| We have audited the attached Balance Sheet of Modi Hoover International
Limited as at 30th June, 2006 and also the Profit & Loss Account and
the Cash Flow statement annexed thereto, 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 We conduct 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 mis-statements. An audit includes examining on a test basis,
evidence supporting the amount 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.
1. As required by the Companies (Auditors Report) Order, 2003 as
amended by the companies (Auditors Reports) (Amendment) order, 2004
issued by the Central Govt in terms of Section 227 (4A) of the
Companies Act, 1956, we give our comments in the annexure on the
matters specified in the order to the extent applicable to the company.
2. Further to our comments in the annexure referred to the paragraph
(1) above, we report as under.
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 law, have
been kept by the Company so far as appears from our examination of
those books.
c. The Balance Sheet and Profit & 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 and Profit & Loss account and Cash
Flow statement comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956.
e. On the basis of the written representations received from the
directors and taken on record by the Board of Directors, we report that
none of the directors is disqualified as on 30th June, 2006 from being
appointed as a director in terms 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 Statements of Account read
together with the other Notes as contained in Schedule 10 thereon, and
subject to the consequential impact on the results for me year of note
No. 2(ii) regarding non-provision of interest on securities amounting
to Rs.20.26 Lacs; Note No.2(viii) regarding non computation of deferred
taxes, amount unascertained; give the information required by the
companies act,1956 in the manner so required and give a true and fair
view.
i) In the case of Balance Sheet, of the state of affairs of the Company
as at 30th June, 2006;
ii) In the case of Profit & 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 flow for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in Paragraph (1) of our Report of even date on the
Statement of Accounts of Modi Hoover International Limited for the year
ended 30th June, 2006.
1 a) Proper records showing full particulars including quantitative
details and situation of fixed assets is being maintained by the
company.
b) The company has no system of physical verification of fixed assets
by the management, which would provide for physical verification of all
the fixed assets at reasonable intervals over of a period of time.
c) The company has not disposed off any substantial part of its Fixed
Assets which has any effect on its going concern during die year.
a) The inventory, except lying widi outside parties , has been
physically verified by me management during the year .In our opinion
frequency of verification is reasonable.
b) In our opinion and according to die information and explanation
giving to us, the procedure of the, physical verification of
inventories followed by die management are reasonable and adequate in
relation to the size of the company and die nature of its business
c) On die basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory, as far
as we could ascertain and no material discrepancies have been noticed
between the physical stock and the book records.
3. During the year, as per the information and explanations provided
to us, die company has neidier granted nor taken any loan secured or
unsecured to/from companies, firms or other parties covered, in the
register maintained u/s 301 of die Companies Act 1956, dierefore
provisions of clause (iii) (a), b, c & d of the Companies (Auditors
Report) Order 2003 (as amended) are not applicable to the Company.
4. In our opinion, and according to die information and explanations
given to us, mere is adequate internal control procedures commensurate
with the size of the company and me nature of its business for me
purcha®e of inventory and fixed assets and for the sale of goods.
However for after sales services die system need to be further
strengthened. During die course of our audit we have not observed any
continuing failure to correct major weaknesses in internal control.
5. The Company has not accepted any deposit from die public within the
meaning of Section 58A and 58AA of the Companies Act 1956 and die rules
framed thereunder. Therefore the provisions of clause 4(vi) of die
Companies (Auditors Report) Order 2003 (as amended) are not applicable
to the company.
6. (a) As per information and explanations given to us by the
management, we arc of the opinion diat all the particulars, of
contracts or arrangement referred to in Section 301 of me Companies Act
1956 and need to be entered into the Register maintained under that
section have been so entered.
(b) As far as we could ascertain on die basis of our selective checking
and according to the information and explanations given to us,
transactions made in pursuance to above said contracts or arrangements
in respect of each party made during the year have been made at prices
which are reasonable having regard to the prevailing market price at me
relevant time.
7. In our opinion and according to die information and explanations
given to us, the company is yet to have an adequate internal audit
system commensurate with its size and nature of business.
8. (a) According to die information and explanations given to us and
records ot the company examined by us, in our opinion, diere were
delays in depositing undisputed statutory dues of Employees Provident
Fund, Employees State Insurance and Sales Tax dues with me appropriate
authorities.
However, Investor Education and Protection Fund , wealth tax, Custom
Duty and Excise Duty for die year are not applicable to die company.
b) According to the information and explanations given to us and the
records of the company examined by us, the particulars of dues of sales
tax, income tax, custom duty, wealth tax, excise duty and Cess as at
30th June 2006, which have not been deposited on account of a dispute
are as follows:
Name of the Nature of Dues Amount
Statute (Rs. in lacs)
relates
1.Central Sales Tax Act Demand for non 1.84
submission of
declaration forms.
2. Delhi Sales Tax Act Non submission of 3.04
declaration forms &
penalty
Period to which Forum where
the amount relates dispute is pending
1997-98 to 2001 Appellate Authority
2002
1997-98 to 2001 Appellate Authority
2002
9.The accumulated losses of the Company, as at 30th June 2006 are more
than fifty percent of the net worth.
lO.In our opinion, on the basis of audit procedures and according to
the information and explanations given to us, the Company has no
outstanding loan from any bank or financial institutions and the
question of default in repayment does not arise.
11.In our opinion, and according to the information and explanations
given to us the company has not given any guarantee for the loans taken
by others from banks and financial institutions,
12.The Company has not granted any loans on the basis of security by
way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit
fund/mdhi/mutual benefit fund/societies are not applicable to the
Company.
14. In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments.
15. On the basis of review of utilization of funds on an overall basis,
related information as made available to us and as represented to us by
the Management, funds raised on short-term basis have not been used to
finance long-term assets.
16. The Company has not made any preferential allotment of shares to
companies or parties covered in the register maintained under section
301 of Act, during the year.
17. The Company has not raised any money by public issue during the
year.
18. During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
fraud or reported during the year, nor have we been informed of such
case by the management.
FOR MANGLA ASSOCIATES
CHARTERED ACCOUNTANT
DATE: 29th Nov.2006
PLACE : NEW DELHI A.P.MANGLA
PARTNER | 