| We have audited the accompanying financial statements of Sharad Fibres
& Yarn Processors Limited, which comprise the Balance Sheet as at March
31,2014, the Statement of Profit and Loss and Cash Flow for the year
then ended, and a summary of significant accounting policies and other
explanatory information.
Management's Responsibility:
The Company's 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 notified under the Companies
Act 1956 (the Act) read with the General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs in respect of
Section 133of the Companies Act, 2013 ("the Act") and in accordance
with accounting principles generally accepted in India. 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, 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 the aforesaid financial statements give the
information required by the Act in the manner Jysœ)>Vquired and give a
true and fair view in conformity with the accounting principles
fiarally accepted in India subject to following note:
RA.I 1 *ll
i) Note No. 23 (b) regarding contingent liability in the Balance Sheet
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 Profit and Loss Account, of the profit/ loss 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.
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 (4A) 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, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards notified under
the Act 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; except AS-15 Retirement Benefits.
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.
Re: SHARAD FIBRES & YARN PROCESSORS LIMITED
Annexure Referred to in paragraph 3 of our report of even date.
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the assets have been physically verified by the management
during the year except the assets which are seized by the Bank and
there is a regular programme of verification which, in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(c) During the year, the Company has not disposed off any
substantial/major part of fixed assets.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. No material discrepancies were notice on such physical
verification.
3. In respect of loans, secured or unsecured, granted or taken by the
Company to/from companies, firms or other parties covered in the
register maintained under section 301 Of the Companies Act, 1956
(a) The company has taken loans from four (eight) parties. The maximum
balance aggregates to Rs. 4,13,86,235/- (Rs. 4,37,52,979/-) The closing
balance in respect of the same is Rs. 69,43,981/- (Rs. 73,58,981/-).
The company has given loans to four (six) such parties. The maximum
balance amounts to Rs. 4,39,81,545/- (Rs. 3,90,00,909/-) and the
closing balance is Rs. 1,35,06,617/- (Rs. 3,30,78,384/-).
(b) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from/granted to companies, firm or other
parties listed in the registers maintained under Section 301 of the
Companies Act, 1956 are not, prima facie, prejudicial to the interest
of the company. However no interest is charged/paid on such loans.
(c) There is no stipulation as regards the repayment schedule of loans
taken from above parties. The loan granted is repayable on demand.
(d) There is no overdue amount of loans taken from or granted to
parties covered under section 301 of the The Companies Act, 1956 as
there in no stipulation as regards the repayment of loans.
4. 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 with regard to purchases 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) Based on the audit procedure applied by us and according to the
information and explanations provided by the management, we are of the
opinion.that the transactions that need to enter into the register
maintained under section 301 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the registers maintained under section 301 and
exceeding the value of five lakh rupees in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
6. The company has not accepted any deposit from the public, within
the meaning of Section 58A of the companies Act, 1956.
7. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8. The Central Government has not prescribed the maintenance of cost
records u/s. 209(l)(d) of The Companies Act, 1956.
9. (a) According to the records of the company, the company is
generally regular in depositing undisputed statutory dues with
appropriate authorities including Provident Fund, Employees State
Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty,
Service Tax, Cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts are payable in respect of income-tax, wealth-tax,
sales tax, customs duty, Service Tax and excise duty outstanding, as at
31.03.2014 for a period of more than six months from the date they
became payable.
According to the records of the company, there are no dues of sales
tax, income-tax, customs duty, wealth tax, excise duty which have not
been deposited on account of any dispute except as given below:
Excise Duty A.Y. 1996-97 - A.Y. 2000-01 Rs. 1,76,04,797/- Supreme
Court.
Excise Duty A.Y. 1995-96 Rs. 3,61,537/- CEGAT
10. In our opinion the accumulated losses of the company are more than
fifty percent of its net worth. However, the company has not incurred
cash losses in the current financial year and in the immediately
preceding financial year.
11. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has not defaulted in repayment of dues to banks in the current
year.
12. The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit
fund/nidhi/miitual benefit fund/ societies are not applicable to the
company.
14. The company is not dealing in or trading in shares, securities,
debentures and other investment. Therefore, the provision of clause
4(xii) of the Companies (Auditor's report) Order, 2003 are not
applicable to the company.
15. The company has not given any guarantee for loans taken by others
from bank or financial institutions which is prejudicial to the
interest of the company.
16. The company has not obtained any terms loans during the year.
17..On. the basis of our examination of the Balance Sheet of the
company, in our opinion, there are no funds raised on short-term basis,
which have been used for long-term investment and vise versa.
18. The company has not made any preferential allotment of shares of
parties and companies covered in the register maintained under section
301 of the Act.
19. The company has not issued any debentures.
20. The company has not raised any money by public issues during the
year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
audit.
FOR M/S VINODH . MEHTA & CO.
CHARTERED ACCOUNTANTS.
FRN.No.:111524W
PARAG V. METHA
PARTNER
MEMBERSHIP NO.36867
PLACE: MUMBAI
DATED: 30.05.2014
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