Auditor Report of Hind Syntex Ltd.
Mar 31, 2015
We have audited the accompanying financial statements of HIND SYNTEX
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, as
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 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 incluues evaluating the
appropriateness of 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 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 31 st March, 2015, its'profit and its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 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 theAnnexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we further 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
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 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 ofthe Companies (Accounts) Rules, 2014;
e) on the basis ofthe written representations received from the
directors as on 31st March, 2015 and taken on record by the Board of
Directors, none ofthe directors is disqualified as on 31 st 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 does not have any pending litigations except as stated in
para vii(b) of the annexure to this report which would impact its
financial position.
ii. ) the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses, and
iii. ) there were no amounts due which were required to be transferred
to the Investor Education and Protection Fund by the Company.
Annexure to the Independent Auditor's Report
(Referred to in paragraph-1 on Other Legal and Regulatory Requirements
of our Report of even date to the members of Hind Syntex Limited on the
Financial Statements ofthe Company for the year ended 31 st March,
2015) On the basis of such checks, as we considered appropriate during
the course of our audit, we report that:
i. a) The Company is generally maintaining proper records to show full
particulars including quantitative details and situation of its Fixed
Assets.
b) As explained to us, Fixed Assets have been physically verified by
the management at regular intervals, and as informed to us no material
discrepancies were noticed on such verification.
ii. a) The inventories have been physically verified during the year at
reasonable intervals 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 inventory. The
discrepancies noticed on verification between the
physical stocks and book records were not material in relation to the
operations of the Company and the same have been properly dealt with in
the books of account. >
iii. According to the information and explanations given to us, the
Company has not granted any loan, secured or unsecured, to companies,
firms or other parties covered in the register maintained under Section
189 of the Act. Accordingly, clause 3(iii)(a) and (b) ofthe Order are
not applicable.
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 for the
purchase of inventories and fixed assets and for sale of products and
services. Further during the course of our audit, we have not observed
any weaknesses or continuous failure to correct any major weakness in
the aforesaid internal control system ofthe Company.
v. According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year
within the meaning of sections 73 to 76 of the Act and the rules framed
there under to the extent notified.
vi. We have broadly reviewed the books of account maintained by the
Company in respect of the products where, pursuant to the rules made by
the Central Government of India, the maintenance of cost records has
been prescribed u/s 148(1) of the Act and are ofthe opinion that prima
facie, the prescribed accounts and records have been maintained. We
have not, however, made a detailed examination ofthe records with a
view to determine whether the same are accurate or complete.
vii a) As per records of the Company and according to the information
and explanations given to us, the Company is generally
regular in depositing undisputed applicable statutory dues including
Provident Fund, Employees' State Insurance, Income Tax, Sales Tax,
Service Tax, Custom Duty, Wealth Tax, Value Added Tax, Cess and any
other statutory dues with the appropriate authorities and there are no
undisputed amount payable in respect of the same which were in arrear
as on 31 st March, 2015 for a period of more than six months from the
date the same became payable.
b) According to the information and explanations given to us, the
Company has not deposited the following dues on account of disputes
with the appropriate authorities:
Name of the statue Nature of the dues Amount in Rs.
Entry Tax Act,1976 Entry Tax 410,968
Employees' Provident
Fund and Miscellaneous Provident Fund 1,083,267
Provisions Act, 1952
CENVAT Credit Availing of and
Rules, 2004 and Central Utilisation of 76,028
Excise Act, 1944 CENVAT Credit
CENVAT Credit Rules, Availing of and 71,534
2004 and Central Excise Utilisation of
Act, 1944 CENVAT Credit
Name of the Statute Period to which Forum where dispute is
the amount relate pending
Entry Tax Act, 1976 1997-98 High Court, Indore
Employees' Provident April 2008 to Employees'Provident
Fund and Miscellaneous December 2010 Fund Appellate Tribunal,
Provisions Act, 1952 New Delhi
CENVAT Credit Rules, September 2010 Asstt. Commissioner of
2004 and Central to December 2012 Central Excise
Excise Act, 1944
CENVAT Credit Rules, January 2013 to Asstt. Commissioner of
2004 and Central November 2013 Central Excise
Excise Act, 1944
c) According to the information and explanations given to us, there
were no amount due which is required to be transferred to Investor
Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules made there
under.
viii. In our opinion, the accumulated losses of the Company as at the
end of the financial year have not exceeded fifty percent of its net
worth. The Company has not incurred cash losses during the financial
year covered by our audit but has incurred cash losses in the
immediately preceding financial year.
ix. In our opinion and according to the information and explanations
given to us, the Company has not obtained any loan from Bank or
Financial Institution or issued any debentures. Accordingly, clause
3(ix) of the Order is not applicable.
x. According to the information and explanations given to us, the
Company has given the corporate guarantees to banks for loans taken by
an associate company and terms and conditions of which are not prima
facie prejudicial to the interest of the Company. However, during the
year, the Company has exceeded the limit sanctioned by the shareholders
for giving corporate guarantee. As informed to us the Company is taking
necessary steps to ratify the same in the ensuing Annual General
Meeting of the shareholders.
xi. According to the information and explanations given to us and on an
overall examination of the Balance Sheet, we report that no term loan
was obtained by the Company during the year.
xii. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any instance of fraud on or by
the Company, noticed or reported during the year nor we have been
informed of such case by the management
For V. SINGHI & ASSOCIATES
Chartered Accountants
Firm Registration No. 311017E
(V.K.SINGHI)
Partner
Date: 30 th May, 2015 Membership No. 050051
Place; Kolkata
Mar 31, 2014
We have audited the accompanying financial statements of HIND SYNTEX
LIMITED ("the Company") which comprise the Balance Sheet as at March
31,2014, the Statement of Profit and Loss and the Cash Flow Statement
for the period from October 01,2013 to March 31,2014 ("the period"),
and a summary of significant accounting policies, and other explanatory
information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India including
Accounting Standards notified under the Companies Act, 1956 ("the
Act")read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of section133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and fair 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 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 judgement, 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, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. 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 that we have obtained is sufficient
and appropriate to provide a basis for our Qualified Audit Opinion as
well as Disclaimer of Opinion.
Basis for Qualified Opinion
(a) During the period ended on March 31,2014, the Company has charged
to the Statement of Profit and Loss of Rs. 1,037,547in respect of
Gratuity and of Rs. 508,952 in respect of Compensated Absences. In the
absence of detailed information from an Independent Actuary, interalia,
as to the present value of obligation and employee benefits cost to be
recognised respectively in the Balance Sheet and Statement of Profit &
Loss, we are unable to ascertain the adjustment and the charges which
should have been made to the Statement of Profit & Loss, respectively,
in respect of Gratuity and Compensated Absences, as contemplated by the
Accounting Standard-15 ("AS-15") on "Employees Benefits" [As-15
(Revised)]and accordingly, we are unable to comment on the effect
thereof on the Profit for the period and the consequential effect on
the Statement of Profit & Loss, and Current Liabilities and Provisions
carried forward for the period end (Refer note no. 25 of Notes forming
part of the financial statements).
Further, in view of the absence of the information as aforesaid, the
Company has not made disclosures of reconciliation of obligation, fair
value of plan assets, Actuarial assumptions, etc. as required by AS-15
(Revised).
(b) Based on a technical opinion, the Company has provided depreciation
on all plant and machinery (including Power Plant) as continuous
process plants at the rate pursuant to notification in GSR No.756E
dated 16.12.1993on straight line method.
On the basis of the Guidance Note issued by the Institute of Chartered
Accountants of India on "Some Important Issues Arising From The
Amendments To Schedule XIVto the Companies Act, 1956", in our opinion,
depreciation should have been provided at the rate other than that
provided for continuous process plant Schedule XIV of the Companies
Act, 1956.
Had depreciation been provided at the rate other than that provided for
continuous process plant, depreciation for the period would have been''
5,028,919 (instead ofRs. 11,488,465), Profit for the period (Net of
Deferred Tax Assets of Rs. 2,095,800 for such depreciation) would have
beenRs. 9,260,490 (instead of Rs. 17,816,881) and for the period end, Net
Block of Fixed Assets would have beenRs. 60,397,543 (instead of Rs.
177,045,598), Debit Balance in the Statement of Profit and Loss, after
adjusting balances in Reserves and Surplus (except to the extent of Rs.
188,227,352 on account of Capital Reserves), (Net of Deferred Tax Asset
of Rs. 37,846,461 for such depreciation) would have been Rs. 138,721,210
[instead of Debit Balance in the Statement of Profit and Loss, after
adjusting balances in Reserves and Surplus (except to the extent of Rs.
188,227,352 on account of Capital Reserves), of Rs. 59,919,616] and there
would have been Deferred Tax Asset (Net) of Rs. Nil (instead of
Deferred Tax Assets (Net) ofRs. Nil).
(c) During the period ended on March 31, 2014 the Company has arrived
at an "One Time Settlement" (OTS) of dues with its lenders, the cut-off
date being September 30,2012; as a result, the lenders have agreed to
waive the principal amount of Rs. 4,482,737and such amount is credited to
Capital Reserve which is not in accordance with the Accounting Standard
(AS) 5 on "Net Profit or Loss for the Period, Prior Period Items and
Changes in Accounting Policies" as notified under the Companies
(Accounting Standards) Rules, 2006. In fact, the said treatment is not
in line with the opinion of the Expert Advisory Committee (EAC) of the
ICAI on Accounting treatment of waiver of loan.
Had the said waiver of principal amount of loan been credited to the
Statement of Profit and Loss instead of the Credit reflected in Capital
Reserve account, the profit for the period and the carried forward
balances in Surplus under the head ''Reserves &Surplus'' would have been
higher by Rs. 4,482,737(Refer note no. 22 of Notes forming part of
financial statements and other explanatory information).
Basis for Disclaimer of Opinion
Since we have not been able to obtain sufficient and appropriate audit
evidencebased on which it is not possible for us to form an opinion as
to whether the Company would be liable to pay Minimum Alternate Tax on
the Book Profit so as to make Provision for Net Current Tax Expense in
the financial statements (Refer note no. 30 of Notes forming part of
financial statements and other explanatory information).
Qualified Opinion and Disclaimer of Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects for the matters
described in Basis for Qualified Opinion and Basis of Disclaimer of
Opinion paragraphs, 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:
a) in the case of Balance Sheet, of the state of affairs of the Company
as at March 31,2014;
b) in the case of Statement of Profit and Loss, of the loss for the
period ended on that date; and
c) in the case of Cash Flow Statement, of the Cash Flows for the period
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), as amended by the Companies (Auditor''s Report) (Amendment)
Order, 2004, issued by the Central Government in terms of Section
227(4A) of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in the paragraphs 4 and 5 of the
Order.
2. As required by Section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which, to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. The Balance Sheet, the Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, the Statement of Profit and Loss
and Cash Flow Statement comply with the Accounting Standards notified
underthe Act read with the General Circular 15/2013 dated 13th
September 2013 of the Ministry of Corporate Affairs in respect of
section133 of the Companies Act, 2013;
e. On the basis of the written representations received from the
directors of the Company as on March 31,2014, taken on record by the
Board of Directors, we report that none of the directors is
disqualified as on March 31,2014 from being appointed as a director in
terms of Section 274(1)(g) of the Companies Act, 1956.
Annexure referred to in Paragraph 1 under the heading of "Report on
Other Legal and Regulatory Requirements" of our Report of even date to
the members of HIND SYNTEX LIMITED on the accounts for the period ended
March 31,2014
On the basis of such checks as we considered appropriate and in terms
of information and explanations given to us, we state that:
(i) (a) The Company is generally maintaining proper records to show
full particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the Company has a phased programme of physical
verification of fixed assets 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) The Company has not disposed off any substantial part of its fixed
assets during the period so as to affect its going concern.
(ii) (a) The inventories have been physically verified by the
management during the period. 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 inventory. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
accounts.
(iii) (a) As per the information furnished, the Company has not granted
any loans, secured or unsecured, to companies, firms or other
parties covered in the register maintained under Section 301 of the
Companies Act, 1956
(b) As the Company has not granted any loans, secured or unsecured to
Companies, firms or other parties covered in the
(c) register maintained under Section 301 of the Companies Act, 1956,
Clause (iii) (b) of the Order relating to the rate of & interest and
terms and conditions being prima facie prejudicial to the Company,
Clause (iii) (c) relating to regularity of
(d) receipt of principal amount and interest and Clause (iii) (d)
relating to steps taken for recovery of overdue principal and interest
of more than rupees one lakh, are not applicable.
(e) During the period, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act.
(f) As the Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in Register
& maintained under Section 301 of the Act, Clause (iii) (f) of the
Order relating to rate of interest and terms and conditions being
(g) prima facie prejudicial to the interest of Company, Clause (iii)
(g) relating to regularity in repayment of principal amount and
interest, are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods. As
informed to us, the Company is not engaged in the sale of any services.
During the course of our audit, no major weakness has been noticed in
these internal control systems.
(v) (a) According to the information and explanations given to us and
the records of the Company examined by us, we are of the opinion
that the particulars of all contracts or arrangements that need to be
entered into the register maintained under section 301 of Act have been
so entered; and
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements (including purchase of services) entered into the register
in pursuance of Section 301 of the Act and exceeding the value of
Rupees Five Lakhs in respect of any party during the year, have been
made at prices which are reasonable, having regard to prevailing market
prices at the relevant time, wherever applicable.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the period. Hence, the question of complying with the directives
issued by the Reserve Bank of India and provisions of Section 58A and
58AA or any relevant provision of the Act, and the rules framed there
under, does not arise. Accordingly clause 4(vi) of the order is not
applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of Cost Records under Section 209(1)(d) of the Companies
Act, 1956, in respect of the manufacturing activities of the Company to
which the said rules are applicable and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained. We have, however, not made a detailed examination of the
records with a view to determine whether they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records examined by us, the Company has been regular in
depositing undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees'' State Insurance, Income-tax,
Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise-duty, Cess and
other material Statutory dues, applicable to it and there were no
arrears of such statutory dues as on March 31,2014 for a period of more
than six months from the date they became payable.
(b) According to the information and explanations given to us, given
herein below are the details of dues of sales tax, income tax, wealth
tax, service tax, customs duty, excise duty, cess which have not been
deposited on account of disputes and the forum where the dispute is
pending:
Name of the statue Nature of the dues Amount in
Entry Tax Act, 1976 Entry Tax 410,968
Employees'' Provident
Fund and Miscellaneous Provident Fund 1,083,267
Provisions Act, 1952
CENVAT Credit Rules, Availing of and
2004 and Central Excise Utilisation of 76,028
Act, 1944 CENVAT Credit
CENVAT Credit Rules, Availing of and
2004 and Central Excise Utilisation of 71,534
Act, 1944 CENVAT Credit
Name of the statue Period to which Forum where dispute
the amount relate is Pending
Entry Tax Act, 1976 1997-98 High Court Indore
Employees'' Provident April, 2008 to Employees'' Provident
Fund and Miscellaneous December, 2010 Fund Appellate
Provisions Act, 1952 Tribunal New Delhi
CENVAT Credit Rules 2004 September, 2010 to Asstt. Commissioner of
and Central Excise Act,1944 December, 2012 Central Excise
CENVAT Credit Rules,2004 and January, 2013 to Asstt. Commissioner of
Central Excise Act, 1944 November, 2013 Central Excise
(x) In our opinion, the accumulated losses of the Company as at the end
of the financial period are more than fifty percent of its net worth.
In addition to this, the Company has incurred cash losses during the
period under audit. However in the immediately preceding financial
period there were no cash losses.
(xi) In view of the sanction of CDR package and related extension of
the due dates, the Company has defaulted in following repayment of dues
to Banks or Institutions:
I.PrincipalPeriod Total Amount Amount Default
due paid on or amount
before due date
2006- 07 51,940,846 16,937,863 35,002,983
2007- 08 66,526,092 25,292,744 41,233,348
2008- 09 75,111,312 2,800,000 72,311,312
2009- 10 75,111,312 - 75,111,312
2010- 11 81,279,485 18,400,000 62,879,485
2011- 12 78,779,485 - 78,779,485
Apr''12 to Sep''12 60,181,810 - 60,181,810
Total 488,930,342 63,430,607 425,499,735
Period Amount of Period in Amount of
Default made which default as on
good default made good September 30, 2012
2006-07 9,727,401 2007-08 25,275,582
2007-08 2,908,204 2008-09 38,325,144
2008-09 - - 72,311,312
2009-10 - - 75,111,312
2010-11 - - 62,879,485
2011-12 - - 78,779,485
Apr''12 to Sep''12 - - 60,181,810
Total 12,635,605 - 412,864,130
# During the period the secured lenders invoked the provision of the
SARFAESI Act, 2002 and took over the possession (including right to
transfer by way of lease, assignment or sale) of fixed assets being
Land & Building valuing '' 50,266,490 situated at survey No. 134 to 140
and 142 at Village Birgod, Tehsil - Sonkutch, Dist - Dewas, M.P. in
lieu of their outstanding term liability. (Refer Note No. 23 of Notes
forming part of the financial statements)
II. Interest Amount in Rs.
Period Total Amount Amount paid Default
due on or before amount
due date
2006- 07 38,010,844 17,548,156 20,462,688
2007- 08 56,694,298 26,429,413 30,264,885''
2008- 09 60,818,220 9,042,313 51,775,907
2009- 10 61,702,017 2,576,644 59,125,373
2010- 11 70,273,125 4,775,462 65,497,663
2011- 12 75,177,927 14,127,308 61,050,619
Apr''12 to Sep''12 31,051,484 - 31,051,484
Total 393,727,915 74,499,296 319,228,619
Period Amount of Period in Amount of
Default made which default default as on
good made good Sept 30, 2012
2006-07 - - 20,462,688
2007-08 1,097,696 2008-09 29,167,189
2008-09 - - 51,775,907
2009-10 - - 59,125,373
2010-11 - - 65,497,663
2011-12 6,787,415 2008-09 to 54,263,204
2010-11
Apr''12 to Sep''12 - - 31,051,484
Total 7,885,111 - 311,343,508
Company and the secured lenders had mutually agreed to arrive at
consensus in respect of settlement of all the claims by the secured
lenders on the Company and as a result, in pursuance to the scheme of
"One Time Settlement (OTS)", with the cut-off date of September 30,
2012, the secured lenders had agreed to settle the total outstanding
(principal and interest thereon). (Refer Note No.22 of Notes forming
part of the financial statements)
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and /
or advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) As the Company is not a chit fund, Nidhi, mutual benefit fund or
society the provisions of Clause 4 (xiii) of the Order are not
applicable to the Company.
(xiv) According to the information and explanations given to us, in our
opinion the Company is not dealing or trading in shares, securities,
debentures and other investments and hence, the requirements of Clause
4(xiv) of the Order are not applicable to the Company.
(xv) As the Company has not given any guarantee for loans taken by
others from banks or financial institutions, clause 4(xv) of the Order
is not applicable to the Company.
(xvi) According to the information and explanations given to us, in our
opinion, the Company has not availed any of the term loan facilities,
and hence, the requirements of Clause 4 (xvi) of the Order are not
applicable to the Company.
(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 the funds raised on short term basis have not been utilised for
long term investment.
(xviii) According to the information and explanations given to us, as
the Company has not made any preferential allotment of shares during
the period, Clause 4 (xviii) of the Order is not applicable to the
Company.
(xix) According to the information and explanations given to us, as the
Company has not issued any debentures and hence, the question of
creating security or charges in respect thereof does not arise, Clause
4 (xix) of the Order is not applicable to the Company.
(xx) As the Company has not raised any money by public issues during
the period, Clause 4 (xx) of the Order is not applicable to the
Company.
(xxi) Based on the audit procedures performed and information and
explanations given to us by the management, we report that no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For Bansi S Mehta & Co.
Chartered Accountants
Firm Registration No.100991W
Divyesh I. Shah
Place : Indore Partner
Date : May 30, 2014 Membership No. 37326
Sep 30, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of HIND SYNTEX
LIMITED ("the Company"), which comprise the Balance Sheet as at
September 30, 2013, and the Statement of Profit and Loss and the Cash
Flow Statement for the period ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility forthe Financial Statements Management is
responsible for the preparation of these financial statements that give
a true and fair view of the financial position, financial performance
and cash flows of the Company in accordance with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 ("the Act"). 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material 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 judgement, 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 the 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 qualified audit opinion.
Basis for Qualified Opinion
(a) During the period ended on September 30, 2013, the Company has
charged to the Statement of Profit and Loss of t 4,562,725 in respect
Of Gratuity and oft 1,738,402 in respect of Compensated Absences. In
the absence of detailed information from an Independent Actuary,
interalia, as to the present value of obligation and employee benefits
cost to be recognised respectively in the Balance Sheet and Statement
of Profit & Loss, we are unable to ascertain the adjustment and the
charges which should have been made to the Statement of Profit & Loss,
respectively, in respect of Gratuity and Compensated Absences, as
contemplated by the Accounting Standard-15 ("AS-15") on- "Employees
Benefits" [AS-15 (Revised)] and accordingly, we are unable to comment
on the effect thereof on the Profit for the period and the
consequential effect on the Statement of Profit & Loss, and Current
Liabilities and Provisions carried forward for the period end.fRefer
note No.25 of notes forming part of the financial statements)
Further, in view of the absence of the information as aforesaid, the
Company has not made disclosures of reconciliation ¦ of obligation,
fairvalue of plan assets, Actuarial assumptions, etc. as required by
AS-15 (Revised).
(b) Based on a technical opinion, the Company has provided depreciation
on all plant and machinery (including Power Plant) as continuous
process plants at the rate pursuant to notification in GSR No.756E
dated 16.12.1993 on straight line method.
On the basis of the Guidance Note issued by the Institute of Chartered
Accountants of India on "Some Important Issues Arising From The
Amendments To Schedule XIV to the Companies Act, 1956", in our opinion,
depreciation should have been providedatthe rate otherthan that
provided for continuous process plant Schedule XlVof the Companies Act,
1956. Had depreciation been provided at the rate other than that
provided for continuous process plant, depreciation for the period
would have been t 12,293,997 (instead off 47,056,590), Profit for the
period (Net of Deferred Tax Assets off 11,278,723 for such
depreciation) would have beent 226,346,083 (instead oft 180,304,767)
and for the period end, Net Block of Fixed Assets would have been t
49,002,269 (instead off 172,109,870), Debit Balance in the Statement of
Profit and Loss, after adjusting balances in Reserves and Surplus
(except to the extent oft 183,744,615 on account of Capital Reserves),
(Net of Deferred Tax Asset of t 39,942,261 for such depreciation) would
ha ve been f 129,750,812 [instead of Debit Balance in the Statement of
Profit and Loss, after adjusting balances in Reserves and Surplus
(except to the extent oft 183,744,615 on account of Capital Reserves),
oft 46,585,472] and there would have been Deferred Tax Asset (Net) of
Rs. Nil (instead of Deferred Tax Assets (Net) oft Nil).
(c) During the period ended on September 30,2013, the Company has
arrived at an "One Time Settlement" (OTS) of dues with its lenders, the
cut-off date being September 30,2012; as a result, the lenders have
agreed to waive the principal amount of f174,826,7 56/-'' and such
amount is credited to Capital Reserve which is not in accordance with
the Accounting Standard (AS) 5 on "Net Profit or Loss for the Period,
Prior Period Items and Changes in Accounting Policies " as notified
under the Companies (Accounting Standards) Rules, 2006. In fact, the
said treatment is not in line with the opinion of the Expert Advisory
Committee (EAC) ofthe ICAI on Accounting treatment ofwaiver ofloan.
Had the said waiver of principal amount of loan been credited to the
Statement of Profit and Loss instead of the Credit reflected in Capital
Reserve account, the profit for the period and the carried forward
balances in Surplus under the head ''Reserves & Surplus''would have been
higher by f 174,826,756.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects for the matter
described in Basis for Qualified Opinion paragraph, 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:
a) in the case of Balance Sheet, of the state of affairs of the Company
as at September 30,2013;
b) in the case of Statement of Profit and Loss, of the profit forthe
period ended on that date; and
c) in the case of Cash Flow Statement, of the Cash Flows forthe period
ended on that date. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), as amended by the Companies (Auditor''s Report) (Amendment)
Order, 2004, issued by the Central Government in terms of Section
227(4A) of the Act, we give in the Annexure a statement on the matters
specified in the 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 accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of accounts;
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to''in sub-section (3C) of Section 211 of the Companies Act,
1956;
(e) On the basis of the written representations received from the
Directors as on September 30, 2013, taken on record by the Board of
Directors, we repdrt that none of the directors is disqualified as on
September 30,2013 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 1 under the heading of "Report on
Other Legal and Regulatory Requirements" of our Report of even date to
the members of HIND SYNTEX LIMITED on the accounts for the period ended
September 30,2013
On the basis of such checks as we considered appropriate and in terms
of information and explanations given to us, we state that: (i) (a) The
Company is generally maintaining proper records to show full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the Company has a phased programme of physical
verification of fixed assets 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) The Company has not disposed off any substantial part of its fixed
assets during the period so as to affect its going concern, subject to
Note 24 to the Accounts relating to assets transferred to Pillukhedi
Unit from Birgod Unit.
(ii) (a) The inventories have been physically verified by the
management during the period. 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 inventory. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
accounts.
(iii) (a) As per the information furnished, the Company has not granted
any loans, secured or unsecured, to companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956.
(b) As the Company has not granted any loans, secured or unsecured to
Companies, firms or other parties covered in the
(c) register maintained under Section 301 of the Companies Act, 1956,
Clause (iii) (b) of the Order relating to the rate of & interest and
terms and conditions being prima facie prejudicial to the Company,
Clause (iii) (c) relating to regularity of
(d) receipt of principal amount and interest and Clause (iii) (d)
relating to steps taken for recovery of overdue principal and interest
of more than rupees one lakh, are not applicable.
(e) During the period, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act.
(f) As the Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in & Register maintained
under Section 301 of the Act, Clause (iii) (f) of the Order relating to
rate of interest and terms and
(g) conditions being prima facie prejudicial to the interest of
Company, Clause (iii) (g) relating to regularity in repayment of
principal amount and interest, are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods. As
informed to us, the Company is not engaged in the sale of any services.
During the course of our audit, no major weakness has been noticed in
these internal control systems. (v) (a) According to the information
and explanations given to us and the records of the Company examined by
us, we are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of Act have been so entered; and (b) In our opinion and
according to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements (including
purchase of services) entered into the register in pursuance of Section
301 of the Act and exceeding the value of Rup Five Lakhs in respect of
any party during the year, have been made at prices which are
reasonable, having regard to prevailing market prices at the relevant
time, wherever applicable. (vi) In our opinion and according to the
information and explanations given to us, the Company has not accepted
any deposits from the public during the period. Hence, the question of
complying with the directives issued by the Reserve Bank of India and
provisions of Section 58A and 58AA or any relevant provision of the
Act, and the rules framed there under, does not arise. Accordingly
clause 4(vi) of the order is not applicable. (vii) In our opinion, the
Company has an internal audit system commensurate with its size and
nature of its business. (viii) We have broadly reviewed the books of
accounts maintained by the Company pursuant to the rules made by the
Central Government for the maintenance of Cost Records under Section
209(1 )(d) of the Companies Act, 1956, in respect of the manufacturing
activities of the Company to which the said rules are applicable and
are of the opinion that prima facie the prescribed accounts and records
have been made and maintained. We have, however, not made a detailed
examination of the records with a view to determine whether they are
accurate or complete. (ix) (a) According to the information and
explanations given to us and the records examined by us, the Company
has been regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees''
State Insurance, Income-tax, Sales-tax, Wealth-tax, Service-tax,
Customs Duty, Excise-duty, Cess and other material Statutory dues,
applicable to it and there were no arrears of such statutory dues as on
September 30,2013 for a period of more than six months from the date
they became payable.
(x) In our opinion, the accumulated losses of the Company as at the end
of the financial period are more than fifty percent of its net worth.
But the Company has not incurred cash losses during the period under
audit. However in the immediately preceding financial period there were
cash losses.
(xi) In view of the sanction of CDR package and related extension of
the due dates, the Company has defaulted in following repayment of dues
to Banks are institutions: I. Principal Amount in X
* The Company and the secured lenders had mutually agreed to arrive at
consensus in respect of settlement of all the claims by
the secured lenders on the Company and as a result, in pursuance to the
scheme of "One Time Settlement (OTS)", with the cutoff date of
September 30,2012, the secured lenders had agreed to settle the total
outstanding (principal and interest thereon) crores (Refer Note No. 23
of notes farming part of financial statements)) (xii) Based on our
examination of the records and the information and explanations given
to us, the Company has not granted any loans and / or advances on the
basis of security by way of pledge of shares, debentures and other
securities. (xiii) As the Company is not a chit fund, Nidhi, mutual
benefit fund or society the provisions of Clause 4 (xiii) of the Order
are not applicable to the Company. (xiv) According to the information
and explanations given to us, in our opinion the Company is not dealing
or trading in shares, securities, debentures and other investments and
hence, the requirements of Clause 4(xiv) of the Order are not
applicable to the Company. (xv) As the Company has not given any
guarantee for loans taken by others from banks or financial
institutions, clause 4(xv) of the Order is not applicable to the
Company. (xvi) In our opinion, the term loans availed by the Company
were prima facie, applied for the purpose for which the loans were
btained. (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 the funds raised on short term basis have not been
utilised for long term investment. (xviii)According to the information
and explanations given to us, as the Company has not made any
preferential allotment of shares during the period, Clause 4 (xviii) of
the Order is not applicable. (xix) According to the information and
explanations given to us, as the Company has not issued any debentures
and hence, the question of creating security or charges in respect
thereof does not arise, Clause 4 (xix) of the Order is not applicable.
(xx) As the Company has not raised any money by public issues during
the period, Clause4 (xx) of the Order is not applicable. (xxi) Based on
the audit procedures performed and information and explanations given
to us by the management, we report that no fraud on or by the Company
has been noticed or reported during the course of our audit.
For BANSI S. MEHTA & CO.
Chartered Accountants
Firm Registration No. 100991W
PLACE :KOLKATA DIVYESH I. SHAH
DATED :October 28,2013 Partner
Membership No:37326
Mar 31, 2012
1. We have audited the attached Balance Sheet of HIND SYNTEX LIMITED
as at March 31,2012 and also the Profit and Loss Account and the Cash
Flow Statement of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financialstatements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit 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.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure a statement on the basis of such
checks, we considered appropriate and the information and explanations
given to us, on the matters specified in paragraphs 4 of the said
Order.
4. Further to our comments in the Annexure referred to above, 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 purposes of our
audit;
(b) In our opinion proper books of accounts as required by law have
been kept by the Company, so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) Refer to Note No. 28 to Accounts relating to the charge to the
Profit & Loss Account of Rs. 25,71,545 in respect of Gratuity and of
17,21,679 in respect of Compensated Absences. In the absence of
detailed information from an independent actuary, interalia, as to the
present value of obligation and employee benefits cost to be recognised
respectively in the Balance Sheet and Profit & Loss Account, we are
unable to ascertain the adjustment and the charges which should have
been made to the Profit & Loss Account, respectively, in respect of
Gratuity and Compensated Absences, as contemplated by the Accounting
Standard-15 ("AS-15") on "Employees Benefits" [AS-15 (Revised)] and
accordingly, we are unable to comment on the effect thereof on the Loss
for the year and the consequential effect on Debit balance in the
Profit & Loss Account, and Current Liabilities and Provisions carried
forward at the year end.
Further, in view of the absence of the information as aforesaid, the
Company has not made disclosures of reconciliation of obligation, fair
value of plan assets, actuarial assumptions, etc. as required by AS-15
(Revised).
Further, as stated in Note 34 to the Accounts, on the basis of the
working prepared by the Company to ascertain the impairment in terms of
Accounting Standard-28, "Impairment of Assets", no impairment loss has
been recognised. However, in view of the uncertainty Involved with the
internal restructuring (refer note 26 of the accounts), and since the
future cash flow prepared to determine the value in use are on basis of
such restructuring, we are unable to comment whether there is an
impairment of assets.
Subject to our observation as mentioned in paragraph (d) above, in our
opinion, the Balance Sheet, Profit and Loss Account and Cash Flow
Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956;
(e) On the basis of written representations received from the
Directors, as on March 31,2012 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31,2012 from being appointed as a director in terms of clause (g)
of sub-section (1) of Section 274 of Companies Act, 1956;
(f) Based on a technical opinion, the Company has provided depreciation
on all plant and machinery (including Power Plant) as continuous
process plants at the rate pursuant to notification in GSR No.756E
dated 16.12.1993 on straight line method.
On the basis of the Guidance Note issued by the Institute of Chartered
Accountants of India on "Some Important Issues Arising From The
Amendments To Schedule XIV to the Companies Act, 1956", in our opinion,
depreciation should have been provided at the rate other than that
provided for continuous process plant Schedule XIV of the Companies
Act, 1956.
Had depreciation been provided at the rate other than that provided for
continuous process plant, depreciation for the year would have been Rs.
1,00,18,680 (instead of Rs. 3,63,45,678), Loss for the year (Net of
Deferred Tax Assets of Rs. 85,41,795 for such depreciation) would have
been 17,10,29,139 (instead of 110,58,97,941) and at the year end, Net
Block of Fixed Assets would have been Rs. 13,40,48,404 (instead of Rs.
29,19,18,598), Debit Balance in the Profit and Loss Account, after
adjusting balances in Reserves and Surplus (except to the extent of X
89,17,860 on account of Capital Reserves), (Net of Deferred Tax Asset
of Rs. 5,12,20,984 for such depreciation) would have been Rs. 50,83,66,206
[instead of Debit Balance in the Profit and Loss Account, after
adjusting balances in Reserves and Surplus (except to the extent of Rs.
89,17,860 on account of Capital Reserves), of 140,17,16,996] and there
would have been Deferred Tax Asset (Net) of Rs. Nil (instead of Deferred
Tax Assets (Net) of Rs. Nil).
(g) We would like to draw attention to Note 26(b) to the Accounts
relating to non availability of loan statement and balance confirmation
of loans outstanding from some of the lender banks/institutions as on
March 31, 2012, due to which the interest charged to Profit & Loss
Account is determined on the basis of the interest rate specified in
the Corporate Debt Restructuring Scheme and therefore, the outstanding
loan and interest balance has been taken as per the records of the
Company;
(h) Subject to our observations as mentioned in paragraph (d) and (f)
above, in our opinion and to the best of our information and according
to the explanations given to us, the said accounts, read together with
notes thereon and significant Accounting Policies siatsd in Schedule
XIV give the information required by the Companies Act, 1956 in the
manner so required and give a true and fair view:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2012;
(ii) in the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date;
(iii) in the case of Cash Flow Statement, of the Cash Flows of the
Company for the year ended on that date.
Annexure referred to in paragraph 3 of the Auditors' Report of even
date to the members of HIND SYNTEX LIMITED on the accounts for the year
ended March 31, 2012.
On the basis of such checks as we considered appropriate and in terms
of information and explanations given to us, we state that:
(i) (a) The Company is generally maintaining proper records to show
full particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the Company has a phased programme of physical
verification of fixed assets 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) The Company has not disposed off any substantial part of its fixed
assets during the year so as to affect its going concern, subject to
Note 27 of Notes to the Accounts relating to assets transferred to
Pillukhedi Unit from Birgod Unit.
(ii) (a) The inventories have been physically verified by the
management during the year. 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 inventory. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
(iii) (a) As per the information furnished, the Company has not granted
any loans, secured or unsecured, to companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956.
(b) As the Company has not granted any loans, secured or unsecured to
Companies, firms or other parties covered in
(c) the register maintained under Section 301 of the Companies Act,
1956, Clause (iii) (b) of the Order relating to the & rate of interest
and terms and conditions being prima facie prejudicial to the Company,
Clause (iii) (c) relating to
(d) regularity of receipt of principal amount and interest and Clause
(iii) (d) relating to steps taken for recovery of overdue principal and
interest of more than rupees one lakh, are not applicable.
(e) During the year, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act.
(f) As the Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in & Register maintained
under Section 301 of the Act, Clause (iii) (f) of the Order relating to
rate of interest and terms
(g) and conditions being prima facie prejudicial to the interest of
Company, Clause (iii) (g) relating to regularity in repayment of
principal amount and interest, are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods. As
informed to us, the Company is not engaged in the sale of any services.
During the course of our audit, no major weakness has been noticed in
these internal control systems.
(v) According to the information and explanations given to us, we are
of the opinion that there are no transactions that need to be entered
into the register maintained under section 301 of the Companies Act,
1956. Consequently, reporting on clause 4(v)(b) of the said Order does
not arise.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the year. Hence, the question of complying with the directives
issued by the Reserve Bank of India and provisions of Section 58A and
58AA or any relevant provision of the Act, and the rules framed there
under, does not arise. Accordingly clause 4(vi) of the order is not
applicable.
(vii) In lieu of Corporate Debt Restructuring, the Monitoring committee
has appointed an independent firm of Chartered Accountants as
Concurrent Auditor to conduct concurrent audit of the Company on
monthly basis, in view of which, the Board of Directors had decided to
discontinue separate internal audit of the Company.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of Cost Records under Section 209(1 )(d) of the Companies
Act, 1956, in respect of the manufacturing activities of the Company to
which the said rules are applicable and are of the opinion that prima
facie the t prescribed accounts and records have been made and
maintained. We have, however, not made a detailed examination of the
records with a view to determine whether they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records examined by us, the Company has been regular in depositing
undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax,
Wealth-tax, Service-tax, Customs Duty, Excise-duty, Cess and other
material Statutory dues, applicable to it and there were no arrears of
such statutory dues as on March 31,2012 for a period of more than six
months from the date they became payable. (b) According to the
information and explanations given to us, given herein below are the
details of dues of sales tax, income tax, wealth tax, service tax,
customs duty, excise duty, cess which have not been deposited on
account of disputes and the forum where the dispute is pending:
Name of the Nature of Amount in Period to which Forum where
statue the dues Rs. the amount relate dispute is
pending
Entry Tax Act,
1976 Entry Tax 4,10,968 1997-98 Tribunal,
Bhopal
(x) in our opinion, the accumulated losses of the Company as at the end
of the financial year are more than fifty percent of its net worth. The
Company has incurred cash losses during the year under audit. However
in the immediately preceding financial year there were no cash losses.
(xi) In view of the sanction of CDR package and related extension of
the due dates, the Company has defaulted in following repayment of dues
to Banks or Institutions:
I. Period Amount in Rs.
Period Total Amount paid Default
Amount due on or before amount
due date
2006-07 5,19,40,846 1,69,37,863 3,50,02,983
2007-08 6,65,26,092 2,52,92,744 4,12,33,348
2008-09 7,51,11,312 28,00,000 7,23,11,312
2009-10 7,51,11,312 - 7,51,11,312
2010-11 8,12,79,485 1,84,00,000 6,28,79,485
2011-12 7,87,79,485 - 7,87,79,485
Total 42,87,48,532 6,34,30,607 36,53,17,925
Period Amount of Year in which Amount of
Default made default made default as on
good good March 31,2012
2006-07 97,27,401 2007-08 2,52,75,582
2007-08 29,08,204 2008-09 3,83,25,144
2008-09 - - 7,23,11,312
2009-10 - - 7,51,11,312
2010-11 - - 6,28,79,485
2011-12 - - 7,87,79,485
1,26,35,605 - 35,26,82,320
II. Interest Amount in Rs.
Period Total Amount paid Default
Amount due on or before amount
due date
2006-07 3.80,10,844 1,75,48,156 2,04,62,688
2007-08 5,66,94,298 2,64,29,413 3,02,64,885
2008-09 6,08,18,220 90,42,313 5,17,75,907
2009-10 6,17,02,017 25,76,644 5,91,25,373
2010-11 7.02,73,125 47,75,462 6,54,97,663
2011-12 7,51,77,927 1,41,27,308 6,10,50,619
Total 36,26,76,431 7,44,99,296 28,81,77,135
Period Amount of Year in which Amount of
Default made default made default as on
good good March 31,2012
2006-07 - - 2,04,62,688
2007-08 10,97,696 2008-09 2,91,67,189
2008-09 - - 5,17,75,907
2009-10 - - 5,91,25,373
2010-11 - - 6,54,97,663
2011-12 67,87,415 2008-09 to 5,42,63,204
2010-11
Total 78,85,111 - 28,02,92,024
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and /
or advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) As the Company is not a chit fund, Nidhi, mutual benefit fund or
society the provisions of Clause 4 (xiii) of the Order are not
applicable to the Company.
(xiv) According to the information and explanations given to us, in our
opinion the Company is not dealing or trading in shares, securities,
debentures and other investments and hence, the requirements of Clause
4(xiv) of the Order are not applicable to the Company.
(xv) As the Company has not given any guarantee for loans taken by
others from banks or financial institutions, clause 4(xv) of the Order
is not applicable to the Company.
(xvi) In our opinion, the term loans availed by the Company were prima
facie, applied for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
examination of the financial statements of the Company, we report that,
the Company has utilized short-term funds for long- term purpose
amounting to Rs.730.39 lacs. The utilization of short term funds
towards long terms funds is due to recovery of interest on term loan by
the bank.
(xviii) According to the information and explanations given to us, as
the Company has not made any preferential allotment of shares during
the year, Clause 4 (xviii) of the Order is not applicable.
(xix) According to the information and explanations given to us, as the
Company has not issued any debentures and hence, the question of
creating security or charges in respect thereof does not arise, Clause
4 (xix) of the Order is not applicable.
(xx) As the Company has not raised any money by public issues during
the year, Clause 4 (xx) of the Order is not applicable.
(xxi) Based on the audit procedures performed and information and
explanations given to us by the management, we report that no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For Bansi S Mehta & Co.
Chartered Accountants
Firm Registration No. 100991W
Place : Plllukhedi Divyesh I. Shah
Dated : May 25, 2012 Partner
Membership No: 37326
Mar 31, 2011
1. We have audited the attached Balance Sheet of HIND SYNTEX LIMITED
as at March 31, 2011 and also the Profit and Loss Account and the Cash
Flow Statement of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit 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.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure a statement on the basis of such
checks, we considered appropriate and the information and explanations
given to us, on the matters specified in paragraphs 4 of the said
Order.
4. Further to our comments in the Annexure referred to above, 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 purposes of our
audit;
(b) In our opinion proper books of accounts as required by law have
been kept by the Company, so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) Refer to Note No. 5 of Schedule 15 to Accounts relating to the
charge to the Profit & Loss Account of Rs. 31,34,025 in respect of
Gratuity and of Rs. 7,14,862 in respect of Compensated Absences. In the
absence of detailed information from an independent actuary, interalia,
as to the present value of obligation and employee benefits cost to be
recognised respectively in the Balance Sheet and Profit & Loss Account,
we are unable to ascertain the adjustment and the charges which should
have been made to the Profit & Loss Account, respectively, in respect
of Gratuity and Compensated Absences, as contemplated by the Accounting
Standard-15 ("AS-15") on "Employees Benefits" [AS-15 (Revised)] and
accordingly, we are unable to comment on the effect thereof on the Loss
for the year and the consequential effect on Debit balance in the
Profit & Loss Account, and Current Liabilities and Provisions carried
forward at the year end.
Further, in view of the absence of the information as aforesaid, the
Company has not made disclosures of reconciliation of obligation, fair
value of plan assets, actuarial assumptions, etc. as required by AS-15
(Revised).
Further, as stated in Note 11 of Schedule 15 to the Accounts, on the
basis of the working prepared by the Company to ascertain the
impairment in terms of Accounting Standard-28, "Impairment of Assets",
no impairment loss has been recognised. However, in view of the
uncertainty involved with the internal restructuring (refer note 3 of
schedule 15), and since the future cash flow prepared to determine the
value in use are on basis of such restructuring, we are unable to
comment whether there is an impairment of assets.
Subject to our observation as mentioned in paragraph (d) above, in our
opinion, the Balance Sheet, Profit and Loss Account and Cash Flow
Statement comply with the Accounting Standards referred to in sub-
section (3C) of Section 211 of the Companies Act, 1956;
(e) On the basis of written representations received from the
Directors, as on March 31, 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of Companies Act, 1956;
(f) Based on a technical opinion, the Company has provided depreciation
on all plant and machinery (including Power Plant) as continuous
process plants at the rate pursuant to notification in GSR No.756E
dated 16.12.1993 on straight line method.
On the basis of the Guidance Note issued by the Institute of Chartered
Accountants of India on "Some Important Issues Arising From The
Amendments To Schedule XIV to the Companies Act, 1956", in our opinion,
depreciation should have been provided at the rate other than that
provided for continuous process plant Schedule XIV of the Companies
Act, 1956.
Had depreciation been provided at the rate other than that provided for
continuous process plant, depreciation for the year would have been Rs.
1,13,95,980 (instead of Rs. 3,70,68,828), Loss for the year (Net of
Deferred Tax Assets of Rs. 83,29,555 for such depreciation) would have
been Rs. 1,12,97,139 (instead of Rs. 2,27,05,265) and at the year end,
Net Block of Fixed Assets would have been Rs. 16,14,56,691 (instead of
Rs. 34,56,53,883), Debit Balance in the Profit and Loss Account, after
adjusting balances in Reserves and Surplus (except to the extent of Rs.
89,17,860 on account of Capital Reserves), (Net of Deferred Tax Asset
of Rs. 5,97,62,779 for such depreciation) would have been Rs.
42,03,29,422 [instead of Debit Balance in the Profit and Loss Account,
after adjusting balances in Reserves and Surplus (except to the extent
of Rs. 89,17,860 on account of Capital Reserves), of Rs. 29,58,95,009]
and there would have been Deferred Tax Asset (Net) of Rs. Nil (instead
of Deferred Tax Assets (Net) of Rs. Nil).
(g) We would like to draw attention to Note 3(c) of Schedule 15 to the
Accounts relating to non availability of loan statement and balance
confirmation of loans outstanding from some of the lender
banks/institutions as on March 31, 2011, due to which the interest
charged to Profit & Loss Account is determined on the basis of the
interest rate specified in the Corporate Debt Restructuring Scheme and
therefore, the outstanding loan and interest balance has been taken as
per the records of the Company;
(h) We would like to further draw attention Note 12 of Schedule 15 to
the Accounts relating to non provisioning of management fees amounting
to Rs. 22,00,000 payable to Bank of India for disbursement of loan
taken by the Company for paying labour dues as the same is payable out
of the sale proceeds of balance assets of the Company at Birgod unit
remaining after reallocation of assets from Birgod unit to Pillukhedi
Unit.
(i) Subject to our observations as mentioned in paragraph (d) and (f)
above, in our opinion and to the best of our information and according
to the explanations given to us, the said accounts, read together with
notes thereon and significant Accounting Policies stated in Schedule
XIV give the information required by the Companies Act, 1956 in the
manner so required and give a true and fair view:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
(ii) in the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date;
(iii) in the case of Cash Flow Statement, of the Cash Flows of the
Company for the year ended on that date.
Annexure referred to in paragraph 3 of the Auditors' Report of even
date to the members of HIND SYNTEX LIMITED on the accounts for the year
ended March 31, 2011.
On the basis of such checks as we considered appropriate and in terms
of information and explanations given to us, we state that:
(i) (a) The Company is generally maintaining proper records to show
full particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the Company has a phased programme of physical
verification of fixed assets 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) The Company has not disposed off any substantial part of its fixed
assets during the year so as to affect its going concern, subject to
Note 4 of Schedule 15 to the Accounts relating to assets transferred to
Pillukhedi Unit from Birgod Unit.
(ii) (a) The inventories have been physically verified by the
management during the year. 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 inventory. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
(iii) (a) As per the information furnished, the Company has not granted
any loans, secured or unsecured, to companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956.
(b) As the Company has not granted any loans, secured or unsecured to
Companies, firms or other parties covered in
(c) the register maintained under Section 301 of the Companies Act,
1956, Clause (iii) (b) of the Order relating to the & rate of interest
and terms and conditions being prima facie prejudicial to the Company,
Clause (iii) (c) relating to
(d) regularity of receipt of principal amount and interest and Clause
(iii) (d) relating to steps taken for recovery of overdue principal and
interest of more than rupees one lakh, are not applicable.
(e) During the year, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act.
(f) As the Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in & Register maintained
under Section 301 of the Act, Clause (iii) (f) of the Order relating to
rate of interest and terms
(g) and conditions being prima facie prejudicial to the interest of
Company, Clause (iii) (g) relating to regularity in repayment of
principal amount and interest, are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods. As
informed to us, the Company is not engaged in the sale of any services.
During the course of our audit, no major weakness has been noticed in
these internal control systems.
(v) According to the information and explanations given to us, we are
of the opinion that there are no transactions that need to be entered
into the register maintained under section 301 of the Companies Act,
1956. Consequently, reporting on clause 4(v)(b) of the said Order does
not arise.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the year. Hence, the question of complying with the directives
issued by the Reserve Bank of India and provisions of Section 58A and
58AA or any relevant provision of the Act, and the rules framed there
under, does not arise. Accordingly clause 4(vi) of the order is not
applicable.
(vii) In lieu of Corporate Debt Restructuring, the Monitoring committee
has appointed an independent firm of Chartered Accountants as
Concurrent Auditor to conduct concurrent audit of the Company on
monthly basis, in view of which, the Board of Directors had decided to
discontinue separate internal audit of the Company.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of Cost Records under Section 209(1)(d) of the Companies
Act, 1956, in respect of the manufacturing activities of the Company to
which the said rules are applicable and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained. We have, however, not made a detailed examination of the
records with a view to determine whether they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records examined by us, the Company has been regular in depositing
undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax,
Wealth-tax, Service-tax, Customs Duty, Excise-duty, Cess and other
material Statutory dues, applicable to it and there were no arrears of
such statutory dues as on March 31, 2011 for a period of more than six
months from the date they became payable.
(b) According to the information and explanations given to us, given
herein below are the details of dues of sales tax, income tax, wealth
tax, service tax, customs duty, excise duty, cess which have not been
deposited on account of disputes and the forum where the dispute is
pending:
Name of the Nature of Amount Period to Forum where
statue The dues in Rs. which the dispute is
amount pending
relate
Entry Tax Act, Entry Tax 4,10,968 1997-98 Tribunal,
1976 Bhopal
(x) In our opinion, the accumulated losses of the Company as at the end
of the financial year are more than fifty percent of its net worth. The
Company has not incurred cash losses during the year under audit.
However in the immediately preceding financial year there were cash
losses.
(xi) In view of the sanction of CDR package and related extension of
the due dates, the Company has defaulted in following repayment of dues
to Banks or Institutions:
I. Principal Amount in Rs.
Period Total Amount paid Default
Amount due on or before amount
due date
2006-07 5,19,40,846 1,69,37,863 3,50,02,983
2007-08 6,65,26,092 2,52,92,744 4,12,33,348
2008-09 7,51,11,312 28,00,000 7,23,11,312
2009-10 7,51,11,312 - 7,51,11,312
2010-11 8,12,79,485 - 8,12,79,485
Total 34,99,69,047 4,50,30,607 30,49,38,440
Period Amount of Year in which Amount of
Default made default made default as on
good good March 31, 2011
2006-07 97,27,401 2007-08 2,52,75,582
2007-08 29,08,204 2008-09 3,83,25,144
2008-09 - - 7,23,11,312
2009-10 - - 7,51,11,312
2010-11 - - 8,12,79,485
Total 1,26,35,605 - 29,23,02,835
II. Interest Amount in Rs.
Period Total Amount paid Default
Amount due on or before amount
due date
2006-07 3,80,10,844 1,75,48,156 2,04,62,688
2007-08 5,66,94,298 2,64,29,413 3,02,64,885
2008-09 5,74,94,893 90,42,313 4,84,52,580
2009-10 6,17,02,017 25,76,644 5,91,25,373
2010-11 7,02,73,125 47,75,462 6,54,97,663
Total 28,41,75,177 6,03,71,988 22,38,03,189
Period Amount of Year in which Amount of
Default made default made default as on
good good March 31, 2011
2006-07 - - 2,04,62,688
2007-08 10,97,696 2008-09 2,91,67,189
2008-09 - - 4,84,52,580
2009-10 - - 5,91,25,373
2010-11 - - 6,54,97,663
Total 10,97,696 - 22,27,05,493
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and /
or advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) As the Company is not a chit fund, Nidhi, mutual benefit fund or
society the provisions of Clause 4 (xiii) of the Order are not
applicable to the Company.
(xiv) According to the information and explanations given to us, in our
opinion the Company is not dealing or trading in shares, securities,
debentures and other investments and hence, the requirements of Clause
4(xiv) of the Order are not applicable to the Company.
(xv) As the Company has not given any guarantee for loans taken by
others from banks or financial institutions, clause 4(xv) of the Order
is not applicable to the Company.
(xvi) In our opinion, the term loans availed by the Company were prima
facie, applied for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
examination of the financial statements of the Company, we report that,
the Company has utilized short-term funds for long- term purpose
amounting to ` 161.13 lacs. The utilization of short term funds towards
long terms funds is due to recovery of interest on term loan by the
bank.
(xviii) According to the information and explanations given to us, as
the Company has not made any preferential allotment of shares during
the year, Clause 4 (xviii) of the Order is not applicable.
(xix) According to the information and explanations given to us, as the
Company has not issued any debentures and hence, the question of
creating security or charges in respect thereof does not arise, Clause
4 (xix) of the Order is not applicable.
(xx) As the Company has not raised any money by public issues during
the year, Clause 4 (xx) of the Order is not applicable.
(xxi) Based on the audit procedures performed and information and
explanations given to us by the management, we report that no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For Bansi S Mehta & Co.
Chartered Accountants
Firm Registration No. 100991W
Place : Mumbai Divyesh I. Shah
Dated : June 25, 2011 Partner
Membership No: 37326
Mar 31, 2010
1. We have audited the attached Balance Sheet of HIND SYNTEX LIMITED
as at March 31, 2010 and also the Profit and Loss Account and the Cash
Flow Statement of the Company 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.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit 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.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure a statement on the basis of such
checks, we considered appropriate and the information and explanations
given to us, on the matters specified in paragraphs 4 of the said
Order.
4. Further to our comments in the Annexure referred to above, 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 purposes of our
audit;
(b) In our opinion proper books of accounts as required by law have
been kept by the Company, so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) Refer to Note No. 5 of Schedule 15 to Accounts relating to the
charge to the Profit & Loss Account of Rs. 37,90,824 in respect of
Gratuity and of Rs. 2,13,144 in respect of Compensated Absences. In
the absence of detailed information from an independent actuary,
interalia, as to the present value of obligation and employee benefits
cost to be recognised respectively in the Balance Sheet and Profit &
Loss Account, we are unable to ascertain the adjustment and the charges
which should have been made to the Profit & Loss Account, respectively,
in respect of Gratuity and Compensated Absences, as contemplated by the
Accounting Standard-15 ("AS-15") on "Employees Benefits" [AS-15
(Revised)] and accordingly, we are unable to comment on the effect
thereof on the Loss for the year and the consequential effect on Debit
balance in the Profit & Loss Account, and Current Liabilities and
Provisions carried forward at the year end.
Further, in view of the absence of the information as aforesaid, the
Company has not made disclosures of reconciliation of obligation, fair
value of plan assets, actuarial assumptions, etc. as required by AS-15
(Revised).
Further, as stated in Note 10 of Schedule 15 to the Accounts, on the
basis of the working prepared by the Company to ascertain the
impairment in terms of Accounting Standard-28, "Impairment of Assets",
no impairment loss has been recognised. However, in view of the
uncertainty involved with the internal restructuring (refer note 3 of
schedule 15), and since the future cash flow prepared to determine the
value in use are on basis of such restructuring, we are unable to
comment whether there is an impairment of assets.
Subject to our observation as mentioned in above paragraph (d) above,
in our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956;
(e) On the basis of written representations received from the
Directors, as on March 31, 2010 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of Companies Act, 1956;
(f) Based on a technical opinion, the Company has provided depreciation
on all plant and machinery (including Power Plant) as continuous
process plants at the rate pursuant to notification in GSR No.756E
dated 16.12.1993 on straight line method.
On the basis of the Guidance Note issued by the Institute of Chartered
Accountants of India on "Some Important Issues Arising From The
Amendments To Schedule XIV to the Companies Act, 1956", in our opinion,
depreciation should have been- provided at the rate other than that
provided for continuous process plant Schedule XIV of the Companies
Act, 1956.
Had depreciation been provided at the rate other than that provided for
continuous process plant, depreciation for the year would have been Rs.
1,24,11,495 (instead of Rs. 3,79,70,737), Loss for the year (Net of
Deferred Tax Assets of Rs. 86,87,586 for such depreciation) would have
been Rs. 5,66,14,209 (instead of Rs. 7,34,85,865) and at the year end,
Net Block of Fixed Assets would have been Rs. 17,27,76,780 (instead of
Rs. 38,26,46,820, including Assets held for disposal Rs.7,45,82,998),
Debit Balance in the Profit and Loss Account, after adjusting balances
in Reserves and Surplus (except to the extent of Rs. 89,17,860 on
account of Capital Reserves), (Net of Deferred Tax Liability of Rs.
7,13,34,827 for such depreciation) would have been Rs. 41,17,24,957
[instead of Debit Balance in the Profit and Loss Account, after
adjusting balances in Reserves and Surplus (except to the extent of Rs.
89,17,860 on account of Capital Reserves), of Rs. 27,31,89,744] and
there would-have been Deferred Tax Asset (Net) of Rs. Nil (instead of
Deferred Tax Liability (Net) of Rs. Nil).
(g) We would like to draw attention to Note 3(c) of Schedule 15 to the
Accounts relating to non availability of loan statement and balance
confirmation of loans outstanding from some of the lender
banks/institutions as on March 31, 2010, due to which the interest
charged to Profit & Loss Account is determined on the basis of the
interest rate specified in the Corporate Debt Restructuring Scheme and
therefore, the outstanding loan and interest balance has been taken as
per the records of the Company;
(h) We would like to further draw attention Note 11 of Schedule 15 to
the Accounts relating to non provisioning of management fees amounting
to Rs. 22,00,000 payable to Bank of India for disbursement of loan
taken by the Company for paying labour dues as the same is payable out
of the sale proceeds of balance assets of the Company at Birgod unit
remaining after reallocation of assets from Birgod unit to Pillukhedi
Unit.
(i) Subject to our observations as mentioned in paragraph (d) and (f)
above, in our opinion and to the best of our information and according
to the explanations given to us, the said accounts, read together with
notes thereon and significant Accounting Policies stated in Schedule
XIV give the information required by the Companies Act, 1956 in the
manner so required and give a true and fair view:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
(ii) in the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date;
(iii) in the case of Cash Flow Statement, of the Gash Flows of the
Company for the year ended on that date.
Annexure referred to in paragraph 3 of the Auditors Report of even
date to the members of HIND SYNTEX LIMITED on the accounts for the year
ended March 31, 2010.
On the basis of such checks as we considered appropriate and in terms
of information and explanations given to us, we state that: (i) (a) The
Company is generally maintaining proper records to show full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the Company has a phased programme of physical
verification of fixed assets 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) The Company has not disposed off any substantial part of its fixed
assets during the year so as to affect its going concern, subject to
Note 4 of Schedule 15 to the Accounts relating to assets transferred to
Pillukhedi Unit from Birgod Unit.
(ii) (a) The inventories have been physically verified by the
management during the year. 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 inventory. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
(iii) (a) As per the information furnished, the Company has not granted
any loans, secured or unsecured, to companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956.
(b) As the Company has not granted any loans, secured or unsecured to
Companies, firms or other parties covered in
(c) the register maintained under Section 301 of the Companies Act,
1956, Clause (iii) (b) of the Order relating to the & rate of interest
and terms and conditions being prima facie prejudicial to the Company,
Clause (iii) (c) relating to
(d) regularity of receipt of principal amount and interest and Clause
(iii) (d) relating to steps taken for recovery of overdue principal and
interest of more than rupees one lac, are not applicable.
(e) During the year, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Act.
(f) As the Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in & Register maintained
under Section 301 of the Act, Clause (iii) (f) of the Order relating to
rate of interest and terms
(g) and conditions being prima facie prejudicial to the interest of
Company, Clause (iii) (g) relating to regularity in repayment of
principal amount and interest, are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods. As
informed to us, the Company is not engaged in the sale of any services.
During the course of our audit, no major weakness has been noticed in
these internal control systems.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided to us, we are of the opinion
that the particulars of contracts or arrangements referred to in
Section 301 of the Act have been entered in the register required to be
maintained under that Section; and
(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 rupees five lakhs in
respect of each party during the year, have been made at prices which
are reasonable, having regard to prevailing market prices at the
relevant time, wherever applicable.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the year. Hence, the question of complying with the directives
issued by the Reserve Bank of India and provisions of Section 58A and
58AA or any relevant provision of the Act, and the rules framed there
under, does not arise. Accordingly clause 4 vi) of the order is not
applicable.
(vii) In lieu of Corporate Debt Restructuring, Asset Reconstruction
Company India Limited (ARCIL) has appointed an independent firm of
Chartered Accountants as Concurrent Auditor to conduct concurrent audit
of the Company on monthly basis, in view of which, the Board of
Directors had decided to discontinue separate internal audit of the
Company.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of Cost Records under Section 209(1 )(d) of the Companies
Act, 1956, in respect of the manufacturing activities of the Company to
which the said rules are applicable and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained. We have, however, not made a detailed examination of the
records with a view to determine whether they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records examined by us, the Company has been regular in depositing
undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, Employees State Insurance, Income-tax, Sales-tax,
Wealth-tax, Service-tax, Customs Duty, Excise-duty, Cess and other
material Statutory dues, applicable to it and there were no arrears of
such statutory dues as on March 31,2010 for a period of more than six
months from the date they became payable except the following statutory
due:
Name of Nature of Amount in Period to
the statue the dues Rupees which the
amount
relate
Income Tax Income Tax 2,83,670 1989-90
Act, 1961 I Assessment dues |
Name of
the statue Due Date Date of
payment
Income Tax September 26, 2008 -
Act, 1961
(b) According to the information and explanations given to us, given
herein below are the details of dues of sales tax, income tax, wealth
tax, service tax, customs duty, excise duty, cess which have not been
deposited on account of disputes and the forum where the dispute is
pending:
Sr. Name of the Nature of
The dues Amount
No. statue in Rupees
1. Entry Tax Act, Entry Tax 4,10,968
1976 Assessment dues
2. M.P. Commercial Tax 2,90,738
Commercial Tax Assessment dues
Act, 1994
3. Central Sales Central Sales Tax 4,17,790
Tax Act, 1956 Assessment dues
Sr. Name of the Period to Forum where dispute
is pending
No. statue
which the
amount relate
1. Entry Tax Act,
1976 1997-98 Tribunal, Bhopal
2. M.P.
Commercial Tax
Act, 1994 2003-04 Tribunal, Bhopal
3. Central Sales
Tax Act, 1956 2003-04 Tribunal, Bhopal
(x) In our opinion, the accumulated losses of the Company as at the end
of the financial year are more than fifty percent of its net worth. The
Company has incurred cash losses during the year under audit and the
immediately preceding financial year.
(xi) In view of the sanction of CDR package and related extension of
the due dates, the Company has defaulted in following repayment of dues
to Banks or Institutions: I. Principle Amount in Rupees
Period Total Amount paid Default
Amount due on or before amount
due date
2006-07 5,19,40,846 1,69,37,863 3,50,02,983
2007-08 6,65,26,092 2,52,92,744 4,12,33,348
2008-09 7,51,11,312 28,00,000 7,23,11,312
2009-10 7,51,11,312 - 7,51,11,312
Total 26,86,89,562 4,50,30,607 22,36,58,955
Period Amount of Year in which Amount of
Default made default made default as on
good good March 31,2010
2006-07 97,27,401 2007-08 2,52,75,582
2007-08 29,08,204 2008-09 3,83,25,144
2008-09 - - 7,23,11,312
2009-10 - - 7,51,11,312
Total 1,26,35,605 - 21,10,23,350
II. Interest Amount in Rupees
Period Total Amount paid Default
Amount due on or before amount
due date
2006-07 3,80,10,844 1,75,48,156 2,04,62,688
2007-08 5,66,94,298 2,64,29,413 3,02,64,885
2008-09 5,74,94,893 90,42,313 4,84,52,580
2009-10 6,17,02,017 25,76,644 5,91,25,373
Total 21,39,02,052 5,55,96,526 15,83,05,526
II. Interest Amount in Rupees
Period Amount of Year in which Amount of
Default made default made default as on
good good March 31,2010
2006-07 - - 2,04,62,688
2007-08 10,97,696 2008-09 2,91,67,189
2008-09 - - 4,84,52,580
2009-10 - - 5,91,25,373
Total 10,97,696 - 15,72,07,830
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and /
or advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) As the Company is not a chit fund, Nidhi, mutual benefit fund or
society the provisions of Clause 4 (xiii) of the Order are not
applicable to the Company.
(xiv) According to the information and explanations given to us, in our
opinion the Company is not dealing or trading in shares, securities,
debentures and other investments and hence, the requirements of Clause
4(xiv) of the Order are not applicable to the Company.
(xv) As the Company has not given any guarantee for loans taken by
others from banks or financial institutions, clause 4(xv) of the Order
is not applicable to the Company.
(xvi) In our opinion, the term loans availed by the Company were prima
facie, applied for the purpose f or which the loans were obtained.
(xvii) According to the information and explanations given to us and on
examination of the financial statements of the Company, we report that,
the Company has utilized short-term funds for long- term purpose
amounting to Rs. 378.27 lacs. The utilization of short term funds
towards long terms
funds is due to recovery of interest on term loan by the bank.
(xviii) According to the information and explanations given to us, as
the Company has not made any preferentia allotment of shares during the
year, Clause 4 (xviii) of the Order is not applicable.
(xix) According to the information and explanations given to us, as the
Company has not issued any debentures and hence, the question of
creating security or charges in respect thereof does not arise, Clause
4 (xix) of the Order is not applicable.
(xx) As the Company has not raised any money by public issues during
the year, Clause 4 (xx) of the Order is not applicable.
(xxi) Based on the audit procedures performed and information and
explanations given to us by the management, we report that no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For Bansi S Mehta & Co.
Chartered Accountants
Place : Mumbai Amit A Desai
Dated : June 30, 2010 Partner
Membership No: 48512
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Hind Syntex Ltd.
-
Hind Syntex Ltd. Tools
- Bulk Deals
-
Hind Syntex Ltd. Company Details
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
Hind Syntex Ltd. Key Financial Ratios
- Ratios
-
Hind Syntex Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Hind Syntex Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Hind Syntex Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Hind Syntex Ltd. Corporate Announcements
- Book Closure
- Board Meetings
