We have audited the accompanying financial statements of Oswal Yarns
Limited ("the Company"), which comprise the Balance Sheet as at
March 31,2014, 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. 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 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.
Auditors' Responsibility
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 misstatements.
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.
Opinion
1. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid 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 India:
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 loss 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 (Auditor's 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 Order.
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
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, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) in our opinion, the Balance Sheet, the 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.
Annexure to Independent Auditors' Report
Referred to in Paragraph 1 under the heading of "report on other legal
and regulatory requirements" of our report of even date
1. In respect of its fixed assets:
a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b) As explained to us, fixed assets have been physically verified by
the management in a phased periodical manner, which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. No material discrepancies were noticed on such physical
verification.
c) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of
the Company is not affected.
2. In respect of its inventories:
a) The inventories have been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories by the management as compared to
the book records.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
not granted any loans, secured or unsecured, to companies, firms or
other parties listed in the register maintained under Section 301 of
the Companies Act, 1956. Consequently, the provisions of clauses iii
(b), iii(c) and iii (d) of the order are not applicable to the
Company.
e) According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
taken loans from two person, maximum balance of which was Rs. 39.16
lacs and balance as at the year end was 39.16 Lacs.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory & fixed assets and for sale of goods & services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in the internal control system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements that need to be entered in the register maintained under
section 301 of the Companies Act, 1956 have been so entered.
b) According to the information & explanations given to us and in our
opinion, the transaction made in pursuance of contracts/ arrangements
entered in the Register maintained under Section 301 of the Companies
Act, 1956 does not exceeds five lacs rupees in a financial year
therefore requirement of reasonableness of transactions does not
arises.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from the public. Therefore, the
provisions of Clause (vi) of paragraph 4 of the Order are not
applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1 )(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however; not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
9. In respect of statutory dues:
a) According to the records of the company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, cess, and other statutory dues have
been generally regularly deposited with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of the aforesaid dues were
outstanding as at 31st of March, 2014 for a period of more than six
months from the date of becoming payable.
b) According to the information and explanations given to us, there is
no amounts payable in respect of income tax, wealth tax, service tax,
sales tax, customs duty and excise duty which have not been deposited
on account of any disputes.
10. The has accumulated losses of the Company at the end of the
financial year was Rs. 9.52 Lacs. The Company has not incurred cash
losses during the financial year covered by the audit and in the
immediately preceding financial year.
11. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that, the Company has
not defaulted in repayment of dues to financial institutions, banks or
debenture holders.
12. In our opinion and according to the explanations given to us and
based on the information available, the Company has not granted loans
and advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi /mutual
benefit fund/society. Therefore, the provision of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company.
14. The company has maintained proper records of the transactions and
contracts in respect of dealing or trading in Shares, securities,
debentures & other Investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the company in its own name.
15. According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.
16. Based on our audit procedures and on the information given by the
management, we report that the company has not raised any term loans
during the year.
17. According to the information and explanations given to us and on
an overall examination ofthe Balance Sheet of the Company, we are of
the opinion that there are no funds raised on short-term basis that
have been used for long-term investment.
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. The Company has no outstanding debentures during the period under
audit.
20. The Company has not raised any monies by way of public issues
during the year.
21. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed
or reported during the year.
FOR SUBASH VIPAN & CO.
CHARTERED ACCOUNTANTS
Sd/-
Place : Ludhiana (SUBHASH JAIN)
Dated :29.05.2014 PARTNER
M. No. 85224 F.R. No. 012898N |