hitkari industries ltd Auditors report

HITKARI INDUSTRIES LIMITED ANNUAL REPORT 2006-2007 AUDITORS REPORT To The Members of Hitkari Industries Limited New Delhi 1. We have audited the attached Balance Sheet of HITKARI INDUSTRIES LIMITED. as at 31st March, 2007, and the Profit and Loss Account 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. 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 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. 3. 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, 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 that: i. 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; 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. File Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account; iv. In our opinion, the Balance Sheet and the Profit & Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies act, 1956: v. On the basis of written representations received from the Directors, as on 31st March, 2007 and taken on record by the Board of Directors. We report that none of the director is disqualified as on 31st March, 2007 from being appointed as a director in terms of clause (g) of sub-section(1) of section 274of 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 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 principles generally accepted in India: a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2007; b) In the case of the Profit and 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 flow for the year ended on that date. For S.R. Kapur & CO Chartered Accountants Sd/- (D.K. Gupta) Place : New Delhi Partner Dated : 29th August, 2007 Membership No. 089480 Annexure referred in paragraph 3 of Auditors Report to the Members of HITKARI INDUSTRIES LIMITED on the accounts for the year ended on 31st March, 2007: i) a) The company has maintained proper records showing full particulars including quantitative details end situation of fixed assets. b) All the assets have been physically verified by the management during tile year 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) In our opinion and according the information and explanations given to us no substantial part of fixed assets of the company have been disposed off during the year. 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) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. iii) a) The company has not granted loans,secured or unsecured to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956, hence clause 4 (iii) (b)(c) & (d) of the Companies (Auditors Report) order 2003 is not applicable. b) The company has taken loans, unsecured front companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 front two number of parties and the maximum amount involved in the transactions as well as on 31st March, 2007 is Rs. 169.03 lacs. c) The loans are free of interest and other terms and conditions of loans taken by the company, are prima facie not prejudicial to the interest of the company. d) The payment of the principal amount is regular wherever stipulated. IV) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory & fixed assets and for to sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system. v) a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts and arrangements referred to section 301 of the Companies Act, 1956 have been entered into the register maintained under that section. b) According to the information and explanations given to us, these contracts or arrangements have been made at price which are reasonable having regards to the prevailing market prices at the relevant time. vi) According to the information and explanations given to us, the company has not accepted deposits covered under section 58A & 58AA and other relevant provisions 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) According to the information and explanations given to us the Central Government has not prescribed tile maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 for the nature of business of the company. ix) (a) According to information and explanations given to us there were no undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues, as applicable, which were requires( to be deposited & were in arrears as on 31st March, 2007 for a period of more than six months from the date the same became payable. (b) In our opinion and according to the information and explanations given to us, there are no dues in respect of the above except for sales tax which has not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below: Name of Nature of Dues Amount Period Forum where Statute dispute is pending Delhi Sales- Sales-tax 14,583 tax Act, 1975 2004-05 Deputy CST Act, 60,893 Commissioner 1956 x) The Company has no accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year. xi) The Company has not defaulted in repayment of any dues to financial institutions or banks. No amount has been borrowed against debentures. xii) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures, and other securities. xiii) The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) order, 2003 are not applicable to the company. xiv) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) order, 2003 are not applicable to the company. xv) According to the information and explanations given to us the company has not given any guarantee for loans taken by others from banks or financial institutions. xvi) On the basis of review of utilisation of funds on an overall basis, in our opinion, the term loans taken by the company were applied for the purpose for which the loans were obtained. 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-terns basis have prima facie been used for long-term investment. xviii) The company has not during the year made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. xix) The Company has not issued debentures during the year, hence the question of creation of security or charge in respect of debentures issued does not arise. xx) The company has not raised money through public issue during the year. xxi) To the best of our knowledge and belief 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. For S.R. Kapur & Co Chartered Accountants Sd/- (D.K. Gupta) Place : New Delhi Partner Dated : 29th August, 2007 Membership No.: 089480