Note – As the incident of the Robbery had taken place on 12th April, 2012, Inventory item lost was booked as “Loss Due To Robbery” under Exceptional Item. The company has filed the Insurance Claim but as the company predict the time period will be long to get the claim thus loss was booked to show the true and fair view of Financial Statements.
From Auditor’s Report
1. We have audited the Balance sheet of VIKASH METAL & POWER LIMITED as on 30th June, 2012 and also the Profit & Loss Account and the Cash Flow Statement for the period from 01.04.2011 to 30.06.2012, 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 have conducted our audit in accordance with auditing standards generally accepted in India. Those standards required that we plan 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 but restricted to the following:-
Since in the referred period, a major incident took place at the work site of the company. A robbery took place at the works site and major parts of plants has been reported lost and looted thus putting the question on the going concern concept of the company and moreover the company operation was suspended from October, 2011.
The management of the company has explained to us that in the said robbery, many important papers were found missing and the company is trying to recreate all the missing papers.
Further, the management has explained that during the said period the company has loss to tune of Rs. 16,064.84 lakh which has eroded the company capital and the net worth becomes negative and still the liabilities on the company are huge. The company is indebted to bankers; statutory liabilities are also here and not being paid up from more than six months and outstanding liabilities to many trade payables which is again a point of concern.
4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:
a) The management could not provide us all the information and documents due to papers destroyed in robbery as explained by the management.
b) Limitation of Scope, In our opinion, proper books of account, are maintained as required by law, and kept by the Company so far as appears from our examination of those books kept at the company’s office, but we are unable to form any opinion on factory accounts as we were not in a position to examine the books kept at factory due to its destruction during robbery.
c) The management has not ascertained the impairment loss, if any, required to be provided form in accordance with the requirement of mandatory Accounting Standard-28 “Impairment of Assets” issued by the Institute of Chartered Accountants of India. In view of it involving judgment of the management, we are unable, to quantify the same;
d) As explained by the management, no actuary valuation for gratuity has been made by the actuarial as no employees was there as on 30th June, 2012.
e) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts maintained.
f) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in s/s. (3C) of Section 211 of the Companies’ Act, 1956;
g) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors of the Company is disqualified as on 30th June, 2012 from being appointed as a director in terms of clause (g) of s/s. (1) of Section 274 of the Companies Act, 1956;
h) In our opinion and to the best of our information and according to the explanation given to us, the said statement of accounts, read with the Accounting Policies & Notes thereon, 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 principle generally accepted in India:
1) in the case of the Balance Sheet, of the state of affairs as on 30th June, 2012,
2) in the case of the Profit and Loss Account, of the Company for the period from 01-04-2011 to 30-06-2012, and
3) in the case of the Cash Flow Statement, of the cash flows of the Company for the period from 01-04-2011 to 30-06-2012.
