The Members of
S.R. INDUSTRIES LIMITED.
1. We have audited the attached Balance Sheet of S.R. Industries Limited as at 30thJune 2012 Statement of Profit & Loss Account and Cash Flow Statement for the fifteenmonths period ended on that date annexed thereto. These financial statements are theresponsibility of the Companys management. Our responsibility is to express anopinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted inIndia. These Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining on test basis evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accounting principles usedand significant estimates made by management as well as evaluating the overall financial'statements presentation. We believe that our audit provides a reasonable basis for ouropinion.
3. As required by the Companies (Auditor's Report) Order (Amendment) 2004 issued bythe Central Government of India in terms of subsection (4A) of Section 227 of theCompanies Act; 1956. (The Act) we enclose In the Annexure a statement on the mattersspecified in . paragraphs 4 and 5 of the said order.
4. Further to our comments in Annexure referred to in paragraph 3 above we reportthat:
(i) we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit.
(i) in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.
(3) the Balance Sheet Statement of Profit & Loss Account and Cash Flow Statementdealt with by this report are in agreement with the books of accounL
(iv) in our opinion the Balance Sheet. Statement of Profit & Loss Account and CashFlow Statement dealt with by this report comply with the Accounting Standards referred toIn sub-section (3C) of Section 211 of The Act.
(v) on the basis of the written representations received from the directors and takenon record by the Board or Directors we report that none of the directors is disqualifiedas at 30th June 2012 from being appointed as a Director in terms of clause (g) ofsub-section (1) of Section 274 of The Act.
(vi) In our opinion and to the best of our information and according to theexplanations given to us the said accounts subject to sub notes (vii) & (viii) ofNote 21 give the information required by The Act In the manner so required and give atrue and fair view in conformity with the accounting principles generally - accepted inIndia:
a. In the case of the Balance Sheet of the state of affairs of the Company as at 30^June. 2012.
b. In the case of the Statement of Profit and Loss account of the Loss for the fifteenmonths period ended on that date and
c. In the case of Cash Flow Statement of the Cash Flows for the fifteen months periodended on that date.
For. KANSAL SINGLA & ASSOCIATES
CA. S.K. Kansal
FRN No. 03897N
Date: December 04 2013.
ANNEXURE TO THE AUDITORS REPORT
TO THE MEMBERS OF S.R. INDUSTRIES LIMITED ON THE ANNUAL ACCOUNTS FOR THE FIFTEENMONTHS PERIOD ENDED JUNE 30 2012.
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As per information given and records produced before us all the assets have beenphysically verified by the management during the period. In our opinion the frequency ofverification is reasonable having regard to the size of the Company and the nature of itsfixed assets. The discrepancies noticed on such verification were not significant innature and have been property dealt with.
(c) During the period the Company has disposed off its terry towei division atDerabassi however it does not affect the going concern status of the Company as footweardivision at Village. Singha Distt. Una (H.P.) is in operation.
(i) (a) As per information given and records produced before us the inventories exceptsmall items of stores and spares has been physically verified during the period by themanagement tn our opinion the frequency of verification is reasonable having regard tothe size of the Company and the nature of its business. As regards Stores and Sparesthere are numerous small items total value of which is insignificant as compared to totalinventories.
(b) The procedures of physical verification of Inventories followed by the managementare reasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) The Company is maintaining proper records of inventories. As explained to us nomaterial discrepancies were noticed on physical verification however minor discrepanciesnoticed on verification between the physical and book stock has been property adjusted.
iii. (a) As per information given and records produced before us the Company has notgiven any advance to the Companies/Parties covered in the Register maintained underSection 301 of The Act-
(b) As per information given and records produced before us the Company has takenunsecured loans and intercorporate deposits from Directors and Companies covered in theRegister maintained under Section 301 of The Act Balance outstanding as at 30th June 2012from these parties amounts to Rs 621.69 lacs and maximum amount outstanding during theperiod was Rs.1544.05 lacs.
(c) As explained to us the terms & conditions on which such loans were acceptedare not prejudicial to the interest of the Company.
(d) No stipulation has been specified for the repayment of these loans.
(iv) In our opinion and according to the information and explanations given to us. itappears to be an adequate internal control system commensurate with the size of theCompany and the nature of its business with regard to purchases of Inventories fixedassets and sale of goods. During the course of our audit we have not observed anycontinuing failure to correct major weaknesses in internal control system.
(v) According to the information and explanations given to us the particulars ofcontracts or arrangements that need to be entered into the Register maintained underSection 301 of The Act have been so entered.
(vi) In our opinion and according to the information and explanations given to us theCompany has not accepted the Deposits covered as per the provisions of Sections 58A and58AA or any other provisions of The Act. and. The Companies (Acceptance of Deposits)Rules. 1975. However the company has accepted unsecured loans from directors andintercorporate loans from companies which are within exempted category of the saidsection.
(vii) In our opinion the Company has in house internal audit system commensurate withthe size and nature of its business.
(viii) According to the information and explanations given to us the CentralGovernment has prescribed the maintenance of cost records under Section 209(1) (d) of TheAct we have broadly reviewed these records maintained by the Company and are of theopinion that prima-facie the prescribed records seems to have been maintained.
(ix) (a) The Company is not regular In depositing with appropriate authoritiesundisputed statutory dues such as Income Tax Safes Tax Service Tax Excise DutyProvident fund ESI and other material statutory dues applicable.
(b) According to the Information and explanations given to us Rs 23.33 lacs payable Inrespect of provident fund were m arrears as at 30th June 2012.
(c) According to the information and explanations given to us the disputed demand ofexcise duty against the Company amounting to Rs. 981.70 Lacs (Previous Year Rs.981.70Lacs) have not been deposited as appeals are pending with CESTAT for the finaladjudication.
(x) The Company has accumulated loss of Rs.2339.20 lacs at the end of the financialyear. Further the Company has incurred cash loss of Rs.1302.79 lacs during the financialyear covered by our audit and Rs 790.51 lacs during the immediately preceding financialyear.
(xi) In our opinion and according to the Information and exp/anaf/ons givento us the Company has defaulted tn repayment of dues to banks amounting toRs.$9.91 lacs as at 30* June 2012 However the same has been paid by 17th August2012.
(xii) In our opinion and according to the information and explanations ' given to us.the Company has not granted loans and advances on the basis of security by way ofpledge of shares debentures and other securities.
(xiii) In our opinion the Company is not a chit fund or a nidhi mutual benefit fund/society.
(xiv) In our opinion the Company is not dealing in or trading in shares securitiesdebentures and other investments.
(xv) In our opinion and according to the information and explanations given to us theCompany has not given any guarantee for loans taken by others from banks or financialinstitutions.
(xvi) According to the information and explanations given to us the term loans raisedduring the period have been utilized for the purposes for which the same were taken.
(xvii) According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company we report that the no funds raised onshort-term basis have been used for long-term Investment.
(xviii) According to the information and explanations given to us the Company has madepreferential allotment of equity shares to parties covered in the Register maintainedunder Section 301 of The Act. The price at which such shares are allotted is notprejudicial to the interest of the Company.
(xix) According to the information and explanations given to us during the periodcovered by our audit report the Company has not issued any debentures.
(xx) According to the information and explanations given to us during the periodcovered by our audit report the Company has not raised any money by public issue ofequity shares however the Company has issued preferential equity shares convertibleshare warrants S non cumulative preference shares.
(xxi) According to the information and explanations given to us no fraud on or by theCompany has been noticed or reported during the course or our audit.
FOR KANSAL SINGLA & ASSOCIATES
CV. S.K. Kansal
FRN No. 03897N
Date: December 04 2012.