| Report on the Financial Statements
We have audited the accompanying financial statements of Hisar Spinning
Mills Limited ("the Company") which comprise the Balance Sheet as at
31st March 2014, the Statement of Profit and Loss and the 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 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 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 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 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 31st March 2014;
(b) in the case of the Statement of Profit and Loss, of the profit 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 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under 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;
(e) on the basis of written representations received from the directors
as on 31st March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act;
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(Annexure referred to in paragraph 1 under the heading Report on Other
Legal and Regulatory Requirements of our Report of even date to the
members of Hisar Spinning Mills Limited for the year ended 31st March
2014)
1 (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The Company has a program for the physical verification of fixed
assets at periodic intervals. In our opinion, the period of
verification is reasonable having regard to the size of the Company and
the nature of its fixed assets. No significant discrepancies were
noticed on such verification.
(c) Based on our scrutiny of the records of the company and the
information and explanations given to us, we report that there was no
sale of fixed assets during the financial year ended 31st March 2014.
substantial or otherwise. Hence, the question of reporting whether the
sale of any substantial part of fixed assets has affected the going
concern of the company does not arise.
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. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3. (a) The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly, paragraphs 4(iii)(a) to
4(iii)(d) of the Order are not applicable to the Company.
(b) The Company has taken unsecured loans from two parties covered in
the register maintained under section 301 of the Act. The maximum
amount involved during the year from these parties was Rs. 4236500/-
but there was no year end balance of loans taken from such parties.
(c) In our opinion, the rate of interest and other terms and conditions
on which unsecured loans have been taken from parties covered in the
register maintained under section 301 of the Act are not, prima facie,
prejudicial to the interest of the Company.
(d) The loans accepted by the Company from parties covered in the
register maintained under section 301 of the Act are interest free
loans. There is no amount outstanding as on the balance sheet date
against such loans. Henceforth, paragraph 4(iii){g) of the Order is not
applicable to the Company in respect of regularity of payment of the
principal amount and interest.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods. The
activities of the company do not involve the sale of services. During
the course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, there are no transactions made in pursuance of such
contracts or arrangements entered in the register maintained under
section 301 of the Act and exceeding the value of five lakh rupees in
respect of any party during the financial year under consideration.
6. The Company has not accepted any deposits from the public within
the meaning of sections 58A, 58AA or any other relevant provisions of
the Act and the rules framed thereunder.
7. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011,
prescribed by the Central Government under Section 209 (1) (d) of the
Act and are of the opinion that prima facie the prescribed cost records
have been maintained. We have, however, not made a detailed examination
of the cost records with a view to determining whether they are
accurate or complete.
9. (a) The Company is generally regular in depositing the undisputed
statutory dues including employees' state insurance, provident fund,
investor education and protection fund, income tax, sales tax, wealth
tax, service tax, customs duty, excise duty, cess and other material
statutory dues as applicable with the appropriate authorities, though
there has been slight delay in a few cases. No undisputed amounts
payable in respect thereof were outstanding at the year end for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of income
tax/sales tax/wealth tax/service tax/custom duty/excise duty/cess which
have not been deposited with the appropriate authorities on account of
any dispute.
10. The Company does not have any accumulated losses as at 31st March
2014 and it has not incurred any cash losses in the financial year
ended on that date or in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank. According to records of the Company, the
Company did not have any outstanding debentures during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/ nidhi/ mutual benefit
fund/ society.
14. The Company is not dealing in or trading in shares, securities,
debentures and other investments. Therefore, the provisions of
paragraph 4(xiv) of the Order 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 others from
banks or financial institutions.
16. According to the records of the Company, the Company has not
obtained any fresh term loan during the year under consideration.
Hence, comments under para 4 (xvi) of the Companies (Auditor's Report)
Order, 2003 are not called for.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion, there are no funds raised on a short-term
basis which have been used for long-term investment.
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 Act.
19. The Company has not issued any debentures.
20. The Company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
for JAIN & ANIL SOOD
Chartered Accountants
Firm Registration No.010505N
(RAJESH KUMAR JAIN)
Place: Chandigarh Partner
Date : 27.05.2014 Membership No. 088447 |