1. We have audited the attached Balance Sheet of M/s Sundram Fasteners
Limited, Chennai 600 004 as at 31st March 2009, the Profit & Loss
Account and also the 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 conducted the audit in accordance with auditing standards
generally accepted in India. These 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 in terms of sub-section (4A) of Section 227
of the Companies Act, 1956 (the Act), we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
order to the extent applicable.
4. Further to our comments in the Annexure referred to above, we state
i) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
v) On the basis of written representations received from directors of
the Company, as on 31st March 2009 and taken on record by the Board of
Directors, we report that no director is disqualified from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act as on the said date;
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and other notes, thereon give the
information required by the Act, 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 the Balance Sheet, of the state of affairs of the
Company as at 31 st March 2009;
b) In the case of the Profit & Loss Account, of the profit for the year
ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in para 3 of our report of even date
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification at
reasonable intervals, which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets. No
material discrepancies were noticed on such verification.
(c) The Company has not disposed off substantial part of its fixed
assets, which will affect the going concern status of the company.
(ii) (a) The inventory other than in transit have been physically
verified at reasonable intervals during the year by the management. In
our opinion, the frequency of such verification is adequate. In respect
of inventory lying with third parties which have not been physically
verified, there is a process of obtaining confirmation from such
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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 has maintained proper records of
inventory. The discrepancies between the physical stocks and book
stocks were not material and have been properly dealt with in the books
(iii) (a) The Company has granted unsecured loan to a company covered
in the register maintained under Section 301 of the Act. The maximum
amount involved during the year was Rs 1720 lakhs and there was Rs.
1710.32 balance at the end of the year. The terms and conditions of
such loans are, prima facie, not prejudicial to the interests of the
(b) The Company has taken an unsecured loan from a Company covered in
the register maintained under Section 301 of the Act, 1956. The maximum
amount involved during the year was Rs 60 lakhs and at the year end,
the outstanding balance of such loan is Rs Nil. The rate of interest
and other terms and conditions of the aforesaid loan is in our opinion,
prima facie not prejudicial to the interest of the Company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and for the sale of goods.
During the course of our audit, no major continuing failure has been
noticed in the internal control procedures.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered in the
register maintained in pursuance of Section 301 of the Act have been
properly entered in the said register;
(b) In our opinion and according to the information and explanations
given to us, the transactions entered in the register maintained under
Section 301 of the Act and exceeding Rupees five lakhs during the year
in respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time;
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of sections
58A and 58AA and any other relevant provisions of the Act and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to deposits
accepted from the public. According to information and explanations
given to us, no order under the aforesaid sections has been passed by
the Company Law Board or National Company Law Tribunal or Reserve Bank
of India or any Court or any ether Tribunal.
(vii) The Company has an internal audit system which, in our opinion,
is commensurate with the size and mature of its, business;
(vi.i) We have broadly reviewed the books of accounts maintained by
the Company pursuant to the rules made by the Central Government under
Section 209 (1)(d) of the Act for maintenance of cost records and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained.
(ix) (a) According to the records provided to us, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Employees State Insurance, Investor Education and Protection
Fund, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty,
Cess and other material statutory dues with the appropriate
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Customs Duty, Excise Duty and Cess were in arrears, as at 31 st
March 2009 for a period of more than six months from the date they
(c) According to the information and explanations given to us, the
following are the details of the disputed Sales Tax, Income Tax,
Customs Duty, Wealth Tax, Excise Duty and Cess that was not paid to the
Nature of demand Amount (Rs lakhs)
Income Tax 115.60
Income Tax 289.80
Excise Duty 49.58
Excise Duty 720.58
Customs Duty 609.11
Property Tax 5.31
Property Tax 6.27
Service Tax 1.49
Service Tax 87.51
Forum where the dispute is pending
Madras High Court
Commissioner & Secretary to Govt, of Tamil Nadu
(x) The Company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
and in the immediately preceding year.
(xi) According to the records of the Company examined by us and the
information and explanations given to us by the management, the Company
has not defaulted in repayment of dues to any financial institution or
bank as at the balance sheet date.
Annexure referred to in para 3 of our report of even date (Contd.)
(xii) Based on our examination and according to the information and
explanations given to us, 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) The Company is not a Chit Fund/Nidhi/Mutual Benefit Fund/
Society and Clause (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments other than in mutual fund in respect
of which the Company is maintaining adequate and proper records.
(xv) The Company has given guarantee to Housing Development Finance
Corporation Limited in respect of housing loans availed by its
employees. The terms of such guarantee are not prejudicial to the
interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term (oans have been applied for the purposes for
which they have been obtained.
(xvii) On the basis of our examination of the Balance sheet of the
Company and according to the explanations given to us, in our opinion,
funds raised on short term basis have not been used for long term
(xviii) The Company has not allotted any shares on preferential basis
to parties and companies covered in the register maintained under
section 301 of the Act.
(xix) The Company has not issued any secured debentures.
(xx) The Company has not raised any money by issue of shares to the
(xxi) During the course of 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 on or by
the Company, noticed or reported during the year nor have we been
informed of such case by the management.
For SUNDARAM & SRINIVASAN
June 4, 2009 Membership No. F7945