| We have audited the accompanying financial statements of M/S.UFM
Industries Limited ("the Company") which comprise the Balance Sheet as
at 31 March 2014, the Statement of Profit and Loss for the year then
ended, and a summary of significant accounting policies and other
explanatory information.
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,
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.
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. 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.
Basis for Qualified Opinion
The Company's recognized Post employment and other long term employee
benefit i.e. Compensated Absences as an expenses in the Statement of
Profit and Loss for the year in which the payment for the same has been
made , which constitutes a departure from the Accounting Standard 15 -
"Employee Benefits" referred to in Section 211(3C) of the Act.
Compensated Absences are accounted for on cash basis, the impact of the
same in the financial statement is unascertainable by us.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph above, the
aforesaid financial statements give the information required by the Act
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 31 March 2014;
ii. in the case of the statement of profit and loss, of the profit for
the year ended on that date.
iii. in the case of the cash flow statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order"), as amended, issued by the Central Government of India in terms
of sub-section (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.
2. 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. Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, 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 dealt with by this
Report are in agreement with the books of account.
d. Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above, in our opinion, the Balance Sheet,
Statement of Profit and Loss comply with the Accounting Standards
referred to in sub-section (3C) of Section 211 of the Companies Act,
1956; and
e. On the basis of written representations received from the directors
as on 31 March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2014, from being
appointed as a 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 to in para (1) of our Report of even date on statements of
Accounts of UFM INDUSTRIES LIMITED, for the year ended 31st March'
2014.
i) a) The Company has maintained proper records to show full
particulars, including quantitative details and situation of its Fixed
Assets.
b) As explained to us, the management conducted the physical
verification of the major fixed assets during the year in phased
periodical manner, which in our opinion, is reasonable having regards
to the size of the Company and the nature of its assets, and no
material discrepancies were noticed as compared with available book
records.
c) In our opinion, and according to the information and explanations
given to us the Company has not disposed of substantial part of fixed
assets during the year.
ii) a) As explained to us, inventories have been physically verified by
the management at regular intervals during the year. In our opinion the
frequency of verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories are
reasonable and adequate in relation to the size of the Company and the
nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
iii) a) The Company has granted unsecured loans to 7 (seven)
concerns/parties covered in the register maintained under Sec-301 of
the Companies Act 1956. The details are hereunder
b) In our opinion and to the best of information and explanation given
to us, the rate of interest and other terms and conditions on which the
Company has granted loans and advances are not pre judicial to the
interest of the Company.
c) The Company has not taken unsecured loans from any Concerns/ Parties
covered in the register maintained under Section 301 of the Companies
Act 1956. However the loan taken during the year has been repaid during
the year itself.
d) In our opinion and to the best of information and explanation given
to us, the rate of interest and other terms and conditions on which the
Company has taken loans and advances are not pre judicial to the
interest of the Company.
iv) 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 inventory, fixed assets and also for the
sale of goods & services. Further, on the basis of our examination of
the books and records of the company, and according to the information
and explanation given to us, we have neither come across nor have we
been informed of any continuing failure to correct major weakness in
the aforesaid internal control system.
v) a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
section 301 of the Act have been entered in the register to be
maintained under Section 301 of the Companies Act, 1956.
b) In our opinion and according to the information and explanations
given to us, the transactions in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Companies
Act, 1956 aggregating during the year to Rs. 5, 00,000/-(Rupees Five
Lacs Only) or more in respect of any party have been made at prices
which are reasonable having regard to the prevailing market price at
the relevant time.
vi) The Company has not accepted any deposits from the public WS 58 A
vii) In our opinion, the internal audits system of the company is
commensurate with its size and nature of its business.
viii) The Central Government has not prescribed maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 in respect
of activities of the Company.
ix) a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including income tax, VAT, PF,
ESI and other material statutory dues applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, VAT,PF,ESI and
other material statutory dues which were in arrears, as at 31.03.2014
for a period of more than six months from the date they became payable.
c) According to the information and explanation given to us, there are
no dues of VAT, PF, ESI ,Income Tax, and other material statutory dues
which have not been deposited on account of any dispute.
x) There are no accumulated losses of the company at the end of the
financial year and it has not incurred any cash losses either during
the financial year ended on the date or in the immediately preceding
financial year.
xi) Based on our audit procedures and according to the information and
explanation given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to banks.
xii) In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the Company 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, clause 4(xiii) of the companies
(Auditor's Report) order 2003 is not applicable to the Company.
xiv) In respect of shares, securities, debentures and other investments
dealt or traded by the Company proper records are maintained in respect
of transactions and contracts and timely entries have been made
therein. All the investments are held by the company in its own name.
xv) According to the information and explanations given to us, and
representations made by the management , the Company has given
guarantee for loans taken by M/s Sethi Flour Mills to United Bank of
India, the terms and conditions whereof in our opinion are not
prima-facie prejudicial to the interest of the Company.
xvi) The company has raised new term loans from North Eastern
Development Finance Corp. Ltd. during the year of Z 48 lakhs. The term
loan raised during the year have been applied for the purpose for which
they were raised.
xvii) On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us there are no funds raised on short term basis
which have been used for long term investment.
xviii) The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Act.
xix) The Company has not issued any debentures during the year.
Accordingly, the question of creation of securities in this regard does
not arise.
xx) The Company has not raised any money by way of public issue during
the year.
xxi) In our opinion 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, that causes the financial statements to be materially
misstated.
For Anil Hitesh & Associates
Chartered Accountants
C.A. Anil Jain
Proprietor
Mem. No. 057336
Firm Reg. No. 325406E
Dated at Silchar
The 12th of August, 2014
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