INDEPENDENT AUDITORS
TO
THE MEMBERS OF
THE NEW GREAT EASTERN SPINNING AND WEAVING COMPANY LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of The New Great Eastern Spinning
And Weaving Company Limited ("the Company") which comprise the Balance Sheet as
at March 31, 2014 and the Statement of Profit and Loss for the year then ended and a
summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The management is responsible for the preparation of these financial statements that
give a true and fair view of the financial position and financial performance 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") read with the General
Circular 15/ 2013 dated September 13, 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
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 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 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 audit opinion.
Basis for Qualified Opinion
As indicated in Note Nos. 29.3, 29.4 and 29.8 to the financial statements in respect of
the modified scheme sanctioned by AAIFR which is under implementation, despite accumulated
losses and consequent total erosion of equity and inadequate liquidity, accounts have been
compiled on a going concern basis and some of the balances of trade receivables, trade
payables, current liabilities and loans and advances are subject to confirmation,
reconciliation and consequential adjustments, if any.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the possible effects of the matter stated in the Basis for
Qualified Opinion paragraph, 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 March
31, 2014;
b) in the case of the Statement of Profit and Loss, of the loss for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors 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.
As required by section 227(3) of the Act, we report that
a) we have obtained all the information and explanation which to the best of our
knowledge and belief was 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 and the Statement of Profit and Loss dealt with by this Report are
in agreement with the books of accounts
d) in our opinion, the Balance Sheet and the Statement of Profit and Loss comply with
the Accounting Standards notified under the Act read with the General Cicular 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 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 disqualified
as on March 31, 2014, from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
|
For BATLIBOI & PUROHIT |
|
Chartered Accountants |
|
Firm Reg. No. 101048W |
|
(Parag Hangekar) |
| Place Mumbai |
Partner |
| Date 30th June, 2014 |
Membership No: 110096 |
ANNEXURE TO THE AUDITORS REPORT
Statement referred to in our report of even date to the members of The New Great
Eastern Spinning & Weaving Company Limited as at and for the year ended 31st March,
2014. We report that:
i) (a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets. The Fixed Asset Register is under
process of updation.
(b) The fixed assets as informed by the Company have been physically verified by the
management during the year and no material discrepancies between the book records and the
physical verification have been noticed. In our opinion, the frequency of verification is
reasonable.
(c) There was no disposal of a substantial part of fixed assets during the year.
ii) (a) The inventory has been physically verified by the management during the year.
In our opinion, the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of inventory 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 inventory records, we are of the opinion
that the Company is maintaining proper records of inventory. The discrepancies noticed on
physical verification of inventory as compared to book records were not material.
iii) (a) During the year the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Accordingly the provisions of clauses iii (b) to (d) of paragraph
4 of the Order are not applicable.
(e) The Company has taken unsecured loans during the year from two companies covered in
the register maintained under Section 301 of the Act. The maximum amount outstanding at
any time during the year was Rs.524.71 lacs and the amount outstanding as at the year end
is Rs. 210.61 lacs.
(f) The rate of interest and other terms and conditions of loans taken by the Company
are prima facie not prejudicial to the interest of the Company.
(g) There are no stipulated terms of repayment of principal and interest and hence we
are not able to comment on the payment of the same. However, according to the information
made available to us, the loan is repayable on demand.
iv) In our opinion there is an adequate internal control procedure commensurate with
the size of the Company and the nature of its business, for the purchase of inventory,
fixed assets and for the sale of goods and services. During the course of our audit, we
have not observed any major weakness or continuing failure to correct any major weaknesses
in the internal control system of the Company in respect of these areas.
v) (a) In our opinion and according to the information and explanation given to us, the
particulars of contracts or arrangements referred to in section 301 of the Act have been
entered in the register required to be maintained under the said section.
(b) The transactions made in pursuance of such contracts or arrangements aggregating
during the year to rupees five lacs or more in respect of each party have been made at
prices which are reasonable having regard to prevailing market prices for such goods and
materials or the prices at which transactions for similar goods or materials have been
made with other parties.
vi) The Company has not accepted any deposit from the public within the meaning of
section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the
rules framed thereunder.
vii) The Company does not have an internal audit system.
viii) The maintenance of the cost records as prescribed by the Central Government under
Clause (d) of sub-section (1) of section 209 of the Act read with The Companies (Cost
Accounting Records) Rules, 2013 is not applicable to the Company since its net worth as on
the last date of immediately preceding financial year does not exceed rupees five crores
and the turnover of the immediately preceding financial year does not exceed rupees twenty
crores.
ix) (a) According to the information and explanation given to us and according to the
books and records of the Company examined by us, in our opinion, the Company is regular in
depositing undisputed statutory dues including provident fund, investor education and
protection fund, ESIC, income tax, sales tax, wealth tax, service tax, customs duty,
excise duty, cess and other material statutory dues as applicable with the appropriate
authorities. There were no outstanding statutory dues as on 31st of March, 2014 for a
period of more than six months from the date they became payable.
(b) According to the information and explanation given to us, and according to the
books and records of the Company examined by us, there are no outstanding dues of sales
tax, income tax, customs duty, wealth tax, service tax, excise duty and cess as at 31st
March, 2014 which has not been deposited on account of a dispute.
x) The Company has accumulated losses which exceeds the net worth of the Company as at
31st March, 2014 and it has incurred cash losses in the financial year ended on that date
and in the immediately preceding financial year.
xi) The Company has not defaulted in payment of dues to any financial institution or
bank.
xii) The Company has not granted loans and advances on the basis of security by way of
pledge of shares, debentures or other securities.
xiii) The provisions of any special statute applicable to Chit Fund, Nidhi or Mutual
Benefit Society are not applicable to the Company.
xiv) In our opinion and according to the information and explanations given to us, the
Company is not dealing or trading in securities. The Company has maintained proper records
of transactions and contracts in respect of investment in shares and securities and timely
entries have been made therein. All shares, securities and other investments are held by
the Company in its own name.
xv) The Company has not given any guarantee for loan taken by others from banks or
financial institutions.
xvi) In our opinion, and according to the information and explanations given to us, no
term loans have been obtained. Hence question of its application does not arise.
xvii) On the basis of our examination, and according to the information and explanation
given to us, the funds raised on a short term basis have not been used for long term
investment or vice versa.
xviii) The Company has not made any preferential issue of shares.
xix) The Company has not issued any debentures and therefore, the provisions of Clause
(xix) of paragraph 4 of the Order are not applicable to the Company.
xx) The Company has not raised any money through a public issue during the year covered
by our audit report.
xxi) In our opinion and according to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the year that causes the
financial statements to be materially misstated.
|
For BATLIBOI & PUROHIT |
|
Chartered Accountants |
|
Firm Reg. No. 101048W |
|
(Parag Hangekar) |
| Place Mumbai |
Partner |
| Date 30th June, 2014 |
Membership No: 110096 |
+91-9892691696
