-tax, sales-tax, wealth-tax,
service tax, professional tax, customs duty, excise duty, value added
tax, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income-tax, wealth-tax, service tax, sales-tax,
customs duty, excise duty, value added tax, cess and other material
statutory dues were outstanding, at the year end, for a period of more
than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, value added tax and cess on account of any dispute, are as
follows:
Name of the Nature of dues
Statue
West Bengal Sales Sales tax and Interest demand for
Tax Act, 1994 non- submission of sales tax declaration forms
for the year 1993-94
Sales Tax Act, Entry tax demand for entry of goods in
1944 Rajasthan for the year 2006-07
Service Tax Act, Service tax demand for input tax credit availed
1994 on foreign business auxiliary services and
other consulting services
Income Tax Act, Disallowance of various expenses /
1961 deductions (under section 80IA) claimed by
the Company for the year 2007-08
Name of the Statute Amount Forum where dispute
(Rs. in lacs) is pending
West Bengal Sales Tax 3.75 Sales Tax Commissioner (Appeal)
Act 1994
Sales Tax Act, 1944 36.06 Hon'ble High Court of Rajasthan
Service Tax Act, 1994 85.48 Joint Commissioner Excise,
Jaipur
Income Tax Act, 1961 55.42 ITAT
Name of the Nature of dues
Statue
Income Tax Act, Penalty proceedings for error made in the
1961 return filed by the Company for the
assessment year 2009-10
Income Tax Act, Disallowance of depreciation u/s 32 for the
1961 assessment year 2010-11
Customs Act, Differential custom duty on account of
1962 misclassification on import of coal.
Name of the Statute Amount Forum where dispute
(Rs. in lacs) is pending
Income Tax Act, 1961 159.79 Assessing Officer
Income Tax Act, 1961 40.24 Commissioner of Income
Tax (Appeal)
Income Tax Act, 1962 37.68 Commissioner of Customs (Appeal)
(d) According to the information and explanations given to us, the
amount required to be transferred to investor education and protection
fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made thereunder has been transferred to such
fund within time.
(viii) The Company has no accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
(ix) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks. The Company
has not issued any debentures and has not borrowed funds from financial
institutions
(x) 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.
(xi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xii) Based upon the audit procedures performed for the purpose of
reporting 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 on or by the Company has been noticed or reported during
the year.
For S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E
Sd/-
Per Vikas Mehra
Partner
Membership No.: 94421
Place of Signature : New Delhi
Date : May 16, 2015
Mar 31, 2014
We have audited the accompanying financial statements of Orient
Abrasives Limited (''the Company''), which comprise the balance sheet as
at March 31, 2014, 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
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956, read with
General Circular 8/2014 dated April 4, 2014 issued by the Ministry of
Corporate Affairs. 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 the entity''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.
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 Companies Act, 1956 ("the Act") in the manner so
required and 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 March 31, 2014,
(b) In the case of the statement of profit and loss, of the profit for
the year ended on that date, and
(c) 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") 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.
2. 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 account 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 cash flow
statement 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
notified under the Companies Act, 1956, read with General Circular
8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs.
(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 1 UNDER THE HEADING "REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE
Re: Orient Abrasives Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a 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 such verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(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.
(iii) (a) According to the information and explanation given to us, 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 Companies Act, 1956. Accordingly, the provisions of clause 4
(iii) (a) to (d) of Order are not applicable to the Company and hence
not commented upon.
(b) The Company had taken loan from four parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 479.82 lacs and the
year-end balance of loans taken from such parties was Rs. 479.82 lacs.
(c) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(d) The Company has repaid the loan to the extent demanded and as
informed, the lenders have not demanded repayment of the balance loans
during the year and thus, there has been no default on the part of the
Company. The payments of interest have been regular.
(iv) In our opinion and according to the information and explanations
given to us, there is an 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. The
activities of the Company do not involve the sale of services. During
the course of our audit, we have not observed any major weakness or
continuing failure to correct any major weakness in the internal
control system of the company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered. (b) In our opinion and according to the information
and explanations given to us, the transactions made in pursuance of
such contracts or arrangements and exceeding the value of Rupees five
lacs have been entered into during the financial year at prices which
are reasonable having regard to the prevailing market prices at the
relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956, and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, related to the manufacture of aluminium oxide grains and
calcined products and the generation of power, and are of the opinion
that prima facie, the prescribed accounts and records have been made
and maintained. We have not, however, made a detailed examination of
the same.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it. (b)
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investors
education and protection fund, employee''s state insurance, sales tax,
custom duty, excise duty, income-tax, service tax,cess and other
material statutory dues were outstanding, at the year end, for a period
of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the Nature of dues Amount Forum where dispute
Statue (in lacs) is pending
West Bengal Sales Sales tax and Interest
demand for 3.75 Sales Tax Commissioner
Tax Act, 1994 non- submission of
sales tax declaration
forms (Appeal)
for the year 1993-94
Sales Tax Act, Entry tax demand for
entry of goods in 36.06 Hon''ble High Court of
1944 Rajasthan for the year
2006-07 Rajasthan
Service Tax Act, Service tax demand for
input tax credit availed 85.48 Joint Commissioner
Excise,
1994 on foreign business
auxiliary services and Jaipur
other consulting
services
Income Tax Act, Disallowance of various
expenses/deductions 1,874.95 High Court, Delhi
1961 (under section 80IA)
claimed by the Company
for the year 2001-02 to
2008-09.
Income Tax Act, Disallowance of
depreciation u/s 32 for 312.78
the Commissioner of Income
1961 assessment year 2010-11 Tax (Appeal)
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks. The Company
did not have any outstanding dues in respect of a financial institution
or debentures during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) 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 (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) 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.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) 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 long term
investment.
(xviii) 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.
(xix) The company did not have any outstanding debentures during the
year.
(xx) The company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting 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 on or by the Company has been noticed or reported during
the year.
For S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E
Sd/-
per Vikas Mehra
Partner
Membership No.: 94421
Place : New Delhi
Date : May 27, 2014
Mar 31, 2013
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Orient
Abrasives Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2013, and the Statement of Profit and Loss and Cash Flow
Statement 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 and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). 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. 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.
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013,
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date and
(c) 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") 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.
2. 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 account 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 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 Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956,
(e) On the basis of written representations received from the directors
as on March 31, 2013 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2013 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 1 UNDER THE HEADING "REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE
Re: Orient Abrasives Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a 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 such verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(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.
(iii) (a) According to the information and explanation given to us, 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 Companies Act, 1956. Accordingly, the provisions of clause
4 (iii) (a) to (d) of Order are not applicable to the Company and hence
not commented upon.
(e) The Company had taken loan from three parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 824.09 Lacs and the
year-end balance of loans taken from such parties was Rs. 440.84 Lacs.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(g) The Company has repaid the loan to the extent demanded and as
informed, the lenders have not demanded repayment of the balance loans
during the year and thus, there has been no default on the part of the
Company. The payments of interest have been regular.
(iv) In our opinion and according to the information and explanations
given to us, there is an 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 our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five Lacs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956, and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1 )(d) of the Companies
Act, 1956, related to the manufacture of aluminium oxide grains and
calcined products and the generation of power and are of the opinion
that prima facie, the prescribed accounts and records have been made
and maintained. We have not, however, made a detailed examination of
the same.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investors
education and protection fund, employee''s state insurance, sales tax,
custom duty, excise duty, income-tax, service tax, cess and other
material statutory dues were outstanding, at the year end, for a period
of more than six months from the date they became payable.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution and bank. The Company did not have any debentures during
the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) 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 (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) 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.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) 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 long term
investment.
(xviii)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.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting 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 on or by the Company has been noticed or reported during
the year.
For S R Batiiboi & Co. LLP
Chartered Accountants
ICAI Firm Registration
Number: 301003E
per Vikas Mehra
Partner
Membership Number: 94421
Place: Gurgaon
Date :May 17, 2013
Mar 31, 2012
1. We have audited the attached balance sheet of Orient Abrasives
Limited ('the Company') as at March 31, 2012 and also the statement of
profit and loss and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company's 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
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) 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 Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, 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
audit;
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
those books;
iii. The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, statement of profit and loss
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 Act, 1956.
v. On the basis of the written representations received from the
directors, as on March 31, 2012, and taken on record by the board of
directors, we report that none of the directors is disqualified as on
March 31, 2012 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 give the information
required by the Companies Act, 1956, in the manner so required and 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 March 31, 2012;
b) in the case of the statement of profit and loss , of the profit for
the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date Re:
[Orient Abrasives Limited] ('the Company')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets were physically verified by the management in
2009-10 in accordance with a planned programme of verifying them once
in three years 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 such verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(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.
(iii) (a) According to the information and explanations given to us,
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 Companies Act, 1956. Accordingly, the
provisions of clause 4(iii)(a) to (d) of the Order are not applicable
to the Company and hence not commented upon.
(e) The Company had taken loan from two parties covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs. 572.28 Lacs and the year-end
balance of loans taken from such parties was Rs. 234.16 Lacs.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(iv) In our opinion and according to the information and explanations
given to us, there is an 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 our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956, and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, related to production of fused aluminum oxide grains and
calcined products and the generation of power, and are of the opinion
that prima facie, the prescribed accounts and records have been made
and maintained.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the
Statute Nature of dues Amount Forum where dispute
(Rs. in
Lacs) is pending
West Bengal
Sales Sales tax and Interest
demand for non 3.75 Sales Tax Commissioner
Tax Act, 1994 submission of sales
tax declaration (Appeal)
forms for the year
1993-94
Sales Tax
Act, 1944 Entry tax demand
for entry of goods in 36.06 Hon'ble High Court of
Rajasthan
Rajasthan for the
year 2006-07
Service Tax
Act, 1994 Service tax demand
for input tax credit 85.48 Joint Commissioner
Excise,
availed on foreign
business auxiliary Jaipur
services and other
consulting services
Income Tax
Act, 1961 Disallowance of
various expenses/ 2,289.52 High Court, Delhi
deductions (under
section 80IA) claimed
by the Company for
the year 2001-02
to 2008-09
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to bank. The Company did
not have dues to financial institutions. The Company did not have any
debentures during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) 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 (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) 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.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) 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 long-term
investment.
(xviii)The Company has not made preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting 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 on or by the Company has been noticed or reported during
the year.
For S.R. BATLIBOI & CO.
Firm registration number: 301003E
Chartered Accountants
per Vikas Mehra
Partner
Membership No.: 94421
Place : Gurgaon
Date : May 29, 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of Orient Abrasive
Limited ('the Company') as at March 31, 2011 and also the Profit and
Loss account and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company's 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
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) 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 Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, 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
audit;
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
those books;
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 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 Act, 1956.
v. On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2011 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 give the information
required by the Companies Act, 1956, in the manner so required and 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 March 31, 2011;
b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph [3] of our report of even date
Re: [Orient Abrasives Limited] ('the Company')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets were physically verified by the management in the
previous year in accordance with a planned program of verifying them
once in three years, which, in our opinion, is reasonable having regard
to the size of the Company and the nature of its assets. As informed,
no material discrepancies were noticed on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(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 carried
out during the current year.
(iii) (a) According to the information and explanations given to us,
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 Companies Act, 1956. Accordingly, the
provisions of clause 4(iii)(a) to (d) of the Order are not applicable
to the Company and hence not commented upon.
(e) The Company had taken loan (repayable on demand) from a company and
a director covered in the register maintained under section 301 of the
Companies Act, 1956. The maximum amount involved during the year was Rs
38,000,000 and the year-end balance of loans taken from such parties
was Rs. NIL.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(g) In respect of loans taken, repayment of the principal amount is as
stipulated and payment of interest has been regular.
(iv) In our opinion and according to the information and explanations
given to us, there is an 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 our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered. (b) In our opinion and according to the information
and explanations given to us, the transactions made in pursuance of
such contracts or arrangements and exceeding the value of Rupees five
lakhs have been entered into during the financial year at prices which
are reasonable having regard to the prevailing market prices at the
relevant time. (vi) In respect of deposits accepted, in our opinion
and according to the information and explanations given to us,
directives issued by the Reserve Bank of India and the provisions of
sections 58A, 58AA or any other relevant provisions of the Companies
Act, 1956, and the rules framed there under, to the extent applicable,
have been complied with. We are informed by the management that no
order has been passed by the Company Law Board, National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business. (viii To the
best of our knowledge and as explained, the Central Government has not
prescribed maintenance of cost records under clause (d) of sub-section
(1) of section 209 of the Companies Act, 1956 for mining and refractory
business of the Company. We have broadly reviewed the books of account
maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under section 209(1)(d)
of the Companies Act, 1956, related to the generation of power, and are
of the opinion that prima facie, the prescribed accounts and records
have been made and maintained. (ix) (a) Undisputed statutory dues
including provident fund, investor education and protection fund,
employees' state insurance, income-tax, sales-tax, wealth-tax, service
tax, customs duty, excise duty, cess and other material statutory dues
have generally been regularly deposited with the appropriate
authorities though there has been a slight delay in a few cases.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same. (b) According to the information
and explanations given to us, no undisputed amounts payable in respect
of provident fund, investor education and protection fund, employees'
state insurance, income-tax, wealth-tax, service tax, sales-tax,
customs duty, excise duty cess and other material statutory dues were
outstanding, at the year end, for a period of more than six months from
the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the
Statute Nature of dues Amount Forum where dispute
is pending
(Rs. In
lacs)
West Bengal Sales tax and Interest
demand for non 3.75 Sales Tax
Sales Tax submission of sales tax
declaration Commissioner
(Appeal)
Act, 1994 forms for the year 1993-94
Sales Tax Entry tax demand for entry
of goods in 36.06 Hon'ble High Court
of Rajasthan,
Act, 1944 Rajasthan for the year
2006-07 Jodhpur
Service Tax
Act, Service tax demand for input
tax credit 85.48 Joint Commissioner
1994 availed on foreign business
auxiliary Excise, Jaipur
services and other
consulting services
Income Tax Act, Disallowance of various
expenses/ 1,685.43 Hon'ble High Court
of Delhi,
1961 deductions (under section
80IA) claimed New Delhi
by the Company for the
year 2001-02 to 2007-08
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) 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 (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) 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.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) 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 long-term
investment.
(xviii) 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.
(xix) The Company did not have any outstanding debentures during the
year. (xx) The Company has not raised any money through a public issue
during the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting 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 on or by the Company has been noticed or reported during
the year.
For S.R. Batliboi & Co.
Firm Registration No: 301003E
Chartered Accountants
per Manoj Gupta
Partner
Membership No. 83906
Place : Gurgaon, Haryana
Date : May 30, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Orient Abrasive
Limited (Ãthe CompanyÃ) as at March 31, 2010 and also the Profit and
Loss account and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the CompanyÃs 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 our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003 (as
amended) 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 Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, 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
audit;
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 those
books;
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 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 Act, 1956.
v On the basis of the written representations received from the
directors, as on March 31, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2010 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 give the information
required by the Companies Act, 1956, in the manner so required and 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 March 31, 2010;
b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph [3] of our report of even date Re:
[Orient Abrasives Limited] (Ãthe CompanyÃ)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(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 carried
out during the current year.
(iii) (a) As informed, 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 Companies Act, 1956.
Therefore the provisions of clause (iii) (b), (c) and (d) of the
Companies (AuditorÃs Report) Order, 2003 (as amended) (hereinafter
referred to as the Order) are not applicable to the Company.
(e) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Therefore the provisions of clause (iii) (f) and (g) of the Order are
not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there is an 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 our audit, no major weakness has been
noticed in the internal control system in respect of these areas.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system of the
company.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be
entered into the register maintained under section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A,58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal, Reserve Bank of India
or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) To the best of our knowledge and as explained, the Central
Government has not prescribed maintenance of cost records under clause
(d) of sub-section (1) of section 209 of the Companies Act, 1956 for
the products of the Company.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employeesà state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and other material statutory dues applicable to it.
Further, since the Central Governent has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act,1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employeesà state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty and other
undisputed statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the Statute Nature of dues Amount
(Rs. In lacs)
West Bengal Sales tax and Interest demand for non 3.75
Sales Tax submission of sales tax declaration
Act, 1994 forms for the year 1993-94
Sales Tax Entry tax demand for entry of goods in 36.06
Act, 1944 Rajasthan for the year 2006-07
Service Tax
Act, Service tax demand for input
tax credit 43.33
1994 availed on foreign business auxiliary
services and other consulting services
Service Tax
Act, Service tax demand for input
tax credit 14.07
1994 availed on foreign business auxiliary
services and other consulting services
Income Tax
Act, Disallowance of various expenses/ 243.91
1961 deductions (under section 80IA) claimed
by the Company for the year 2003-04
Name of the Statue Forum where dispute is pending
West Bengal
Sales Tax
Act, 1994 Sales Tax
Commissioner (Appeal)
Sales Tax
Act, 1944 Honble High Court of Rajasthan,
Jodhpur
Service Tax Act,
1994 Joint, Commissioner
Excise, Jaipur
Service Tax Act,
1994 Additional Commissioner
Excise, Jaipur
Income Tax Act,
1961 Honble High Court, Delhi
According to the information and explanation given to us, there are no
dues of wealth tax, customs duty, excise duty and cess which have not
been deposited on account of any dispute.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) 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.
(xiii) 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 Order are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company.
(xv) 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.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) 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 long-term
investment.
(xviii) 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.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting 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 on or by the Company has been noticed or reported during
the course of our audit.
For S.R. Batliboi & Co.
Firm Registration No: 301003E
Chartered Accountants
per Manoj Gupta
Partner
Membership No. 83906
Place : Gurgaon, Haryana
Date : May 31, 2010