BILATI (ORISSA) LIMITED
ANNUAL REPORT 2005-2006
The Members of
Bilati (Orissa) Limited,
1. We have audited the attached Balance Sheet of BILATI (ORISSA) LIMITED as
at 31st March, 2006, the Profit and Loss Account and also 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 have conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by the
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
3. As required by the Companies (Auditors' Report) Order, 2003 issued by
the Central Government of India in terms of subsection (4A) of Section 227
of the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the annexure referred to above, we report
(i) We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purpose of our audit.
(ii) In our opinion, proper books of 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 to the extent applicable.
(v) On the basis of written representations received from the Directors of
the Company and read with the Department of Company Affair's classification
No. 2/95/2001 CLB, General Circular No. 8/2002 dated 22.03.2002 taken on
record by the Board of Directors and we report that none of the Directors
are disqualified as on 31st March, 2006 from being appointed as a Director
in terms of Section 274(1)(g) 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 :
i) in the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2006;
ii) in the case of the Profit and Loss Account, of the loss for the year
ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
For L. N. MORE & CO.
L. N. MORE
Membership No. 011485
Dated : 20th October, 2006
ANNEXURE TO THE AUDITORS' REPORT
With reference to the Annexure referred to in paragraph 3 of the Auditors'
Report to the Members of Bilati (Orissa) Limited ('the Company') on the
financial statements for the year ended 31st March, 2006, we report that :
i) (a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) All the 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
(c) During the year the Company has not disposed off any of its fixed
assets and maintained going concern status.
ii) (a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are of
the opinion that the Company is maintaining proper records of inventory.
The discrepancies noted on physical verification between the physical
stocks and the book records were not material.
iii) (a) The Company has not taken loan during the year from body
corporates and other parties listed in the register maintained under
Section 301 of the Companies Act, 1956 on such terms which are prejudicial
to the interest of the Company.
(b) The Company has not granted any loan, secured or unsecured to any
companies, firms or other parties listed in the Register maintained under
Section 301 of the Companies Act, 1956 during the year. There are no
companies under the same management within the meaning of Section 370(1-B)
of the Companies Act, 1956.
iv) In our opinion and according to the information and explanations given
to us, there are adequate internal control procedures commensurate with the
size of the Company and the nature of its business with regard to purchases
of inventory, fixed assets and with regard to the sale of goods. During the
course of our audit, we have not observed any continuing failure to correct
major weaknesses in internal control.
v) There are no transactions for purchase of goods and materials and sale
of goods, materials and services made by the Company in pursuance of
contracts or arrangements entered in the Registers maintained under Section
301 of the Companies Act, 1956 and aggregating during the year to
Rs. 5,00,000 or more during the year in respect of each party.
vi) The Company has not accepted deposits from the public under Section 58A
and 58AA of the Companies Act, 1956.
vii) In our opinion, the Company has an internal audit system commensurate
with the size and nature of its business.
viii) The Central Government has not prescribed the maintenance of cost
records under Section 209(1) of the Companies Act, 1956.
ix) The Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education & Protection Fund, ESI,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty,
Cess and any other statutory dues applicable to it with the appropriate
authorities. The statutory dues which were outstanding for more than six
months from the date they became payable are P.F. sums Rs. 1,45,811,
Pension Fund Rs. 44,157 & TDS Rs. 18,39,996.
x) In our opinion, the accumulated losses of the Company are more than of
its net worth. The Company has incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year. The
Company is a Sick Industrial Company within the meaning of Section 3(1)(0)
of the Sick Industrial Companies (Special Provisions) Act, 1985.
xi) In our opinion and according to the information and explanations given
to us, the Company has defaulted in repayment of dues to Banks. The default
positions are as follows :
(Amount Rs. in Lacs)
Name of Previous year position Current year position
the Bank (2004-2005) (2005-2006)
A B C A B C
Bank of India 393.56 - 393.56 75 - 75
Orissa State 456.15 541.03 997.18 456.15 541.03 997.18
Keonjhar Central 49.00 32.87 81.87 49.00 29.87 78.87
A = Principal
B = Interest
C = Total
xii) The provisions of clause xii, xiii, xiv, xv, xvi, xvii, xviii, xix and
xx of paragraphs 4 and 5 of the Companies (Auditor's Report) Order, 2003
are not applicable for the current year.
xiii) According to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the course of our
For L. N. MORE & CO.
L. N. MORE
Membership No. 011485
Dated : 20th October, 2006