| 1. Report on the Financial Statements
We have audited the accompanying financial statements of HARTRON
COMMUNICATIONS LTD., Panchkula ("the Company") which comprise the
Balance Sheet as at 31st March 2014 and the Statement of Profit and
Loss Account and Cash Flow Statement for the year then ended, and a
summary of significant accounting polices and other explanatory
information.
2. Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position and
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in Sub-Section (3C) of section 211
of the Companies Act, 1956 ("the Act"'). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
4. Basis of Qualified Opinion
i. AS-15 regarding accounting for retirement benefits i.e. provision
for retirement benefits has not been made (Refer Note (1.7)).
ii. Further we have relied upon the management representations
relating to disclosures regarding impairment of assets as stated in
Note No. - 6 in Schedule to the Balance Sheet.
iii. Debit & credit balances in the accounts of debtors, suppliers and
few banks are subject to their respective confirmation and
reconciliation (Note -3).
The effect of items mentioned at paragraph 4(i) and (ii) above on
profit for the year, assets, liabilities and reserves in
unascertainable.
5. Auditor's Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effect of the matters
described in the Basis of Qualified Opinion paragraph the effect of
which is unascertainable and read together with the other notes, give
the information required by the Act in the manner so required and give
a true and fair view conformity with the accounting principles
generally accepted in India.
a. in the case of Balance Sheet of the state of affairs of the company
as at 31st March, 2014.
b. in the case of the Statement of Profit and Loss Account of the
profit for the year ended on that date, and
c. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
6. Report on Other Legal and Regulatory Requirements
A. As required by Companies (Auditor's Report) order 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section 227 (4A) of Section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
order.
B. As required by Section 227(3) of the Act, 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 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 appears from our examination of those
books.
c. the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d. in our opinion, the Balance Sheet statement of Profit & Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956.
e. On the basis of written representations received form the Directors
as on March, 31, 2014, and taken on record by the Board of Directors,
none of the Directors is disqualified as on March 31,2014, from being
appointed as Director in terms of clause (g) of Sub- Section (1) of
Section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITOR'S REPORT
(Referred in the paragraph (6) 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.
b) As per the information and explanations given to us, the fixed
assets have been physically verified by the management during the year
and to the best of our knowledge no material discrepancies between the
book records and physical inventory verification has been noticed
during the year.
c) During last year, the company had demolished one of the buildings at
Plot No. 244-245 and a sum of Rs. 246.64 lacs was written off. A new
Modern multistoried building is under construction on the same site.
ii. a) The management has conducted physical verification
of inventory at reasonable intervals.
b) The procedure of physical verification of stock followed by
management is reasonable & adequate in relation to the size of the
company & nature of its business.
c) No significant discrepancies between the book records & physical
inventories have been noticed.
iii. a.) The company has not granted any loans, secured/unsecured to
other parties covered in the register maintained under section 301 of
the Act.
b. Since the Company has not granted any loans as explained above, the
applicability of rate of interest and other terms & conditions does not
arise.
c. Since the Company has not granted any loans as explained above,
question of repayment of principal amount & interest does not arise.
d. Since the Company has not granted any loans as explained above,
question of any overdue amount does not arise.
e & f. The company has not taken any interest free unsecured loan from
Directors & other parties covered in the register maintained under
section 301 of the Act during the year where the terms and conditions
are not prima- facie prejudicial to the interests of the company. As
informed to us as no written agreement has been entered into between
the company & the lenders. There are four such parties from whom loan
has been accepted. The amount involved is Rs.249236/-.
g. These loans are repayable on demand & as informed to us the payments
are made as & when demanded.
iv. a) In our opinion and according to the information and
explanations given to us, there are adequate internal control
procedures commensurate with the size of the company and the nature of
its business for the purchase of inventories plant & machinery and
other assets and for the sale of goods & services.
b. As there are no major weaknesses in the internal control procedures
so question of correcting them does not arise.
v. a) The particulars of contracts or arrangements referred to in
Section 301 of the Act have been entered in the register required to
be maintained under that section.
b. Not applicable.
vi) The company has not accepted any deposits from the public within
the preview of section 58A, 58AA & any other relevant provisions of the
Companies Act, 1956 and the rules framed thereunder.
vii) The company has internal audit system commensurate with its size
and nature of its business.
viii) As informed to us, the Central Govt. has not prescribed the
maintenance of cost records under section 209(1) (d) of The Companies
Act, 1956 to the company.
ix) As explained to us there are no disputed statutory dues outstanding
for a period of more than 6 months. The company has been regular in
depositing undisputed statutory dues i.e. P.F, ESI, Service tax & other
statutory dues with appropriate authorities except delay on few
occasions.
x) The company has no accumulated losses at the end of the financial
year. It has not incurred cash losses in the financial year under
report and the immediately preceding financial year.
xi) On the basis of the records examined by us and the information &
explanation given to us the company has not defaulted in repayment of
dues to bank and financial institution.
xii) As explained to us the company has not granted any loan and
advances on the basis of security by way of pledge of shares,
debentures or any other security.
xiii) In our pinion 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 2003 are not applicable to the company.
xiv) According to the information and explanation given by the
management the company is not dealing in or trading in shares,
securities, debentures and other investments.
xv) In our opinion the company has not given any guarantees for loans
taken by associate concerns.
xvi) In our opinion & on the basis of information & explanation given
to us, term loan raised during the year has been used for purpose for
which these were raised.
xvii) The company has not been raised any short term unsecured loans.
xviii) During the year The company has not made preferential allotment
of shares to parties covered in the register maintained Under Section
301 of the Act.
xix) During the financial year the company did not issue any
debentures. Hence the provisions of clause 4 (xix) of the companies
(Auditors Report) order 2003 is not applicable to the company.
xx) The company has not raised any money by way of public issue during
the year. Accordingly the provisions of clause 4 (xx) of the Companies
(Auditor's Report) order 2003 on the end use of money are not
applicable to company.
xxi) According to information and explanation given to us, no fraud on
or by the company has been noticed or reported during the course of our
audit.
For VINOD KUMAR & ASSOCIATES
CHARTERED ACCOUNTANTS
(PARTNER)
Pardeep Diwan
PLACE : CHANDIGARH M. No. 086687
DATED : 26.05.2014 FRN. 00234N | 