1. We have audited the attached Balance Sheet of Ashnoor Textile Mills
Limited as at March 31, 2012, the Profit and Loss Account and also the
Cash Flow Statement for the year ended on that date annexed thereto.
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 the 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 also 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
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
4. Further to our comments in the Annexure referred to above, we
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
ii) 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
iii) The Balance Sheet, the Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
iv) In our opinion, the Balance Sheet, the Profit and Loss Account and
Cash Flow Statement dealt from this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
v) On the basis of written representations received from the directors,
as on March 31, 2012 and taken on records by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
vi) (a) Speculative loss of Rs.129,11,943.28 (Rs. 8,541,620.63) on
Trading of Foreign Currency treated as Current Assets in Balance Sheet.
Due to none charging of speculative loss in the Profit and Loss
Account, profit has been overstated by Rs. 21,453,563.91. Refer
paragraph 17.1 of Notes on accounts.
(b) Subject to above, in our opinion and to the best of our information
and according to the explanations given to us, the said accounts give
the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view conformity with the accounting
principles generally accepted in India:
i) In the cases of the Balance Sheet, of the state of affairs of the
company as at March 31, 2012; and
ii) In the case of the Profit and Loss Account, of the profits 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.
ANNEXTURE TO THE AUDITOR''S REPORT OF THE MEMBERS OF ASHNOOR TEXTILE
MILLS LIMITED ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2012 (Referred
to in paragraph 3 of our report of even date)
(i) (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) According to the information and explanation given, the company has
adopted a phased program of physical verification of fixed assets.
Under this program all the assets would be verified in phased manner
the frequency of which, in our opinion, is reasonable, having regard to
the size of the company and nature of its assets. As explained to us no
material discrepancies were noticed in respect of assets verified
during the year.
(c) During the year, the company has disposed off old Dryer Machine,
Hydro Machine and Stenter Machine.
(ii) (a) The inventory has been physically verified during the year by
the management, In our opinion, the frequency of verification is
(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) The company is maintaing proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) The company has not granted or taken any loan, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956. As no
loans is granted or taken, clauses (b), (c), (d), (e), (fa) and (g) of
paragraph (iii) of this order are not applicable.
(iv) 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 with regard
to purchases of inventory, fixed assets and with regard to the sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weakness in internal
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 have been entered in the register required
to be maintained under that section; and
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regards to prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any fixed deposits from the
public within the meaning of section 58A, 58AA or any other relevant
provisions of the of the Companies Act, 1956 and the rules framed there
under. The Company Law Board, National Company Law Tribunal or Reserve
Bank of India or any Court or any other Tribunal has not passed any
(vii) In our opinion the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government has prescribed for the maintenance of
cost records by the company under Section 209(l)(d) of the Companies
Act, 1956 for Cotton Textile Industry. The company has not maintained
prescribed cost records.
(ix) (a) The Company has generally been regular in depositing
undisputed statutory dues, including provident fund, investor education
and protection fund, employees'' state insurance, income-tax, sales-tax,
wealth tax, service tax, custom duty, excise duty, cess and any other
statutory dues with the appropriate authorities. There is no
outstanding statutory liability as at March 31, 2012, which is due for
a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us,
Development Tax of Rs. 7,105,146/- levied by the State Government has
been disputed and the local association on behalf of all the industries
in the region has filed an appeal with Supreme Court of India.
Name of the Nature of Amount Period to Forum where
Statute the Dues which the dispute is
Local Area Haryana 2,110,645 2003-2004
Development Tax Development 1,966,381 2004-2005 Court
Tax 1,660,354 2005-2006
Central Excise Excise Duty 50,000,000 Various
Act, 1944 from
(x) The company does not have accumulated losses. The company has not
incurred cash losses during the financial year covered by our audit and
in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not taken loans from the financial
institutions and has not issued any debentures. Accordingly, there is
no defaulted in repayment of dues to financial institution, bank or
(xii) The company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
(xiii) In our opinion, the company is not a chit fund of a nidhi/mutual
benefit fund/society. Therefore, the provision of clause 4(xiii) of the
companies (Auditor''s Report) Order, 2003 are not applicable to the
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the company.
(xv) The company has not given guarantees for loans taken by others
from banks or financial institutions.
(xvi) The company has availed term loan from its Bank and according to
the information and explanation given to us the loan has been applied
for the purpose for which the same was obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised in 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.
(xviii) According to the information and explanations given to us, the
company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under section 301 of
(xix) According to the information and explanations given to us, during
the year covered by out audit report, the company had not issued any
debentures and has not created any security in respect of debentures.
(xx) According to the information and explanations given to us, the
company has not raised any money from the public issue.
(xxi) 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 KSA& Co.
(Registration No. 003822C)
Membership Number: 83399
Place: New Delhi
Date : August 07, 2012