micro forge india ltd Auditors report

MICRO FORGE (INDIA) LIMITED ANNUAL REPORT 2007-2008 AUDITORS REPORT To, The Member of Micro Forge (India) Limited, RAJKOT We have audited the attached Balance Sheet of M/s. MICRO FORGE (INDIA) LIMITED as at 31st March, 2008 and also the Profit and Loss Account of the Company for the year ended on that date annexed thereto. This financial statement are the responsibility of the companys management. Our responsibility is to express as opinion on these financial statement based on our audit. 1. We conducted 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 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 estimate made by management as well as evaluating the overall financial statement presentations. We believe that our audit provides a reasonable basis for our opinion. 2. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Govt. of India in terms of sub-section 4A section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in paragraph 4 and 5 of the said Order. 3. Further to our comments in the Annexure referred to in paragraph 1 & 2 above. 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 it appears from our examination of the books. c) The Balance Sheet and Profit and Loss Account referred to in this Report are in agreement with the Books of Account. d) In our opinion, the Profit and Loss Account and Balance Sheet comply with the mandatory accounting standard referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable. e) Based on information and explanations given to us, none of the directors are disqualified as on 31st March, 2008 from being appointed as directors in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956. f) Subject to foregoing and Note C-I, in our opinion and to the best of the information and according to the explanations given to us the said Balance Sheet and the Profit and Loss Account read together with the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give true and fair view in conformity with the accounting principles generally accepted in India. i) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2008 and ii) In so far as it relates to the Profit and Loss Account, of the profit of the company for the year ended on that date. FOR M.B. THUMMAR & Co., CHARTERED ACCOUNTANTS -sd DATE : 11.05.2008 (M.B. THUMMAR) PLACE: RAJKOT Proprietor ANNEXURE TO THE AUDITORS REPORT [i] (a) As per information provided, the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of information available. (b) According to the information and explanations given to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner 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, the Company has not disposed off substantial part of its fixed assets. [ii] (a) As explained to us, the 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 and no discrepancies were notice on physical verification as compared with the books of accounts. [iii] (a) As per the information and records made available, the Company has granted unsecured loans to a concern listed in the register maintained under section 301 of the Companies Act, 1956. d) The Company has not accepted unsecured loans from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956 [iv] According to the information and explanations 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 inventories including components, plant and machinery, equipments and other assets, and for the sale of goods. During course of audit we have not observed any weakness in internal controls. [v] (a) The transaction that requires to be entered into the register in pruance to the section 301 of the Act have been so entered. (b) The transactions of purchase and sales of goods and material made in persuance of contracts or arrangement entered in the register maintain under section 301 of the companies Act 1956 and exceeding the value of Rs.five lacs; in respect of any party during the year have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time as explanation and information provided to us. [vi] In our opinion & according to the information and explanation given to us, The Company has neither invited nor accepted deposit from public. [vii] As informed, the company has adequate internal audit system considering size and nature of business of the company. [viii] We have informed that the maintenance of cost records Under Section 209(1) (d) of the Companies Act, 1956 is not required by the Company. [ix] According to the information & explanation given to us undisputed statutory dues including Provident Fund, Employees State insurance Act, Income Tax, Sales Tax,, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues have been generally deposited with appropriate authorities According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding as on 31st March, 2008 for a period of more than six months from the date they become payable. [x] The Company has accumulated loss od Rs.128801784/- at the end of the financial year and has incurred loss of Rs.172365602 during the year. The networth of the company is negative by Rs.(52978469), therefore company is sick within the meaning of Industrial Sick Companies Act. [xi] 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 banks. except March 2008. [xii] In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. [xiii] 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. [xiv] The Company has not entered into any transactions and contracts in respect of trading in securities, debentures and other investments. [xv] The Company has given a corporate guarantees to the banks for loans given to related companies/firm. [xvi] The Company has not raised any new term loans during the year. [xvii] According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we are of the opinion that the Company has not utilised any short term fund for long term investments. [xviii] During the year, the Company has not made any 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 any debenture during the year. [xx] The company has so raised money by public issue during the year. [xxi] In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year. For M.B. THUMMAR & CO. Chartered Accountants Place: RAJKOT Date : 11.05.2008 MANASUKH THUMMAR Proprietor