regent realtech ltd Auditors report

MODI HOOVER INTERNATIONAL LIMITED ANNUAL REPORT 2005-2006 AUDITORS REPORT To, The Members of Modi Hoover International Ltd. We have audited the attached Balance Sheet of Modi Hoover International Limited as at 30th June, 2006 and also the Profit & Loss Account and the Cash Flow statement annexed thereto, for the year ended on that date. 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 conduce 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 mis-statements. An audit includes examining on a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluates the overall financial statement presentation. We believe that our audit provides a reasonable basis fog our opinion. 1. As required by the Companies (Auditors Report) Order, 2003 as amended by the companies (Auditors Reports) (Amendment) order, 2004 issued by the Central Govt. in terms of Section 227 (4A) of the Companies Act, 1956, we give our comments in the annexure on the matters specified in the order to the extent applicable to the company. 2. Further to our comments in the annexure referred to the paragraph (1) above, we report as under. a. 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; b. 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. c. The Balance Sheet and Profit & 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 and Profit & Loss account and Cash Flow statement comply with the accounting standards referred to in sub- section(3C) of Section 211 of the Companies Act, 1956. e. On the basis 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 30th June, 2006 from being appointed as a director in terms 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 the explanations given to us the said Statements of Account read together with the other Notes as contained in Schedule 10 thereon, and subject to the consequential impact on the results for the year of note No. 2(ii) regarding non-provision of interest on securities amounting to Rs.20.26 Lacs; Note No. 2 (viii) regarding non computation of deferred taxes, amount unascertained; give the information required by the companies act, 1956 in the manner so required and give a true and fair view. i) In the case of Balance Sheet, of the state of affairs of the Company as at 30th June, 2006; ii) In the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date; and iii) In the case of the Cash Flow Statement of the cash flow for the year ended on that date. FOR MANGLA ASSOCIATES CHARTERED ACCOUNTANTS DATE : 29TH November 2006 PLACE: NEW DELHI A.P. MANGLA PARTNER ANNEXURE TO THE AUDITORS REPORT: (Referred to in Paragraph (1) of our Report of even date on the Statement of Accounts of Modi Hoover International Limited for the year ended 30th June, 2006) 1. a) Proper records showing full particulars including quantitative details and situation of fixed assets is being maintained by the company. b) The company has no system of physical verification of fixed assets by the management, which would provide for physical verification of all the fixed assets at reasonable intervals over of a period of time. c) The company has not disposed off any substantial part of its Fixed Assets which has any effect on its going concern during the year. a) The inventory, except lying with outside parties, has been physically verified by the management during the year. In our opinion frequency of verification is reasonable. b) In our opinion and according to the information and explanation giving to us, the procedure of the 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 inventory records, in our opinion, the company is maintaining proper records of inventory, as far as we could ascertain and no material discrepancies have been noticed between the physical stock and the book records. 3. During the year, as per the information and explanations provided to us, the company has neither granted nor taken any loan secured or unsecured to/from companies, firms or other parties covered, in the register maintained u/s 301 of the Companies Act 1956, therefore provisions of clause (iii) (a), b, c & d of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company. 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 for the purchase of inventory and fixed assets and for the sale of goods. However for after sales services the system need to be further strengthened. During the course of our audit we have not observed any continuing failure to correct major weaknesses in internal control. 5. The Company has not accepted any deposit from the public within the meaning of Section 58A and 58 AA of the Companies Act 1956 and the rules framed thereunder. Therefore the provisions of clause a 4(vi) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the company. 6. (a) As per information and explanations given to us by the management, we are of the opinion that all the particulars, of contracts or arrangement referred to in Section 301 of the Companies Act 1956 and need to be entered into the Register maintained under that section have been so entered. (b) As far as we could ascertain on the basis of our selective checking and according to the information and explanations given to us, transactions made in pursuance to above said contracts or arrangements in respect of each party made during the year have been made at prices which are reasonable having regard to the prevailing market price at the relevant time. 7. In our opinion and according to the information and explanations given to us, the company is yet to have an adequate internal audit system commensurate with its size and natures of business. 8. (a) According to the information and explanations given to us and records of the company examined by us, in our opinion, there were delays in depositing undisputed statutory dues of Employees Provident Fund, Employees State Insurance and Sales Tax. dues with the appropriate authorities. However, Investor Education and Protection Fund, Wealth tax, Custom Duty, and Excise Duty for the year are not applicable to the company. b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, excise duty and Cess as at 30th June 2006, which have not been deposited on account of a dispute are as follows: Name of the Nature of Dues Amount Period to which Forum where Statute (Rs. in the Amount dispute is lacs) relates pending Central Sales Demand for non 1.84 1997-98 to Appellate Tax Act submission of 2001-2002 Authority declaration forms. Delhi Sales Non submission 3.04 1997-98 to Appellate Tax Act of declaration 2001-02 Authority forms & penalty 9. The accumulated losses of the Company, as at 30th June 2006 are more than fifty percent of the net worth. 10. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has no outstanding loan from any bank or financial institutions and the question of default in repayment does not arise. 11. In our opinion, and according to the information and explanations given to us the company has not given any guarantee for the loans taken by others from banks and financial institutions. 12. The Company has not granted any loans on the basis of security by way of pledge of shares, debentures and other securities. 13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company. 14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments 15. On the basis of review of utilization of funds on an overall basis, related information as made available to u and as represented to us by the Management, funds raised on short-term basis have not been used to finance long-term assets. 16. The Company has not made any preferential allotment of shares to companies or parties covered in the register maintained under section 301 of Act, during the year. 17. The Company has not raised any money by public issue during the year. 18. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud or reported during the year, nor have we been informed of such case by the management. FOR MANGLA ASSOCIATES CHARTERED ACCOUNTANT DATE : 29th Nov, 2006 PLACE: NEW DELHI A.P. MANGLA PARTNER