international hometex ltd Auditors report

INTERNATIONAL HOMETEX LIMITED ANNUAL REPORT 2006-2007 AUDITORS REPORT To The Members of, International Hometex Limited 1. We have audited the attached Balance Sheet of INTERNATIONAL HOMETEX LIMITED as at 31st March 2007 and the Profit and Loss Account and 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. 2. 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 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 out audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 (as amended) 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 hereto a statement on the matters specified in paragraphs 4 & 5 of the said order. 4. 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 purposes of our audit; b) In our opinion, proper books of account, as required by the law, have been kept by the Company, so far as it appears from our examination of those books; c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; d) 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 in sub-section (3C) of section 211 of the Companies Act, 1956; e) On the basis of written representation received from the directors of the Company and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2007 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 the explanations given to us, the said accounts read together with the Significant Accounting Policies and other 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: i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2007; ii) In the case of the Profit and 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 flows of the Company for the year ended on that date. For Pravin Manudhane & Co. Chartered Accountants Place: Mumbai Pravin Manudhane Date : 5th July, 2007 Proprietor Membership No. 40039 ANNEXURE TO THE AUDITORS REPORT: Referred to in paragraph 3 of our report of even date: 1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. b) Fixed assets have been physically verified by the management according to the regular program of periodical verification in which, in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification. c) No substantial part of fixed assets has been disposed off during the year, which has bearing on the going concern status of the Company. 2. a) As explained to us, inventories have been physically verified by the management at regular intervals during the year. b) In our opinion and according to the information and explanations given to us, 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 has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records. 3. The Company has neither granted nor taken any loans, secured or unsecured to and from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the clause 4(iii) (b) to (g) of the order, are not applicable. 4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls. 5. a) According to the information and explanation given to us. We are of the opinion that the transactions made in pursuance of contracts of arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into a register required to be maintain under that section. b) In our opinion and according to the information and explanations given to us, there are no transactions of purchase of goods and material and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5,00,000/- (Rupees Five Lacs only) or more in respect of any party. 6. In our opinion and according tb the information and explanation given to us, the Company has complied with the provision of Sections 58 A and 58 AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975 with regards to the deposits accepted from the public. 7. In our opinion, the internal audit system of the Company is commensurate with its size and the nature of its business. 8. The Central Government has not prescribed maintenance of Cost Records by the Company under Section 209 (1) (d) of the Companies Act, 1956. 9. The Company has been generally regular in depositing with the appropriate authorities undisputed statutory dues i.e income tax, Sales Tax, Wealth Tax, Provident funds, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues. As explained to us, the provision regarding Employees State Insurance Act, 1948 are not applicable to the Company. There were no arrears as at 31st March, 2007 of undisputed amount which were due for a period more than six months from the date they became payable. 10. The Company has no accumulated losses at the end of financial year. It has not incurred any cash losses during financial year covered by our audit or in the immediately preceding financial year. 11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. 12. In our opinion and according to the information & explanation given to us, no loans & advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion, 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. In our opinion, the Company is not dealing in or trading shares, securities, debentures & other investments. Accordingly, the provision of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. 15. According to the information and explanation given to us, the Company has not given guarantee for loans taken by others from banks or financial institutions. 16. Based on information and explanation given to us, term loans were applied for the purpose for which the loans were obtained. 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 fund raised on short-term basis have been used for long term investment & no long-term fund have been used to finance short term assets. 18. During the year, the Company has made preferential allotment of equity Shares to a company, covered in the Register maintained under Section 301 of the Companies Act, 1956, at a price which is not prejudicial to the interest of the Company. 19. The Company did not have any outstanding debenture during the year. 20. The Company has not raised any money by way of public issue during the year. 21. Based upon the audit procedures performed and information and explanations given by management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. For Pravin Manudhane & Co. Chartered Accountants Pravin Manudhane Place: Mumbai Proprietor Date : 5th July, 2007 Membership No. 40039