Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Hariyana Ship Breakers Limited, (''the Company''), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit And Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information [in which arc incorporated the Returns for the year ended on that date audited by the branch auditors of the Companyâs branch at Mumbai].
Management''s Responsibility for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards as prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the branch auditor of the Company in terms of their report referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of report of the branch auditor on the financial information of the branch of the Company referred to in the Other Matters paragraph below, the aforesaid standalone Ind AS 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, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, cash flows and the changes in equity for the year ended on that date.
Other Matters
We did not audit the Ind AS financial statements/ information of Mumbai branch included in these standalone Ind AS financial statements of the Company whose Ind AS financial statements/ financial information reflect total assets of Rs. 17655.91 Lakhs as at March 31, 2018 and total revenues of Rs.1955.91 Lakhs for the year ended on that date, as considered in the standalone Ind AS financial statements. The Ind AS financial statements/ information of this branch have been audited by the branch auditors whose reports have been furnished to us by the management, and our opinion in so far as it relates to the amounts and disclosures included in respect of this branch, is based solely on the report of such branch auditors.
Our opinion on the standalone Ind AS financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of this matter with respect to our reliance on work done and the report of the branch auditors.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books [and proper returns adequate for the purposes of our audit have been received from the branches not visited by us].
c. The reports on the accounts of the branch offices of the company audited under section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
d. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account [and with the returns received from the branches not visited by us].
e. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.
f. On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;
g. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in "Annexure A"; and
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us and to branch auditors in terms of their report referred in the Other Matters paragraph above:
i. the Company has disclosed impact of pending litigations on its financial position in its financial statements - Refer Note 43 of the standalone financial statements;
ii. the Company did not any long term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure B" statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
Annexure A to the Auditors'' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited, the internal financial controls over financial reporting of Hariyana Ship Breakers Limited ("the Company") as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date [in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''s branch at Mumbai].
Management''s Responsibility for Internal Financial Controls
The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountant of India and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
We believe that the audit evidence obtained by us and the audit evidence obtained by the branch auditors in terms of their reports referred in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of information and explanations provided to us, and based on the consideration of report of the branch auditor on the financial information referred to in the Other Matters paragraph below, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters
Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to Mumbai Branch, is based on the corresponding reports of the auditors of such branch.
Annexure B to the Independent Auditors'' Report
(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date on the accounts of Hariyana Ship Breakers Limited (''the Company'') for the year ended March 31, 2018)
Our reporting on the Order includes branch of the Company, which has been audited by branch auditors in terms of their report referred in the Other Matters paragraph of our report of even date, and our report referred in respect of the branch is solely on the report of the auditor.
i) a) The Company has maintained proper records showing the full particulars, including the quantitative details and situation of its fixed assets.
b) All the assets have not been physically verified by the management during the year, but as per the information and explanations provided to us, there is a regular programme of physical verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
c) According to information and explanations given by the management, the title deeds of immovable properties, included under tangible fixed assets, are held in the name of the Company, except as detailed in Annexure -1, The company holds certain lands near Shantigrama, Hassan. We were given to understand except main land on which company has constructed factory building is registered in favor of the company, however, all other are agriculture lands, situated at Near Shantigrama, Hassan, cannot be registered in the name of the company; and therefore, the properties are registered in the name of Mr. H. Veerappa and subsequently a general power of attorney is entered by Mr. H. Veerappa in favor of the company. Details of such agricultural land are enclosed to this report. Moreover, in case of Green Plot Development (Alang), the company has done redevelopment work on a lease hold plot at Alang (Alang Ship Breaking Yard, Alang).
ii) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable and no material discrepancies were noticed on such physical verification.
iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013.
v) According to the information and explanations given to us, the company has not invited any deposits as per the provisions of section 73 to 76 or any other relevant provisions of companies act and the rules framed there under.
vi) 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 148(1) of the Companies Act, 2013, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
vii) a) In our opinion and according to the information and explanations given to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it and no such undisputed amounts were in arrears for a period of more than six months from the date they became payable.
b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows: (Rs in lakhs)
Name of the authority (where the dispute is pending) |
Related period |
Nature |
Amount (Rs. in lakhs) |
Hon. ITAT, Mumbai |
AY 2007-08 |
Income Tax |
Rs.3.97 |
Hon. ACIT Circle 3(1)(2), Mumbai |
AY 2009-10 |
Income Tax |
Rs.l.SS |
Hon. ACIT Circle 3(1)(2), Mumbai |
AY 2010-11 |
Income Tax |
Rs.2.01 |
Hon. DCIT Circle 3(1)(2), Mumbai |
AY 2011-12 |
Income Tax |
Rs.3.53 |
Hon. DCIT Circle 3(1)(2), Mumbai |
AY 2012-13 |
Income Tax |
Rs.30.31 |
Hon. ACIT Circle 3(1)(2), Mumbai |
AY 2013-14 |
Income Tax |
Rs.60.30 |
Hon. CIT (Appeal)-8, Mumbai |
AY 2014-15 |
Income Tax |
Rs.98.54 |
viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks and financial institution. The Company has not taken any loan from government.
ix) In our opinion and according to the information and explanations given to us, the company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loan during the year under report.
x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud by the Company or material fraud on the Company by its officers or employees has been noticed or reported during the year.
xi) According to the information and explanations given by the management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the standalone Ind AS financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations given by the management and based on the examinations of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.
xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act are not applicable.
xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 1 to Companies Auditors Report ( CARO 2016)
Details of Para 3(i) (c) : Immovable Properties (rs. in lakhs)
Sr. No. |
Particulars |
Gross Block Value as at 31.03.2018 (Rs.) |
Net Block Value as at 31.03.2018 (Rs.) |
Remarks |
1 |
Agricultural Land Survey No. 10/2, 10A, KanchanhalliVillage, Shantigrama, Hobli, Hassan Taluk |
6.51 |
6.51 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
2 |
Agricultural Land Survey No. 13A,9/1,9/4,9/5, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
6.08 |
6.08 |
Held in the name of Mr. H. Veerappa as Company can not purchase agriculture land; and a registered power of attorney is entered in his favour. |
3 |
Agricultural Land Survey No. 10/7, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
6.10 |
6.10 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
4 |
Agricultural Land Survey No. 9/2, 9/3, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
1.99 |
1.99 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
5 |
Agricultural Land Survey No. Sfl, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
1.47 |
1.47 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
6 |
Agricultural Land Survey No. 9/6, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
0.72 |
0.72 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
7 |
Agricultural Land Survey No. lfVp-l, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
10.50 |
10.50 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
S |
Agricultural Land Survey No. $3, 10/8, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
6.19 |
6.19 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
9 |
Agricultural Land Survey No. 10/6, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
0.98 |
0.98 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
10 |
Agricultural Land Survey No. 10/3, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
2.40 |
2.40 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
11 |
Agricultural Land Survey No. 10/4, 11/la, 10/5, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
6.51 |
6.51 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
12 |
Godown 1929, Iron & Steel Market Yard, Kalamboli, Dist: Raigad |
48.17 |
28.19 |
Held in the name of director of the company. |
For P. D. Goplani & Associates
Chartered Accountants
FRN: 118023W
Mumbai CA. Prem Goplani
May 30,2018 Partner
M. No. 103765
Mar 31, 2016
To
The Members,
HARIYANA SHIP BREAKERS LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of HARIYANA SHIP BREAKERS LIMITED, (''the Company''), which comprise the balance sheet as at 31st March, 2016, the statement of profit and loss and the cash flow statement and a summary of significant accounting policies and other explanatory information for the year then ended, [in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''s branches at Mumbai HO and Bangalore].
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, 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 on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated 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, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date, except for non provision for gratuity and long term employee benefits as per AS - 15, the amount of which could not be ascertained in the absence of actuarial valuation.
Other Matter
We have not audited the financial statements of Mumbai Division (HO) and Bangalore (Steel & Power Unit), whose financial statements reflect total assets of Rs. 11,263.99 Lakhs and Rs. 1,108.49 Lakhs and as at March 31, 2016, total revenue of Rs. 2,522.30 Lakhs and Rs. 23.36 Lakhs respectively, whose financial statements have been audited by other auditors whose reports have been furnished to us by the Management, and our opinion is based solely on the reports of the other auditors. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The reports on the accounts of the branch offices of the company audited under section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
d. 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.
e. In our opinion, and except for the effects of our qualified opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
f. On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
g. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in ''Annexure - B''; and
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed impact of pending litigations on its financial position in its financial statements - Refer Note 2.33 of the financial statements.
ii. The Company did not any long term contracts including derivative contracts for which there were any material foreseeable losses. and
iii. There has been no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure A to the Independent Auditors'' Report
The Annexure referred to in our Independent Auditors'' Report to the members of the Company on the financial statements for the year ended 31st March 2016, we report that:
i) a) The Company has maintained proper records showing the full particulars, including the quantitative details and situation of its fixed assets.
b) All the assets have not been physically verified by the management during the year, but as per the information and explanations provided to us, there is a regular programme of physical verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
c) According to information and explanations given by the management, the title deeds of immovable properties, included under tangible fixed assets, are held in the name of the Company, except as detailed in Annexure - 1, the properties which are not in the name of the company. We were given to understand except main land on which company has constructed factory building is registered in favor of the company, however, all other are agriculture lands, situated at Near Shantigrama, Hassan, cannot be registered in the name of the company; and therefore, registered power of attorney is entered into in favor of Mr. H. Veerappa and consideration has been paid to the land owners directly.
ii) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable and no material discrepancies were noticed on such physical verification.
iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013.
v) According to the information and explanations given to us, the company has not invited any deposits as per the provisions of section 73 to 76 or any other relevant provisions of companies act and the rules framed there under.
vi) 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 148(1) of the Companies Act, 2013, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
vii) a) In our opinion and according to the information and explanations given to us , the
Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it and no such undisputed amounts were in arrears for a period of more than six months from the date they became payable.
b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows:
Name of the authority (where the dispute is pending) |
Related period |
Nature |
Amount Rs. |
Hon. ITAT, Mumbai |
AY: 2007-08 |
Income Tax |
3,96,780 |
Hon. ITAT, Mumbai |
AY: 2009-10 |
Income Tax |
1,88,120 |
Hon. CIT, Central Circle - 54, Mumbai |
AY: 2010-11 |
Income Tax |
2,00,550 |
Hon. ACIT, Central Circle - 7, Mumbai |
AY: 2011-12 |
Income Tax |
3,58,140 |
Hon. CIT (A) - 8, Mumbai |
AY: 2012-13 |
Income Tax |
30,30,960 |
Hon. CIT (A) - 8, Mumbai |
AY: 2013-14 |
Income Tax |
60,298,00 |
viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks and financial institution. The Company has not taken any loan from government.
ix) In our opinion and according to the information and explanations given to us, the company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or tern loan during the year under report.
x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud by the Company or material fraud on the Company by its officers or employees has been noticed or reported during the year.
xi) According to the information and explanations given by the management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
xiv) According to the information and explanations given by the management and based on the examinations of the records of the company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.
xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act are not applicable.
xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 1 to the Auditor''s Report (CARO, 2016) Details of Para 3(i) (c) : Immovable Properties
Sr. |
Particulars |
Gross Block Value |
Net Block Value |
Remarks |
1 |
Agricultural Land Survey No. 10/2, 10/1, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
6,51,300 |
6,51,300 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
2 |
Agricultural Land Survey No. 13/1,9/1,9/4,9/5, Kanchanhalli Village, Shantigrama, Hobli, H assan Taluk |
6,07,960 |
6,07,960 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
3 |
Agricultural Land Survey No. 10/7, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
6,09,636 |
6,09,636 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
4 |
Agricultural Land Survey No. 9/2, 9/3, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
1,99,054 |
1,99,054 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
5 |
Agricultural Land Survey No. 8/2, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
1,46,805 |
1,46,805 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
6 |
Agricultural Land Survey No. 9/6, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
71,874 |
71,874 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
7 |
Agricultural Land Survey No. 16/p-1, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
10,50,000 |
10,50,000 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
8 |
Agricultural Land Survey No. 8/3, 10/8, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
6,19,002 |
6,19,002 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
9 |
Agricultural LandSurvey No. 10/6, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
97,980 |
97,980 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
10 |
Agricultural LandSurvey No. 10/3, Kanchanhalli Village, Shantigrama, Hobli, Hassan Taluk |
2,39,618 |
2,39,618 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
11 |
Agricultural LandSurvey No. 10/4, 11/1a, 10/5, Kanchanhalli Village, Shantigrama, Hobli, Hassan Tal uk |
6,51,330 |
6,51,330 |
Held in the name of Mr. H. Veerappa as Company cannot purchase agriculture land; and a registered power of attorney is entered in his favour. |
12 |
Godown1929, Iron & Steel Market Yard, Kalamboli, Dist: Raigad |
48,17,420 |
29,72,224 |
Held in the name of director of the company. |
Annexure B to the Auditor''s Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Hariyana Ship Breakers Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the company for the year ended on that date. [in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''s branches at Mumbai HO and Bangalore].
Management''s Responsibility for Internal Financial Controls
The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion and according to the best of information and explanations provided to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters
Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to Mumbai Branch and Bangalore, are based on the corresponding reports of the auditors of such branches.
For P. D. Goplani & Associates
Chartered Accountants
FRN: 118023W
Sd/-
CA. Sonam Langalia
Partner
M. No. 154014
Bhavnagar
May 19, 2016
Mar 31, 2015
We have audited the accompanying financial statements of HARIYANA SHIP
BREAKERS LIMITED ('the Company'), which comprise the balance sheet as
at 31St March, 2015, the statement of profit and loss and the 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
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation 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 principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
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.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. 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 the 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 financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, 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 on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us and based on the consideration of the reports
of the other auditors on the financial statements of the
divisions/branches, except for non provision for gratuity and long term
employee benefits as per AS Â 15, 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, of the state of affairs of the Company as
at 31st March 2015, and its profit and its cash flows for the year
ended on that date.
Other Matter
We have not audited the financial statements of Mumbai Division (HO) &
Hariyana Steel & Power (Bangalore), whose financial statements reflect
total assets (net) of Rs. 11,468.31 Lacs as at March 31, 2015, total
revenue of Rs. 4,341.98 Lacs financial statements have been audited by
other auditors whose reports have been furnished to us by the
Management, and our opinion is based solely on the reports of the other
auditors. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
a. we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b. in our opinion proper books of account as required by law have been
kept by the Company so far as it 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 aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
e. on the basis of the written representations received from the
directors as on 31st March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
f. with respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position
in its financial statements - Refer Note 2.32 to the financial
statements;
ii. the Company did not any long term contracts including derivative
contracts for which
there were any material foreseeable losses and
iii. There has been no amounts which were required to be transferred,
to the Investor Education and Protection Fund by the Company.
The Annexure referred to in our Independent Auditors' Report to the
members of the Company on the financial statements for the year ended
31st March 2015, we report that:
i) a) The Company has maintained proper records showing the full
particulars, including the quantitative details and situation of its
fixed assets.
b) All the assets have not been physically verified by the management
during the year, but as per the information and explanations provided
to us, there is a regular program of physical verification, which in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
ii) a) The inventory has 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 is maintaining proper records of the inventory and
according to the information given to us. The discrepancies noticed on
verification between the physical stocks and the book records were not
material.
iii) The Company has not granted unsecured loans to company covered in
the registered maintained under section 189 of the Companies Act, 2013.
iv) 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 with regard
to purchase of inventories and purchase of fixed assets and sale of
goods. We have not observed any major weakness in the internal control
system during the course of the audit.
v) According to the information and explanations given to us, the
company has not invited any deposits as per the provisions of section
73 to 76 or any other relevant provisions of companies act and the
rules framed there under.
vi) We have broadly reviewed the books of account relating to material,
wages and other items of cost maintained by the Company pursuant to the
rules made by the Central Government under sub-section (1) of section
148 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 records with a view to determining whether they are accurate or
complete.
vii) a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/ accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees' State Insurance,
IncomeÂTax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Value Added Tax, Cess and any other material 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 Provident Fund, Income Tax,
Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Value Added Tax, Cess and other material statutory dues
were in arrears as at 31st March, 2015 for a period of more than six
months from the date they became payable.
b) According to information and explanations given to us, the following
dues of income tax, excise duty, service tax and value added tax have
not been deposited by the Company on account of dispute except:
Pending with Related period Nature Amount (Rs.)
Hon. ACIT,
Central Circle -
41, Mumbai AY: 2007-08 Income Tax Rs. 3,96,780
ITAT, Mumbai AY: 2009-10 Income Tax Rs. 1,88,120
Hon. ACIT, Central
Circle  38, Mumbai AY: 2010-11 Income Tax Rs. 2,00,550
Hon. ACIT,
Central Circle -
7, Mumbai AY: 2011-12 Income Tax Rs. 3,58,140
Hon. CIT (Appeal 8),
Mumbai AY: 2012-13 Income Tax Rs. 30,30,960
c) According to the information and explanations given to us the
amounts which were required to be transferred to the investor education
and protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules there under has been
transferred to such fund within time.
viii) The Company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses in the financial
year and in the immediately preceding financial year.
ix) In our opinion and according to the information and explanations
provided to us, the company has not defaulted in repayment of dues to a
financial institutions, bank or debenture holders.
x) In our opinion and according to the information and the explanations
given to us, the Company has not given any corporate guarantee for
loans taken by others from banks or financial institutions.
xi) In our opinion and as per the information and explanation given to
us the company has not applied or availed any term loan during the
year.
xii) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For P. D. Goplani & Associates
Chartered Accountants
FRN: 118023W
Sd/-
CA. Sonam Langalia
Partner
M. No. 154014
Place: Mumbai
Date: May 29, 2015
Mar 31, 2013
We have audited the accompanying financial statements of HARIYANA
SHIP-BREAKERS LIMITED, which comprise the Balance Sheet as at March 31,
2013, 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.
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 referred to in sub-section (3C) of section 211
of the Companies Act, 1956. 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 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.
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
India, subject to: Note 1.2(h): with regard to non-Provision for
liability for gratuity
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
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.
1. 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 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) In our opinion, the Balance Sheet and Statement of Profit & Loss
dealt with by this report, read with other notes in Note 1, forming
part of the accounts, comply with the Accounting Standards referred to
in sub-section (3C) of section 211 of the Companies Act, 1956 except
AS-15 for non provision for gratuity and long terms employee benefits.
e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, 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 441A of the
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.
ANNEXURE TO AUDITORS'' REPORT
Referred to in paragraph 3 of our report of even date.
i) a) The company has maintained proper records showing the full
particulars, including the quantitative details and situation of its
fixed assets.
b) All the assets have not been physically verified by the management
during the year, but there is a regular programme of physical
verification, which in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
c) During the year the company has not disposed off any core assets
which could affect the going concern status of the company.
ii) a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) 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 is maintaining proper records of the inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
iii) a) The company has taken loans from a parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 11.16 Crores and the
year-end balances of loans taken from such parties were Rs. 8.91
Crores.
There are two parties covered in the register maintained under section
301 of the Companies Act, 1956, to which the company has granted loans.
The maximum amount involved during the year was Rs.72.41 Crores and the
year-end balance of loans granted to such party was Rs. 24.92 Crores.
b) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from/granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the company.
c) The Company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest. The parties
have repaid the principal amounts as stipulated and have been regular
in the payment of interest.
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 the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weakness in
internal controls.
v) a) According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupee five Lakhs in
respect of any party during the year have been made at a price which
are reasonable having regard to prevailing market prices at the
relevant time.
vi) According to the information and explanations given to us, the
company has not accepted any deposits from the Public. However the
company has taken unsecured loans from Associate Companies.
vii) The Directors themselves conduct the affairs of the company. The
company does not have a formal system of internal audit but there are
adequate checks and controls at all levels.
viii) 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 made and maintained. We have,
however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
ix) a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including Income Tax, Sales Tax,
Custom Duty, Cess and other material statutory dues applicable to it.
b) According to the information and explanation given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty and cess were in arrears, as at 31st March 2013 for a
period of more than six months from the date they become payable.
c) According to the information and explanations given to us, there are
no dues of custom duty, wealth tax, central excise duty and cess, which
have not been deposited on account of any dispute.
x) In our opinion, there was no accumulated losses of the company,
therefore the provision of clause 4 (x) of the Companies (Auditors
Report) Order 2003 are not applicable to the Company.
xi) In our opinion and according to the information and explanation
given to us, the company has not defaulted in repayment of dues to a
financial institution, banks or debenture holders.
xii) In our opinion and as per the information provided to us, the
company has not granted any 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 a nidhi mutual
benefit fund/society. Therefore the provision of clause 4 (xiii) of the
Companies (Auditors Report) Order 2003 is not applicable to the
Company.
xiv) In our opinion, the company has maintained proper records of the
transactions and contracts in respect of dealing or trading in shares,
securities, debentures and other investments timely entries have been
made therein. All shares, securities, debentures and other investments
have been held by the company in its own name.
xv) In our opinion, the terms and conditions on which the company has
given guarantees for loans taken by others from banks or financial
institutions, the terms of which are not prima facie not prejudicial to
the interest of the company.
xvi) As per the information and explanation given to us the company has
not raised any term loans during the year.
Xvii) 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. However the long term funds have been used to finance
short-term investment.
Xviii) According to the information and explanations given to us, the
company has not made any issue of shares or securities during the year.
xix) According to the information and explanations given to us, during
the period covered by our audit, the company has not issued any
debentures.
xx) According to the information and explanations given to us, during
the period covered by our audit, the company has not raised any money
by public issue.
xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For P.D.Goplani & Associates,
Chartered Accountants
Sd/-
Prem Goplani
Place : Bhavnagar Partner
Date : 28th May 2013 Membership No.103765
Mar 31, 2012
We have audited the attached Balance Sheet of HARIYANA SHIP BREAKERS
LIMITED as at 31st March, 2012 and also the Statement of Profit & Loss
and the Cash Flow for the year ended on that date annexed thereto (
collectively referred to as Financial Statements ). 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.
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 also 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.
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 Order.
Further to our comments in the Annexure referred to above we report
that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the propose of our
audit;
ii) In our opinion, proper books of account, as required by the law
have been kept by the Company so far as appears from our examination of
the books;
iii) The Balance Sheet and Statement of Profit & Loss and Cash Flow
Statements dealt with by this report are in agreement with the books of
account;
iv) In our opinion, the Balance Sheet and Statement of Profit & Loss
dealt with by this report, read with other notes in Note 1, forming
part of the accounts, comply with the Accounting Standards referred to
in sub-section (3C) of section 211 of the Companies Act, 1956 except
AS-15 for non provision for gratuity and long terms employee benefits.
v) On the basis of the written representations received from the
Directors, as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on
31st March, 2012, from being appointed as Director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956:
Vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with notes and
schedules thereon give the information required by the companies Act,
1956,in the manner so required and give a true and fair view in
conformity with the accounting the principles generally accepted in
India.
i) In the case of Balance Sheet of the state of affairs of the company
as at 31st March, 2012 and
ii) In the case of Statement of Profit & Loss of the Profit of the
company for the year ended on that date.
iii) In the case of the cash flow statement of the cash flows for the
year ended on that date
ANNEXURE TO AUDITORS' REPORT Referred to in paragraph 3 of our report
of even date.
i) a) The company has maintained proper records showing the full
particulars, including the quantitative details and situation of its
fixed assets.
b) All the assets have not been physically verified by the management
during the year, but there is a regular programme of physical
verification, which in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
c) During the year the company has not disposed off any core assets
which could affect the going concern status of the company.
ii) a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) 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 is maintaining proper records of the inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
iii) a) The company has taken loans from Five parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 5.96 Crores and the
year-end balances of loans taken from such parties were Rs. 5.96 Crores.
There is Three parties covered in the register maintained under section
301 of the Companies Act, 1956, to which the company has granted loans.
The maximum amount involved during the year was Rs.78.80 Crores and the
year-end balance of loans granted to such party was Rs. 33.96 Crores.
b) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from/granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the company.
c) The Company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest. The parties
have repaid the principal amounts as stipulated and have been regular
in the payment of interest.
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 the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weakness in
internal controls.
v) a) According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupee five Lakhs in
respect of any party during the year have been made at a price which
are reasonable having regard to prevailing market prices at the
relevant time.
vi) According to the information and explanations given to us, the
company has not accepted any deposits from the Public. However the
company has taken unsecured loans from Associate Companies.
vii) The Directors themselves conduct the affairs of the company. The
company does not have a formal system of internal audit but there are
adequate checks and controls at all levels.
viii) 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 made and maintained. We have,
however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
ix) a) The Company is regular in depositing with appropriate
authorities undisputed statutory
dues including Income Tax, Sales Tax, Custom Duty, Cess and other
material statutory dues applicable to it.
b) According to the information and explanation given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty and cess were in arrears, as at 31st March 2012 for a
period of more than six months from the date they become payable.
c) According to the information and explanations given to us, there are
no dues of custom duty, wealth tax, central excise duty and cess, which
have not been deposited on account of any dispute except Sales tax
pertaining to previous years Rs. 17,50,000/-.
x) In our opinion, there was no accumulated losses of the company,
therefore the provision of clause 4 (x) of the Companies (Auditors
Report) Order 2003 are not applicable to the Company.
xi) In our opinion and according to the information and explanation
given to us, the company has not defaulted in repayment of dues to a
financial institution, banks or debenture holders.
xii) In our opinion and as per the information provided to us, the
company has not granted any 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 a nidhi mutual
benefit fund/society. Therefore the provision of clause 4 (xiii) of the
Companies (Auditors Report) Order 2003 is not applicable to the
Company.
xiv) In our opinion, the company has maintained proper records of the
transactions and contracts in respect of dealing or trading in shares,
securities, debentures and other investments timely entries have been
made therein. All shares, securities, debentures and other investments
have been held by the company in its own name.
xv) In our opinion, the terms and conditions on which the company has
given guarantees for loans taken by others from banks or financial
institutions, the terms of which are not prima facie not prejudicial to
the interest of the company.
xvi) As per the information and explanation given to us the company has
not raised any term loans during the year.
Xvii) 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. However the long term funds have been used to finance
short-term investment.
Xviii) According to the information and explanations given to us, the
company has not made any issue of shares or securities during the year.
xix) According to the information and explanations given to us, during
the period covered by our audit, the company has not issued any
debentures.
xx) According to the information and explanations given to us, during
the period covered by our audit, the company has not raised any money
by public issue.
xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For Jain Seth & Co.,
Chartered Accountants
(Firm Reg. No. 002069W)
Sd/-
CA Rajendra Saini
Partner
Membership No. 0499913
Place: Mumbai
Date : 16th August, 2012
Mar 31, 2010
We have audited the attached Balance Sheet of HARIYANA SHIP BREAKERS
LIMITED as at 31 st March 2010 and also the Profit & Loss Account and
the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
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 also 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.
As required by the Companies (Auditors 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
Order. Further to our comments in the Annexure referred to above we
report that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the propose of our
audit;
ii) In our opinion, proper books of account, as required by the law
have been kept by the Company so far as appears from our examination of
the books;
iii) The Balance Sheet and Profit &
Loss Account and cash flow statements dealt with by this report are in
agreement with the books of account;
iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt
with by this report, read with other notes in Schedule-19, forming part
of the accounts, comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956:
v) On the basis of the
written representations received from the Directors, as on 31st March,
2010, and taken on record by the Board of Directors, we report that
none of the Directors is disqualified as on 31 st March, 2010, from
being appointed as Director in terms of clause (g) of sub-section.
(1) of section 274 of the Companies Act,1956:
Vi) In our opinion and to the best of our information and
according to the explanations given to us, the said accounts read with
notes and schedules thereon give the information required by the
companies Act, 1956,in the manner so required and give a true and fair
view in conformity with the accounting the principles generally
accepted in India.
i) In the case of Balance Sheet of the state of affairs of
the company as at 31 st March, 2010 and
ii) In the case of Profit & Loss account of the Profit of the company
for the year ended on that date.
iii) In the case of the cash flow statement of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT Referred to in paragraph 3 of our report
of even date.
i) a) The company has maintained proper records showing the full
particulars, including the quantitative details and situation of its
fixed assets.
b) All the assets have not been physically verified by the management
during the year, but there is a regular programme of physical
verification, which in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
c) During the year the company has disposed off few non-core surplus
assets. According to the information and explanations given to us, we
are of the opinion that the sale of the said assets has not affected
the going concern status of the company.
ii) a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) 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 is maintaining proper records of the inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
iii) a) The company has taken loans from three parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 3.75 Crores and the
year-end balance of loans taken from such parties was Rs. 3.75 Crores.
There is one party covered in the register maintained under section 301
of the Companies Act, 1956, to which the company has granted loans. The
maximum amount involved during the year was Rs. 41.91 Crores and the
year-end balance of loans granted to such party was Rs. 4.30 Crores.
b) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from/granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the company.
c) The Company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest. The parties
have repaid the principal amounts as stipulated and have been regular
in the payment of interest.
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 the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weakness in
internal controls.
v) a) According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupee five Lakhs in
respect of any party during the year have been made at a price which
are reasonable having regard to prevailing market prices at the
relevant time.
vi) According to the information and explanations given to us, the
company has not accepted any deposits from the Public. However the
company has taken unsecured loans from Associate Companies.
vii) The Directors themselves conduct the affairs of the company. The
company does not have a formal system of internal audit but there are
adequate checks and controls at all levels.
viii) As per the information and explanations given to us, the Central
Government has not prescribed maintenance of cost records under section
209 (1) (d) of the Companies Act, 1956 for any of the products of the
Company.
ix) a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including Income Tax, Sales Tax,
Custom Duty, Cess and other material statutory dues applicable to it.
b) According to the information and explanation given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty and cess were in arrears, as at 31st March 2010 for a
period of more than six months form the date they become payable.
c) According to the information and explanations given to us, there are
no dues of sales tax, custom duty, wealth tax, central excise duty and
cess, which have not been deposited on account of any dispute.
x) In our opinion, there was no accumulated losses of the company,
therefore the provision of clause 4 (x) of the Companies (Auditors
Report) Order 2003 are not applicable to the Company.
xi) In our opinion and according to the information and explanation
given to us, the company has not defaulted in repayment of dues to a
financial institution, banks or debenture holders.
xii) In our opinion and as per the information provided to us, the
company has not granted any 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 a nidhi mutual
benefit fund/society. Therefore the provision of clause 4 (xiii) of the
Companies (Auditors Report) Order 2003 is not applicable to the
Company.
xiv) In our opinion, the company has maintained proper records of the
transactions and contracts in respect of dealing or trading in shares,
securities, debentures and other investments timely entries have been
made therein. All shares, securities, debentures and other investments
have been held by the company in its own name.
xv) In our opinion, the terms and conditions on which the company has
given guarantees for loans taken by others from banks or financial
institutions are not prejudicial to the company.
xvi) As per the information and explanation given to us the company has
not raised any term loans during the year.
Xvii) 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. However the long term funds have been used to finance
short-term investment.
Xviii) According to the information and explanations given to us, the
company has not made any issue of shares or securities during the year.
xix) According to the information and explanations given to us, during
the period covered by our audit, the company has not issued any
ebentures.
xx) According to the information and explanations given to us, during
the period covered by our audit, the company has not raised any money
by public issue.
xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For Jain Seth &Co.
Chartered Accountants
Firm Reg No. 002069W
Sd/-
Prem Goplani
Place : Mumbai Partner
Date : 20,th August,2010 M.No.103765