We have audited the accompanying financial statements of ISF Limited
(the Company), which comprise the Balance Sheet as at March
31,2014, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Managements'' 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.
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 auditors'' 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 auditors
consider internal controls 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 the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements,
We believe that audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit 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
a. In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
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 (Auditors'' 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
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
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 March 31,2014 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956;
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441 Aofthe
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the company.
( Referred to in paragraph 1 under Report on other Legal & Regulatory
requirements Section 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) The Fixed Assets have been physically verified by the management at
the end of the year which in our opinion is reasonable having regard to
the size of the Company and the nature of assets. No material
discrepancies were noticed on such verification.
c) As fixed assets disposed off during the year are not significant,
the going concern assumption is not affected.
ii. As per information and explanations given to us and taking into
consideration the nature of business, clauses (ii) (a) regarding
physical verification of inventories and its frequency, (ii) (b)
regarding procedures of physical verification of inventories and (ii)
(c) regarding maintenance of records of inventory and discrepancies
noticed on verification between physical stocks and book records are
iii. a) The Company has granted unsecured loans to a company covered in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs. 13286767/- and
balance of Rs. 13286767/- was outstanding at the year end.
b) In our opinion, the rate of interest and other terms and conditions
on which the loan was given to the above party are not prima facie
prejudicial to the interest of the company.
c) As there are no stipulations regarding the above loan, we are unable
to offer our comments on the same.
d) There is no overdue amount of loan granted to the company listed in
the Register maintained under section 301 of the Companies Act, 1956.
e) The company has taken unsecured loans from two directors and thirty
one relatives covered in the Register maintained under Section 301 of
the Companies Act, 1956. The maximum amount involved during the year
was Rs 38637224/- and balance of Rs. 26757224/- was outstanding at the
f) In our opinion, the rate of interest and other terms & conditions of
loans taken by the company are not prima facie prejudicial to the
interest of the company.
g) The company is regular in repayment of principal amount and interest
on the above loans.
h) There is no overdue amount of loans taken from companies listed in
the Register maintained under Section 301 of the Companies Act, 1956.
iv. 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 nature of its business
with regard to purchases of fixed assets. The Company does not
undertake any purchases of inventory, sale of goods and services.
During the course of our audit we have not come across any major
weakness in internal controls.
vii. In our opinion, the Internal audit function carried out during the
year by a firm of Chartered Accountants appointed by the Management has
been commensurate with the size of the company and nature of its
viii. The provisions of clause (viii) of the Order regarding
maintenance of cost records under clause (d) of Sub-Section (1) of
Section 209 of the Companies Act, 1956 are not applicable to the.
ix. a) According to the information and explanations given to us and
the records of the company examined by us, the company has been
generally regular in depositing with appropriate authorities undisp
-uted statutory dues including Provident Fund, Income Tax, Wealth
Tax and other material Statutory dues applicable to it. However,
according to the information & explanations given to us, the provis
-ons of Employees State Insurance, Sales Tax, Custom Duty & Excise
Duty are not applicable to the Company in view of its nature of
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of statutory dues applicable to
the company as stated above were in arrears as at the last day of the
financial year for a period of more than six months from the date they
c) According to the books of account and records as produced and
examined by us in accordance with the generally accepted auditing
practices in India and information and explanations given to us, there
are no dues of sales tax, income tax, custom duty, wealth tax, excise
duty and cess which have not been deposited on account of any dispute.
x The Company does not have any accumulated losses as at the end of the
financial year. The Company has not incurred cash losses during the
current year 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 defaulted in repayment of dues to
banks. The Company has not obtained any borrowings from any financial
institutions or by way of debentures.
xii. Based on our examination of documents and records and as per
informations explanations given to us, we are of the opinion that the
company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii. In our opinion the company is not a chit fund or nidhi/mutual
benefit fund/society and hence clause (xiii) of the Order is not
xiv. In our opinion, as the Company does not deal or trade in shares,
securities, debentures and other investments, the provisions of
paragraph 4(xiv) are not applicable.
xv. According to the information and explanations given to us, the
Company has not given any guarantees for loans taken by others from
banks or financial institutions.
xvi. In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvh. 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 on short
term basis have been used for long term investment.
xviii. According to the information & explanations given to us, no
preferential allotment of shares has been made by the company to
parties and companies covered in the Register maintained under Section
301 of the Companies Act.
xix. According to the information & explanations given to us, no
debentures have been issued by the company during the year.
xx Based on our examination of books and records of the company, no
public issue was made by the company during the year.
xxi. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, we have not come across any instance of fraud on
or by the company nor have we been informed by the management of any
such instance being noticed or reported during the year.
For JAGDISH SAPRA & CO.
FIRM REGISTRATION N0.001378N
Place: NEW DELHI (VIPAL KALRA)
Dated: 31-05-2014 PARTNER