We have audited the attached Balance Sheet of M/s. Mittal Securities
Finance Limited as at 31st March, 2006 and also the Profit & Loss
Account and cash flow statement of the company 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 bused 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 amount and
disclosures in the financial statements. An audit also includes
accessing the accounting principals used and significant estimate made
by management, as well as evaluating the over all financial statement
presentation. We believe that our audit provides a reasonable basis for
As required by the Companies (Auditors Report) order, 2003, issued by
the Government of India, in terms of Section 227(4A) of the Companies
Act, 1956 and on the basis of such checks of books and records of the
Company as we considered appropriate and according to the information
and explanations given to us during the course of audit, we further
state on the matters specified in paragraphs 4 and 5 of the said Order
1. We have obtained all the in information and explanations, which to
the best of our knowledge and belief were necessary for the purpose of
2. In our opinion, the Company has kept proper books of accounts as
required by law, so far as appears from our examination of the books of
3. The Balance Sheet and Profit and Loss Account dealt with this
report are in agreement with the books of accounts.
4. In our opinion the Profit & Loss Account and Balance Sheet have
complied with the Accounting Standards referred to in Sub Section 3 C
of Section 211 of the Companies Act, 1956.
5. In our opinion and on the basis of the information & explanations
given to us and on the basis of the written representation received
from the directors and taken on record, none of the directors of the
company is disqualified as on 3 1*1 March, 2006 from being appointed as
a director in terms of clause (g) of sub section (1) of Section 274 of
the Companies Act, 1956.
6. The company has not registered as NBFC nor complied with NBFC
prudential norms (Reserve Bank) Directions, 1998 and other relevant
notifications issue by the Reserve Bank of India in the following
a) The company has given unsecured interest free loans/advances of Rs.
148.94 lakhs to various parties for which the confirmations have not
yet been obtained.
b) No provision has been made for the dues as referred in note of
Schedule 9 for dues of Rs. 148.94 lakhs which even though a Non
performing Assets as per the Non-Banking Financial Companies Prudential
norms (reserve Bank) Directions 1998, is considered to be recoverable
by the management in their view.
c) The capital adequacy ratio as on 31/03/2006 is not calculated as the
company has not registered as NBFC.
d) The company has not framed the policy for granting demand / call
7. The financial Statement have been prepared on going concern basis..
8. Subject to above, in our opinion and to the best of our information
and according to the explanations given to us, the said accounts reed
together with the notes-thereon, give the information required by the
Companies Act, 1956 in the manner so required and give a true end fair
i) In the case of the Balance Sheet of the state of affairs of the
Company as at 31st March, 2006; and
ii) In the case of the Profit & Loss Account of the loss of the Company
for the year ended on the date;
iii) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on the date.
ANNEXURE TO THE AUDITORS REPORT
i) The main activities of the company consists of dealing in shares &
Securities and hence as such, clauses (iii), (iv), (v), (xii), (xvi)
and (xvi) of the Companies (Auditors Report) order, 2003, issued in
terms of section 227 (4A) of the Companies Act 1956, are not applicable
to the company.
ii) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. The fixed
assets have been physically verified by the management during the year,
which in our opinion is reasonable having regard to the size of the
Company and nature of its assets. No material discrepancies were
noticed on such verification as compared with the book records.
iii) In our opinion and on the basis of our examination of valuation of
the Stocks, such valuation is fair and proper in accordance with the
normally accepted accounting principles and is on the same basis as in
the previous year.
iv) The principal amount and interest wherever applicable thereon in
respect of loan, and/or advances in the nature of loans given by the
Company have not been recovered regularly as stipulated.
v) The company has not taken any loan, secured or unsecured from u/s
301 of the Companies Act, 1956 and companies under the same management
within the meaning of section 370 (IB) of the Companies Act, 1956 where
the rate of interest of the Company.
vi) The Company has not granted any loan, Secured or Unsecured to
Companies, firms or other parties listed in the registers maintained
u/s 301 of the Companies Act, 1956 and companies under the same
management within the meaning of Section 370 (IB) of the Companies Act,
1956, where the rate of interest and other terms and conditions are
prima facie prejudicial to the interest of the Company.
vii) In our opinion, there are adequate internal control procedures
commensurate with the size of the companies and the nature of its
viii) According to the information and explanation given to us,
transactions made in pursuance of contracts or arrangement entered in
the Register maintained u/s 301 of the Companies act, 1956 as
aggregating during the year to Rs.5,00,0007/- or more in value in
respect of each party have been made at price which are reasonable
having regards to prevailing market price for such goods, material or
services have been made with other parties.
ix) The company has not accepted any deposits from public during the
year under the provisions of Section 58A of the Companies Act, 1956 and
the rules framed there under with regard to deposits accepted from the
x) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
xi) The Central Government has not prescribed the maintenance of cost
accounting records section 209(1)(d) of the Companies Act, 1956 in
respect of the business of the company.
xii) According to the records of the Company, the Provident Fund and
Employees State Insurance Scheme is not applicable to the company.
xiii) According to the information ad explanations given to us and
record of the Company examined by us, there were no undisputed amounts
payable in respect of sales-tax, customs duty and excise duty which
have remained outstanding as at 31st March, 2006 for a period of more
than six month from the date they became payable, except the demands
for Income-Tax A.Y 1997-98 for Rs.5, 20,231 For which company has filed
appeal with Appellate Tribunal and the same is pending.
xiv) The company has accumulated losses of Rs. 6,16,177.09 and has not
incurred cash losses during the financial year covered by our audit
and, in the immediately preceding financial year company.
xv) According to the information and explanations given to us and
records of the Company examined by us, personal expenses of employees
of directors have not been charged to revenue account other than those
payable under contractual obligations in accordance with generally
accepted business practices.
xvi) The Company is not a Sick Industrial Company within meaning of
clause (o) of sub-section (1) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985.
xvii) In respect of shares, securities and other investments, dealt in
or traded by the company, proper records have been maintained of the
transactions and contacts and timely entries have been made therein but
the shares, securities and other investments have not been held by the
company in its own name.
xviii) According to the information and explanations given to us, the
provisions of any special statute applicable to chit funds, Nidhi or
mutual benefit society are not applicable to the company.
xix) According to the information and explanations given to us the
there are no outstanding guarantees as on the date of Balance sheet.
xx) In our opinion and according to the information and explanations
given to us the company has not obtained any term loan during the year.
xxi) 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
investments. No long-term funds have been used to finance short-term
xxii) According to the information and explanation given to us, the
company has not made any preferential allotment of shares to parties
and companies mentioned in section 301.
xxiii) According to the information and explanations given to us, the
company has not issued any debentures during the year and hence
creation of security for issue of debenture does not arise.
xxiv) According to the information and explanations given to us, and
representation made to us and to the best of our knowledge & belief no
fraud on or by the company has been reported or noticed during the
course of our audit.