MODI HOOVER INTERNATIONAL LIMITED
ANNUAL REPORT 2005-2006
The Members of
Modi Hoover International Ltd.
We have audited the attached Balance Sheet of Modi Hoover International
Limited as at 30th June, 2006 and also the Profit & Loss Account and the
Cash Flow statement annexed thereto, for the year ended on that date. 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. We conduce 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 mis-statements. An audit includes
examining on a test basis, evidence supporting the amount and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluates the overall financial statement presentation. We believe
that our audit provides a reasonable basis fog our opinion.
1. As required by the Companies (Auditors' Report) Order, 2003 as amended
by the companies (Auditors Reports) (Amendment) order, 2004 issued by the
Central Govt. in terms of Section 227 (4A) of the Companies Act, 1956, we
give our comments in the annexure on the matters specified in the order to
the extent applicable to the company.
2. Further to our comments in the annexure referred to the paragraph (1)
above, we report as under.
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
b. 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.
c. The Balance Sheet and Profit & Loss Account and Cash Flow statement
dealt with, by this report are in agreement with the books of accounts.
d. In our opinion the Balance Sheet and Profit & Loss account and Cash Flow
statement comply with the accounting standards referred to in sub-
section(3C) of Section 211 of the Companies Act, 1956.
e. On the basis of the written representations received from the directors
and taken on record by the Board of Directors, we report that none of the
directors is disqualified as on 30th June, 2006 from being appointed as a
director in terms of clause (g) of sub section (1) of section 274 of the
Companies Act, 1956.
f. In our opinion and to the best of our information and according to the
explanations given to us the said Statements of Account read together with
the other Notes as contained in Schedule 10 thereon, and subject to the
consequential impact on the results for the year of note No. 2(ii)
regarding non-provision of interest on securities amounting to Rs.20.26
Lacs; Note No. 2 (viii) regarding non computation of deferred taxes, amount
unascertained; give the information required by the companies act, 1956 in
the manner so required and give a true and fair view.
i) In the case of Balance Sheet, of the state of affairs of the Company as
at 30th June, 2006;
ii) In the case of Profit & Loss Account, of the Profit of the Company for
the year ended on that date; and
iii) In the case of the Cash Flow Statement of the cash flow for the year
ended on that date.
FOR MANGLA ASSOCIATES
DATE : 29TH November 2006
PLACE: NEW DELHI A.P. MANGLA
ANNEXURE TO THE AUDITORS' REPORT:
(Referred to in Paragraph (1) of our Report of even date on the Statement
of Accounts of Modi Hoover International Limited for the year ended 30th
1. a) Proper records showing full particulars including quantitative
details and situation of fixed assets is being maintained by the company.
b) The company has no system of physical verification of fixed assets by
the management, which would provide for physical verification of all the
fixed assets at reasonable intervals over of a period of time.
c) The company has not disposed off any substantial part of its Fixed
Assets which has any effect on its going concern during the year.
a) The inventory, except lying with outside parties, has been physically
verified by the management during the year. In our opinion frequency of
verification is reasonable.
b) In our opinion and according to the information and explanation giving
to us, the procedure of the 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) On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory, as far as
we could ascertain and no material discrepancies have been noticed between
the physical stock and the book records.
3. During the year, as per the information and explanations provided to us,
the company has neither granted nor taken any loan secured or unsecured
to/from companies, firms or other parties covered, in the register
maintained u/s 301 of the Companies Act 1956, therefore provisions of
clause (iii) (a), b, c & d of the Companies (Auditor's Report) Order 2003
(as amended) are not applicable to the Company.
4. In our opinion, and according to the information and explanations given
to us, there is adequate internal control procedures commensurate with the
size of the company and the nature of its business for the purchase of
inventory and fixed assets and for the sale of goods. However for after
sales services the system need to be further strengthened. During the
course of our audit we have not observed any continuing failure to correct
major weaknesses in internal control.
5. The Company has not accepted any deposit from the public within the
meaning of Section 58A and 58 AA of the Companies Act 1956 and the rules
framed thereunder. Therefore the provisions of clause a 4(vi) of the
Companies (Auditors Report) Order 2003 (as amended) are not applicable to
6. (a) As per information and explanations given to us by the management,
we are of the opinion that all the particulars, of contracts or arrangement
referred to in Section 301 of the Companies Act 1956 and need to be entered
into the Register maintained under that section have been so entered.
(b) As far as we could ascertain on the basis of our selective checking and
according to the information and explanations given to us, transactions
made in pursuance to above said contracts or arrangements in respect of
each party made during the year have been made at prices which are
reasonable having regard to the prevailing market price at the relevant
7. In our opinion and according to the information and explanations given
to us, the company is yet to have an adequate internal audit system
commensurate with its size and natures of business.
8. (a) According to the information and explanations given to us and
records of the company examined by us, in our opinion, there were delays in
depositing undisputed statutory dues of Employee's Provident Fund,
Employee's State Insurance and Sales Tax. dues with the appropriate
However, Investor Education and Protection Fund, Wealth tax, Custom Duty,
and Excise Duty for the year are not applicable to the company.
b) According to the information and explanations given to us and the
records of the company examined by us, the particulars of dues of sales
tax, income tax, custom duty, wealth tax, excise duty and Cess as at 30th
June 2006, which have not been deposited on account of a dispute are as
Name of the Nature of Dues Amount Period to which Forum where
Statute (Rs. in the Amount dispute is
lacs) relates pending
Central Sales Demand for non 1.84 1997-98 to Appellate
Tax Act submission of 2001-2002 Authority
Delhi Sales Non submission 3.04 1997-98 to Appellate
Tax Act of declaration 2001-02 Authority
forms & penalty
9. The accumulated losses of the Company, as at 30th June 2006 are more
than fifty percent of the net worth.
10. In our opinion, on the basis of audit procedures and according to the
information and explanations given to us, the Company has no outstanding
loan from any bank or financial institutions and the question of default in
repayment does not arise.
11. In our opinion, and according to the information and explanations given
to us the company has not given any guarantee for the loans taken by others
from banks and financial institutions.
12. The Company has not granted any loans on the basis of security by way
of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund / nidhi /
mutual benefit fund / societies are not applicable to the Company.
14. In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments
15. On the basis of review of utilization of funds on an overall basis,
related information as made available to u and as represented to us by the
Management, funds raised on short-term basis have not been used to finance
16. The Company has not made any preferential allotment of shares to
companies or parties covered in the register maintained under section 301
of Act, during the year.
17. The Company has not raised any money by public issue during the year.
18. During the course of our 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 or reported during
the year, nor have we been informed of such case by the management.
FOR MANGLA ASSOCIATES
DATE : 29th Nov, 2006
PLACE: NEW DELHI A.P. MANGLA