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TMT (I) Ltd.

BSE: 522171 Sector: Engineering
NSE: TMTINDIA ISIN Code: INE182E01010
BSE 05:30 | 01 Jan TMT (I) Ltd
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TMT (I) Ltd. (TMTINDIA) - Auditors Report

Company auditors report

TMT (INDIA) LIMITED ANNUAL REPORT 2006-2007 AUDITORS' REPORT To The Members of TMT (INDIA) LIMITED 1. We have audited the attached Balance Sheet of TMT (INDIA) LIMITED as at 31st March, 2007 and also the Profit & Loss Account 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 have 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 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 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, issued by the Central Government of India, in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph 3 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 those books: (c) The Balance Sheet and Profit & Loss account dealt with by this report are in agreement with the books of account; (d) In our opinion, the Balance Sheet and Profit & Loss account dealt with by this report comply with the applicable accounting standards referred to in Section 211 (3C) of the Companies Act, 1956; (e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2007 from being appointed as a Director in terms of Section 274 (1) (g) of the Companies Act, 1956; (f) In our opinion and to the best of our information and according to the explanations given to us; i) The Company has not provided for interest on delayed payments to creditors/lenders and on statutory dues and the amount is not ascertainable, since there are no specific demand notices, ii) The Company has not provided for loss on physical verification of fixed assets and Inventories and the amount is not ascertained, since the physical verification was not done by the Company. iii) The Company has not made any provision for doubtful debts; advances/deposits and the amount is not ascertained. iv) The Company's settlements with NBFC's are accounted for, pending reconciliation. Subject to the above, 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, 2007; and (ii) In the case of the profit and loss account, of the loss for the year ended on that date; For BRAHMAYYA & CO. Chartered Accountants Sd/- (B. Daivadheenarn Reddy) Partner Membership No. 26450 Place: Hyderabad (Camp) Date : 16th August 2007 ANNEXURE TO THE AUDITORS' REPORT Referred to in paragraph 3 of our report of even date; (i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, but the amounts were not compared with the financial ledger balances. (b) All the assets have not been physically verified by the management during the year and there is no regular programme of verification. It is explained by the Company that most of the staff have left the company and there is sufficient security to safe guard the fixed assets at all the units, and the discrepancies, if any, noticed on physical verification will be considered in the relevant year of physical verification. (c) During the year the Company has not disposed off any major part of the Plant and machinery. (ii) (a) The inventory has not been physically verified during the year by the management. It is explained by the Company that most of the staff have left the Company and there is sufficient security to safe guard the Inventories. (b) Accordingly, the Provisions of Clause 4 (ii) (b) of the Companies (Auditor's Report) Order, 2003, are not applicable. (c) The company is maintaining proper records of inventory. During the year under report Inventory has not been physically verified by the Company and hence the discrepancies, if any, noticed on physical verification between the physical stocks and book records shall be considered in the relevant year of physical verification. (iii) (a) The Company has taken a secured loan from one party (Guarantor to Bank Loans) and the maximum amount involved during the year and the year end balance was Rs.200.00 lakhs and unsecured loans from four parties and the maximum amount involved during the year was Rs.463.96 lakhs and the year end balance was Rs. 547.33 lakhs. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to any company, firm or other parties covered in the register maintained U/s 301 of the Companies Act, 1956. (b) In our opinion and according to the information and explanations given to us, the rate of interest, wherever applicable and other terms and conditions on which loans have been taken are not, prima facie, prejudicial to the interest of the Company. (c) In respect of loans taken by the Company, the interest and principal amount is payable on demand. (d) There is no overdue amount in respect of loans taken by the Company, since these loans are repayable on demand and therefore the question of overdue amounts does not arise. (iv) In our opinion and according to the information and explanations given to us, there are no adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and it is explained by the Company that most of the staff have left the Company and there were no purchases of inventory / Fixed assets during the year. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls and the internal controls are to be strengthened. (v) (a) According to the information and explanations given to us, there were no transactions that needed to be entered in the register maintained under Section 301 of the Companies Act, 1956. (b) In our opinion and according to the information and explanation given to us, there were no transactions exceeding the value of rupees five lakhs in respect of any party during the year in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956. (vi) In our opinion and according to the information and explanations given to us, the company has not accepted deposits from public specified under the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. No order has been passed by the Company Law Board. (vii) The Company has no internal audit system to commensurate with its size and nature of its business and it is explained by the Company that in view of meager operations / transactions, internal audit was not conducted during the year under report. (viii) In our opinion and according to the information and explanations given to us, the Central Government has not prescribed for maintenance of Cost Records by the Company under Section 209(1)(d) of the Companies Act, 1956 in respect of any product/activity of the company. (ix) (a) According to the records of the Company, the Company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Income Tax Deducted at Source, and other material statutory dues applicable to it. (b) According to the information and explanations given to us, the following undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income tax, Wealth tax, Sales tax, Customs Duty, Excise Duty and Cess, Income Tax deducted at source were in arrears, as t 31st March 2007 for a period of more than six months from the date they became payable. Statement of arrears of undisputed statutory dues outstanding for more than six months: Name of the Statute Nature of dues Amount due period to which In Rs. lakhs the amount due ESI Act ESI Recoveries 0.27 Jan '97 to Aug 2006 ESI Act ESI Contributions 1.97 Jan '97 to Aug'06 profession Tax Act PT Collections 0.23 Feb '03 to Aug'06 EPF Act PF Recoveries 0.14 Upto Aug 2006 EPF Act PF Contributions 0.26 Upto Aug 2006 TDS 0.41 Fringe Benefit Tax 1.07 (c) According to the information and explanations given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute. (x) The accumulated losses of the Company Rs.944.96 lakhs at the end of the financial year, are more than 50% of its net worth. The Company has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year 2005-06. The effect of unqualified qualifications in the Audit report has not been taken into consideration for the purpose of making comments in respect of this clause. (xi) According to the records of the Company and the information and explanations given to us, the Company has settled its dues to the financial institutions and there are no debentures holders. (xii) According to the records of the Company and 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. (xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company. (xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company. (xv) According to the records of the Company and the information and explanations given to us the Company has not given any guarantee for loans taken by others from banks or financial institutions. (xvi) According to the records of the Company and the information and explanations given to us the company has not taken any new term loans during the year under report and hence the usage of loan funds does not arise. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that during the year under report the Company has not raised any funds on short- term basis and also no long-term funds have been raised and hence the usage of funds does not arise. (xviii) According to the information and explanations given to us, during the year under report the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained U/S 301 of the Companies Act, 1956. (xix) According to the information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures and hence creation of security does not arise. (xx) According to the information and explanations given to us, the company has not raised any money by public issue during the year covered by our audit report. (xxi) According to the information and explanations given to us, no fraud on or by the company was noticed or reported during the course of our audit. For BRAHMAYYA & CO. Chartered Accountants Sd/- (B. Daivadheenam Reddy) Partner Membership No. 26450 Place: Hyderabad (Camp) Date : 16th August 2007