harig crankshafts ltd Auditors report

HARIG CRANKSHAFTS LIMITED ANNUAL REPORT 2008-2009 AUDITORS REPORT TO THE MEMBERS OF HARIG CRANKSHAFTS LIMITED We have audited the attached Balance Sheet of M/s. Harig Crankshafts Limited, Noida as at 31st March 2009 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 companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 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 from 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 opinion. In accordance with the provisions of section 227 of The Companies Act, 1956, we report that; 1. As required by the Companies (Auditors Report) order, 2003, issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks of the books and record of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraphs 4and 5 of the said order. 2. Further to our Comments in the annexure referred to above, 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 the examination of the books. c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts. d) 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 sub section (3C) of section 211 of the Companies Act, 1956; and subject to non provision of certain liabilities, Note 11 of schedule- 12. e) On the basis of the written representation received from the directors as on 31st March, 2009 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2009 from being appointed as a director in term of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956. f) In our opinion and to the best of our information and according to explanations given to us, the said accounts, subject to Note No. 5 regarding non-confirmation\reconciliation of account of secured loansdebtors\ creditors\ loans & advances, Note No. 11 regarding non provisions of gratuity, leave encashment, of schedule 12 read together with significant accounting policies and note appearing 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 accounting principals generally accepted in India: g) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2009. h) In the case of Profit & Loss Account, of the loss of the Company for the year ended on that date; and i) In the case of Cash Flow statement, of the cash flows for the year ended on that date. For J.K. ARORA & CO., Chartered Accountants PLACE : New Delhi DATE : 31.08.09 (J.K. ARORA) PROPRIETOR Membership no. 9787 ANNEXURE TO THE AUDITORS REPORT Re; Referred to in paragraph 1 of our report of even date. I. (a) The Company is maintaining 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 verification. (c) During the year, in our opinion, the company has not disposed of a substantial part of fixed assets. II. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. (b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management were found 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 records of inventory, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the books records were not material in relation to the operations of the company. III. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act 1956. As the company has not granted loans, secured or unsecured, from parties listed in the Register maintained under section 301 of the Companies Act 1956, paragraphs (iii) (b), (c) and (d) of the order, are not applicable, (e) The Company has not taken, any loan, secured or unsecured from companies, firm or other parties listed in the register maintained U/s 301 of the Companies Act 1956. As the company has not taken loan secured or unsecured from parties listed in the register maintained U/s 301 of the Companies Act 1956, paragraphs (iii) (f) and (g) of the order are not applicable. IV. In our opinion and according to the information and explanations given to us, there exists an adequate Internal control system 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 sales of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company. V. (a) According to the information and explanation given to us, we are of the opinion that the particulars of all contract or arrangements that need to be entered into the register maintained u/s 301 of companies Act 1956, have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangement entered in the register maintained u/s 301 of Companies Act 1956, and exceeding the value of Rs. 5 lacs in respect of any party during the year have been made at price which are reasonable having regard to prevailing market price at the relevant time. VI. According to information and explanation given to us the company has not accepted deposits from the public. 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 account relating to materials, labour and other items of cost maintained by the company pursuant to rules made by the Central Government for the maintenance of cost records u/s 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We are not required to and, accordingly, have not made detailed examination of the records. IX. (a) The company is irregular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, Income tax, sales tax, wealth tax, service tax. excise duty, custom duty and other material statutory dues applicable to it. Further since the central government has till date not prescribed the amount of cess payable U/s 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, undisputed amounts payable in respect of income tax, sales tax, wealth tax, service tax, customs duty and excise duty were in arrears, as at 31st March, 2009 for a period of more than six months from the date they became payable. Particulars Amount (Rs.) Employee Provident Fund 12,60,392.00 Tax coll. At Sources 27,532.00 Tax Deducted at Sources 1,92,167.00 Service Tax ,26,500.00 (c) According to the information and explanations given to us, there are no dues of sales tax, income tax, customs duty wealth tax, service tax and excise duty, which have not been deposited on account of any dispute. X In our opinion the accumulated losses of the company are not more than fifty percent of its net worth. Further the company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year. XI Based on our verification and according to the information and explanation given by the management of the company has defaulted in CC Hypothecation which was regularized by the bank by sanctioning and disbursement of demand loan of Rs. 800 lacs. XII According to the information and explanation given to us, the company has not covered any loans and advance on the basis of securities by way of pledge of shares, debenture 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 IV(XIII) of the companies (Auditors Report) order, 2003 are not applicable to the company. XIV In our opinion, the company is not dealing in or trading in shares, securities, debenture and other investments. Accordingly, the provision of clause 4(XIV) of the companies (Auditors Report) order, 2003 are not applicable to the company. XV According to the information and explanation given to us the company has not given any guarantees for loans taken by others from bank or financial institution. XVI In our opinion, and according to the information and explanation given to us the term loans were applied for the purpose for which they were raised. 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. No long-term funds have been used to finance short-term assets except permanent working capital. XVIII According to the information and explanation given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained u/s 301 of Companies Act 1956 during the year. XIX According to the information and explanation given to us, during the period covered by our audit report, the company had not issued any debenture. XX According to the information and explanation given to us, during the period covered by our report, the company has not raised any money the public issues. XXI 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 audit. For J.K. ARORA & CO., Chartered Accountants (J.K. ARORA) Place: New Delhi Proprietor Date : 31.08.09 Membership No.9787