Micro Forge (India) Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2009

We have audited the attached Balance Sheet of MICRO FORGE (INDIA) LIMITED, as at 31st March, 2009 and also the profit and Loss Account of the Company for the year ended on that date annexed thereto. This financial statement are the responsibility of the companys management. Our responsibility is to express as opinion on these financial statement based on our audit.

1. We conducted 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 misstatements. 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 estimate made by management as well as evaluating the overall financial statement presentations. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Govt.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 matter specified in paragraph 4 and 5 of the said Order.

3. We were not able to verify Bank Balances As on 31st March 2009, because of non availability of the Bank Statements.

4. Further to our comments in the Annexure referred to in paragraph 1 &2 above.

a) 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.

b) In our opinion, proper books of account as required by law have been kept by the company, so far as it appears from our examination of the books.

c) The Balance Sheet and Profit and Loss Account referred to in this Report are in agreement with the Books of Account.

d) In our opinion, the Profit and Loss Account and Balance Sheet comply with the mandatory accounting standard referred accounting Section 211(3C) of the Companies Act,1956 to the extent applicable.

e) Based on information and explanations given to us, none of the directors are disqualified as on 31st March, 2009 from being appointed as directors in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

f) Subject to Para no.3, In in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information 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:

i) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2009; ii) in the case of the profit and loss, of the Loss of the company for the year ended on that date;

ANNEXURE TO THE AUDITORS REPORT TO THE MEMBER OF MICRO FORGE (INDIA) LTD.

(i) (a) As per information provided, the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of information available.

(b) According to the information and explanations given to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner 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) During the year, the Company has not disposed off substantial part of its fixed assets.

(ii) (a) As explained to us, the inventories have been physically verified by the management at regular intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The Company has maintained proper records of inventories and no discrepancies were notice on physical verification as compared with the books of accounts

(iii) (a) As per the information and records made available, the Company has not granted any unsecured loans to company listed in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company has not accepted unsecured loans from company covered in the register maintained under section 301of the Companies Act, 1956.

(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 for the purchase of inventory.fixed assets and for the sale of goods and services. Further, on the basis of our examinations and according to the information and explanations given to us, we have neither come across nor we have been informed of any instance of major weaknesses in the aforesaid internal control systems.

(v) a) The transaction that requires to be entered into the register in pursuance to the section 301 of the Act have been so entered.

b) The transactions of purchase and sales of goods and material made in pursuance of contracts or arrangement entered in the register maintain under section 301 of the companies Act 1956 and exceeding the value of Rs.five lacs in respect of any party during the year have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time as explanation and information provided to us.

(vi) In our opinion & according to the information and explanation given to us, The Company has neither invited nor accepted deposit from public.

(vii) In our opinion, the company has not an internal audit system but it needs to be established both in terms of coverage and periodicity to be commensurate with the size and nature of its business.

(viii) We have informed that the maintenance of cost records Under Section 209(1) (d) of the Companies Act, 1956 is not required by the Company.

(ix) (a) According to the explanation, company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Sales Tax, Income Tax, Customs duty excise duty, cess and other material statutory dues as applicable with the appropriate authorities. Except Professional tax which payable since year 2007-08 of Rs.43090, Fringe Benefit Tax of Rs. 125217 of the year 2007-08

(b)There are disputed amounts of statutory dues, Disputed Income Tax Rs. 70 Lacs , Disputed Sales Tax Rs. 55 Lacs, Disputed Providend Fund Approx Rs.10 Lacs.

(x) The Company has accumulated loss of Rs 22,32,94,968. at the end of the financial year and has incurred loss of Rs.9,44,93,184 during the year and the Net worth of the company is negative by 14,74,71,653 therefore company is sick within the meaning of Sick Industrial company (Special Provision) Act 1985

(xi) Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has defaulted in repayment of dues to banks and accordingly bank has filed a suit against company during the year.

(xii) In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund/ society. Therefore, clause 4(xiii) of the Companies (Auditors Report) Order 2003 is not applicable to the Company.

(xiv) The Company has not entered into any transactions and contracts in respect of trading in securities, debentures and other investments.

(xv) The Company has given a corporate guarantees to the banks for loans given to related company.

(xvi) The Company has not raised new unsecured loans during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we are of the opinion that the Company has not utilised any short term fund for long term investments.

(xviii) During the year, 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.

(xix) The company has not issued any debenture during the year.

(xx) The company has not raised money by public issue during the year.

(xxi) In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

FOR M. B. SARDHARA & ASSOCIATES

Chartered Accountants



(Mahendra Sardhara)

Proprietor

M/NO. 120837

Date : 6th August,2009

Place : Rajkot