ANNUAL REPORT 2005-2006
THE MEMBERS OF
HI-TECH GEARS LIMITED
1. We have audited the attached Balance Sheet of HITECH GEARS Limited as at
31st March 2006 and also the Profit & Loss Account and the Cash Flow
Statement for the year ended on that date annexed thereto. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
2. 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 our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 [as amended
by the Companies (Auditor's Report) (Amendment) Order, 2004] issued by the
Central Government of India in terms of sub-section (4A) of section 227 of
the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 & 5 of the said order.
4. Further to our comments in Annexure 'A' referred to above, we report
i) We have obtained all the information and explanations, which to the best
of our knowledge and belief were necessary for the purpose of our audit.
ii) 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.
iii) The Balance Sheet, Profit & 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 & 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 Companies Act, 1956;
v) On the basis of the written representations received from the directors,
as on 31st March 2006 and taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on 31st 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.
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 notes appearing thereon as contained in
Schedule 18 give the information as 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 the Balance Sheet, of the state of affairs of the Company
as at 31st March 2006.
b) In the case of the Profit and Loss Account, of the profit for the year
ended on that date.
c) In the case of Cash Flow Statement, of the cash flow for the year ended
on that date.
For GUPTA VIGG & CO.
PLACE : GURGAON PARTNER
DATED : JUNE 30, 2006 MEMBERSHIP NO. 89214
ANNEXURE 'A' REFERRED TO IN PARAGRAPH 4' OF THE AUDITOR'S REPORT ON THE
ACCOUNTS OF HI-TECH GEARS LIMITED FOR THE YEAR ENDED 31ST MARCH 2006
1) The Company has maintained proper records to show full particulars,
including quantitative details and situation of all fixed assets.
2) All the fixed assets have not been physically verified by the management
during the year but there is a regular programme of verification except for
furniture and fixtures and office equipments 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.
3) The company has not disposed off any substantial part of its fixed
assets during the year under report.
4) The Inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable.
5) The procedures of physical verification of inventories followed by the
management, are reasonable and adequate in relation to the size of the
company and its nature of business.
6) On the basis of our examination of the records of inventory, we are of
the opinion that the company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks and
the book records were not material.
7) The following are the particulars of loans granted by the Company to
Companies, firms or other parties covered in the Register maintained under
Section 301 of the Companies Act, 1956.
S.No. Name of Relationship Amount Year end
Party with party Rs. Balance Rs.
1. Hi-Tech Robotic 100% subsidiary 48,59,175/- 51,04,804/-
8) According to the explanation and information given to us, the company
has not taken any loans from Companies, firms or other parties covered in
the Register maintained under section 301 of the Companies Act, 1956.
9) In our opinion the rate of interest wherever applicable and other terms
and conditions on which loan has been granted to companies, firm or other
parties listed in the registers maintained under section 301 are not, prima
facie, prejudicial to the interest of the company. Loan to M/s Hi-Tech
Robotics Systemz incorporated as wholly owned subsidiary of the company, is
interest free and is repayable on demand.
10) There is no default in repayment of principal and no overdue interest
amount is paid during the year as the same is not due.
11) There is no overdue amount of loans granted to Companies, Firms or
other parties listed in the Register maintained u/s 301 of the Companies
12) In our opinion and according to the information and explanation given
to us there are adequate internal control procedures commensurate with the
size of the company and the nature of its business with regard to purchases
of inventory, fixed assets and with regard to the sale of goods. During the
course of our audit, no major weakness has been noticed in the internal
13) 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 into the Register
maintained under Section 301 have been so entered.
14) In our opinion and according to the information and explanations given
to us, the transactions made in pursuance of contracts and arrangements
entered in the Register maintained under Section 301 and exceeding the
value of Rupees Five Lacs in respect of any party during the year, have
been made at prices which are reasonable having regard to prevailing market
prices at the relevant time.
15) The Company has not accepted any deposits from the public, under
Section 58A and 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975.
16) In our opinion the Company has an internal audit system commensurate
with the size and nature of its Business.
17) We have broadly reviewed the books of accounts relating to materials,
labour and other items of cost maintained by the company pursuant to the
rules made by the Central Government for the maintenance of cost records
under section 209(1) (d) of the Companies Act, 1956 and we are of the
opinion that prima facie the prescribed accounts and records have been made
18) According to the records of the Company, the company is regular in
depositing with appropriate authorities undisputed statutory dues including
Provident Fund, Investor Education Protection Fund, Employees State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other statutory dues applicable to it.
19) According to the information and explanation given to us, there are no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Service
Tax, Sales Tax, Customs Duty and Excise Duty, Cess which were outstanding,
as at 31st March 2006 for a period of more than six months, from the date
they became payable.
20) According to the records of the Company, no dues were pending against
Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty,
Cess, which have not been deposited on account of any dispute.
21) The company has no accumulated losses and has not incurred any cash
losses during the financial year covered by our audit and immediately
preceding financial year.
22) Based on our audit procedures and on the information and explanations
given by the management, we are of the opinion that the company has not
defaulted in repayment of dues to a financial institution and banks.
23) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities,
during the year under audit.
24) According to the information and explanation given to us, the company
has not given any loans to M/s Getrag Hi-Tech Gears (India) Private
25) The term loans, have been applied for the purpose for which they were
26) According to the information and explanation 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,
by the Company.
27) The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section 301
of the Companies Act, 1956 during the year.
28) During the period covered by our audit report, the company has not
issued any debentures.
29) The company has not raised any money by public issues.
30) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by the
company has been noticed or reported during the course of our audit.
For GUPTA VIGG & CO.
PLACE: NEW DELHI PARTNER
DATED: JUNE 30, 2006 MEMBERSHIP NO. 89214