INDEPENDENT AUDITOR
TO THE MEMBERS OF..
THE KHATAU MAKANJI SPINNING AND WEAVING COMPANY LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of The Khatau Makanji Spinning
and Weaving Company Limited ("the Company"), which comprise the Balance
Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement
for the year then ended, and a summary of the significant accounting policies and other
explanatory information.
Managements Responsibility for the Financial Statements
The Companys 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
Section 211 (3C) of the Companies Act, 1956 ("the Act") read with the General
Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. This responsibility includes the
design, implementation and maintenance of internal control relevant to the preparation and
fair presentation of the financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
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
the 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
the accounting policies used and the reasonableness of the accounting estimates made by
the Management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
i) An Unsecured Loan which was received from the party appointed as per the Companys
sanctioned scheme under BIFR for settlement of creditors, and remaining outstanding at the
end of the accounting year amounting to Rs 6,260,283 is subject to reconciliation and
confirmation. Hence we are unable to ascertain the exact liability which may arise on this
account.
ii) The Companys preference shares amounting to Rs 29,92,500 have not been redeemed by
22-02-2012 as per the companys sanctioned scheme under BIFR, vide its order dated
22-02-2007.
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 aforesaid financial statements give the information required by the
Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st
March, 2014;
b) in the case of the Statement of Profit and Loss, of the Profit of the Company for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the Company for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2003 ("the Order")
issued by the Central Government in terms of Section 227(4A) of the Act, we give in the
Annexure a statement on the matters specified in 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 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 Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956
("the Act") read with the General Circular 15/2013 dated 13th September 2013 of
the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.
e) On the basis of the written representations received from the Directors as on 31st
March, 2014 taken on record by the Board of Directors, none of the Directors are
disqualified as on 31st March, 2014 from being appointed as a Director in terms of Section
274(1 )(g) of the Act.
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For SORAB S. ENGINEER & CO. |
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Chartered Accountants |
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Firm Registration No. 110417W |
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CA M. P. ANTIA |
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PARTNER |
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MEMBERSHIP NO. 7825 |
| Date : 28th April, 2014 |
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| Place: Mumbai |
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ANNEXURE
Re : The Khatau Makanji Spinning and Weaving Company Limited
Referred to in paragraph 1 of our report of even date.
i. a) The Company is maintaining proper records showing full particulars including
quantitative
details and situation of its fixed assets except Furniture and Fixtures and Office
Equipments.
b) These fixed assets have been physically verified by the management and no material
discrepancies were noticed.
c) The Company has not disposed off substantial parts of its fixed assets during the
year.
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) On the basis of our examination of the records of inventory, we are of the opinion
that the company is maintaining proper records of inventory. The discrepancies noticed on
verification between the physical stocks and the book records were not material.
iii. (a) to (d) The Company has granted an interest free advance to a company covered
in the Register maintained under Section 301 of the Companies Act, 1956. There are no
terms of repayment. In respect of the said advance, the maximum balance outstanding at any
time during the year is Rs. 6,539 and the year ended balance is Rs. 6,539.
(e) to (g) The Company has taken interest free loans from a director and from 3
companies covered in Register maintained under Section 301 of the Companies Act, 1956. The
maximum balance outstanding during the year was Rs 422,332 and the year end balance of
loans taken from parties was Rs. 422,332. There are no terms for repayment.
iv. We are informed by the management that Internal control systems commensurate with
the size and nature of its business will be introduced by the Company as and when the
proposed comprehensive Rehabilitation Scheme at Mahad is implemented.
v. a) According to the information and explanations given to us, we are of the opinion
that the particulars of all contracts or arrangements that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements entered in the register
maintained under section 301 of the Companies Act, 1956 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 deposits from the public to which the provisions
of Section 58A, 58AAor any other relevant provisions of the Companies Act, 1956 and the
rules framed there under would apply.
vii. The Company has no Internal Audit System.
viii. As there is no production of processed goods during the year under audit, there
is no question of maintenance of Cost Records U/s. 209(1 )(d) of Companies Act, 1956.
ix. a) The company is generally regular in depositing undisputed statutory dues with
the appropriate authorities. There are no outstanding statutory dues as at the last day of
the financial year which were outstanding for a period of more than six months from the
date they became payable.
b) There are no disputed statutory liabilities not paid by the Company.
x. Accumulated losses of the Company are more than fifty percent of its net worth. The
Company has not made cash loss during the year or in the immediately preceding financial
year.
xi. As the Company has not availed any loan from a financial institution or a bank, nor
has it issued any debentures, there are no dues to any financial institution or bank or
debenture holders.
xii. The Company has not granted any loans and advances on the basis of security by way
of pledge of shares, debentures or any other security.
xiii. In our opinion, the company is not a chit fund or nidhi/mutual benefit
fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors
Report) Order, 2003 are not applicable to the company.
xiv. In our opinion, the company is not dealing in or trading in shares, securities,
debentures and any other investments. Accordingly, the provisions of clause 4 (xiv) of the
aforesaid Order are not applicable to the company.
xv. In our opinion and according to the information and explanation given by the
management, the company has not given any guarantees for loans taken by others from banks
or financial institutions.
xvi. The Company has not taken any term loan during the year. Therefore, the provisions
of clause 4 (xvi) of the Order are not applicable.
xvii. There were no short term funds raised during the year. Therefore, the provisions
of clause 4 (xvii) of the Order are not applicable.
xviii. According to the information and explanation given to us and the records
examined by us, during the year, the Company has not made any preferential allotment of
shares to parties and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
xix. The Company has not issued any debentures during the year.
xx. No public issue was made by the company during the year.
xxi. Based upon the audit procedures performed and the information and explanations
given by the management, we report that no fraud on or by the company has been noticed or
reported during the year.
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For SORAB S. ENGINEER & CO. |
|
Chartered Accountants |
|
Firm Registration No. 110417W |
|
CA M. P. ANTIA |
|
PARTNER |
|
MEMBERSHIP NO. 7825 |
| Date : 28th April, 2014 |
|
| Place: Mumbai |
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+91-9892691696
