1. We have audited the attached Balance Sheet of HI- TECH GEARS
LIMITED as at 31st March 2009 and also the Profit Et Loss Account and
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 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 [as
amended by the Companies (Auditors 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 Et 5 of the said
4. Further to our comments in the Annexure A referred to above, we
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
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
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 2009 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st 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) During the financial year under audit, the Company has changed the
accounting policy on foreign currency transactions pursuant to the
notification of the Companies (Accounting Standards) Amended Rules,
2009 issued on 31st March 2009, exchange differences relating to long
term monetary items, arising during the year, in so far as they relate
to the acquisition of a depreciable capital asset are added to I
deducted from the cost of the asset w.e.f 1st April 2007 and
depreciated over the balance life of the asset. Had the Company not
changed the accounting policy the profit for the year would have been
lower by Rs. 382.49 Lacs and General Reserve would have been higher by
Rs. 204.22 Lacs.
vii) 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 17 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
a) In the case of the Balance Sheet, of the State of affairs of the
Company as at 31st March 2009.
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.
ANNEXURE A REFERRED TO IN PARAGRAPH 4 OF THE AUDITORS REPORT ON
THE ACCOUNTS OF HI-TECH GEARS LIMITED FOR THE YEAR ENDED 31st MARCH
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
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) According to the explanation and information given to us, the
Company has not taken or granted any loans from Companies, Firms or
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956.
8) 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 controls.
9) 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.
10) 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 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
11) 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.
12) In our opinion the Company has an internal audit system
commensurate with the size and nature of its business.
13) 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 and maintained. However, we have
not made a detailed examination of the records with a view to determine
whether they are accurate or complete.
14) 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.
15) 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, Excise Duty and Cess which were
outstanding, as at 31- March 2009 for a period of more than six
months, from the date they became payable.
16) According to the records of the Company, no dues were pending of
Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service Tax, Excise
Duty and Cess, which have not been deposited on account of any dispute.
17) 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.
18) 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.
19) 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.
20) According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
21) The term loans, have been applied for the purpose for which they
22) In our opinion and 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 for
short term basis have been used for long term investment during the
accounting period covered by our Audit report.
23) 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.
24) During the period covered by our audit report, the Company has not
issued any debentures.
25) The Company has not raised any money by public issues.
26) 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
For GUPTA VIGG a CO.
(CA. KAWAL JAIN)
PLACE : NEW DELHI PARTNER
DATED : MAY 23, 2009 MEMBERSHIP NO. 089214