Auditor Report of Harita Seating Systems Ltd.
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Harita Seating Systems Limited (âthe Companyâ), Jayalakshmi Estates, #29, Haddows Road, Chennai - 600 006, which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, the Cash Flow Statement and Statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS 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 Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant rules issued thereunder.
This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give true and fair view 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 Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs of the Company as at 31st March, 2018, and its profit including its other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on other Legal and Regulatory Requirements
1. As required under the Companies (Auditorâs Report) Order, 2016 (âThe Orderâ), issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, we give in the âAnnexure Aâ a statement of the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder;
e. On the basis of written representations received from the directors as on 31st March 2018, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018, from being appointed as a director in terms of Section 164(2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financials statements - Refer note 38 (4) to the standalone Ind AS financial statements;
ii. The Company did not have any longterm contracts including derivatives contracts for which there were any material foreseeable losses.
iii. There are no amounts required to be transferred to investor education and Protection fund.
i) a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets;
b) Fixed assets are physically verified by the management in accordance with a regular programme at reasonable intervals. In our opinion the interval is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been noticed on such verifications;
c) The title deeds of the immovable properties of the company are held in the name of the Company;
ii) The inventory, other than in-transit, has been physically verified at reasonable intervals during the year under review by the management. The discrepancies noticed between the book stock and physical stock were not material and have been properly dealt with in the books of account.
In respect of inventories with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.
iii) During the year, the Company has not granted any loan to a Company, firm or other parties covered in the register maintained under section 189 to the Companies Act, 2013.
iv) During the year, the Company has not granted any loans nor has furnished any guarantee nor provided any security or made any investments which attracts provisions of section 185 and 186 of the Companies Act, 2013. Hence, reporting under sub-clause (iv) of paragraph 3 of the Order does not arise;
v) The Company has not accepted any deposits from the public within the meaning of section 73 to 76. Hence, reporting under sub-clause (v) of paragraph 3 of the Order are not applicable to the Company;
vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government under section 148(1) of the Companies Act, 2013 for the maintenance of cost records and we 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 cost records with a view to determine whether they are accurate or complete.
vii) a) According to the information and explanation given to us, and on the basis of our examination of the records of the Company, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, Income-tax, sales-tax, custom duty, excise duty, service tax, value added tax, cess, goods and services tax and any other material statutory dues with the appropriate authorities except for few marginal delays.
b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, sales-tax, custom duty, excise duty, service tax, value added tax, cess, goods and services tax were in arrears as at 31st March 2018 for a period of more than six months from the date they became payable.
c) According to the information and explanations given to us, following are the details of the disputed dues that were not been deposited on account of any dispute as on 31st March 2018:
|
Period of dues |
Nature of Dues |
Amount of dispute (Rs. In lakhs) |
Forum where dispute is pending |
|
2015-16 |
Service Tax |
2.10 |
Commissioner of Appeals- Central Excise Salem |
|
2013-14 |
Commercial Tax |
295.16 |
Sonâble Supreme Court |
|
2013-14 |
Commercial Tax |
97.75 |
Honâble Hi gh Court of Madras |
|
2014-15 |
Commercial Tax |
29.60 |
Commercial Tax Department |
viii) Based on our verification and according to the information and explanations given by the management, the company has not defaulted in repayment of dues to its banks. The company has not borrowed from any financial institution or Government nor has issued any debentures.
ix) a) The Company has not raised any money by way of initial public offer or further public offer including (including debt instruments) during the year. Hence, reporting on utilization of such money does not arise.
b) The Company has not availed any term loan, during the year and hence reporting subclause (ix) of paragraph 3 of the Order does not arise;
x) Based on the audit procedures adopted and the information and explanation given to us, no fraud by the Company or on the Company has been noticed or reported during the course of our audit;
xi) In our opinion and according to the information and explanations given to us, Managerial remuneration paid/provided are in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V of the Companies Act. Hence, reporting sub-clause (xi) of paragraph 3 of the Order does not arise;
xii) The Company is not a Nidhi Company and as such this clause of the order is not applicable;
xiii) In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with section 177 and 188 of the act and details of such transactions have been disclosed in standalone Ind AS financial statements as required by the applicable accounting standards.
xiv)According to the information and explanation given to us and in our opinion, the company has not made any preferential or private placement of shares or fully or partly convertible debentures during the year under review;
xv) According to the information and explanation given to us and in our opinion, the company has not entered into any non-cash transactions with directors or persons connected with them.
xvi)The company is not required to be registered under section 45-IA of the Reserve Bank Act, 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Harita Seating Systems Limited (âthe Companyâ), Jayalakshmi Estates, #29, Haddows Road, Chennai - 600006, as of 31st March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable Ind AS financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that;
(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the standalone Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on;
i. existing policies and procedures adopted by the Company for ensuring orderly and efficient conduct of business;
ii. continuous adherence to Companyâs policies;
iii. existing procedures in relation to safeguarding of Companyâs fixed assets, investments, inventories, receivables, loans and advances made and cash and bank balances;
iv. existing system to prevent and detect fraud and errors;
v. accuracy and completeness of Companyâs accounting records; and
vi. existing capacity to prepare timely and reliable financial information
For Raghavan, Chaudhuri & Narayanan
Chartered Accountants
FRN: 007761S
V. Sathyanarayanan
Partner
Membership No. 027716
Place : Chennai
Date : 10th May 2018
Mar 31, 2016
To the Members of
Harita Seating Systems Limited,
29 Haddows Road, Chennai.
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Harita Seating Systems Limited, Chennai - 600006 ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone 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 of these standalone 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 of 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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) of the state of affairs of the Company as at 31st March, 2016;
b) its Profit for the year ended on that date; and
c) 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, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure-1, a statement on the matters specified in the paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure-2".
g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note no. XXIV (2) to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts and hence question of making provision for material foreseeable losses does not arise.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) Fixed assets are verified physically by the management in accordance with a regular programme at reasonable intervals. No material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties of the Company are held in the name of the Company.
2. The inventory (including inventories with third parties) has been physically verified at reasonable intervals during the year by the management. The discrepancies between the physical stocks and the books were not material and have been properly dealt with in the books of account.
3. During the year, the Company has not granted any loan to a Company, firm, limited liability partnership or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.
4. During the year, the Company has not granted any loan nor has furnished any guarantees nor provided any security. Hence reporting on compliance with provisions of section 185 and 186 of the Companies Act, 2013 does not arise.
5. The Company has not accepted any deposit within the meaning of Sections 73 to 76 of the Companies Act, 2013, during the year.
6. In our opinion and according to the information and explanations given to us, the requirement for maintenance of cost records pursuant to sub-section (1) of section 148 of the Companies Act, 2013 read with rules made by the Central Government is not applicable to the Company for the year under audit.
7. (a) According to the records provided to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues to the appropriate authorities. However we have observed a few instances of delay in remittance of Service Tax and an instance of delay each in remitting Duty of Excise, Dividend Distribution Tax and Income Tax deduction into the Government.
The provisions of Employees'' State Insurance Act, 1948 are not applicable to the unit at Pune. In respect of unit at Dharwad, the employees draw remuneration above the limits prescribed.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and Cess were in arrears, as at 31st March 2016 for a period of more than six months from the date they became payable.
(c) According to information and explanations given to us, the following are the details of the disputed dues that were not deposited with the concerned authorities:
8. Based on our verification and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to its banks. The Company has not borrowed from any financial institution and Government nor has issued any debenture.
9. (a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Hence reporting on utilization of such money does not arise.
|
Name of the Statute |
Nature of dues |
Amount (Rs. in Lakhs) |
Forum where dispute is pending |
|
Central Excise Act, 1944. |
Excise Duty |
11.97 |
Commissioner (Appeals), Chennai III Commissioner ate |
|
50.84 |
Customs Excise and Service Tax Appellate Tribunal, Mumbai |
||
|
Finance Act, 1994 |
Service Tax |
310.64 |
The Assistant and Additional Commissioner, Chennai III Commissioner ate |
|
Income Tax Act, 1961 |
Income Tax |
126.40 |
Commissioner of Income Tax (Appeals), Chennai |
|
Tamil Nadu Value Added Tax Act, 2006 |
Value Added Tax |
288.92 |
The Honorable Supreme Court of India |
|
104.41 |
The Assistant Commissioner, Commercial Tax Office, Hosur |
(b) The Company has not availed any fresh term loan during the year. The loans availed in earlier year were applied for the purpose for which they were availed.
10. Based on the audit procedures adopted and information and explanations given to us by the management, no fraud on or by the Company has been noticed or reported during the course of our audit.
11. In our opinion and according to the information and explanations given to us, managerial remuneration has been paid and provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
12. The Company is not a Nidhi company and as such this clause of the Order is not applicable.
13. (a) In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013.
(b) The details of transactions during the year have been disclosed in the Financial Statements as required by the applicable accounting standards. Refer Note no. XXIV (AS-18) to the financial statements.
14. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures under Section 42 of the Companies Act, 2013.
15. In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with them.
16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of HARITA SEATING SYSTEMS LIMITED, CHENNAI ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audi of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that;
I. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
II. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
III. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on;
i. existing policies and procedures adopted by the Company for ensuring orderly and efficient conduct of business;
ii. continuous adherence to Company''s policies;
ii. existing procedures in relation to safeguarding of Company''s fixed assets, investments, inventories, receivables, loans and advances made and cash and bank balances;
iv. existing system to prevent and detect fraud and errors;
v. accuracy and completeness of Company''s accounting records; and
vi. existing capacity to prepare timely and reliable financial information.
For Sundaram & Srinivasan
Chartered Accountants
Firm Regn. No: 004207S
M BALASUBRAMANIYAM
Place : Chennai Partner
Date :20th May 2016 Membership No.: F7945
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Harita Seating
Systems Limited, Chennai - 600006 ("the Company"), which comprise of
the Balance Sheet as at 31st March 2013, and the Statement of Profit
and Loss and Cash Flow Statement for the year ended on that date along
with Notes on accounts.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made
by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2013;
b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by Section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) the Balance Sheet, 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, Statement of Profit and Loss, and
Cash Flow Statement
comply with the Accounting Standards referred to in subsection (3C) of
Section 211 of the Companies Act, 1956; and e) on the basis of written
representations received from the directors as on 31st March 2013, and
taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March 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 our report of even date on the accounts for the
year ended 31st March 2013
(i) (a) the Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) Fixed assets are physically verified by the management at
reasonable intervals. In our opinion, the interval 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 assets disposed off during the year are not substantial and
therefore do not affect the going concern status of the Company.
(ii) (a) The inventory has been physically verified at reasonable
intervals during the year by the management. In our opinion, the
frequency of such verification is adequate. In respect of inventory
with third parties, which have not been physically verified, there is a
process of obtaining confirmation from such parties.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventory
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion, the Company has maintained proper records of
inventory. The discrepancies between the physical stocks and the book
stocks were not material and have been properly dealt with in the books
of account.
(iii) (a) During the year the Company has not granted loans and
advances, to Companies covered in the register maintained under section
301 of the Companies Act, 1956.
(b) During the year the Company has availed Rs.500 Lakhs and repaid
Rs.150 lakhs of unsecured loan from a party covered in the register
maintained under section 301 of the Companies Act, 1956. The amount
outstanding at the year end is Rs.650 Lakhs including balance due as on
1st April 2012 - Rs. 300 Lakhs. During the year the company has repaid
(interest bearing) advance of Rs.90 Lakhs to its subsidiary. The
opening balance was Rs.347 Lakhs leaving an outstanding of Rs.257 Lakhs
payable to the subsidiary.
(c) In our opinion, the rate of interest and the terms and other
conditions of loan availed by the Company were not, prima facie
prejudicial to the interest of the Company. The payment of interest was
regular and in accordance with the terms of loan. No portion of the
principal amount was due for repayment during the financial year.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, with regard to purchase of inventory, fixed assets and for
the sale of goods and services. During the course of our audit, no
minor or major continuing failure has been noticed in the internal
control system.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion, that the contracts or arrangements that need to be entered
in the register maintained under Section 301 of the Companies Act,
1956, have been properly entered in the said register.
(b) In our opinion and according to the information and explanations
given to us, transactions entered in the register maintained under
Section 301 of the Companies Act, 1956 and exceeding the value by
rupees five lakhs during the year in respect of each party have been
made at prices which are reasonable having regard to the prevailing
market prices at the relevant time.
(vi) The Company has not accepted any deposit from the public.
(vii) The Company has an Internal Audit System, which in our opinion is
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government under
Section 209(1)(d) of the Companies Act, 1956 for maintenance of cost
records and are of the opinion that prima-facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) According to the records provided to us, the Company is
generally regular in depositing undisputed statutory dues including
Provident Fund, Employees'' State Insurance, Investor
Education and Protection Fund, Income Tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty and Cess and other statutory dues with the
appropriate authorities. However, there have been marginal delays in
respect of Value Added Tax and Service tax. The provisions of
Employees'' State Insurance Act, 1948 are not applicable to the units at
Hosur and Pune.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears as
at 31st March 2013 for a period of more than six months from the date
they became payable.
(c) According to the information and explanations given to us, the
following are the details of the disputed dues that were not deposited
with the authorities concerned.
Name of the Nature of Forum where Amount involved
Statute dues dispute is pending (Rs. in Lakhs)
TNVAT Tamil Nadu
Act, 2006 Value Added High Court of Madras 323.03
Tax
KVAT Karnataka Joint Commissioner
Act, 2004 Value Added of C.T. (Appeals) 5.95
Tax Bangalore
Central
Excise Excise Duty The Asst. and
Act,1944 Additional Commissioner 314.59
Chennai III
Commissionerate
Finance Act, Service Tax The Asst. and
1994 Additional
Commissioner 325.71
Chennai III
Commissionerate
Income Tax Income Tax Commissioner of Income 1,206.94
Act, 1961 Tax (Appeals), Chennai
(x) The Company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
and in the immediately preceding financial year.
(xi) Based on our verification and according to the information and
explanations given by the management, the Company has not defaulted in
repayment of dues to its banks.
(xii) Based on our examination and according to the information and
explanations given to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not a chit / nidhi / mutual benefit fund /
society and as such this clause of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments. In this year the company has also not
traded in mutual fund investments. Proper records have been maintained
in respect of these transactions and contracts and timely entries have
been made therein. The investments have been held by the Company in its
own name.
(xv) The Company has not given any guarantee for loans taken by others
from banks or financial institutions.
(xvi) The term loans availed by the Company were utilised for the
purpose for which the loans were obtained.
(xvii) On the basis of our examination, the Company has not used funds
raised on short-term basis for long term investments.
(xviii) During the year the Company has not allotted any shares on
preferential basis to parties and Companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
(xix) During the year the Company has not issued any secured debenture.
(xx) During the year the Company has not raised any money by public
issue.
(xxi) Based on the audit procedure adopted and information and
explanation given to us by the management, no fraud on or by the
Company has been noticed or reported during the course of audit except
a defalcation of Rs. Six Lakhs by alteration of vouchers. This has been
written off to the debit of freight charges as recovery was not
possible. The Company has since then taken adequate measures to prevent
recurrence of such instances in future.
For SUNDARAM & SRINIVASAN
CHARTERED ACCOUNTANTS
FRN: 004207S
M BALASUBRAMANIYAM
Chennai Partner
22nd May 2013 Membership No.F7945
Mar 31, 2012
We have audited the attached Balance Sheet of Harita Seating Systems
Limited, Chennai 600 006 as at 31st March 2012 and the Statement of
Profit and Loss for the year ended on that date annexed thereto and the
Cash Flow Statement for the year ended on that date. 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.
1. We conducted our audit in accordance with auditing standards
generally accepted in India. These 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 presentation of the
financial statements. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditor's Report) Order, 2003 and
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
issued by the Central Government in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
3. Further to our comments in the Annexure, referred to above, we
state that -
(i) 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.
(ii) 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. The Company's branch accounts were also audited by us.
(iii) The balance sheet, statement of profit and loss and cash flow
statement referred to in this report are in agreement with the books of
account including its branch.
(iv) In our opinion, the balance sheet, statement of profit and loss
and cash flow statement dealt with by this report comply with the
accounting standards, referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
(v) On the basis of written representations received from the
directors, as on 31st March 2012 and taken on record by the board of
directors, we report that no director is disqualified from being
appointed as a director of the Company in terms of clause (g) of sub-
section (1) of Section 274 of the Companies Act, 1956 on the said date.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, they said accounts read together with the
Significant Accounting Policies and other notes thereon particularly
Note (XXVII) No.5 on Managerial remuneration give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India.
a. in so far as it relates to the Balance Sheet, of the state of
affairs of the Company as at 31st March 2012;
b. in so far as it relates to the Statement of Profit and Loss, of the
profit for the year ended on that date; and
c. in so far as it relates to the cash flow statement, of the cash
flows for the year ended on that date.
For SUNDARAM & SRINIVASAN
CHARTERED ACCOUNTANTS
FRN: 004207S
M BALASUBRAMANIYAM
Chennai Partner
30th May 2012 Membership No.F7945
(i) (a) The Company has maintained proper records
showing full particulars including quantitative details and situation
of fixed assets.
(b) Fixed assets are verified physically by the management at
reasonable intervals. In our opinion the interval is reasonable having
regard to the size of the Company and the nature of its assets. The
discrepancies noticed during verification were not material and have
been properly dealt with in the books of account.
(c) The assets disposed off during the year are not substantial and
therefore do not affect the going concern status of the Company.
(ii) (a) The inventories have been physically verified at reasonable
intervals during the year by the management. In our opinion, the
frequency of such verification is adequate. In respect of inventory
with third parties which have not been physically verified, there is a
process of obtaining confirmation from such parties.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventory
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion, the Company has maintained proper records of
inventory. The discrepancies between the physical stocks and the books
stocks were not material and have been properly dealt with in the books
of account.
(iii) (a) During the year the Company has not granted any loan, secured
or unsecured to companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(b) During the year, the Company has taken and repaid an unsecured loan
of Rs. 300 lakhs from one company covered in the register maintained
under Section 301 of the Companies Act, 1956 and the Company has partly
repaid another unsecured loan during the year which was taken in
earlier years. The amount outstanding against that loan at the year end
is Rs. 300 lakhs.
(c) In our opinion, the rate of interest and the terms and other
conditions of loan availed by the Company were not, prima facie
prejudicial to the interest of the Company. The payment of interest was
regular and in accordance with the terms of loan. No portion of the
principal amount was due for re-payment during the financial year.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and for the
sale of goods and services. During the course of our audit, no minor or
major continuing failure has been noticed in the internal control
system.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the contracts or arrangements that need to be entered
in the Register maintained in pursuance of Section 301 of the Companies
Act, 1956 have been properly entered in the said Register.
(b) In our opinion and according to the information and explanations
given to us, the transactions entered in the Register maintained under
Section 301 of the Companies Act, 1956 and exceeding in value by rupees
five lakhs during the year in respect of each party have been made at
prices which are reasonable having regard to prevailing market prices
at the relevant time.
(vi) The Company has not accepted any deposit from the public.
(vii) The Company has an internal audit system which, in our opinion,
is commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government under
Section 209(1)(d) of the Companies Act, 1956 for maintenance of cost
records and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) According to the records provided to us, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Employees State Insurance, Investor Education and Protection
Fund, Sales Tax, Wealth Tax, Service Tax, Income Tax, Customs Duty,
Excise Duty, Cess and other statutory dues with the appropriate
authorities. The provisions of Employees State Insurance Act, 1948 are
not applicable to the units at Hosur and Pune.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
as at 31st March 2012 for a period of more than six months from the
date they became payable.
(c) According to information and explanations given to us, the
following is the detail of the disputed dues that were not deposited
with the concerned authorities:
Name of the Nature of Forum where Amount involved
Statute dues dispute is pending (Rs. in Lakhs)
Tamil Nadu Tamil Nadu
Value Added Value Added High Court of Madras 114.78
Tax Act, 2006 Tax
Karnataka Karnataka The Joint
Commissioner
Value Added Value Added of Commercial Taxes 5.95
Tax Act, 2003 Tax (Appeals) Bangalore
Central Excise Excise duty The Assistant and
Act, 1944 Additional
Commissioner
Chennai III
Commissioner ate 269.51
Finance Act, Service tax The Assistant and
1994 Additional Commissioner
Chennai III
Commissioner ate 290.25
Income Tax Income Tax Commissioner of Income
Act, 1961 Tax (Appeals ), Chennai 44.77
(x) The Company has not incurred cash loss during the year. However,
the Company has incurred cash losses during the immediately preceding
financial year.
(xi) Based on our verification and according to the information and
explanations given by the management, the Company has not defaulted in
repayment of dues to its banks.
(xii) Based on our examination and according to the information and
explanations given to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not a chit / nidhi / mutual benefit fund /
society and as such clause (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments. However, the Company invests its
surplus funds in mutual funds from time to time. Securities are held as
current investments and are not traded in.
(xv) The Company has not given any guarantee for loans taken by others
from banks or financial institutions.
(xvi) The term loan availed by the Company was utilized for the purpose
for which the loan was obtained.
(xvii) On the basis of our examination, the Company has not used funds
raised on short term basis for long term investment.
(xviii)During the year, the Company has not allotted any shares on
preferential basis to parties and companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) During the year, the Company has not issued any secured
debentures.
(xx) During the year, the Company has not raised any money by public
issue.
(xxi) Based on the audit procedures adopted and information and
explanations given to us by the management, no fraud on or by the
Company has been noticed or reported during the course of our audit.
For SUNDARAM & SRINIVASAN
CHARTERED ACCOUNTANTS
FRN: 004207S
M BALASUBRAMANIYAM
Chennai Partner
30th May 2012 Membership No.F7945
Mar 31, 2011
We have audited the attached Balance Sheet of Harita Seating Systems
Limited, Chennai 600 006 as at 31st March 2011 and the Profit and Loss
account for the year ended on that date annexed thereto and the Cash
Flow Statement for the year ended on that date. 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.
1. We conducted our audit in accordance with auditing standards
generally accepted in India. These 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 presentation of the
financial statements. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditor's Report) Order, 2003 and
amended by the Companies (Auditor's report) (Amendment) Order, 2004
issued by the Central Government in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
3. Further to our comments in the Annexure, referred to above, we
state that -
(i) 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;
(ii) 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. The Company's branch accounts were also audited by us;
(iii) the balance sheet, profit and loss account and cash flow
statement referred to in this report are in agreement with the books of
account including its branch;
(iv) in our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
accounting standards, referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) on the basis of written representations received from the
directors, as on 31st March 2011 and taken on record by the board of
directors, we report that no director is disqualified from being
appointed as a director of the Company in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956 on the said
date; and
(vi) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
significant accounting policies and other notes thereon give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India.
a. In so far as it relates to the balance sheet, of the state of
affairs of the Company as at 31st March 2011;
b. In so far as it relates to the profit and loss account, of the loss
for the year ended on that date; and
c. In so far as it relates to the cash flow statement, of the cash
flows for the year ended on that date.
Annexure referred to in our report of even date on the accounts for the
year ended 31st March 2011.
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) Fixed assets are verified physically by the management at
reasonable intervals. In our opinion the interval 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 assets disposed off during the year are not substantial and
therefore do not affect the going concern status of the Company.
(ii) (a) The inventories have been physically verified at reasonable
intervals during the year by the management. In our opinion, the
frequency of such verification is adequate. In respect of inventory
with third parties which have not been physically verified, there is a
process of obtaining confirmation from such parties.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventory
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion, the Company has maintained proper records of
inventory. The discrepancies between the physical stocks and the books
stocks were not material and have been properly dealt with in the books
of account.
(iii) (a) During the year the Company has not granted any loan, secured
or unsecured to companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(b) During the year, the Company has taken an unsecured loan of Rs. 300
lakhs from one Company covered in the register maintained under Section
301 of the Companies Act, 1956. The amount outstanding at the year end
is Rs. 1800 lakhs.
(c) In our opinion, the rate of interest and the terms and other
conditions of loan taken by the Company were not, prima facie
prejudicial to the interest of the Company. The payment of interest was
regular and in accordance with the terms of loan. No portion of the
principal amount was due for re-payment during the financial year.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and for the
sale of goods and services. During the course of our audit, no minor or
major continuing failure has been noticed in the internal control
system.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the contracts or arrangements that need to be entered
in the register maintained in pursuance of Section 301 of the Companies
Act, 1956 have been properly entered in the said register.
(b) In our opinion and according to the information and explanations
given to us, the transactions entered in the register maintained under
Section 301of the Companies Act, 1956 and exceeding in value by rupees
five lakhs during the year in respect of each party have been made at
prices which are reasonable having regard to prevailing market prices
at the relevant time.
(vi) The Company has not accepted any deposit from the public.
(vii) The Company has an internal audit system which, in our opinion,
is commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government under
Section 209 (1)(d) of the Companies Act, 1956 for maintenance of cost
records and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) According to the records provided to us, the Company is
generally regular in depositing undisputed statutory dues including
Provident Fund, Employees State Insurance, Investor Education and
Protection Fund, Sales Tax, Wealth Tax, Service Tax, Income Tax,
Customs Duty, Excise Duty, Cess and other statutory dues with the
appropriate authorities. However, there have been delays in few
payments dealt with herein. The provisions of Employees State Insurance
Act, 1948 are not applicable to the units at Hosur and Pune.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
as at 31st March 2011 for a period of more than six months from the
date they became payable.
(c) According to information and explanations given to us, the
following is the detail of the disputed dues that were not deposited
with the concerned authorities:
Name of the Nature of Amount Forum where
statute dues (Rs. in Lakhs) dispute is pending
Income Tax Income tax 44.77 Commissioner of Income
Act, 1961 tax (Appeals), Chennai
Central Excise Excise duty 199.81 The Commissioner of
Act, 1944 Central Excise,
Chennai III
Commissionerate
Central Excise Excise duty 38.19 The Assistant
Act, 1944 Commissioner of
Central Excise, Hosur
II Division, Hosur
Finance Act, Service tax 179.15 The Commissioner of
1994 Central Excise,
Chennai III
Commissionerate.
Finance Act, Service tax 9.20 The Additional
1994 Commissioner of
Central Excise,
Chennai III
Commissionerate.
Finance Act, Service tax 40.16 The Asst. Commissioner
1994 of Central Excise Hosur
II Division Hosur.
Karnataka Value 5.95 The Joint.Commissioner
Value Added Added Tax of Commercial Taxes
Tax, 2003 (Appeals), Bangalore.
Tamil Nadu Value 94.37 High Court of Madras,
Value Added Added Tax Chennai
Tax, 2006
(x) The Company has incurred cash loss during the year. However, the
accumulated losses is not exceeding fifty percent of its net worth.
(xi) Based on our verification and according to the information and
explanations given by the management, the Company has not defaulted in
repayment of dues to its banks.
(xii) Based on our examination and according to the information and
explanations given to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not a chit / nidhi / mutual benefit fund /
society and as such clause (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments. However, the Company invests its
surplus funds in mutual funds from time to time. Securities are held as
long term investments and are not traded in.
(xv) The Company has not given any guarantee for loans taken by others
from banks or financial institutions.
(xvi) The term loan availed by the Company was utilized for the purpose
for which the loan was obtained.
(xvii) On the basis of our examination, the Company has not used funds
raised on short term basis for long term investment.
(xviii) During the year, the Company has not allotted any shares on
preferential basis to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) During the year, the Company has not issued any secured
debentures.
(xx) During the year, the Company has not raised any money by public
issue.
(xxi) Based on the audit procedures adopted and information and
explanations given to us by the management, no fraud on or by the
Company has been noticed or reported during the course of our audit.
For SUNDARAM & SRINIVASAN
CHARTERED ACCOUNTANTS
FRN: 004207S
M BALASUBRAMANIYAM
Partner
Membership No.F7945
Chennai
3rd August, 2011
Mar 31, 2010
We have audited the attached balance sheet of Hartta Seating Systems
Limited, Chennai 600 006 as at 31 * March 2010 and the profit and loss
account for the year ended on that date annexed thereto and the cash
flow statement for the year ended on that date.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.
1. We conducted our audit in accordance with auditing standards
generally accepted in India. These 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 presentation of the
financial statements. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 and
amended by the Companies (Auditors report) (Amendment) Order, 2004
issued by the Central Government in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
3. Furtherto our comments in the Annexure, referred to above, we state
that -
(i) 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.
(ii) 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. The Companys branch accounts were also audited by us.
(ili) The balance sheet, profit and loss account and cash flow
statement referred to in this report are in agreement with the books of
account including its branch.
(iv) In our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
accounting standards, referred to in sub-section (3C) of section 211 of
the Companies Act, 1956.
(v) On the basis of written representations received from the
directors, as on 31 st March 2010 and taken on record by the board of
directors, we report that no director is disqualified from being
appointed as a director of the Company in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956 on the said
date.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and other notes thereon give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India.
a. In so far as it relates to the balance sheet, of the state of
affairs of the Company as at 31 st March 2010,
b. In so far as it relates to the profit and loss account, of the
profit after tax for the year ended on that date, and
c. In so far as it relates to the cash flow statement, of the cash
flows of the Company for the year ended on that date.
Auditors report to the shareholders of Harita Seating Systems Limited,
Chennai for the year ended 31st March, 2010
Annexure referred to in our report of even date on the accounts for the
year ended 31st March 2010
(i) (a) The Company has maintained proper records showing full
particulars Including quantitative details and situation of fixed
assets.
(b) All the assets have not been physically verified by the management
during the year but there Is a regular programme of verification at
reasonable Intervals, which, in our opinion. Is reasonable having
regard to the size of the Company and the nature of Its assets. No
material discrepancies were noticed on such verification,
(c) During the year, the Company transferred Land, Buildings, Plant &
machinery and other assets to its subsidiary namely M/s. Harita Fehrer
Limited, Chennai (formerly Harita Polymer Limited) for the purpose of
manufacture of Foams. The transfer did not affect the going concern
status of the Company.
(il) (a) The inventory other than In-transit have been physically
verified at reasonable intervals during the year by the management. In
our opinion, the frequency of such verification is adequate. In respect
of inventory with third parties which have not been physically
verified, there Is a process of obtaining confirmation from such
parties.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventory
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion, the Company has maintained proper records of
inventory.
The discrepancies between the physical stocks and the books stocks were
not material and have been properly dealt with in the books of account.
(Ill) (a) During the year the Company has granted unsecured loan of
Rs.5627.53 lakhs to one Company listed In the Register maintained under
Section 301 of the Companies Act, 1956, which Is also a subsidiary of
the Company.
The rate of interest and other terms and conditions are not prejudicial
to the Interest of the Company.
The loan is not outstanding at the yea end.
(b) During the year, the Company has taken unsecured loan from one
Company covered in the register maintained under Section 301 of the
Companies Act, 1956.
In our opinion, the rate of interest and the terms and other conditions
of loan taken by the Company were not, prima facie prejudicial to the
interest of the Company.
The aggregate amount involved in the transaction is Rs. 1500 lakhs.
This is outstanding at the year end. The payment of Interest thereon
was regular.
(iv) In our opinion and according to the Information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal control system.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the contracts or arrangements that need to be entered
in the register maintained in pursuance of Section 301 of the Companies
Act, 1956 have been properly entered in the said register.
(b) In our opinion and according to the information and explanations
given to us, the transactions entered in the register maintained under
Section 301 and exceeding in value by rupees five lakhs during the year
in respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time. fyi)
The Company has not accepted any deposit from the public.
(vll) The Company has an internal audit system which, in our opinion,
is commensurate with the size and nature of Its business.
(viil) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government under
Section 209 (l)(d) of the Companies Act, 1956 for maintenance of cost
records and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) According to the records provided to us, the Company is
generally regular in depositing undisputed statutory dues including
Provident Fund, Employees State Insurance, Investor Education and
Protection Fund, Sales Tax, Wealth Tax, Service Tax, Income Tax,
Customs Duly, Excise Duty, Cess and other material statutory dues with
the appropriate authorities. However certain marginally delayed
remittances were noticed in respect of some payments dealt with herein.
The provisions of Employees State Insurance Act, 1948 are not
applicable to the units at Hosur and Pune.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
as at 31st March 2010 for a period of more than six months from the
date they became payable
(c) According to information and explanations given to us, the
following is the detail of the disputed dues, that were not deposited
with the concerned authorities:
Name of the Nature of Amount Faum where
statute dues (Rs. in
Lakhs) dispute is pending
Income Income tox 0,98 Commissioner of
Tax Act, 1961 Tax Act, 1961
Income-tax
(Appeds),Chennoi
Central Excise Excise duly 199.81 The Commissioner of
Central Excise, Chennai III Division,
Commissionerate
Finance Act, Service tax 6.48 The Commissionef of
1994 Central Excise,
Chennai III Division,
Commissionerate
4.82 The Asst.
Commissioner of Central
Excise, Hosur II Division,
Hosur.
Kamataka Value 5.95 The Joint.
Value Added Added Commissioner of
Tax Tax Commercial Taxes,
(Appeals), Bangalore.
Tamil Nadu Value 114.78 High Court at
Value Added Added Judicature at
Madras, Tax Tax Chennai.
(x) The Company has not incurred cash loss during the year. However in
the previous year, the Company had incurred cash Loss.
(xi) Based on our verification and according to the information and
explanations given by the management, the Company has not defaulted in
repayment of dues to its banks.
(xii) Based on our examination and according to the information and
explanations given to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xill) The Company is not a chit / nidhi / mutual benefit fund /
society and as such clause (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments. However, the Company invests its
surplus funds in mutual funds from time to time. During the year, the
Company has invested in shares of the subsidiary company in respect of
which proper records have been maintained of the transactions and
timely entries have been made thereon. Securities are held as long term
investments and are not traded in.
(xv) The Company has not given any guarantee for loans taken by others
from banks or financial institutions.
(xvi) The term loan availed by the Company was utilized for the purpose
for which the loan was obtained.
(xvll) On the basis of our examination, the Company has not used funds
raised on short term basis for long term investment.
(xviil) During the year, the Company has not allotted any shares on
preferential basis to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xlx) During 1he year, the Company has not issued any secured
debentures.
(xx) During the year, the Company has not raised any money by public
issue.
(xxi) Based on the audit procedures adopted and information and
explanations given to us by the management, no fraud on or by the
Company has been noticed or reported durina the course of our audit.
For SUNDARAM & SRINIVASAN
Chartered Accountants
FRN: 004207S
M BALASUBRAMANIYAM
Chennai Partner
30th July 2010 Membership No.F7945
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