| Report on the Financial Statements
We have audited the accompanying financial statements of MAHAN
INDUSTRIES LIMITED, which comprise the Balance Sheet as at March 31,
2014, and the Statement of Profit and Loss and Cash Flow Statement 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') read with general circular
15/2013 dated 13th Sept 2013 of the ministry of corporate affairs in
respect of section 133 of the companies Act, 2013. 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 evidences 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
controls 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 company'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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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:
(a) In the case of the Balance Sheet, of the State of Affairs of the
Company as at March 31, 2014;
(b) In the case of the Statement of Profit and Loss, of the Loss for
the year ended on that date;
(c) 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") 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. 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 Statement of Profit and Loss dealt with by
this Report are in agreement with the books of account;
d. In our opinion, the Balance Sheet and Statement of Profit and Loss
comply with the Accounting Standards referred to in subsection (3C) of
section 211 of the Companies Act, 1956 read with the general circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013 ; and
e. On the basis of written representations received from 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 a director in terms of clause (g) of sub-section (1) of
section 274 of The Companies Act, 1956:
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITOR'S REPOERT
(1) (a) In our opinion and according to the information and explanation
given to us, the company has maintained all the relevant records
showing full particulars including quantitative details and situation
of fixed assets.
(b) In our opinion, the fixed assets have been physically verified by
the management at reasonable intervals having regard to the size of the
company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) The fixed assets have not disposed any fixed assets during the
year.
2. (a) According to the information & explanations given to us, the
Physical verification of shares has been followed by the management at
reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us, the procedure of physical verification of stock of Shares
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 the information and explanation given to us, the
company is maintaining proper records of inventory of shares. No
material discrepancies were noticed on physical verification
(3) (a) According to the information and explanation given to us, the
company has not granted any loans secured or unsecured to companies,
firms or other parties listed in the register maintained under section
301 of the Companies Act, 1956 and hence clause (a) to (d) are not
applicable.
(e) The company has taken unsecured loan from one party covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year is Rs. 683.63 lacs and the year
end balance of such loan taken is Rs. 334.43 lacs.
(f) According to the information given to us, the loan taken by the
company is interest free and there are no specific terms and conditions
and as such the loans are prima facie not prejudicial to the interest
of the company.
(g) The loans taken are interest free without any stipulation as to
repayment.
(4) In our opinion and according to the information and explanation
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to the purchase of inventory, fixed assets and
with regard to the sale of goods. During the course of our audit, no
major weakness has been noticed in the internal controls.
(5) (a) In our opinion and according to the information and explanation
given to us, the transactions for the year that needed to be entered
into the register maintained under section 301 of the Companies Act,
1956, have so been entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of the contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
and having regard to prevailing market prices at the relevant time.
(6) The company has not accepted any deposits from the public which
falls within the provisions of section 58 A and 58 AA of the Companies
Act, 1956, and the rules framed there under.
(7) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(8) According to the best of knowledge and according to the information
given to us, the Central Government has not prescribed maintenance of
cost record under section 209 (1)(d) of the Companies Act, 1956.
(9) (a) According to the information and explanations given to us and
on the basis of our examination of the books of accounts, the company
is regular in depositing undisputed statutory dues including Provident
Fund, Investor Education Protection Fund, Employee State Insurance,
Sales Tax, Wealth Tax, Service-Tax, Custom Duty,
Excise Duty, Cess and other statutory dues with the appropriate
authorities.
(b) According to information and explanation given to us, details of
dues in respect of income tax, on account of dispute are as follows:
INCOME TAX LITIGATION PENDING
Name of the statute Nature of Amount Period to which
dues (in lakhs) the amount relates
Income Tax Act, 1961 Income tax 2,225,639/- A.Y .:2000-2001
Income Tax Act, 1961 Income tax 6,584,951/- A.Y.:2006-2007
Name of the statute Forum where
the dispute is
pending
Income Tax Act, 1961 CIT Appeal
Income Tax Act, 1961 CIT Appeal
(10) In our opinion, the accumulated losses of the company are more
than fifty per cent of its net worth at the end of the financial year.
Further, the company has incurred cash losses only during the financial
year covered by our audit, but not in the immediately preceding
financial year.
(11) In our opinion and according to the information and explanation
given to us, the company has not defaulted in repayment of dues to a
financial institution / bank.
(12) According to the information & explanation given 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, 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.
(14) In our opinion, proper records have been maintained of the
transactions and contracts of trading in shares, securities, debentures
and other investments and timely entries have been made therein. All
stocks of trading shares have been held by the company except to the
extent of exemption if any granted under section 49 of the Act.
(15) According to the information & explanations given to us, the
company has not given any guarantees for the loans taken by others from
banks or financial institutions
(16) In our opinion, the term loans have been applied for the purpose
for which they were raised.
(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 the no funds raised on short term basis have been used for long
term investment.
(18) According to the information and explanation given to us, the
company has not made preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the
Act.
(19) According to the information and explanations given to us, Company
has not issued any debenture during the year. Accordingly, the
provisions of clause 4(xix) of the Companies (Auditor's Report) Order,
2003 are not applicable to the company.
(20) The Company has not made any fresh allotment of equity shares
during the year.
(21) Based upon the audit procedures performed and on the basis of
information and explanation provided by the management, we report that
no fraud on or by the company has been noticed or reported during the
year.
For DJNV & CO.
Chartered Accountants
Firm Regn. NO.115145W
Jayesh Parikh
(Partner)
M.No.40650
Place: Ahmedabad
Date:30/05/2014.
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