ORISSA INDUSTRTES LIMITED
ANNUAL REPORT 2007-2008
The Members of
Orissa Industries Limited,
1. We have audited the attached Balance Sheet of ORISSA INDUSTRIES LIMITED,
P.O. Lathikata, Dist.: Sundargarh as at 31st March, 2008, the Profit & Loss
Account and the Cash Flow Statement of the Company for the year ended on
that date both 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 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 misstatements. 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 opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 issued by
the Central Government 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 the Paragraphs 4 & 5 of the said Order.
4. Further to our comments in the Annexure referred to in Paragraph 3
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 purpose of our audit;
ii. In our opinion, proper books of accounts as required by law have been
kept by the Company so far as appears from our examination of those books
and proper returns adequate for our audit have been received from the
Depots and Offices not visited by us;
iii. The Balance Sheet, Profit & 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 & Loss Account and Cash Flow
Statement dealt with by this report comply with the mandatory Accounting
Standards referred to in Section 211 (3C) of the Companies Act, 1956;
v. On the basis of our review of the written representations received from
the Directors and taken on record by the Board of Directors, we report
that, none of the Directors is disqualified as on 31st March, 2008 from
being appointed as a director in terms of clause (g) of subsection (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 read together-With the
Schedules, significant accounting policies and notes thereto and subject to
the following remark 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.
Unpaid and unclaimed Dividend of Rs. 14.35 lakhs should have been
transferred to 'Investor Education & Protection Fund' as per Provisions of
Section 205C of the Companies Act, 1956.
a. in the case of the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2008.
b. in the case of the Profit & Loss Account, of the LOSS for the year ended
on that date and;
c. in the case of the Cash Flow Statement, of the cash flows of the Company
for the year ended on that date.
For H. NAIK & CO.
ANNEXURE TO THE AUDITORS' REPORT
Referred to in Paragraph 3 of our report of even date to the Members of
Orissa Industries Limited on the accounts for the year ended 31st March,
1. In respect of Fixed Assets
a. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets at Lathikata
Unit. The Fixed Asset Register in respect of Barang Unit is still in
process in preparation.
b. The Fixed Assets have not been physically verified during the year, but
as given to understand 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. The Company is in process of reconciliation of
physical inventory of Fixed Assets with book records.
c. In our opinion the disposal of Fixed Assets during the year does not
affect the going conern/status of the Company.
2. In respect of its inventories:
a. As explained to us, the inventories of finished goods, stores & spares,
and raw materials are in process of verification by the Management except
certain goods lying at different Depots and Ports.
b. In our opinion and according to the information and explanations given
to us, the procedures of verification of inventories followed by the
Management are reasonable and adequate in relation to the size of the
Company and nature of its business.
c. The Company is maintaining proper records of inventories. Since the
materials are in the process of verification, discrepancies if any found
between the physical verification and book records, will be adjusted as
explained to audit after completion of the physical verification.
3. In respect of loans secured or unsecured, granted or taken by the
Company to/from Companies, Firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
a. The Company has taken loan from one party-Orind Exports Limited,
amounting to Rs. 860.00 Lacs and has not given any loan secured or
unsecured to Companies, Firms or other parties covered in register
maintained under Section - 301 of the Companies Act, 1956.
b. In our opinion and according to the information and explanations given
to us, the rate of interest where applicable are not prima-facie
prejudicial to the interest of the Company.
c. The interest due to the above party is Rs. 55.90 Lacs (Previous Year Rs.
55.90 Lacs). The terms and conditions of loan taken do not contain any
specific period to pay principal and interest. Due to paucity of funds and
as the Company has gone to BIFR, the payment of principal and interest have
d. There is overdue amount in respect of loan taken by the Company, which
will be repayable on demand and therefore, question of overdue amount does
4. In our opinion, and according to the information and explanations given
to us, there is adequate internal control procedures commensurate with the
size of the Company and the nature of its business with regard to purchase
of stores, raw materials including components, plants and machinery,
equipment and other assets and for sale of goods. During the course of our
audit, we have not observed any major weakness in internal control.
The balance of slow and non-moving stores as at the end of the year is
valued at Rs. 21.77 Lacs (Previous Year Rs. 21.31 Lacs).
5. In respect of transactions covered under Section 301 of the Companies
a. In our opinion and according to the information and explanations given
to us, the transactions made in pursuance of contracts or arrangements that
needed to be entered into the register maintained under Section 301 of the
Companies Act, 1956 have been so entered.
b. These transactions have been made at prices which are reasonable having
regard to the prevailing market price at the relevant time.
6. The Company has not accepted any fixed deposits during the year.
7. The Internal Audit of the accounts of the Company has been audited by a
Firm of Chartered Accountants.
8. 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 any of the products of the Company.
9. In respect of statutory dues:
a. According to the records of the Company examined by us the followings
are the undisputed statutory dues outstanding at the year end for a period
of more than six months from the date they became payable
Particulars Current Year Previous Year
(Rs. In Lacs) (Rs. In Lacs)
1. Provident Fund 686.80 1181.19
2. E.S.I. 3.51 3.84
3. State & Central Sales Tax 440.86 424.10
4. Tax Deducted at Sources 48.75 43.66
5. ProfessionalTax 0.02 0.01
6. Service Tax 0.28 0.38
7. LIC Premium 29.86 34.82
8. Customs Duty 46.28 4628
(against materials at ports)
TOTAL 1256.36 173428
b. The disputed statutory dues aggregating to Rs. 11380.23 Lacs (Previous
Year Rs. 11838.46 Lacs) have not been deposited on account of matters
pending before appropriate authorities are as under:
Name of Nature of Forum where dispute Current Previous
the Statute Dues pending Year Year
(Rs. in Lacs) (Rs.in Lacs)
Fund Penalty, Asst. Provident 19926 19926
Penal Fund Commissioner,
Damage & Bhubaneswar
2. State &
Central Additional With different 141.70 14021
Sales Tax Demand Appellate
Duty & Additional Pending with Asst 824.63 1305.40
cess Demand Commissioner of
Central Excise and
(Appeals) of Central
Excise and other
4. Income Incom Tax Tribunal 68.57 68.57
Tax and Commissioner of
Income Tax, Cuttack
Deduded Additional lncome Tax Officer 63.39 -
at Sources Demand (TDS), Rourkela
6. Customs Additional Before CEGAT & 9921.21 9971.770
Duty Demand Commissiner of
7. Sales Tax Interest D.I.C Bhubaneswar 161.47 15325
TOTAL 11380.23 11838.46
(*) Rs. 839.79 Lacs (Previous Year 839.79 Lacs) on account of Custdms Duty
provision made in the accounts against which Rs. 15.00 Iacs has been
deposited with Hon'ble High Court, Cuttack.
10. The Company has accumulated loss of Rs. 14587.07 Lacs (Previous Year
Rs. 12530.05 Lacs) at the end of the financial year which is more than 50%
of its net worth and also incurred cash losses during the financial year
and in the immediate preceding financial year are Rs. 2033.89 Lacs and
Rs.1822.91 Lacs respectively.
11. According to the records of the Company, it has not defaulted in
repayment of its dues to any Financial Institution or Bank during the year.
12. According to the information and explanations given to us the Company
has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanation given
to us the Company is not a Chit Fund or a Nidhi/Mutual Benefit
Fund/Society. Therefore, clause 4 (xiii) of the Companies (Auditors'
Report) Order 2003 is not applicable to the Company.
14. The Company has not dealt with any transactions and contracts in
respect of investment purchased and sold during the year. The investments
made by the Company are held in its own name.
15. The Company has not given any guarantee for loans taken by others from
banks or financial institutions except in case of loans taken by its staff
16. According to the information and explanations given to us, and the
records examined by us, the Company has not obtained any term loan during
17. 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.
18. 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 during the year.
19. The Company has not issued any debentures during the year. So the
question of security does not arise.
20. The Company has not raised any money by way of public issue during the
21. In our opinion and according to the information and explanations given
to us, no fraud on or by the Company has been noticed or reported during
the year that causes the financial statements to be materially misstated.
For H. NAIK & CO.