| We have audited the attached Balance Sheet of HINAFIL INDIA LIMITED as
at 31st MARCH, 2012, the Profit and Loss Account for the year ended on
that date annexed thereto and the Cash flow Statement 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 Statement based on our audit.
We conducted our audit in accordance with Auditing Standards generally
accepted in India. Those standard 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 Statement. 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.
This report is made solely to the Company's members, as a body, in
accordance with the provisions of the Companies Act, 1956. Our audit
work has been undertaken so that we might state to the Company's
members those matters we are required to state to them in an auditors'
report and for no other purpose. To the fullest extent permitted by law
we do not accept or assume responsibility to anyone other than the
company and the company's members as a body, for our audit work, for
this report or for the opinions we have formed.
We report that :
1. (a) sale Tax liability of the company has not been accounted for in
the books of account. Effect of the same on financial statement could
not be ascertained, as the required information could not be made
available to us.
(c) No provisions has been made in accounts in respect of Gratuity as
per AS-15. (Refer Note 9 & 19 of Annexure I).
(d) The Company has defaulted in repayment of Term Loan & Working
Capital loan taken from Canara Bank, The Bank has initiated recovery
action and sold all fixed assets of the company viz. factory / non
factory building, plant & machineries, electrical installation etc. and
party recovered defaulted loan. Still bank has to recover Rs. 273.82
lac. Subject to foregoing, we further report that :
2. 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;
3. 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;
4. The Balance Sheet, Profit and Loss Account and Cash Flow statement,
dealt with by this report are in agreement with the books of accounts;
5. In our opinion Balance Sheet, Profit & Loss Account and Cash Flow
Statement comply with Accounting Standards referred to in Sub-sec. (3c)
of Sec. 211 of the Companies Act, 1956;
6. On the basis of written representations received by the Company
from the Director as regards their eligibility to assume and occupy
office as directors as on 31st March, 2011, we report that non of the
Directors is disqualified as on 31st March, 2011 from being appointed
as a Director under Section 274(1) (g) of the Companies Act, 1956.
7. Subject to foregoing, in our opinion and to the best of our
information and according to the explanations given to us the said
accounts, subject to the Notes given in Schedule 'O', Significant
Accounting Policies and Notes on account, give the information required
by the Companies Act, 1956 in the manner so required and give a true &
fair view in conformity with the accounting principles generally
accepted in India :
i. In the case of Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
ii. In the case of Profit & Loss account, of the loss of the Company
for the year ended on that date and;
iii. In the case of Cash Flow statement, of the cash flow for the year
ended on that date.
1. a. The Company has maintained proper records showing full
particulars, including quantitative details & situation of fixed
assets.
b. The Company has physically verified certain assets during the year
at reasonable intervals and no material discrepancies were noticed on
such verification.
c. According to the information and explanation given to us and after
taking note of the fact that Canara Bank has auctioned major fixed
assets of the company to recover Term Loan and Caah Credit Loans. Due
to this we are of opinion that the company's going concern assumption
is affected substantially.
2. a. The Management has certified that the physical verification of
inventory held by the company was conducted at reasonable intervals
during the year and / or at the year- end.
b. In our opinion and according to the information and explanations
given to us, the procedure of physical verification of Stocks followed
by the Management is reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. According to information and explanations given to us, the company
has maintained proper records of inventory. The discrepancies noticed
on such verification as compared to the book records were not material
having regard to the size and nature of the operations of the Company
and have been properly adjusted in the books of account.
3. a. The Company has granted interest free unsecured loan to the
parties covered in the register maintained under section 301 of the
Companies Act, 1956. There are two parties, to whom the company has
granted such loans; maximum amount involved of such loan granted is Rs.
42.47 Lacs & the year-end outstanding balance of such loan granted is
Rs. 28.51 Lacs.
b. We have been informed that the Company has not charged interest on
such loans and in our opinion terms and conditions are prima facie
prejudicial to the interest of the Company.
c. We have been informed that there are no stipulations as to
repayment of loans.
d. Since there are no stipulations as to repayment of such loan, we
are unable to comment on overdue amount.
e. The company has taken interest free unsecured loan form the parties
covered in the register maintained under section 301 of The Companies
Act 1956. There is one party form whole the company has taken such
loans, Maximum amount involved of such loan aggregated to Rs.2.60 Lac
and the year end outstanding balance of such loans taken aggregated to
Rs.2.60 lac.
f. We have been informed that no interest is paid on said loan and the
other terms and conditions of such loans are prima facie not
prejudicial to the interest of the company.
g. The company is regular in repayment of loans whenever asked for ,
however there are no stipulations as to time of repayment of principal
and interest amount.
4. According to the information and explanations given to us, the
company has no formal system of internal control for the purchase of
inventory and fixed assets and sale of goods and services, commensurate
with the size of the company. Although, the same is personally looked
after by the Managing Director of the Company. However, the existing
system needs to be strengthened and formalized.
5. a. According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into
the register maintained under section 301 of the Companies Act, 1956
have been so entered. b. In our opinion and according to the
information and explanations given to us, there is no transactions made
in pursuance of contracts or arrangements entered into the register in
pursuance of section 301 of the Act and exceeding the value of Rupees
Five Lacs in respect of any party during the year.
6. The Company has not accepted any deposits from the public within
the meaning of Section 58A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed hereunder.
7. According to the explanation and information given to us the
company has an internal audit system by its own staff and not by an
independent chartered accountant firm. In our opinion the same is
required to be properly strengthened and designed to cover all-
important areas so as to commensurate with the size and nature of its
business.
8. The Central Government has not prescribed for maintenance of cost
records u/s 209(1) (d) of the Companies Act, 1956 (1 of 1956).
9. a. On the basis of information and explanations we report that the
Company is not regular in payment of statutory dues with appropriate
authorities and subject to our comments in para 1. a), & b) of our
report, followings are the statutory dues as per books of accounts,
which are outstanding for a period of more than six months from the day
they became payable, we are however not able to quantify statutory dues
which are outstanding but not provided for in the books of accounts.
Amt. Rs.
Sales Tax 3,28,618/-
Income Tax for FY 0708 10,46,760/-
b. According to the information and explanations given to us and
according to the books and records as produced and examined by us, in
our opinion, there are no dues outstanding of Sales tax, Income Tax,
Custom duty, Wealth tax, Excise duty, Cess & Service tax on account of
any dispute except what is stated herein below :
Assessment
Year Type of demand Amount in Authority before
dispute dispute pending
AY 2005-06 Penalty U/s 271(1)(c)
of the IT 24,20,374/- ITAT, Ahmedabad
Act Bench
AY 2006-07 Income Tax demand
raised U/s 27,74,160/- ITAT, Ahmedabad
143(3) of the IT Act Bench
AY 2007-08 Income Tax demand
raised U/s 16,06,320/- CIT (A)
143(3) of the IT Act
10. The Company has accumulated losses of Rs. 54431314/- as at 31st
March 2012, which is exceeding fifty percent of its net worth. The
Company has incurred financial cash losses during the year at Rs.
112911/- (Last Year Rs. 11805823/-).
11. As per books and records maintained by the Company and according
to the information and explanations given to us, the company has
defaulted in repayment of terms loan and working capital loan along
with interest, the bank recovered partly by disposing off entire
properties including Stock of the company. The company is still o pay
Rs.20166907/- towards Term Loan and Rs.7214963\- towards working
capital loan as at 31/03/2012.Also company has not taken any loans
against debentures.
12. According to the information and explanations given to us and
based on the documents and records produced to us, the company has not
granted loans and advances on the basis of security by way of pledge of
Shares, debentures and other securities.
13. In our opinion, and considering the nature of activities carried
on by the Company during the year, the provisions of any special
statute applicable to chit fund / nidhi / mutual benefit fund / society
are not applicable.
14. According to the information and explanations given to us, the
company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly the provisions of clause 4(xiv) of the
Companies (Auditors' Report) Order, 2003 are not applicable to the
Company.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by other from banks
and financial institutions.
16. This clause is not applicable, as no term loans have been raised
during the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investments.
18. The Company has not made any preferential allotment of shares to
parties covered in the register maintained under section 301 during the
year, hence this clause of the order is not applicable to the company.
19. The Company has not issued any debenture and as such clause 4(xix)
of the Order is not applicable to the Company.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books of accounts and
records carried out in accordance with the generally accepted auditing
practice and according to the information and explanations given to us,
no fraud on or by the Company has been noticed or reported during the
year nor have we been informed of such case by the management that
clauses the financial statements to be materially misstated.
For RAMESH GAUTAM & CO.
Chartered Accountants
Sd/-
(RAMESH KUMAR JAIN)
(Proprietor)
M.No. 108887
Place : Mumbai
Date : 24.08.2012 | 