Report on the Financial Statements
We have audited the accompanying financial statements of HINDUSTAN
ADHESIVES LIMITED (the company) which comprise the Balance Sheet as
at 31 March 2013, 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 referred to in sub-section (3C) of section 211
of the Companies Act, 1956. (the act) 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.
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. 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.
Matter of Emphasis
Attention is drawn to the Note No. Y(B)(3) regarding the inclusions of
inter unit transfer in sale and purchases.
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
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2013;
(ii) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
(iii) 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), as amended, 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
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
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
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
d. in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956; and
e. on the basis of written representations received from the directors
as on 31 March 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT
(Ref. to point 1 of paragraph Report on Other Legal and Regulatory
Requirements of our Report of even date)
(i) (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets. (b) The management at reasonable intervals has physically
verified the fixed assets, no material discrepancies were noticed on
such verification. (ii) (a) The physical verification of inventory has
been conducted by the management at reasonable intervals.
(b) In our opinion the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion the Company is maintaining proper records of
inventory and the discrepancies noticed on physical verification were
not material and have been properly dealt with in the books of
(iii) In respect of loans, secured or unsecured, granted or taken by
the company to or from companies, firms or other parties covered under
the register maintained U/s. 301 of the Companies Act, 1956, according
to the information and explanations given to us:
(a) The Company has taken unsecured loans from 8 (Eight) parties
covered under the register maintained under section 301 of the
Companies Act, 1956. The maximum amount involved in such loans during
the year aggregates to Rs.146.88 Lacs and the closing balance
outstanding as on 31st March 2013 is Rs.214.00 Lacs.
(b) In our opinion the terms and conditions of such loans taken by the
company are prima facie not prejudicial to the interests of the company
(c) There is no pre-determined schedule for repayment of unsecured
(d) As there is no schedule for repayment of unsecured loans taken by
the company, therefore, we are not in a position to comment on steps,
if any, taken by the company for repayment of the same.
(e) The company has not granted any loans to companies, firms or other
parties covered under the register maintained U/s. 301 of the Companies
Act, 1956, except temporary advances given to 1 (Oner) such parties
which has been recovered in stipulated time.The maximum amount involved
in such loans during the year aggregates to Rs.69.21 Lacs and the
closing balance outstanding as on 31st March 2013 is Rs. Nil Lacs.
(iv) In our opinion and according to the information and explanations
given to us the company has an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchases of inventory and fixed assets and for the
sale of goods. There is no continuing failure or weakness in internal
(v) According to the information and explanation given to us, the
transactions that need to be entered into the register in pursuance of
section 301 of the Companies Act, 1956 has been so entered.
In our opinion and according to the information & explanation given to
us, there were no transactions made in pursuance of contracts or
arrangements entered in the register mentioned under section 301 of the
Companies Act exceeding the value of Rs. Five lacs in respect of any
party during the year.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any public deposits for which
the provisions for compliance U/s.58 and 58AA or any other relevant
provisions of the Companies Act, 1956 applies.
(vii) The Company has an internal audit system commensurate with its
size and nature of its business.
(viii) Prima-facie it appears that the company has maintained the cost
records as prescribed for maintenance of cost records
for the company U/s.209 (1)(d) of the Companies Act, 1956, however we
not examined the same in detail.
(ix) (a) The Company is generally
regular in depositing undisputed applicable statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees''
State Insurance, Income-tax, Sales Tax, Wealth Tax, Custom Duty, Excise
Duty, Service Tax, Cess and any other statutory dues with the
appropriate authorities. Except for certain cases of delays in
(x) The Company has been registered for a period of more than five
years, and the Company does not have any accumulated losses during the
year under report.
(xi) According to the information and explanations given to us, the
company has not defaulted in repayment of dues to any financial
institutions and banks during.
(xii) The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to Chit Fund,
Nidhi/Mutual Benefit Fund/Societies are not applicable to this company.
(xiv) The company is not dealing or trading in business of securities,
debentures and other investments. (xv) According to the information
and explanations given to us, the company has given a corporate
guarantee of Rs. 14.63 crore to bank against loan taken by M/s Bagla
Polifilms Ltd., for which approval from Central Government under
section 295 of Companies Act,1956 dated 19-03-2010 has been obtained by
(xvi) In our opinion and according to the information and explanations
given to us, the term loans obtained in earlier years and continued to
remain outstanding during the financial year under report are applied
for the purpose for which the loans were obtained.
(xvii)According to the information and explanations given to us and on
an overall examination of financial statements of the company and after
placing reliance on the reasonable assumption made by the company for
the classification of long term and short term use of funds we are of
the opinion that, prima-facie, long term funds have not been utilised
for short term purposes and vice-versa.
(xviii)The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained U/s.301 of the
Companies Act, 1956.
(xix) The Company has not issued any debentures since inception.
(xx) The company has not raised any money by public issue during the
(xxi) According to the information and explanations given to us no
fraud on or by the company has been noticed or reported during the year
For SALARPURIA & PARTNERS
Firm Registration No. 302113E
Place: 1008, Chiranjiv Tower,
(KAMAL KUMAR GUPTA)
43, Nehru Place,
New Delhi-110 019 Partner
Date : 04.09.2013 M. No. 89190