AUDITORS' REPORT TO THE MEMBERS OF
KOTHARI FERMENTATION AND BIOCHEM LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Kothari Fermentation andBiochem Limited ("the Company"), which comprise the Balance Sheet as atMarch 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the yearthen ended, and a summary of significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position, financial performance and cash flows of theCompany in accordance with the Accounting Standards referred to in sub-section (3C) ofsection 211 of the Companies Act, 1956 ("the Act"). This responsibility includesthe design, implementation and maintenance of internal control relevant to the preparationand presentation of the financial statements that give a true and fair view and are freefrom material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements.
The procedures selected depend on the auditor's judgment, including the assessment ofthe risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevantto the Company's preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by management, as well as evaluating the overall presentation ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us, the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the Company as at March31, 2014;
b) in the case of the Statement of Profit and Loss, of the profit for the year ended onthat date; and
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on thatdate.
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 ofthe Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and5 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 ourknowledge 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 theCompany so far as appears from our examination of those books
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt withby this Report are in agreement with the books of account.
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash FlowStatement comply with the Accounting Standards referred to in subsection (3C) of section211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors as on March 31,2014, and taken on record by the Board of Directors, none of the directors is disqualifiedas on March 31, 2014, from being appointed as a director in terms of clause (g) ofsub-section (1) of section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to the rate at whichthe cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued anyRules under the said section, prescribing the manner in which such cess is to be paid, nocess is due and payable by the Company.
|For NAHATA JAIN & ASSOCIATES|
|Regn. No. 016351-N|
|Place : New Delhi||(CA ANIL K. JAIN)|
|Date : 30th May, 2014||Partner, M. No. 93912|
Annexure referred to in paragraph-1 of Section "Report on Other Legal andRegulatory Requirements" of our report of even date Re: KOTHARI FERMENTATION ANDBIOCHEM LIMITED (the Company) for the year ended 31 March 2014)
On the basis of such checks as we considered appropriate and in terms of theinformation and explanations given to us, we state that:-
01. In respect of its fixed assets:
a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.
b) As explained to us, the fixed assets have been physically verified by the managementduring the year, which in our opinion is reasonable, having regard to the size of thecompany and nature of its assets. No material discrepancies were noticed on such physicalverification.
c) In our opinion, the company has not disposed of substantial part of fixed assetsduring the year and the going concern status of the company is not affected.
02. In respect of inventories
a) As explained to us inventories have been physically verified by the management atregular intervals during the year.
b) In our opinion, procedures for physical verification of inventory followed by themanagement are reasonable and adequate in relation to the size of the company and thenature of its business c) In our opinion, the company is maintaining proper records ofinventory. We have been explained that discrepancies noticed on physical verification ascompared to book records were not material and the same have been properly dealt with inthe books of account.
03. In respect of loans, secured or unsecured, granted or taken by the company to/fromcompanies, firms or other parties covered in the register maintained under Section 301 ofthe Companies Act, 1956:
a) During the year, the company has granted unsecured loan to one party covered in theregister maintained u/s 301 of the Companies Act, 1956 and the same was received backduring the year. The amount involved was Rs 97.38 lacs. However, during the year nointerest has been charged on such accounts.
b) During the year, the company has taken unsecured loan from two party covered in theregister maintained u/s 301 of the Companies Act, 1956 and repaid back the same during theyear. The amount involved was Rs.19.00 lacs and no interest has been paid during the yearon such account. In our opinion the terms and conditions of unsecured loan taken by thecompany, are not, prima-facie, prejudicial to the interest of the company.
04. In our opinion and according to the information and explanations given to us, thereis adequate internal control system commensurate with the size of the company and thenature of its business for the purchase of inventories and fixed assets and sale of goods.During the course of our audit, we have not observed any major weaknesses in internalcontrol system.
05. In respect of transactions covered under Section 301 of the Companies Act, 1956:
a. In our opinion and according to the information and explanations given to us, thetransactions that need to be entered in the register in pursuance to Section 301 of theCompanies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations given to us, thetransaction, if any, made in pursuance of contract or arrangements entered in theregisters maintained under Section 301 and exceeding the value of rupees five lacs inrespect of any party during the year have been made at prices which are reasonable havingregard to prevailing market price at the relevant time.
06. The company has not accepted any deposits from the public thus the directivesissued by the Reserve Bank of India and the provisions of section 58A, 58AA or any otherrelevant provisions of the Act and the rules framed there under are not applicable.
07. In our opinion, the internal audit system of the Company is commensurate with itssize and nature of its business.
08. We have broadly reviewed the books of accounts maintained by the company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 209(1) (d) of the Act in respect of the Company's products to which the said rulesare made applicable and are of the opinion that prima facie, the prescribed records havebeen made and maintained. We have, however, not made a detailed examination of the saidrecords with a view to determine whether they are accurate and complete.
09. In respect of statutory dues:
a) According to the information and explanations given to us and on the basis of ourexamination of the records of the company, the company is generally regular in depositingthe undisputed statutory dues including provident fund, ESI contributions, income tax,service tax, cess and other statutory dues as applicable with appropriate authoritiesexcept few cases of delays in deposit of ESI contributions and tax deducted at source.According to the information and explanations given to us, generally there are noundisputed amounts payable in respect of statutory dues which have remained outstanding asat 31st March, 2014 for a period of more than six months.
b) According to the information and explanations given to us and as per the books andrecords examined by us, there are no dues of income tax, sales tax, service tax, wealthtax, excise duty, custom duty, cess, etc., which have not been deposited on account of anydispute, except following:
|Name of the Statute||Nature of dues||Amount involved||Period||Forum where dispute is pending|
|(Rs in Lacs)|
|Central Excise Act||Demand of duty due to non-allowability of expenses||2.52||1994-95||Dy. Commissioner, Central Excise, Division V, Noida|
10. The company has no accumulated losses as at 31st March, 2014. The company has notincurred any cash losses in the financial year under report and in the immediatelypreceding financial year.
11. According to the records of the company examined by us and the information andexplanations given to us, the company has not defaulted in repayment of dues to thefinancial institutions or banks. The company has no debenture holders.
12. In our opinion and according to the information and explanation given to us, noloans and advances have been granted by the company on the basis of security by way ofpledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefitfund/society. Accordingly clause (xiii) of para no.4 of the Companies (Auditor's Report)(amended) Order, 2004 is not applicable.
14. According to the information & explanation given to us the company is notdealing or trading in shares, securities, debentures and other investments. Accordingly,clause (xiv) of para no.4 of the Order is not applicable.
15. According to the information & explanation given to us and on our overallexamination of balance sheet of the company we are of the opinion that the company has notgiven any guarantee for loans taken by others from bank or financial institutions.
16. In our opinion and according to the information and explanations given to us, on anoverall basis, the term loans have been applied for the purposes for which they wereraised.
17. According to the information and explanation given to us and on our overallexamination of the balance sheet of the company, we are of the opinion that no fundsraised on short term basis have been used for long term purposes.
18. During the year, the Company has not made any preferential allotment of shares.
19. The company has not issued any debentures during the year.
20. The company has not made any public issue during the year.
21. During the course of our examination of the books of account carried out inaccordance with the generally accepted auditing practices in India, and according to theinformation and explanations given to us, we have neither come across any instance offraud on or by the company, noticed or reported during the year, nor have we been informedof such case by the management.
|For NAHATA JAIN & ASSOCIATES|
|Regn. No. 016351-N|
|(CA ANIL K. JAIN)|
|Partner, M. No.93912|
|Place: New Delhi|
|Date : 30th May, 2014|
Pramod Kumar Kothari , Chairman & Managing Director
Prasanna Kumar Pagaria , Director
Ratan Lal Dudheria , Director
Kapil Dev Puri , Director
Company Head Office / Quarters:
16 Community Centre,
1st Floor Saket,
Phone : New Delhi-91-011-26517665/26850004/40590944 / New Delhi-
Fax : New Delhi-91-011-41664840 / New Delhi-
E-mail : email@example.com
Web : http://www.kothariyeast.in
Abhipra Capital Ltd
GF Abhipra Complex,A-387 G T Karnel Rd,Azadpur,Delhi - 110033