1. We have audited the attached balance sheet of Hisar Spinning Mills
Limited (the company) as at 31st March 2012, the related statement of
profit and loss and cash flow statement for the year ended on that date
annexed thereto, which we have signed under reference to this report.
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 mis-statement. 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 princip es 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, as
amended by the Companies (Auditor s Report) (Amendment) Order, 2004
(together the Order), issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956
(the Act) and on the basis of such checks of the books and records of
the company as we considered appropriate and sccofiifv1 t/j tho
information given to us, we enclose in the Annsxyrs,
a statement on the matters specified in paragraphs 4 and 5 of the
4. Further to our comments in the Annexure referred to in paragraph 3
above, 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 purposes of
(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
(c) The balance sheet, statement of profit and toss and cash flow
statement dealt with by this report are in agreement with the books of
(d) In our opinion, the balance sheet, statement of profit and loss and
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
(ej Oh the basis of written representations renewed.from tt]f directors
as on & taken on record by the board of directors, none of the
directors is disqualified as on 31st March 2012; from being appointed
as a director in terms of clause^) of sob-section (1) df5 gectioh!274
of the Act;
(f) In otir opinion and to the best of our informatidn and according
to, t|ieexp^natioris given,to us, the said financial statements
together with the notes thereon and attached ^hereto,/, 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 (ndia:
(i) in the case of the balance sheet, of the state of affairs or the
company as at 3ist March 2012;
(ii) in the case of the statement of profit and loss, of the profit for
the year ended on that date;
(ii) inthe case of the cash flow statement, of the cash flows for the
year ended on that date
ANNEXURETO THE AUDITORS REPORT
(referred to in paragraph 3 of the Auditor s Report of even date to the
members of Hisar Spinning Mills Limited on the financial statements for
the year ended 31st March 2012)
1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) The company has a program for the physical verification of fixed
assets at perbdic 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
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
2. (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) 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 three parties covered in
the register maintained under section 301 of the Act. The maximum
amount involved during the year from these parties was rupees 6511500/-
and the year end balance of loans taken from such parties was rupees
(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. In the case of loans accepted from the parties covered in the
register maintained under section 301 of the Act, no principal amount
was due for payment to the said parties during the financial year under
consideration. Accordingly, 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.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
5. According to the information given to us, tftereafe no contracts or
arrangements during the year that need to be entered into a register in
pursuance of section 301 tif the Act. therefore; the provisions of
clause 4 (v) of the Order are not applicable to the company.
6. The company has hot accepted any depasjts from the public
witninth,e,meaningo^ sections 58A, 58AA or arty dther relevant
provisions of the Act and the rules framed thereunder.
7; In 6Ur opinion, the company has an internal,audjt.system
cqnyriensu[Pate,with the size and the nature of its business.
We haweotooadJyreviewedthe cosffecibi^ maintained by the cbrripa ny
pursuant to the Companies (Cost Accounting Records) Rutes,2flM,pre^ri^
(d) of the Act and are of the opinion that prima facie the prescribed
cost records have maintained we have how ever not made a detailed
examination of the cost records with a view to derermining whether they
are accurate or compete
9. (a) The company is generally regular in depositing the undispted
statutor dues including exployees state insureance provided 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 that six months from the date they become payable How
ever a cheque of rupees 105617/- issued by the company in favour or
Punjab National Bank for payment of custom duty during Judy 2011 was
presented for payment by the bank after the balance sheet date .
(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 exorse duty/ cess
which have not been deposited with the appropriate authorities on
account of any-dispute.
10. In our opinion, the accumulated losses of the company are not more
than fifty per cent of its net worth as on 31st March 2012. The company
also has not incurred any cash losses during the financial year covered
by our audit and the immediately preceding financial year. In arriving
at the accumulated losses net worth and cash tosses as above, we have
considered the qualifications, if anyt,whicji,are quantifiable in the
audit reports of the years to which these pertain.
11. In our opinion and according to the information and explanations
given to us, the company has not pdefaulted 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
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 bans taken by others from banks
or financial institutions.
16. In our opinion and according to the information and explanations
given to us, the term loans taken during the year have been applied for
the purpose for which they were obtained.
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 albtment of shares to
parlies 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
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
Firm Registration No. 010505N
(RAJESH KUMAR JAIN)
Date : 30.082012
Membership No. 088447