HANJER FIBRES LIMITED
ANNUAL REPORT 2011-2012
TO THE MEMBERS OF
HANJER FIBRES LIMITED.
1. We have audited the attached Balance Sheet of HANJER FIBRES LIMITED as
at 31st March, 2012 and also Profit & Loss Account for the year ended on
that date annexed thereto and Cash Flow Statement for the year ended on
that date. 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 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 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 our opinion.
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 Orders.
4. Further to our comments in the Annexure referred to in paragraph (3)
Company has not provided interest on outstanding tern loan/overdraft during
the subject F.Y.201112. Had interest been provided, loss of the company
increased by Rs. 7,32,68,249/-(Seven crores thirty two lacs sixty eight
thousand two hundred and forty nine rupees only). On account of this non
provision, reserve and surplus amount is overstated by 7,32,68,249/- and
secured loan is understated by the same amount.
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 and profit & loss account and cash flow statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the profit & loss account and balance sheet and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956, to the extent applicable except AS- 29 on Provision, contingent
Liabilities and Contingent Assets.
e) On the basis of the written representations received from the Directors
for the year ended March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors are prima facie
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,
f) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts together with the schedules and
notes thereon give the information-required by the Companies Act, 1956 in
the manner so required and give subject to our observations in paragraph 4
foregoing, a true and fair view in conformity with the accounting
principles generally accepted in India.
i. in the case of the balance sheet, of the state of affairs of the Company
as at 31st March 2012 and
ii. in the case of the profit and loss account, of the loss 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.
For S.M. BHAT & ASSOCIATES
Membership Number: 30696
Dated: 31st May, 2012.
ANNEXURE TO THE AUDITOR'S REPORT
(Annexure referred to in Paragraph (3) of the Auditors' Report of even date to the members of HANJER FIBRES LIMITED for the year ended 31st March, 2012)
1a) The Company has generally maintained proper records showing particulars
including quantitative details and situation of its fixed assets
b) As explained to us, fixed assets are physically verified by the
management according to a phased verification programme, which, in our
opinion is reasonable having regard to the size of the Company and nature
of its assets. Pursuant to the programme, a portion of the fixed assets of
the Company has been physically verified by the management during the year
and no material discrepancies between the book records and the physical
inventory have been noticed.
c) In our opinion, and according to the information and explanations given
to us, a substantial part of fixed assets has not been disrobed off by the
Company during the year.
2a) As explained to us, inventories have been physically verified during
the year by the management, except for inventories lying with third
parties, which have, however been substantially been confirmed by them. In
our opinion the frequency of verification is reasonable.
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) On the basis of our examination of the inventory records in our opinion,
the Company is maintaining proper records of inventory. The discrepancies
noticed on physical verification of inventory as compared to the book
records were not material.
3.a) The Company had taken interest free loan from the parties listed in
the registered maintained u/s. 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs. 11,23,200/- and the year end
balance of loans taken during the year was Rs. 11,28,200/-. The Company has
not granted any loan, secured or unsecured, to companies, firms or other
parties covered in the registered maintained u/s. 301 of the Companies Act,
b) In our opinion other terms and conditions on which loans have been taken
from the parties listed in the registered maintained u/s. 301 of the
Companies Act, 1956 are not, prima facie, prejudicial to the interest of
c) There is no stipulation with regards to repayment and the loans are
interest free hence no question of regularity in repayment of principal or
d) There is no overdue amount of loans taken from the parties listed in the
registered maintained u/s. 301 of the Companies Act, 1956.
4. 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 the nature of its business, for the purchase of
inventory, fixed assets and for the sale of goods. Further on the basis of
our examination of the books and records of the Company and according to
the information and explanations given to us, we have neither come across
nor have been informed of any instances of major weaknesses in the
aforesaid internal control procedures.
5. On the basis of the audit procedures performed by us, and according to
the information, explanations and representations given to us, there are no
transactions with the parties in which directors were interested, and which
were required to be entered in the register maintained under section 301 of
the Companies Act, 1956.
6. In our opinion and according to the information and explanations given
to us, the Company has not accepted any deposit under the provisions of
Sections 58A and 58AA of the Act and the rules framed there under.
7. In our opinion, the Company has an internal audit system commensurate
with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the Company
pursuant to the rules made by the central government for the maintenance of
cost records under section 209(I)(d) of the Companies Act, 1956 in respect
of the Company's products to which the said rules are made applicable, and
are of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained. We have, however, not made a detailed
examination of the records with a view to determine whether they are
9.a) According to the records of the Company, it has been regular in
depositing undisputed statutory dues including provident fund, employees'
state insurance, wealth tax, custom duty, excise duty, cess and other
statutory dues with the appropriate authorities,
b) According to the information and explanations given to us, except
disputed sales tax duos of Rs. 13,661,826 , there are no dues of, income
tax, customs duty, wealth tax, excise duty and cess which have not been
deposited on account of any dispute.
10. The Company has incurred cash losses, in the financial year under
report and in the immediately preceding financial year. The Company has
accumulated losses of Rs. 11,87,16,235/- at the end of the financial year.
11. On the basis of the records examined by us and the information and
explanations given to us, we arc of the opinion that the Company has
defaulted in repayment of dues to financial institutions and banks.
12. As explained to us, the Company has not granted any loans or advances
on the basis of security by way of pledge of shares, debentures or any
13. In our opinion the Company is not a chit fund or 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 Company
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures or other investments.
15. According to the information and explanations given to us, and the
representations made by the management, the Company has not given any
guarantee for loans taken by others from any bank or financial institution;
16. On the basis of the records examined by us, and relying on the
information compiled by the Company for co-relation the funds raised to the
end use of term loan, we have to state that, the Company has, prima-facie,
applied the term loans for the purposes for which they were obtained.
17. According to the information and explanations given to us and on an
overall examination of the financial statements of the Company and after
placing reliance on the reasonable assumptions made by the Company for
classification of long term and short term usages of funds, we are of the
opinion that, no funds raised on 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.
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 Companies Act, 1956;
19. On the basis of the records and documents examined by us, the Company
has not issued any debentures during the year;
20. The Company has not raised any money by public issue, during the year;
21. According to the information and explanations given to us, and to the
best of our knowledge and belief, no fraud on or by the Company, has been
noticed or reported by the Company during the year;
For S.M. BHAT & ASSOCIATES
Membership Number: 30696
Dated: 31st May, 2012.