1. We have audited the attached Balance Sheet of HANJER FIBRES LIMITED
as at 31st March, 2012 and also Profit & Loss Account for the year ended
on that date annexed thereto ana 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 statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards 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 statements. An audit 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.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Orders.
4. Further to our comments in the Annexure referred to in paragraph
(3) above.
Company has not provided interest on outstanding tern loan/overdraft
during the subject F.Y.2011- 12. Had interest been provided, loss of
the company increased by Rs. 7,32,68,249/-(Seven crores thirty two lacs
sixty eight thousand two hundred and forty nine rupees only). On account
of this non provision, reserve and surplus amount is overstated by 7,32,68,249/- and secured loan is understated by the same amount.
we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessaiy for the purpose of our
audit. .
b) In our opinion, proper books of account as required by lav/ have
been Kept by the company so far as appears from our examination of
those books.
c) The balance sheet and profit & loss account and cash flow statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the profit & loss account and balance sheet and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956, to the extent applicableexcept AS- 29 on
Provision, contingent Liabilities and Contingent Assets.
e) On the basis of the written representations received from the
Directors for the year ended March 31, 2012, and taken on record by the
Board of Directors, we report that none of the directors are prima
facie disqualified as on March 31, 2012 from being appointed as a
director in terms of clause (") of sub-section (1) of section 274 of
the Companies Act, 1956.
t) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with the s
hedules and notes thereon give the information-required by the
Companies Act, 1956 in the manner so required and give subject to our
observations in paragraph 4 foregoing, 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 31st March 2012 and
ii. in the case of the profit and loss account, of the loss for the
year ended on that date.
iii. in the case of cash flow statement, of the cash flows for the year
ended on that date.
(Annexure referred to in Paragraph (3) of the Auditors' Report of
even date to the members of HANJER
FIBRES LIMITED for the year ended 31st March, 2012)
1- a) The Company has generally maintained proper records showing
particulars including quantitative details and situation of its fixed
assets
b) As explained to us, fixed assets are physically verified by the
management according to a phased verification programme, which, in our
opinion is reasonable having regard to the size of the Company and
nature of its assets. Pursuant to the programme, a portion of the fixed
assets of the Company has been physically verified by the management
during the year and no material discrepancies between the book records
and the physical inventory have been noticed.
c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disced off
by the Company during the year.
2 a) As explained to us, inventories have been physically verified
during the year by the management, except for inventories lying with
third parties, which have, however been substantially been confirmed by
them. In our opinion the frequency of verification is reasonable.
b) In our opinion, the procedures of physical verification of inventory
followed bv 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 inventory records in our
opinion, the Company is maintaining proper records of inventoty. The
discrepancies noticed on physical verification of inventory as compared
to the book records were not material. .
3. a) The Company had taken interest free loan from the parties listed
in the registered maintained u/s. 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 11,23,200/- and the year
end balance of loans taken during the year was Rs. 11,28,200/-. The
Company has not granted any loan, secured or unsecured, to companies,
firms or other parties covered in the registered maintained u/s. 301
of the Companies Act, 1956.
b) In our opinion other terms and conditions on which loans have been
tnken from the parties listed in the registered maintained u/s. 301 of
the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the Company.
c) There is no stipulation with regards to repayment and the loans nre
interest free hence no question of regularity in repayment of principal
or interest arises.
d) There is no overdue amount of loans taken from the parties listed in
the registered maintained u/s. 301 of the Companies Act, 1956.
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, for the purchase of inventory, fixed assets and for the sale
of goods. Further on the basis of our examination of the books and
records of the Company and according to the information and
explanations given to us, we have neither come across nor have been
informed of a of major weaknesses in the aforesaid internal
control procedures.
5. On the basis of the audit procedures performed by us, and according
to the information, explanations and representations given to us, there
are no transactions with the parties in which directors were
interested, and which were required to be entered in the register
maintained under section 301 of the Companies Act, 1956.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit under the
proviisions of Sections 58A and 58AA of the Act and the rules framed
there under. -
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the central government for the
maintenance of cost records under section 209(!)(d) of the Companies
Act, 1956 in respect of the Company's products to which the said
rules are made applicable, and are of the opinion that, prima facie,
the prescribed accounts and records have been made and maintained. We
have, howe er, not made a detailed examination of the records with a
view to determine whether they are accurate.
9. a) According to the records of the Company, it has been regular in
depositing undisputed statutory dues including provident fund,
employees' state insurance, wealth tax, custom duty, excise duty,
cess and other statutory dues with the appropriate authorities,
b) According to the information and explanations given to us, except
disputed sales tax duos of Rs. 13,661,826 , there are no dues of,
income tax, customs duty, wealth tax, excise duty and cess which have
not been deposited on account of any dispute.
10. The Company has incurred cash losses, in the financial year under
report and in the immediately preceding financial year. The Company has
accumulated losses of Rs. 11,87,16,235/- at the end of the financial
year.
11. On the basis of the records examined by us and the information and
explanations given to us, we are of the opinion that the Company has
defaulted in repayment of dues to financial institutions and banks.
12. As explained to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures or any other securities;
13. In our opinion the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore the provision of clause 4 (xiii) of
the Companies (Auditor's Report) OrJer, 2003 are not applicable to
Company
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures or other investments.
15. According to the information and explanations given to us, and the
representations made by the management, the Company has not giv"n any
guarantee for loans taken by others from any bank or financial
institution;
16. On the basis of the records examined by us, and relying on the
information compiled by the Company for co-relation the funds raised to
the end use of term loan, we have to state that, the Company has,
prima-facie, applied the term loans for the purposes for which they
were obtained.
17. According to the information and explanations given to us and on
an overall examination of the financial statements of the Company and
after placing reliance on the reasonable assumptions made by the
Company for classification of long term and short term usages of funds,
we are of the opinion that, no funds raised on short term basis have
been used for long term investment. No long-term funds have been used
to finance short-term assets except permanent working capital.
18. The Company has not made any preferential allotment of shares to
parties and Companies covered in the register maintained under section
301 of the Companies Act, 1956;
19. On the basis of the records and documents examined by us, the
Company has not issued any debentures during the year;
20. The Company has not raised any money by public issue, during the
year;
21. According to the information and explanations given to us, and to
the best of our knowledge and belief, no fraud on or by the Company,
has been noticed or reported by the Company during the year;
For S.M. BHAT & ASSOCIATES
Chartered Accountants
(S.M.BHAT)
Proprietor
Membership Number: 30696
Place : Mumbai
Dated :31stMay, 2012.
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