INDEPENDENT AUDITOR REPORT
HARTRON COMMUNICATIONS LTD.
1. Report on the Financial Statements
We have audited the accompanying financial statements of HARTRON COMMUNICATIONSLTD. Panchkula (the Company) which comprise the Balance Sheet as at 31 March 2014 andthe Statement of Profit and Loss Account and Cash Flow Statement for the year then endedand a summary of significant accounting polices and other explanatory information.
2. Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position and financial performance and cash flows ofthe Company in accordance with the Accounting Standards referred to in Sub-Section (3C) ofsection 211 of the Companies Act 1956 (the Act). This responsibility includes the designimplementation and maintenance of internal control relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement. An audit involvesperforming procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor's judgment includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error. In making those risk assessments the auditor considers internalcontrol relevant to the Company's preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate in the circumstancesbut not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management aswell as evaluating the overall presentation of the financial statements. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
4. Basis of Qualified Opinion i. AS-15 regarding accounting for retirement benefitsi.e. provision for retirement benefits has not been made (Refer Note (1.7)). ii. Furtherwe have relied upon the management representations relating to disclosures regardingimpairment of assets as stated in Note No. 6 in Schedule to the Balance Sheet. iii. Debit& credit balances in the accounts of debtors suppliers and few banks are subject totheir respective confirmation and reconciliation (Note 3).
The effect of items mentioned at paragraph 4(i) and (ii) above on profit for the yearassets liabilities and reserves in unascertainable.
5. Auditor's Opinion
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effect of the matters described in the Basis of QualifiedOpinion paragraph the effect of which is unascertainable and read together with the othernotes give the information required by the Act in the manner so required and give a trueand fair view conformity with the accounting principles generally accepted in India. a. inthe case of Balance Sheet of the state of affairs of the company as at 31 March 2014. b.in the case of the Statement of Profit and Loss Account of the profit for the year endedon that date and c. in the case of the Cash Flow Statement of the cash flows for theyear ended on that date.
6. Report on Other Legal and Regulatory Requirements
A. As required by Companies (Auditor's Report) order 2003 (>the OrderB)issued by the Central Government of India in terms of sub-section 227 (4A) of Section 227of the Act we give in the Annexure a statement on the matters specified in paragraphs 4and 5 of the order. B. 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 ofour 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 bythe Company so far as appears from our examination of those books. c. the BalanceSheet Statement of Profit and Loss and Cash Flow Statement dealt with by this Report arein agreement with the books of account.
d. in our opinion the Balance Sheet statement of Profit & Loss and CashFlow Statement comply with the Accounting Standards referred to in subsection (3C) ofsection 211 of the Companies Act 1956.
e. On the basis of written representations received form the Directors as on March 312014 and taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2014 from being appointed as Director in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies Act 1956.
|For VINOD KUMAR & ASSOCIATES || |
| ||CHARTERED ACCOUNTANTS |
| ||FRN : 002304N |
| ||(PARTNER) |
|PLACE : CHANDIGARH ||Pardeep Diwan |
|DATED : 26.05.2014 ||M. No. 086687 |
ANNEXURE TO THE AUDITOR'S REPORT
(Referred in the paragraph (6) of our report of even date).
i.a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) As per the information and explanations given to us the fixed assets have beenphysically verified by the management during the year and to the best of our knowledge nomaterial discrepancies between the book records and physical inventory verification hasbeen noticed during the year.
c) During last year the company had demolished one of the buildings at Plot No.244-245 and a sum of Rs. 246.64 lacs was written off. A new Modern multistoried buildingis under construction on the same site.
ii. a) The management has conducted physical verification of inventory at reasonableintervals.
b) The procedure of physical verification of stock followed by management is reasonable& adequate in relation to the size of the company & nature of its business.
c) No significant discrepancies between the book records & physical inventorieshave been noticed.
iii.a.) The company has not granted any loans secured/unsecured to other partiescovered in the register maintained under section 301 of the Act.
b. Since the Company has not granted any loans as explained above the applicability ofrate of interest and other terms & conditions does not arise.
c. Since the Company has not granted any loans as explained above question ofrepayment of principal amount & interest does not arise.
d. Since the Company has not granted any loans as explained above question of anyoverdue amount does not arise. e & f. The company has not taken any interest freeunsecured loan from Directors & other parties covered in the register maintained undersection 301 of the Act during the year where the terms and conditions are not prima- facieprejudicial to the interests of the company. As informed to us as no written agreement hasbeen entered into between the company & the lenders. There are four such parties fromwhom loan has been accepted. The amount involved is Rs.249236/-.
g. These loans are repayable on demand & as informed to us the payments are made as& when demanded.
iv.a) In our opinion and according to the information and explanations given to usthere are adequate internal control procedures commensurate with the size of the companyand the nature of its business for the purchase of inventories plant & machinery andother assets and for the sale of goods & services.
b. As there are no major weaknesses in the internal control procedures soquestion of correcting them does not arise.
v.a) The particulars of contracts or arrangements referred to in Section 301 ofthe Act have been entered in the register required to be maintained under that section.
b. Not applicable.
vi) The company has not accepted any deposits from the public within the previewof section 58A 58AA & any other relevant provisions of the Companies Act 1956 andthe rules framed thereunder.
vii) The company has internal audit system commensurate with its size and natureof its business.
viii) As informed to us the Central Govt. has not prescribed the maintenance ofcost records under section 209(1) (d) of The Companies Act 1956 to the company.
ix) As explained to us there are no disputed statutory dues outstanding for aperiod of more than 6 months. The company has been regular in depositing undisputedstatutory dues i.e. P.F ESI Service tax & other statutory dues with appropriateauthorities except delay on few occasions.
x) The company has no accumulated losses at the end of the financial year. Ithas not incurred cash losses in the financial year under report and the immediatelypreceding financial year.
xi) On the basis of the records examined by us and the information &explanation given to us the company has not defaulted in repayment of dues to bank andfinancial institution.
xii) As explained to us the company has not granted any loan and advances on thebasis of security by way of pledge of shares debentures or any other security.
xiii) In our pinion the company is not a chit fund or a Nidhi/Mutual benefitfund/Society. Therefore the provisions of clause 4(xiii) of the companies (Auditor's)Report 2003 are not applicable to the company.
xiv) According to the information and explanation given by the management thecompany is not dealing in or trading in shares securities debentures and otherinvestments.
xv) In our opinion the company has not given any guarantees for loans taken byassociate concerns.
xvi) In our opinion & on the basis of information & explanation given tous term loan raised during the year has been used for purpose for which these wereraised.
xvii) The company has not been raised any short term unsecured loans.
xviii) During the year The company has not made preferential allotment of sharesto parties covered in the register maintained Under Section 301 of the Act.
xix) During the financial year the company did not issue any debentures. Hencethe provisions of clause 4 (xix) of the companies (Auditors Report) order 2003 is notapplicable to the company.
xx) The company has not raised any money by way of public issue during the year.Accordingly the provisions of clause 4 (xx) of the Companies (Auditor's Report) order 2003on the end use of money are not applicable to company.
xxi) According to information and explanation given to us no fraud on or by thecompany has been noticed or reported during the course of our audit.
For VINOD KUMAR & ASSOCIATES CHARTERED ACCOUNTANTS
PLACE : CHANDIGARH M. No. 086687 DATED : 26.05.2014 FRN. 00234N