INDEPENDENT AUDITORS
TO THE MEMBERS OF DUNLOP INDIA LIMITED
Report on the Financial Statements
We have audited the accompanying financial statement of DUNLOP INDIA LIMITED
("the Company"), which comprises the Balance sheet as at March 31, 2014, and the
Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a
true and fair view of the financial position, financial performance and cash flows of the
Company in accordance with the Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant to the preparation
and presentation of the financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit. We conducted our audit in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
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 Companys 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 qualified audit opinion.
Basis for Qualified Opinion
1. Refer to note no. 2.6 regarding non-provision of interest amounting to Rs. 1697.10
lakhs on loan from a bank for working capital of Rs. 3920.65 lakhs.
2) Refer to note no. 2.8 regarding non provision of interest on certain loans against
which one time settlement is under active consideration (amount not ascertained).
3) Refer to note no. 2.9 regarding decapitalization of Assets of Rs. 29384.14 lakhs
representing refurbishment expenditure incurred in earlier years for restoration of full
capacity of plants.
4) Refer to note no. 2.11 regarding providing of deferred tax assets amounting to Rs.
9740.00 lakhs on carry forward loss and unabsorbed depreciation withought virtual
certainty of profit in future years.
5) We could not veify the investment held as non-current of book-value of Rs.7.00 lakhs
as neither the share certificates in physical form nor any demat certificate produced to
us.
The cumulative effects of above could not be ascertainable on the net Loss and
shareholders fund as amount on certain notes is not quantified.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the Basis for Qualified
Opinion Paragraph, the financial statements 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 the case of the Balance Sheet of the state of affairs of the Company as at 31st
March, 2014;
b. in the case of Statement of Profit and Loss, of the Loss for the year ended on that
date ; and
c. in the case of 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 (Auditors Report) Order, 2003 ("theOrder")
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 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, Statement of Profit & 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 & Loss, and Cash Flow
Statement comply with the Accounting Standards referred to in sub-section (3C) of Section
211 of the Companies Act, 1956.
e. Based on legal opinion obtained, none of the present directors are disqualified as
on 31.03.2014 for being appointed as a director, in terms of clause (g) of subsection (1)
of section 274 of the Companies Act,1956.
|
for GORA & CO. |
|
Chartered Accountants |
| C/O Abhijit Dutt & Associates |
Firm s Registration no. 327183E |
| 8/2, K.S.Roy Road, 2nd Floor, |
G. C. Mukherjee |
| Room No. 2 & 3, Kolkata-700001 |
Partner |
| Dated: 29th May, 2014 |
Membership No. 017630 |
ANNEXURE REFERRED TO IN PARA 1 OF OUR REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
OF EVEN DATE.
I. a) Proper records showing full particulars, including quantitative details and
situation of fixed assets were maintained by the company. However, as both the plants of
the Company is under suspension of operation, the fixed assets register could not be
Produced to us this year and in the previous year and hence we are unable to comment
whether the company is maintaining proper records showing full particulars, including
quantitative details and situation of fixed assets.
b) As both the plants of the company is under suspension of operation, physical
verification of fixed assets could not be carried out by the management during the year
end and hence we were unable to comment whether there is any discrepancies between the
physical balance and book balance.
c) As per information and explanations given to us and from the records verified, no
substantial part of the fixed assets have been disposed off during the year which affects
the going concern.
II. a) As both the plants of the company are under suspension of operation, physical
verification of inventory has not been carried out during the year.
b) As mentioned in (a) above, clause 4 (ii) (b) is not applicable during the year.
c) The company was maintaining proper records of inventory. However, as stated in (a)
above, we are unable to make any comment on discrepancy of book balance and physical
balance as the record of inventory was not produced to us.
III. a) As per information and explanations given to us, the Company has not given any
loan, secured or unsecured to Companies, firms or other parties covered in the register
maintained under section 301of the Companies Act 1956 and as such the provision of clause
4 (iii) (b),(c) & (d) are not applicable.
b) As per information & explanation given to us, the Company has not taken any loan
secured/ unsecured from Companies, firms or other parties covered in the register maintain
under section 301 of the Act and as such the provision of clause 4(iii) e to g are not
applicable.
IV. There is an adequate internal control system commensurate with the size of the
company and the nature of its business, for the purchase of inventory and fixed assets and
for the sale of goods and services.
However, during the year there is no sale of goods and services and purchase of
inventory.
V. a) The particulars of contract or arrangements referred to in Section 301 of the act
have been entered in the register required to be maintained under that section, and
b) No such contracts or arrangements have been made during the year of purchase and
sale.
VI. The Company has accepted deposits from the public in earlier years. However the
Directives issued by the Reserve Bank of India and the provision of Section 58A & 58AA
or any other relevant provision of the Act and the Rules framed thereunder, wherever
applicable have not been complied with. However the company has repaid Rs.345.77 lakhs to
the Fixed Deposit Holders after take over by the present management.
VII. The Company has an internal audit system commensurate with its size and nature of
business. However, it should be strengthened.
VIII. As both the plants are under suspension of operation, cost records were not
maintained for the year and hence we are unable to make any comment.
IX. a) The Company is generally regular in depositing undisputed statutory dues of the
current financial year including Provident Fund. Employees State Insurance, Income-tax,
Sales Tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and any other
Statutory dues to the extent applicable with the appropriate authorities.
However, in respect of above, statutory dues including for earlier years are
outstanding for a period of more than six months amounting to Rs. 489.52 lakhs as below :
| Particulars |
Amount(Rs in lakhs) |
| Provident Fund |
161.09 |
| E.S.I |
120.44 |
| TDS |
20.72 |
| Professional Tax |
6.40 |
| Sales Tax |
180.87 |
| Total |
489.52 |
b) Details with respect to the amount involved and the forum where dispute is pending
to be provided under this clause with regard to disputed liability in respect of sales
tax, income tax as detailed in Note No. 2.24 are yet to be compiled by the management and
therefore, we are unable to provide the same.
X. There is no accumulated loss at the end of the financial year. The Company has
incurred cash losses during the current year and also in the immediately preceding
financial year.
XI. The management has settled all the liabilities of loan taken by earlier management
from financial institution / Bank except two loans amounting to Rs 1083.05 Lakhs.
XII. We have been informed and explained that the Company has not granted any loans and
advances on the basis of security by way of pledge of shares and, debentures and other
securities.
XIII. The Company is not a chit fund or a nidhi/mutual fund/ society. Accordingly, the
provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not
applicable to the Company.
XIV. The Company is not dealing in or trading in shares, securities debentures and
other Investments. Accordingly, the provisions of Clause 4(xiv) of the Companies
(Auditor’s report) Order, 2003 are not applicable to the Company.
XV. As per information and explanations given to us and record verified by us the
Company has given guarantee for loans taken by its associates or subsidiaries or others
from bank or financial institutions which is not prejudicial to the interest of the
company.
XVI. According to the information and explanations given to us, no term loans were
raised and hence application for the purposes for which they were raised does not arise.
XVII. On the basis of information received from the management and based on the overall
analysis of the balance sheet of the Company, funds raised on short term basis have not
been utilized for long term investment.
XVIII. The Company has not made any preferential allotment of shares during the year.
XIX. The Company has not issued unsecured debentures during the year.
XX. The Company has not raised any money through a public issue during the year XXI.
According to information and explanation given to us and based on our examination of the
books and records of the Company in accordance with the generally accepted auditing
practices in India, we have neither come across any incidence of fraud on or by the
Company nor have we been informed of any such case by the management.
|
for GORA & CO. |
|
Chartered Accountants |
|
Firm’s Registration No. 327183E |
| C/O Abhijit Dutt & Associates |
|
| 8/2, K.S.Roy Road, 2nd Floor, |
G. C. Mukherjee |
| Room No. 2 & 3, Kolkata-700001 |
Partner |
| Dated: 29th May, 2014 |
Membership No. 017630 |
INDEPENDENT AUDITORS’ REPORT
TO THE BOARD OF DIRECTORS OF DUNLOP INDIA LIMITED
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of DUNLOP INDIA
LIMITED ("the Company") and its subsidiary/ies, which comprises the
consolidated Balance sheet as at March 31, 2014, and the consolidated Statement of Profit
and Loss and the consolidated Cash Flow Statement for the year then ended, and a summary
of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation of these consolidated financial
statements that give a true and fair view of the consolidated financial position,
consolidated financial performance and consolidated cash flows of the Company in
accordance with the accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on
the auditors judgment, including the assessment of the risks of material misstatement of
the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the Companys preparation
and presentation of the consolidated 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 accounting policies used and the
reasonableness of the accounting estimates made by management, as well as evaluating the
overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Basis of Qualified Opinion
We draw attention to following notes:
1) Refer to note no. 2.6 regarding non-provision of interest amounting to Rs. 1697.10
laks on loan from a bank for working capital of Rs. 4025.90 lakhs.
2) Refer to note no. 2.8 regarding non provision of interest on certain loans against
which one time settlement is under active consideration (amount not ascertained).
3) Refer to note no. 2.9 regarding decapitalization of Assets of Rs. 29384.14 lakhs
representing refurbishment expenditure incurred in earlier years for restoration of full
capacity of plants.
4) Refer to note no. 2.11 regarding providing of deferred tax assets amounting to Rs.
9740.00 lakhs on carry forward loss and unabsorbed depreciation withought virtual
certainty of profit in future years.
5) We could not verified the investments held as non-current of book-value of Rs.7.00
lakhs as neither the share certificates in physical form nor any demat certificate
produced to us.
The cumulative effects of above could not be ascertainable on the net Loss and
shareholders fund as amount on certain notes is not quantified.
Qualified Opinion
Subject to above, in our opinion and to the best of our information and according to
the explanations given to us, and based on the consideration of the reports of the other
auditors on the financial statements of the subsidiaries as noted below, the consolidated
financial statements give a true and fair view in conformity with the accounting
principles generally accepted in India:-
(a) in the case of the consolidated Balance Sheet of the state of affairs of the
Company as at 31st March, 2014;
(b) in the case of consolidated Statement of Profit and Loss, of the Profit for the
year ended on that date; and
(c) in the case of consolidated Cash Flow Statement, of the Cash Flows for the year
ended on that date.
Other Matter
We did not audit the financial statements of subsidiaries, whose financial statements
reflect total assets(net) of Rs. 363.27 lakhs as at 31st March,2014, total revenues
amounting to Rs.0.44 lakh and net cash inflows amounting to Rs. 0.26 lakh for the year
then ended. These financial statements have been audited by other auditors whose reports
have been furnished to us by the Management, and our opinion is based solely on the
reports of the other auditors. Our opinion is not qualified in respect of this matter.
|
for GORA & CO. |
|
Chartered Accountants |
| C/O Abhijit Dutt & Associates |
Firm s Registration No. 327183E |
| 8/2, K.S.Roy Road, 2nd Floor, |
G. C. Mukherjee |
| Room No. 2 & 3, Kolkata-700001 |
Partner |
| Dated: 29th May, 2014 |
Membership No. 017630 |
+91-9892691696
