| We have audited the attached Balance Sheet of M/s. AAKAR ENGINEERING &
MANUFACTURING COMPANY LIMITED as at 31st March 2007, together with the
Profit & Loss Account of the Company 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.
1. We have 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 presentation of
the financial statements. 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 Government in terms of section 227(4A) of the Companies
Act, 1956, we annex hereto a statement on the matters specified in
paragraph 4 and 5 of the said order.
3. Further to our comments in the Annexure referred to in paragraph 2
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 accounts as required by the law have
been maintained by the company so far as it is appears from our
examination of the books.
c) The Balance Sheet & Profit & Loss Account dealt with by this report
are in agreement with the books of accounts.
d) In our opinion, the Balance Sheet and Profit and Loss Account comply
with the Accounting standards referred to in Sub-Section 3(C) of the
section 211 of the Companies Act, 1956 to the extent applicable.
e) On the basis of information obtained, we state that, none of the
Directors of the Company are prima-facie disqualified under section 274
(1) (g) of the
Companies Act, 1956 from being appointed as a Director of the Company
as on 31stMarch, 2007.
f) In our opinion and to the best of our information and according to
the explanations; given to us, the said accounts give a true and fair
view.
i)In the case of Balance Sheet of the State of Affairs of the Company
as at 31stMarch, 2.007 and
ii)In the case of the Profit & Loss Account, of the Loss of the Company
for the year ended on that date.
iii)In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE OF THE
ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2007 OF M/s. AAKAR ENGINEERING &
MANUFACTURING COMPANY LIMITED.
As required by the Companies (Auditors Report) Order, 2003 issued by
the Company Law Board in terms of section 227(4A) of the Companies Act,
1956 and on the basis of such checks as we consider appropriate and in
terms of the information and explanations given to us, we state that :-
i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets;
(b) As explained to us, all the assets have been physically verified by
the management at reasonable intervals during the year. According to
the information and explanations given to us, no discrepancies have
been noticed on such physical verification by the management;
(c) As informed to us none of the fixed assets of the company has been
disposed off during the year.
ii) (a) The inventories have been physically verified by the management
at reasonable intervals during the year;
(b) In our opinion, 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) In our opinion, the company is maintaining proper records of
inventory. The discrepancies noticed on physical verification were not
material in relation to the operations of the company and the same have
been properly dealt with in the books of accounts;
iii) The company has not taken / granted any loans and advances in the
nature of loans from / to parties covered in the registered maintained
under section 301of the Companies Act, 1956.
iv) In our opinion and according to the information and explanations
given to us, there are generally adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for purchase shares and securities, plant and machinery.
equipments and other assets and sale of shares and securities.
v) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, wean? of the
opinion that there are no transactions that need to be entered into the
register in pursuance of section 301 of the Act
vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public
during the year within the meaning of section 58A and 58AA of the
Companies Act, 1956 and rules framed thereunder.
vii) In our opinion and according to the information and explanations
given to us, there are no internal audit system commensurate with the
size of the Company and the nature of its business.
viii) As informed to us maintenance of cost records has not been
prescribed by the Central Government u/s 209(l)(d) of the Companies
Act, 1956, in respect of the activities carried on by the Company.
ix) (a) According to the records of the company, the company is regular
in depositing with appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income-tax, Sales- tax, Wealth Tax, Custom
Duty, Excise Duty, Cess during the year except there is a delay in
payment of Fringe Benefit tax payments.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, custom duty and excise duty were outstanding as at 31st March,
2007 except Fringe Benefit Tax, for a period of more than six months
from the date they become payable.
(c)According to the information and explanation given to us there are
no dues of sales tax, income tax, custom duty, wealth tax, excise duty
or Cess outstanding at the year ended on account of any dispute.
x) The accumulated losses of the Company as at 31st March 2007, are
more than half of its net worth and the Company has incurred cash loss
of Rs.2,36,82,668/- in the current financial year and Rs.
3,55,04,132/- in the financial year immediately preceding the financial
year.
xi) Based on our audit procedure and as per the information and
explanations given by the management, the Company has defaulted in
repayment of following dues to Banks:
Period of default Amount (Rs.)
Above 180 Days 6,57,69,743/-
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii) In our opinion, considering the nature of activities carried on
by the Company during the year, the provisions of any special statute
applicable to chit fund / nidhi / mutual benefit fund / societies are
not applicable to it.
xiv) On the basis of our examination of the companies records we are of
the opinion that the company is maintaining adequate records regarding
transactions and contracts regarding its dealing in shares and
securities and timely entries have been made in these records.
xv) According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we report that
the Company has not given any guarantees for loans taken by others from
banks or financial institutions.
xvi) The Company has not taken any term loan during the year.
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 the no funds raised on short-term basis have used for long term
investment. No long term funds have been used to finance short-term
assets.
xviii) According to the information and explanations given to us, 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) According to the information and explanations given to us, during
the year covered by our audit report, the Company has not issued
debentures.
xx) The Company has not made any public issue during the year.
xxi) Based upon on the Audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
Audit.
For S M BHAT & ASSOCIATES
Chartered Accountants
Proprietor
DATE: 6th June, 2007.
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