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Auditor Report of Golden Carpets Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Golden Carpets Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow statement for the year ended, and summary of significant accounting policies and other explanatory information.

Management 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 of the Company in accordance with 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 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal controls 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 auditor''s 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 Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company''s internal control. 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 Balance Sheet, of the state affairs of the Company as at March 31, 2014

(b) In the case of the Statement of Profit and Loss, of theLoss for the year ended on that date; and

(c) In the case of Cash Flow statement, 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 (Auditor''s 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.

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 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, Statement of Profit and Loss dealt with by this report are in agreement with the books of account

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting standards referred to in sub-section (3c) of section 211 of the Companies Act, 1956read 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 written representations received from the directors as on 31st March 2014 and taken on record by the Board of Directors, 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.

f. Since the central Government has not issued any notification as to the rate at which cess is to be paid under section 441A of companies act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company..

Annexure to the Auditors'' Report

(referred to in paragraph 1 of our Report of even date to the Members of "GOLDEN CARPETS LIMITED" for the year ended March 31, 2014)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that,

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets of the company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets.

(c) In our opinion, and according to the information and explanation given to us, the company has not disposed off any fixed asset during the year.

(ii) (a) As explained to us, inventories have been physically verified by the Management at regular intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion, the company has maintained proper records of inventories and as explained to us there was no material discrepancies were noticed on physical verification.

(iii) (a) In our opinion and according to the information and explanations given to us, the company didn''tgrantany loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, requirements of clauses (b),(c),(d),of paragraph 4(iii) of the order are not applicable.

(e) According to the information and explanations given to us, during the current year the company had not taken any loan from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 and the unsecured loans taken in previous years from its Managing Director is outstanding for an amount of Rs. 4,49,94,579/- (Rs Four Crores Forty Nine Lakhs Ninety Four Thousand Five hundred and Seventy Nine).

(f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan were not prima facie prejudicial to the interest of the company.

g) In our opinion and according to the information and explanations given to us, the company is in regular in payment of principal and interest for the above said loans.

(iv) On the basis of checks carried out during the course of the audit and as per the explanations given to us, we are of the opinion that there are adequate internal control systems commensurate with the size of the company and the nature of its business, with regard to payment of expenses. During the course of audit no major weaknesses in the internal controls are noticed.

(v) According to the information and explanations given to us, the particulars of contracts or arrangements during the year that need to be entered into a register in pursuance of section 301 of the Companies Act. 1956 have been so entered.

(vi) In our opinion and according to the explanations given to us, the company has not accepted any deposits within the meaning of Sections 58A and 58AA of the Companies Act and Companies (Acceptance of Deposits) Rules, 1975.

(vii) As per information and explanations given by the management, the company has an internal audit system commensurate with its size and nature of its business.

(viii) According to the information and explanations given to us, maintenance of cost records has not been prescribed by the central government under the clause (d) of sub-section (1) to Section 209 of the Act.

(ix) (a) According to the information and explanation given to us, the company is regular in depositing undisputed statutory dues including income-tax, cess and other statutory dues with the appropriate authorities. According to the information and explanation given to us, there were no arrears of undisputed statutory dues as at 31st March 2014, which were outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanation given to us, there are no dues of income- tax, wealth- tax, sales-tax and cess which have not been deposited on account of any dispute.

(x) The company has accumulated losses as at the end of the financial year and it accumulated losses are not less than fifty percent of its net worth and the company has not incurred anycash losses during the current financial year covered by our audit and it has incurred cash losses in the immediately preceding financial year.

(xi) According to the records of the company and as per the explanations given to us the company has not taken any loans from a financial institution or bank and the company was not raised any debentures during the year. Accordingly, clause 4 (xi) of the order is not applicable.

(xii) According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way pledge of shares, debentures and other securities.

(xiii) The company is not a chit fund or nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the said Order are not applicable to the company.

(xiv) According to the information given to us, the company is not dealing in or trading in shares, securities, debentures and other instruments, accordingly the provisions of clause 4 (xiv) of the order is not applicable.

(xv) According to the information and explanations given to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, no term loans were raised during the year.

(xvii) According to the information and explanation given to us, and on an overall examination of the balance sheet, we report that the company was not raised any funds on short term basis during the year.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

(xix) The company has not issued any debentures during the year. Accordingly, question of creating securities or charge does not arise.

(xx) The company has not raised any money by public issue during the year.

(xxi) Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Ramasamy Koteswara Rao & Co., Chartered Accountants Firm Regn No: 010396S

Sd/- Place: Hyderabad (C.V.Koteswara Rao) Date: 29-05-2014. Partner Membership No: 028353.


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Golden Carpets Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and the Cash Flow Statement for the year ended, and summary of significant accounting policies and other explanatory information.

Management 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 of the Company in accordance with 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 controls 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 auditor''s judgement, 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 Company''s 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 Balance Sheet, of the state affairs of the Company as at March 31, 2013

(b) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the Cash Flow for the year ended on that date.

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 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 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, 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, Statement of Profit and 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. On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditors'' Report

[referred to in paragraph 3 of our Report of even date to the Members of Golden Carpets Limited for the year ended March 31, 2013]

i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The company has a regular program of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with the program, certain fixed assets were verified during the year and no material discrepancies have been noticed on such verification. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the company and nature of its assets.

(c) No Fixed Assets are disposed off during the year.

ii. (a) The verification of inventory is being conducted at reasonable intervals by the management.

(b) The procedures followed for the physical verification of inventory are reasonable and adequate in relation to the size of the company and the nature of its business.

(c ) Proper records regarding the inventory are being maintained and no material discrepancies are noticed during the physical verification.

iii. (a) According to the information and explanation given to us, the company has not granted any loans, secured or unsecured to/from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii-b), (iii-c) and (iii-d) of paragraph 4 of the order are not applicable.

(e) According to the information and explanation given to us, the company has not taken any loans, secured or unsecured to/from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clauses (iii-f), (iii-g) of paragraph 4 of the order are not applicable.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, with regard to the purchases of inventory and fixed assets and for the sale of goods and services. During the course of audit, no major weaknesses in the internal controls are noticed.

v. (a) According to the information and explanation given to us, we are of the opinion that the company has not entered into any transactions that required to be entered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clause (v-b) of paragraph 4 of the order is not applicable.

vi. In our opinion and according to the explanations given to us, the company has not accepted any deposits within the meaning of Sections 58A and 58AA of the Companies Act and Companies (Acceptance of Deposits) Rules, 1975.

vii. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

viii. The Central Government of India has not prescribed maintenance of cost records under Section 209 (i) (d) of the Act for any of the services rendered by the company.

ix. (a) According to the records of the company, the company is regular in depositing undisputed statutory dues including income tax, sales tax, customs duty, excise duty, cess and other statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us, there are no income tax, wealth tax, sales tax, customs duty and excise duty, which have not been deposited on account of any dispute. There were no dues on account of cess under 441A of the Companies Act, 1956 since the date from which the aforesaid section comes into force has not yet been not filed by the Central Government.

x. The company have the accumulated losses as at the end of the financial year and that are more than fifty percent of its net worth, and has incurred cash losses in the financial year and in the immediately preceding financial year.

xi. According to the records of the company and as per the explanations given to us the company, we are of the opinion that the company has not defaulted in repayment of dues to financial Institutions, banks or debenture holders during the year.

xii. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The company is not a chit or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

xiv. According to the information given to us, the company is not dealing in or trading in shares, securities, debenture and other instruments, accordingly the provisions of clause 4(xiv) of the order is not applicable.

xv. 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.

xvi. The Company did not have any term loans outstanding during the year.

xvii. The company has not raised any funds on short-term basis.

xviii.The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 Act.

xix. The company has not issued any debentures during the year. Accordingly, no securities have been created.

xx. The company has not raised any money by public issue during the year.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Ramasamy Koteswara Rao & Co.,

Chartered Accountants

Firm Regn No: 010396S

(C.V.Koteswara Rao)

Place: Hyderabad Partner

Date: 29th May 2013. Membership No: 028353


Mar 31, 2010

1. We have audited the attached Balance Sheet of GOLDEN CARPETS LIMITED, as at March 31, 2010, the Profit and Loss account and also the (Cash Flow statement) for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of The Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph (3) and subject to in paragraph (4) above, we report that:

(i) 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;

(ii) 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;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; and

(vi) In our opinion and to the best of our information and according to the explanations given to us, subject to the effect on the financial statements of the matter referred to in the preceding paragraph and subject to Note 3 of Schedule 18 regarding non-implementation of Negotiated Settlement, the said accounts together with the notes thereon 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 March 31,2010;

(b) In the case of the Profit and Loss Account, of the Loss for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to Auditors Report

(Referred to in paragraph 3 of our Report of even date to the Members of GOLDEN CARPETS LIMITED for the year ended March 31, 2010)

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have been physically verified by the management during the year and there is regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, the company has not disposed off a major part of the plant and machinery.

(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 is reasonable and adequate in relation to the size of the company and the nature of its business.

c) 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) The company has neither taken nor granted during the year any loans to Companies covered under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods.

(v) a) According to the information and explanations given to us, we are of the opinion that the transactions 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.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central Government did not prescribe maintenance of cost Records under Section 209(1) (d) of the Companies Act, 1 956(Act 1 of 1956) for product of the company.

a) The RF & E.S.I Act are not applicable for the Company.

b) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, excise duty and cess were in arrears, as at 31.03.2010 for a period of more than six months from the date they became payable.

c) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, excise duty and cess which have not been deposited on account of any disputes.

ix) In our opinion, the accumulated losses of the company are not more than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

x) In our opinion and according to the information and explanations given to us, the Company has not defaulted in payment of interest with respect to loan taken from IDBI and it is further negotiating for reliefs and the matter is pending.

xi) In our opinion and according to the information and explanation given to us no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

xii) In our opinion, the company is not a chit fund or a 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.

xiii) In our opinion, 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 (Auditors Report) Order, 2003 are not applicable to the company.

xiv) The company has not given guarantees for loans taken by others from banks or financial institutions.

xv) The company has not raised any new term loan during the year. The term loans outstanding at the beginning of the year were applied for the purpose for which they were raised.

xvi) According to the information and explanations given to us and on overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long- term investment. No long- term funds have been used to finance short-term assets except permanent working capital.

xvii) 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.

xviii) The Company has not issued any debentures during the year.

xix) The Company has not raised any money by way of public issue during the year.

xx) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For N V GANGADHARA & ASSOCIATES

Chartered Accountants

Firm Reg No.011861S

V GANGADHARA RAO N

Place: Hyderabad Proprietor

Date: 13-08-2010 Membership No. 219486

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