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Heatshrink Technologies Ltd.

BSE: 522130 Sector: Engineering
NSE: REPLENGINE ISIN Code: INE966B01012
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Heatshrink Technologies Ltd. (REPLENGINE) - Auditors Report

Company auditors report

HEATSHRINK TECHNOLOGIES LIMITED ANNUAL REPORT 2007-2008 AUDITORS' REPORT TO THE MEMBERS' OF HEATSHRINK TECHNOLOGIES LIMITED 1. We have audited the attached Balance Sheet of HEATSHRINK TECHNOLOGIES LIMITED as at 31 March 2008 and the Profit and Loss Account and the Cash Flow Statement of the Company 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 (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government in terms of Section 227(4A) 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 the Annexure referred to in paragraph 1 above, we report that: a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b. 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 the books. c. The Balance Sheet and Profit and Loss account dealt with by this report are in agreement with the books of account. d. In our opinion, the Balance Sheet, the Profit and Loss account and the 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. e. In our opinion Mr. Pramod Shah. Mr. Behram Doctor & Mr. Pramod Gangurde, directors of the Company fall under the purview of Section 274 (I) and hence are disqualified from being appointed as directors. f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes in Schedule 18 give the information required by the Companies Act, 1956 in the manner so required subject to: 2.1 Refer Note No. 2 relating to the continuation of the company as a going concern. 2.2 Refer Note No.3 relating- to non availability of Balance confirmations and reconciliation thereof from Banks and Financial Institutions. 2.3 Refer Note No.6 relating to non provision for depreciation on fixed assets in violation of Accounting Standard 6 'Depreciation Accounting' issued by the Institute of Chartered Accountants of India. 2.4 Refer Note No.6 relating to non provision of impairment loss in violation of Accounting Standard 28 'Impairment of Assets' issued by the Institute of Chartered Accountants of India. 2.5 Refer Note No. 15 relating to non-provision for retirement benefits in violation of Accounting Standard 15 'Accounting for Retirement Benefits in the Financial Statements of Employers' issued by the Institute of Chartered Accountants of India. 2.6 Refer Note No.20 relating to the non-compliance of Section 383A of the Companies Act, relating to the appointment of a Whole time Company Secretary 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 2008 and b. In the case of the Profit and Loss Account, of the Loss for the year ended on that date; and c. In the case flow Statement of the cash Flows for the year ended on that date. For KANAK RATHOD & CO., Chartered Accountants K.B. RATHOD Place: Mumbai Proprietor Date : July 10, 2008. Membership No.: 32833 Annexure to the Auditors' Report To The Members of HEATSHRINK TECHNOLOGIES LTD. (Referred to in our Report of Even Date) i. (a) The Company has not maintained complete records showing full particulars. including quantitative details and situation of fixed assets. (b) The management has substantially completed the physical verification of fixed assets. (c) Substantial parts of fixed assets are under the possession of the Court Receiver, Bombay High Court. ii.(a) The stock of inventory has been physically verified during the year by the Management at reasonable intervals. (b) In our opinion, the procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and nature of its business. (c) On the basis of our examination of inventory records, in our opinion, the company is maintaining proper records of inventory. (d) The discrepancies noticed on physical verification of stocks as compared to book records were not material. ii. The Company has neither granted nor taken any loans, unsecured or secured to and from companies firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clauses 4 (iii) (a) to (h) of the Order are not applicable. iv. In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods. In our opinion, there is no continuing failure to correct major weaknesses in internal control. v. According to the information and explanations given to us, there are no transactions with parties listed in the register maintained under section 301 of the Companies Act, 1956. vi. According to the information and explanations given to us, the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder, in respect of repayment of the said fixed deposits and interest thereon have not been completed with. vii. The company has an internal audit system commensurate with its size and the nature of its business. viii. The maintenance of cost records has not been prescribed by the Central Government Under Section 209(1)(d) of the Companies Act, 1956 for the products manufactured by the Company. ix. (a) In our opinion and according to the information and explanations given to us, except for Customs Duty Rs. 2,22,52,509/- (Previous Year Rs.2,22,52,509/-) and Fringe Benefit Tax payable. Rs.6,52,881/- (Previous Year Rs. 2,98,476/-), undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance Dues, Income Tax, Sales Tax, Wealth Tax, Customs duty, Excise duty, cess and any other statutory dues have been generally regularly deposited in time with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable. (b) There are no dues outstanding of Income tax, Sales tax, Wealth tax, Custom duty, Excise duty and cess on account of any dispute other than the following: Nature of Nature of Dues Amount Forum where dispute is Statute (Rs. in pending crore) The Income Demand raised by the 67.31 Income Tax Tribunal. Tax Act, 1961 Income Tax Authorities Mumbai The Central Demand raised by the 0.12 Suprindent of Central Excise Central Excise Excise. Act, 1944 Authorities The Central Demand raised by the 0.53 Commissioner of Central Excise Central Excise Excise (Appeals) Act, 1944 Authorities The Central Demand raised by the 6.92 The Western Regional Excise Central Excise Bench Tribunal Act, 1944 Authorities The Central Demand raised by the 0.43 Deputy Commissioner Sales Sales Tax Authorities Sales Tax Appeal-I Tax Act, 1956 Mumbai The Bombay Demand raised by the 0.42 Deputy Commissioner- Sales Sales Tax Authorities Sales Tax Appeal-I, Tax Act, 1999 Mumbai. x. The Company has acculumated losses that exceed its Net Worth and has incurred cash losses in the current Finanncial year and in the immediately preceding financial year. xi. The company has defaulted in repayment of dues to financial institutions, banks and debenture holders. xii. 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. Accordingly clause 4(xii) of the Order is not applicable to the company. xiii. The company is not a chit fund, nidhi or mutual benefit fund/society, therefore, the clause 4 (xiii) of the Order is not applicable to the company. xiv. According to the information and explanations given, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly clause 4(xiv) of the Order is not applicable to the company. xv. The company has given counter guarantees for loans taken by others from bank or financial institutions, aggregating to Rs. 74.93 crores, where the terms and conditions in our opinion, are prima facie prejudicial to the interest of the Company. xvi. No term loans have been raised during the year. Accordingly clause 4 (xvi) of the Order is not applicable to the company. xvii. No loans have been raised during the year. Accordingly clause 4 (xvii) of the Order is not applicable to the Company. xviii. The Company has not made any preferential allotment of shares to any parties or companies covered the register maintained under Section 301 of the Companies Act, 1956. xix. The Company has not raised any money through issue of debentures or through a public issue during the year. According by the provisions of clause 4(xix) of the Order are not applicable to the Company. xx. According to the information and explanation given to us, the Company has not raised money by way of public issue during the year ended March 31, 2008. Accordingly the provisions of clause 4(xx) of the Order are not applicable to the Company. xxi. Based upon the audit procedures performed and on the basis of information and explanations provided 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 KANAK RATHOD & CO., Chartered Accountants K.B. RATHOD Place: Mumbai Proprietor Date : July 10, 2008. Membership No.: 32833