Independent Auditors
The members
XLO MACHINE TOOLS LTD
REPORT ON THE FINANCIAL STATEMENTS
1. We have audited the accompanying financial statements of XLO MACHINE TOOLS LTD. which
comprises the Balance Sheet as at 31.03.2014 and the statement of Profit & Loss for
the year ended as on 31.03.2014.
MANAGEMENTS RESPONSIBILITYFORTHE FINANCIALSTATEMENTS
2. The Companys 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 of India. 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
3. Our responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit in accordance with accounting standards 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.
4. Anaudit involves performing procedures to obtain audit evidence, about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditorsjudgement, including assessment of the risks of material misstatement 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 reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
6. OPINION
Subject to the following:
a. No provision has been made in respect of certain court cases filed by few employees
for recovery of unpaid salary/reinstatement etc. (Refer Note no. U (B) (8&9)of the
Notes to the accounts)
b. In the absence of required information and explanation we are unable to express
our opinion in respect of the recoverability of un-provided sundry debtors and loans and
advances and accuracy of their balances. (Refer Note no. U (B) (5) of the Notes to the
accounts)
c Non provision for penalty and interest that may be levied on the company for
delay/default in remitting money to the various authorities. (Refer Note no. U (B) (10) of
the Notes to the accounts).
d. No provision has been madefor doubtful debts amounting to Rs. 65,52,964/-.
e. Provision for liability in respect of unencashed privileged leave is made on
cash basis, contrary to the mandatory Accounting Standard prescribed by the Institute of
Chartered Accountants of India. (Refer Note No. U (A) (9) contained in Notes to the
Accounts).
f. The valuation of Work-in-Progress, as well as the issues from Stores to Shop floor
made on estimated basis, which is not in conjunction with the Accounting Standard (AS-2)
issued by the Institute of Chartered Accountant of India. (Refer Note No. U (A) (3)
inNotes to the Accounts)
In our opinien and to the best of our information and according to the explanations
given to us, the accompanying financial statements give the information required by the
Companies Act, 1956 in the manner so required and give true and fair view in conformity
with the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the Company as at
31.03.2014.
ii) In the case of the Statement of Profit & Loss Account, of the profit for the
year ended on that date.
7. As required by the Companies (Auditors Report) Order, 2003 as amended by the
Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of
India, in terms of Subsection 4 A of Section 227 of the Companies Act, 1956 (Order), we
enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the
said order.
8. Asrequiredbysection227(3)oftheAct, we report that:
a. We have obtained all the information and explanations 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 it appears from our examination of such books.
c. The Balance Sheet and the Statement of Profit & Loss dealt with by this report
are in agreement with the books of account.
d. In our opinion & to the best of our information, the Balance Sheet and the
Statement of Profit & Loss dealt by this report comply with the accounting standards
prescribed under Section 211 (3C) of the Companies Act, 1956.
e. On the basis of written representations received from the Directors as on 31 st
March, 2014, and taken on record by the Board of Directors, we report that none of the
directors is disqualified as on 31st March, 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 H.V. DEODHAR & Co.
Chartered Accountants
FRN.127965W
H.V. DEODHAR
Proprietor
M.No.125625
Place:-Thane
Date:-30/04/2014
ANNEXURE TO THE AUDITORS REPORT
(AS REFERRED TO IN PARA I OF OUR REPORT TO THE MEMBERS OF XLO MACHINE TOOLS LIMITED)
1. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets. The process of updating the said fixed
assets register was completed during the financial year 2007-08 which continues to be
considered as base record on the subject.
b) The management during the year has not physically verified the fixed assets.
c) No fixed assets were disposed off during the year.
2. In respect of inventory:-
a) We were informed that the company has not conducted physical verification of
inventory as at year end as there is no major change in the inventory.
b) Since no physical verification is carried out, we are unable to comment on procedure
followed for verification of inventory is reasonable & adequate.
c) The inventory records are not updated. In our opinion, the said records must be
updated to incorporate the physical inventory as on year end date. Since the inventory
records have not been updated since August 2000, comparison of book and the physical stock
for material discrepancies is not possible.
3. From the .examination of the books of accounts and other records, the company has
neither granted nor taken loans secured or unsecured to/from companies, firms or other
parties covered in the register maintained under S.301 of the Act excepting loan
transactions with its promoter viz. XLO Machine Tools Employees Industrial Co-operative
Society Limited. A sum of Rs 20,79,650/- is due on Current Account to ECS as at the end of
the year, on which no interest has been provided during the year 2013-14.
4. In Our opinion, and according to the information and explanations given to us,
having regard to the explanations that certain items purchased are of a special nature in
respect of which suitable alternative sources do not exist for obtaining comparative
quotations, there are adequate internal control procedures 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. In our opinion, there is no continuing failure to
correct major weaknesses in the internal control.
5. In respect of transactions entered in the register maintained pursuance of Section
301 of the Companies Act, 1956:
a) To the best of our knowledge and belief and according.to the information and
explanations given to us, transactions that needed to be entered into the register have
been entered.
b) According to the information and explanations given to us, there were no
transactions exceeding Rs. 5 lacs during the year and hence we have nothing to report on
the reasonability of the rates in comparison to prevailing market rates.
6. The company has not accepted any deposits from the general public. However the
company has obtained unsecured Loans from concerns wherein the company has not followed
the directives issued by the Reserve Bank of India and the provisions of Section 58 A.
7. For the year under report, a firm of Chartered Accountants has been appointed to
carry Internal Audit. Based on our review the internal audit is commensurate with the size
and nature of companies business.
8. According to the information and explanations given to us, the Central Government
has not prescribed the maintenance of cost records under clause (d) of sub-section of
S.209 of the Companies Act, 1956 in respect of the services carried out by the company.
9. According to the information and explanations given to us, and on the basis of our
examination of the books of accounts:
a) The Company has been generally regular in depositing with appropriate authorities
undisputed statutory dues including Provident Fund, Investor Education and Protection
Fund, Employees State Insurance, Income Tax, Wealth-Tax, Service-tax, Custom Duty,. Excise
Duty, Cess and any other material statutory dues applicable to it. The details of
undisputed statutory dues remaining unpaid as on 31.03.2014 are as follows:
| Nature of Dues |
Amount |
Period |
| Profession Tax |
Rs. 1.65 lacs |
01.07.1999 to 31.12.1999 |
| TDS |
Rs. 17.47 lacs |
Before closure in 1993 |
| MVAT |
Rs. 7.20 lacs |
01.04.2013 to 31.03.2014 |
b) As at 31.03.2014, according to the records of the company, the summary of statutory
dues in dispute is as follows:
| Nature of Dues |
Amount |
Period |
Forum Where dispute is pending |
| Contribution to Welfare Fund |
Rs. 0.12 lacs |
01.06.1999 to 31.12.1999 |
Recovery notice received |
| Provident Fund Damage Charges |
Rs. 10.01 lacs |
1993 - 1994 |
Recovery notice received from PF commissioner |
10 The Company has accumulated losses at the end of the period. But its networth is
positive. It incurred cash losses during the period under audit as well as in the
immediately preceding financial year.
11 According to the information and explanations given to us and according to the
records available, no amount is due to financial institution or banks or debenture
holders.
12 The Company has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities. Accordingly clause 4 (xii) of the Order
is not applicable.
13 The company is not a nidhi / mutual benefit society and the provisions of the
special statute applicable to chit fund are not applicable to the company.
14 The company does not deal or trade in shares, securities, debentures, and other
investments and hence clause 4(xiv) is not applicable.
15 According to the information and explanations given to us, the Company has not given
any guarantee for loans taken by others from banks or financial institutions. Accordingly
clause 4 (xv) of the Order is not applicable. -
16 The Company has not taken any term loan excepting working capital loan & the
same has been utilized forthe purpose availed.
17 According to the information and explanation given to us and on an overall
examination of the Balance Sheet of the Company, we report that no funds raised on short
term basis have been used for long term investment by the company.
18 According to the information and explanations given to us the Company has made
preferential allotment of shares to parties covered in the Register maintained under
section 301 of the Companies Act, 1956, during the period and the price at which shares
have been issued is not prejudicial to the interest of the Company.
19 The Company has not issued any Debentures. Accordingly clause 4(xix) of the Order is
not applicable.
20 The Company has not raised monies by public issues during the year.
21 In our opinion & according to the information and explanations given to us, no
fraud on or by the Company was noticed or reported during the year.
For H.V. DEODHAR & Co.
Chartered Accountants
FRN.127965W
H.V. DEODHAR
Proprietor
M. No. 125625
Place:-Thane
Date:-30/04/2014
+91-9892691696
