| 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 31sl 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 loansdebtorsV 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.
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
S. No. Particulars Amount (Rs.)
1. Employee Provident Fund 12,60,392.00
2. Tax coll. At Sources 27,532.00
3. Tax Deducted at Sources 1,92,167.00
4. Service Tax 4,26,500.00
(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 acccording 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
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