We have audited the attached Balance Sheet of SAMKRG PISTONS AND RINGS
LIMITED as at 31st March, 2007 and the profit and Loss Account for the
year ended as on that date annexed thereto and the cash flow statement
for the period ended on that date. This 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 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
Further we report as follows :
1. As required by the Companies (Auditors Report) Order 2003 issued by
the central government of India in terms of subsection (4A) of section
227 of the Companies Act, 1956 and on the basis of the such checks of
books and records of the company as we considered appropriate and
according to information and explanations given to us during the course
of the audit, we annex hereto a statement on that matter specified in
paragraph 4 and 5 of the said order to the extent applicable.
2. Further to our comments in the statement referred to in paragraph
A. We have obtained all the information end explanations, which to the
best of our knowledge And belief were necessary for the purpose of our
B. In our opinion, the Company has kept proper books of accounts as
required by law so far as appears from the examination of books.
C. The Balance Sheet and Profit and Loss Account referred to in the
Report are in agreement with the books of accounts.
D. In our opinion the Balance Sheet and the Profit and Loss account
dealt with by this Report comply with the mandatory Accounting
standards referred to in subsection (3-C) of section 211 of the
Companies Act 1956.
E. On the basis of the written representation received from the
Directors, as on 31st March 2007 and taken on record by the Board of
Directors, We report that none of the directorsare disqualified as 5n
31st March 2007 from being appointed as director under clause (g) of
sub-section (1) of section 274 of companies act 1956,
F. In our opinion and to the best of our information and according to
the explanation given to us, the accounts read together with other
notes annexed to and forming part of the accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view.
i) In so far as it relates to the Balance Sheet of the state of affairs
of the Company as at 31st March 2007 and
ii) In so far as it relates to the Profit and Loss Account of the
Profit of the Company, for year ended as on that date,
iii) In the case of the cash flow statement of the cash flow for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT
(statement referred to in paragraph 1 of our report of even date)
1. (a) The Company has maintained proper records showing the full
particulars including quantitative details and situation of fixed
(b) The fixed assets were physically verified during the year by the
management. According to the information and explanation given to us,
no discrepancies were noticed on physical verification.
(c) None of the other fixed assets have been revalued during the year.
2. (a) The Management has conducted physical verification of the
finished goods at reasonable intervals.
(b) The Procedure of physical verification of stocks followed by the
Management are considered reasonable and adequate in relation to the
Size of the company and the nature of its business.
( c) On the physical verification of stocks as compared to book records
no material discrepancies were noticed. The company is maintaining
proper records of inventory.
(d) On the basis of our examination of stocks, we are satisfied that
the valuation of socks in fair and in accordance with normally accepted
3. (a) According to the information and explanations given to us, the
Company has taken unsecured loans from the Directors and their
relatives as listed in the register maintained under Section 301 of the
companies act 1956. In terms of subsection (6) of section 370 of the
companies act 1956 provision of this section is not applicable to the
(b) According to the information and explanations given to us, 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 In terms of subsection (6) of section 370
of the companies act 1956 provision of this section is not applicable
to the company.
(c The rates of interest and other terms and conditions of loans taken
by the company are unsecured and are prima facie not prejudicial to the
interest of the company.
(dl The payment of the principal and interest are regular.
4. In our opinion and 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 with regards topurchases of stores, spare parts including
components, plant and machinery, equipment and other assets and for the
sale of the goods.
5. In our opinion and according to the information and explanation given
to us there are no transactions of purchases of goods and material and
sale of goods, materials and service aggregating during the year to R.
5,00,000/- or more in respect of each party listed in the register
maintained under Section 301 of the companies Act, 1956.
6. A explained to us, there are no unserviceable or damaged stores and
there are no unserviceable or damaged raw materials or finished goods.
7. The Company has not accepted any deposists from public. Hence, the
provisions of Section 58A of the companies Act, 1956, will not be
8. In our opinion reasonable records have been maintained by the Company
for the sales and disposal of realizable scrap.
9. It our opinion the company has internal audit system commensurate
with the size of the company and the nature of its business.
10.We have broadly reviewed the books of account relating to
materials, labor and other items of cost maintained by the company
pursuant .to the rules made by the Central Government for the
maintenance of the cost records under Section 209 (i) (d) of the
Companies Act, 1956 and are of the opinion that, prima facie, the
(prescribed records and accounts have been maintained by the Company.
11. (a) The Provident fund and Employees State Insurance dues have
regularly deposited with the appropriate authorities.
(b) According to the information and explanation given to us the
company does not have undisputed amounts payable in respect of Income
Tax, wealth Tax, Excise Duty and Customs Duty outstanding for a period
of more than six months from the date they become payable.
In respect of Sale Tax (Entry Tax) there is disputed amount of Rs.
22.47 lacs not deposited with A. P. Sales Tax department. The Company
had filed an appeal with ADC(CT) Punjagutta Division Hyderabad against
certain points in the order of for the assessment year 2002-03.
S.no Name Of Of The Statue Nature Of Dues Amount In Rs In Lacs
1 SALES TAX ACT ENTRY TAX 22. 47
S.no Name Of Of The Statue Forum Where Despute Is Pending
1 SALES TAX ACT ADC (CT)
12. As explained to us there are outstanding of Rs One lac or more to
the suppliers under the category of Small scale units which are
outstanding for more than 30 days are Rs. 88.32 lacs.
13. During the year under report, the company has not made any
preferential allotment of shares to the parties and companies covered
in the register maintained under Section 301 of the companies Act 1956.
14. The company has no accumulated losses at the end of the financial
year and, has not incurred any cash losses in the financial year under
report and in the immediately preceding financial year.
15. In our opinion and according to the information and explanation
given to us, the company has not defaulted in repayment of dues to
financial institutions/banks. The company has not issued any debentures
16. According to the information and explanations given to us, the
company has not granted any leans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
17. In our opinion of the company is not chit fund or Nidhi/Mutual
fund/society. Therefore the provsions of 4(XIII) of the companies
(Auditors report) order 2003 are not applicable to the company.
18. According to the information and explanation given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
19. 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
20. The company has not raised any money by way of public issue during
21. According to the information and explanation given to us, no fraud
on or by the company has been noiced or reported during the course of