| We have audited the accompanying Financial Statements of Garg Furnace
Limited ("the Company"), Kanganwal Road, V.P.O. Jugiana, G. T. Road,
Ludhiana, which comprise the Balance Sheet as at March 31,2015, the
Profit and Loss Statement and Cash Flow Statement for the year then
ended, and a summary of significant accounting policies and other
explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the 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 Companies Act, 2013, 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 the 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 consolidated 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 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 thereunder. We conducted our
audit in accordance with the Standards on Auditing specified under
section 143(10) of the Companies Act, 2013("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 misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on auditor's judgment, including 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 auditor 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 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, of the state of affairs of the Company as at 31st March, 2015,
and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to Note 30 to the financial statements which
describes the uncertainty related to outcome of appeal filled by the
Company against demand of Punjab Power Corporation Ltd. However our
Opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraph 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the Balance Sheet, the statement of Profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
specified under Section 133 of the Companies Act,2013, read with rule 7
of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the
directors as on March 31, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015,
from being appointed as a director in terms of Section 164(2) of the
Companies Act, 2013.
f) With respect to 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
explanations given to us:
i) The Company has disclosed the impact of pending litigations on its
financial positions in its financial statements as referred to in note
30 to its financial statements.
ii) The Company does not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii) There were no amount which were required to be transferred to
Investor Education and Protection Fund by the company.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING OF "REPORT ON OTHER LEGAL
AND REGULATORY REQUIREMENTS'^ OUR REPORT OF EVEN DATE.)
(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 which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. No material discrepancies were noticed on
such verification.
(ii) a). The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) . 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 stocks and the
book records were not material.
(iii) According to the information and explanations given to us and on
the basis of our examination of the books of accounts, the company has
not granted any loans, secured or unsecured, to companies, firms or
other parties listed in the register maintained under section 189 of
the companies Act, 2013. Consequently, the provisions of clauses iii
(b) and iii (c) of paragraph 3 of the order are not applicable to the
company.
(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
purchases of inventory, fixed assets and for sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) According to the information and explanations given to us, the
Company has not accepted deposits within the meaning of Section 73 to
76 or other relevant provisions of the Companies Act, 2013 and the
Companies (Acceptance of Deposits) Rules, 2014 during the year. No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any court or any other Tribunal.
(vi) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 148(1) of the Companies Act,
2013 and 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 record with a view to determine whether
they are accurate or complete.
(vii) a). The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees' state insurance, income tax, sales tax, custom duty, excise
duty, cess, service tax and other material statutory dues applicable to
it.
b) . According to the information and explanations given to us, there
are no dues of sales tax, income tax, custom duty, excise duty, cess
and service tax which have not been deposited on account of any dispute
except mentioned below:
Name of Statute Nature of Dues Forum where appeal
is pending
Income Tax Act,1961 Income Tax ITAT
Income Tax Act,1961 Income Tax ITAT
Income Tax Act,1961 Income Tax ITAT
Name of Statute Period to which Amount involved
amount relates in Rs
Income Tax Act,1961 A.Y 2008-09 29.00 Lacs
Income Tax Act,1961 A.Y 2010-11 10.00 Lacs
Income Tax Act,1961 A.Y 2011-12 12.11 Lacs
c) . According to the information and explanations given to us, there
is no amount which is required to be transferred to Investor education
and protection fund in accordance with relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules there under.
(viii) The Company does not have any accumulated losses, further it has
not incurred cash losses during the financial year covered by our audit
and in the immediately preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
bank/ financial institutions.
(x) The Company has not given guarantees for loan taken by others from
banks or financial institutions.
(xi) In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purpose for which
they were obtained.
(xii) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
For Dass Khanna & Co.
Chartered Accountants
(Reg No. 000402N)
Sd/-
(CA AMARJIT KAMBOJ)
Place: LUDHIANA. PARTNER
Date : 30-05-2015 M. No. 082152
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