1. We have audited the attached Balance Sheet of M/s Hindustan
Adhesives Limited as on 31 st March, 2009, the Profit and Loss Account
for the year ended on that date 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 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India under sub- section (4A) of section
227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraph (4) & (5) of the said Order.
Attention of members is drawn on following:
(a) Settlement with Benaras State Bank Limited ( merged with Bank of
Baroda ) (Refer Note No.2 of Notes on Accounts appearing in Schedule
(b) Non identification of dues to Micro/ Small Scale Industrial
Undertakings (Refer Note No.9 of Notes on Accounts appearing in
4. Further to our comments in Annexure referred to above, we report
(i) We have obtained all the information and explanation, which to the
best of our knowledge and belief were necessary for the purpose of our
(ii) In our opinion, proper books of account as required by law, have
been kept by the Company so far as appears from our examination of
(iii) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account;
(iv) In our opinion, the Balance Sheet and Profit and Loss
Account dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956; (v) On the basis of written representations
received from the directors, as on 31 st March, 2009, and taken on
record by the Board of Directors, we report that none of the director is
disqualified as on 31 st March, 2009 from being appointed
as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956; (vi) Subject to our comments above, in our
opinion and to the best of our information and according to the
explanations given to us, the said statements of accounts read together
with the Notes appearing in Schedule V 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:
(a) in the case of Balance Sheet, of the state of affairs of the
Company as at 31 st March, 2009;
(b) in the case of Profit and Loss Account, of the Profit of the
Company for the year ended on that date; and
(c) in case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our Report of even date)
(i) (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
(b) The management at reasonable intervals has physically verified the
fixed assets, no material discrepancies were noticed on such
(ii) (a) The physical verification of inventory has been conducted by
the management at reasonable intervals.
(b) In our opinion the procedures of physical verification of inventory
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 and the discrepancies noticed on physical verification were
not material and have been properly dealt with in the books of
(iii) In respect of loans, secured or unsecured, granted or taken by
the company to or from companies, firms or other parties covered under
the register maintained U/s. 301 of the Companies Act, 1956, according
to the information and explanations given to us:
(a) The Company has taken unsecured loans from 6 (Six) parties covered
under the register maintained under section 301 of the Companies Act,
1956. The maximum amount involved in such loans during the year
aggregates to Rs.541.06 Lacs and the closing balance outstanding as on
31 st March 2008 is Rs. 372.72 Lacs.
(b) In our opinion the terms and conditions of such loans taken by the
company are prima facie not prejudicial to the interests of the
(c) There is no pre-determined schedule for repayment of unsecured
(d) As there is no schedule for repayment of unsecured loans taken by
the company, therefore, we are not in a position to comment on steps,
if any, taken by the company for repayment of the same.
(e) The company has not granted any loans to companies, firms or other
parties covered under the register maintained U/s. 301 of the Companies
Act, 1956, except temporary advances which are recovered as stipulated.
(iv) In our opinion and according to the information and explanations
given to us the company has an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchases of inventory and fixed assets and for the
sale of goods. There is no continuing failure or weakness in internal
(v) According to the information and explanation given to us, the
transactions that need to be entered into the register in pursuance of
section 301 of the Companies Act, 1956 has been so entered.
In our opinion and according to the information & explanation given to
us, there were no transactions made in pursuance of contracts or
arrangements entered in the register mentioned under section 301 of the
Companies Act exceeding the value of Rs. Five lacs in respect of any
party during the year.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any public deposits for which
the provisions for compliance U/s.58 and 58AA or any other relevant
provisions of the Companies Act, 1956 applies.
(vii) The Company has an internal audit system commensurate with its
size and nature of its business.
(viii) The Central Government has not prescribed maintenance of cost
records for the company U/s.209 (1 )(d) of the Companies Act, 1956.
(ix) (a) The Company is generally regular in depositing undisputed
applicable statutory dues including Provident Fund, Investor Education
and Protection Fund, Employees State Insurance, Income-tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and any other
statutory dues with the appropriate authorities.
(b) Following disputed dues of Sales Tax and Excise Duty/cess have not
been deposited: -
SI. Name of the Statue/ Amount Period to which Authority where
No. Nature of Dues (Rs.) Amount Relates dispute is
1. The Central Sales Tax 2,14,012/- 2003-04 High Court at
(Central Sales Tax) 18,916/- 2004-05 Officer Deputy
Trade Tax Noida
14,885/- 2005-06 ----do----
28,06,049/- 2006-07 ----do----
480/- 1999-00 (Sales Tax
V T O - Delhi
2. The Uttar Pradesh
Trade Tax 12,054/- 2004-05 Assessing
Act (Local Sales Tax) Deputy
Sales Tax Officer-Delhi 3,337/- 2003-04 Sales Tax
VAT - Delhi
3. The Central Excise
Act, 1944 1,95,000/- March, 1998 HighCourt.
(Penalty for wrong
(x) The Company has been registered for a period of more than five
years; however, its accumulated losses at the end of the financial
year are not more than fifty percent of its net worth and the
Company has not incurred cash loss during the year under report
and also in the financial year immediately preceding the financial
year under report.
(xi) According to the information and explanations given to us, the
company has not defaulted in repayment of dues to any financial
institutions and banks during.
(xii) The Company has not granted any loans or advances on the basis
of security by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to Chit Fund,
Nidhi /Mutual Benefit Fund/Societies are not applicable
to this company.
(xiv) The company is not dealing or trading in business of securities,
debentures and other investments.
(xv) According to the information and explanations given to us, the
company has not given any guarantees for loan taken by other from
banks and financial institutions.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans obtained in earlier years and continued to
remain outstanding during the financial year under report are applied
for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and
on an overall examination of financial statements of the company and
after placing reliance on the reasonable assumption made by the company
for the classification of long term and short term use of funds we
are of the opinion that, prima-facie, long term funds have not been
utilised for short term purposes and vice-versa.
(xviii) The company has not made any preferential allotment of shares
to parties and companies covered in the register maintained U/s.301
of the Companies Act, 1956.
(xix) The Company has not issued any debentures since inception.
(xx) The company has not raised any money by public issue during the year.
(xxi) According to the information and explanations given to us no fraud
on or by the company has been noticed or reported during the year under
For SALARPURIA & PARTNERS
Place: 1008, Chiranjiv Tower, (KAMAL KUMAR GUPTA)
43, Nehru Place, New Delhi-110 019 Partner
Date : 04.09.2009 M. No. 89190