Mar 31, 2015
We have audited the accompanying financial statements of LUMAX
AUTOMOTIVE SYSTEMS LIMITED ("the Company"), which comprise the Balance
Sheet as at 31st March, 2015, the Statement of Profit and Loss, the
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements The Company's
Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the
preparation and presentation 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 principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, 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 have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. 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 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 financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, 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 on the financial
statements.
Basis for qualified opinion
1. Inventories '29,01,31,912/-
a. The management has not valued the inventories at lower of cost and
net realizable value whichever is lower as required by accounting
standard to valuation of inventories but has stated them solely at cost
inclusive of taxes and duties. The inventory prepared by the company
shows a large amount of inventories very old which are un-useable for
manufacturing purposes and are in obsolete nature and have scrap value
only. The difference between the valuation of stock at cost and net
realizable value whichever is lower and as shown in the books of
accounts is substantial. On account of the above loss of the company
will be increased and inventories will be decreased. The management has
not quantified the difference. This matter was also qualified in audit
report of earlier years. b. Stock in transit '4,66,24,216/- :- The raw
material was imported in the earlier years and was not cleared from
custom authorities. The custom authorities have already issued notices
U/s 48 of the Custom Act, 1962 for auction of the above goods. The
company has not provided any evidence whether the material is lying with
custom authorities or auctioned by them. That in case the Govt.
authorities had made the auction of goods the company suffered a loss of
'4,66,24,216/-. The custom duty liability of the above goods is about
'1.36 crore which is also not provided in the financial statements. This
matter was also qualified in audit report of earlier year.
2. Trade receivable long term (due for more than twelve months-
unsecured consider doubtful- no provision for doubtful receivable)
'12,78,18,588/-:-That the debts were outstanding for a quite period of
long time and in our opinion the entire debts are bad and should be
w/off in the books of the company. Due to the above opinion the loss of
the company will be increased by '12, 78,18,588/- and the trade
receivable long term will be reduced by that amount. This matter was
also qualified in audit report of earlier year.
3. Short term loans and advances (unsecured consider good)
'9,84,72,987/ -('6,84,91,775/-):- The company has given advances
'85,76,645/- to five parties during the year for which satisfactory
explanation of giving the advances has not been provided. Further it is
noticed that the suppliers and tooling amounts recoverable from
customers amounting to '7.13 crores are not fulfilling their
obligations nor making the payments to the company. The company has not
taken proper steps for recovery of the above amounts. That in our
opinion the advances under report are doubtful for recovery for which
the company should have made the provision for the same. Due to above,
the losses of the company will be increased by substantial amount.
4. No Provision has been made in the financial statements for Interest
in respect of (i) delayed/ non- payment to suppliers/ service providers
which are registered under the provisions of The Micro, Small or Medium
Enterprises Development Act, 2006 (ii) delayed payments/outstanding
payments in respect various statutory dues such as provident fund,
employees' state insurance, income tax, wealth tax, sales tax, excise
duty, cess and other statutory dues and (iii) on enhanced cost not paid
'2,79,72,000/- to HSIIDC in respect of factory plot at Manesar. This
matter was also qualified in audit report of earlier year ;
5. As mentioned in note 11 of the notes to accounts no.29 regarding
confirmations of the balances of sundry creditors and debtors, loans
and advances, price variance claims and rebate claimed from suppliers
have not been obtained and they are subject to reconciliations and
subsequent adjustments if any. As such we are unable to express any
opinion as to the effect on the financial statements for the year.
6. Going concern concept:- The financial statements indicates that the
company has accumulated losses and its net worth has been fully eroded
( without considering the capital reserves and capital revaluation
reserve) and the company has incurred a net cash loss in the current as
well as in the preceding financial year. That keeping in view of our
audit observations 1 to 5 above, reporting under "Emphasis of matter" as
under, report made in (Auditor's report) order, 2015, defaults in
repayment of the loans to Banks and financial institutions and the
current liabilities exceeded its current assets as at the balance sheet
date, it indicates the existence of a material uncertainty that make
cast significant doubt about the company's ability to continue as a
going concern. However the financial statements of the company have been
prepared on a going concern basis.
Emphasis of matters
We draw attentions to the following matters given in the notes to the
financial statements (Note No.29) other than reported in "Basis for
qualified opinion" and report made in (Auditor's report) order, 2015,
our considered opinion in respect of the said notes are as under:-
1. Note No.29- 2(d):- The Company has evaluated the useful lives of
fixed assets on the basis of Internal Technical Assessment which are
based in accordance with the rates given in schedule-XIV of the
Companies Act, 1956. The company has not obtained a report from
Independent technical person that the internal assessment is justified.
2. Note No.29 - 2(p.) Impairment of assets:- As stipulated in AS-28,
the company assessed potential generation of economic benefits from its
business unit and is of the view that assets employed in continuing
business are capable of generating adequate returns over their useful
lives in the usual course of business. There is no indication to the
contrary and accordingly the management is of the view that no
impairment provision is called for in these accounts.
The company has already closed down its units at Faridabad, Aurangabad
and Pune. The Plant and machinery, Other Fixed assets excluding land
and building and stocks have been stated at cost less accumulated
depreciation/ at cost respectively, the management has no plans to
restart the above units in future. That as per accounting standard-10
"Accounting for fixed assets" such fixed assets is required to be
stated at the lower of net book value and net realizable value in the
financial statements. The opinion in respect of stocks has already been
given above in qualified opinion. The expected losses are to be
recognized in the profit and loss statement and such fixed assets
should be shown separately in the balance sheet as ' Assets retired
from active use and held for disposal. However the company has not
followed AS-10 and AS-2 and has not booked expected losses. Further the
carrying amount as shown in the financial statement is more than its
recoverable amount and the company has not booked impairment loss as
required by AS-28 'Impairment of assets'
3. Note No.29- 3(a)- "Contingent liabilities":- The company has
inadequate records of Sales tax assessments. The contingent liabilities
reported in respect of Sales tax are in respect of financial years for
which assessment orders are available with the company. That there can
be a possibility of contingent liabilities/ascertained liabilities in
respect of Sales tax for which the assessment orders are not with the
company. Further no evidences have been furnished in respect of filing
appeals with higher Sales Tax authorities.
4. Note No.29- 3(b)- "Capital Commitments":- The company has decided
to postpone its capital commitment expenditure in respect of capital
work in progress '2,46,22,558/- ('2,63,57,993/-) on account of
inadequacy of liquid funds. The company will have to suffer the loss in
case the company fails to fulfill its capital commitments program.
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 matters
described in the Basis of qualified opinion paragraph, Emphasis of
Matter paragraph and adverse remarks in CARO,2015, 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, of the state of
affairs of the Company as at 31st March, 2015, and its Loss and its
cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
a) Subject to the matters described in the Basis for Qualified opinion
paragraph, Emphasis of matters paragraph and Auditor's report order,
2015, we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit;
b) Except for the possible effect of the matters described in the Basis
for Qualified opinion paragraph, Emphasis of matters paragraph and
Auditor's report order, 2015, 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, Statement of Profit and Loss and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) Except for the possible effect of the matter described in the Basis
for Qualified opinion paragraph, Emphasis of matter paragraph and
Auditor's report order, 2015, in our opinion, the aforesaid financial
statements comply with the Accounting Standards specified under Section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014;
e) The matters described in the Basis for Qualified opinion paragraph,
Emphasis of matter paragraph and Auditor's report order, 2015, in our
opinion, may have an adverse effect on the functioning of the company.
f) On the basis of the written representations received from the
directors as on 31st March, 2015 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act;
g) The qualifications relating to the maintenance of accounts and other
matters connected therewith are stated in the 'Basis for Qualified
opinion' paragraph, 'Emphasis of matter' paragraph and Auditor's report
order, 2015; and
h) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:-
I. The company has disclosed the impact of pending litigations on its
financial positions in its financial statements(See note no.3(a) of
Notes to accounts (Note No.29) of the financial statements).
II. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses; and
III. There has been no delay in transferring amounts to the Investor
Education and Protection Fund by the Company.
Annexure to the Independent Auditors' Report
(The Annexure referred to in our Independent Auditors' Report to the
members of LUMAX AUTOMOTIVE SYSTEMS LIMITED ( 'the company') on the
financial statements for the year ended 31s1 March, 2015, we report
that:
i. (a) The company which is maintaining records showing full
particulars, including quantitative details and situation of fixed
assets have not been produced for our verification. Also the fixed
assets have not been physically verified by the management during the
year, hence we are unable to comment on the discrepancies, if any.
ii. (a) The Management has conducted physical verification of inventory
in respect of its working units at Manesar at reasonable intervals.
However no physical verification has been carried out in respect of the
closed units at Plot No. 78, Sector-6, Faridabad, Aurangabad unit and
12/2, Mathura Road, Faridabad and two Pune Units. The stock values in
respect of the closed units have been taken as per values declared in
the earlier financial statements.
(b) In our opinion and according to the information and explanation
given to us the procedures of physical verification of inventory
followed by the management at working unit referred to above is
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 and
subject to observation made in paras ii(a) and (b) above, we are of the
opinion that the Company is maintaining proper records. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operation of the
Company and the same have been properly dealt with in the books of
account.
iii. As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 189 of The Companies Act, 2013. Accordingly,
the provisions of clauses (iii)(a) and (iii) (b) of the Order, 2015 are
not applicable to the Company
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control systems commensurate
with the size of the Company and the nature of its business, for sale
of goods/services and for the purchase fixed assets. However the
internal control system for purchase of inventory is inadequate since
the purchases are made without inviting quotations. In our opinion this
a continuing failure to correct major weakness in the internal control
system.
v. The Company has not accepted any deposits from the public.
vi. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records u/s 148(1) of the Companies Act, 2013
related to the manufacture of auto components and are of the opinion
that prima facie, the specified accounts and records have been made and
maintained. We have not however made detailed examination of the same.
vii. (a) (a) According to the information and explanations given to us
and on the basis of our examination of the records of the company,
amount deducted / accrued in the books of the company in respect of
undisputed statutory dues including provident fund, employees' state
insurance, income-tax, sales-tax, wealth tax, service tax, duty of
customs, duty of excise, value added tax, cess and other material
statutory dues have not been regularly deposited with the appropriate
authorities and there have been serious delays in large number of cases.
(b) According to the information and explanation given to us, the
undisputed amounts payable in respect of provident fund, employees'
state insurance, income-tax, sales-tax, wealth tax, service tax, duty
of customs, duty of excise, value added tax, cess and other undisputed
statutory dues were outstanding,, at the year end for a period of more
than six months from the date they became payable are Rs.
12,52,10,182/-(previous year Rs. 13,34,55,488/-)
(c) According to the records of the company and the information and
explanations given to us, the dues outstanding of Income tax, sales
tax, Wealth tax, service tax, custom duty, excise duty, Value added tax
and cess on account of any dispute are as follows :
S. Name of the Statute Nature of Amount Period to which
No Dues (In lacks) the amount
relates
1 Income Tax Act, 1961 Income Tax 1.89 F.Y 2006-07
2 Haryana Value added VAT 1935.68 F. Y. 2008-09
tax (Local) to 2011-12
3. Haryana Value added CST 488.09 F.Y. 2008-09
tax (Central) To F.Y.
2011-12
4 Maharashtra State 116.86 F.Y.2010-11
Value added tax
(Local) VAT
5 Maharashtra State 89.55 F.Y.2010-11
Value added tax
(Central) CST
S. Name of the Statute Forum where the dispute is pending
No
1 Income Tax Act, 1961 Review petition pending with A.O.
2 Haryana Value added Appeal is pending before Joint Excise
tax (Local)
& Taxation Commissioner (Appeals),
Faridabad
3. Haryana Value added Appeal is pending before Joint Excise
tax (Central)
& Taxation Commissioner (Appeals),
Faridabad
4 Maharashtra State Commissioner (Appeals), Pune
Value added tax
(Local)
5 Maharashtra State Commissioner (Appeals), Pune
Value added tax
(Central)
d. According to the information and explanations given to us, the
amount required to be transfer to investor education and protection fund
in accordance with relevant provisions of the Companies Act, and rules
made there under has been transferred to such fund within time.
viii. The company has accumulated losses and the company has incurred
cash losses in the current financial year as well as in the immediately
preceding financial year.
ix. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has defaulted in repayment of dues to banks and financial
institution as here under:-
Particulars Overdue amount with interest
HSIIDC (Term Loan) 10,15,47,000
Axis Bank/ICICI Bank(Vehicle loans) 13,22,449
Electronics Finance Limited (Term Loan) 30,08,140
Syndicate Bank-working capital limit 8,25,36,129
The company did not have any debentures during the year.
x. According to the information and explanations given to us the
Company has not given guarantee for loans taken by others from bank or
financial institutions.
xi. According to the information and explanations given to us by the
management, the term loans were applied for the purpose for which the
loans were obtained.
xii. Based upon the audit procedures performed for the purpose of
reporting a true and fair view of the financial statements and as per
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 course of our audit nor we have been informed of such cases by the
management.
FOR R.JAIN & SANJAY ASSOCIATES,
ICAI FIRM REGISTRATION NO.012377N,
CHARTERED ACCOUNTANTS
PLACE: NEW DELHI CA-R.K. JAIN
DATE: 30/05/2015 (PARTNER)
MEMBERSHIP NO: - 9981
Mar 31, 2014
We have audited the accompanying financial statements of LUMAX
AUTOMOTIVE SYSTEMS LIMITED (''the Company'') which comprise the
balance sheet as at 31 March 2014, the statement of profit and loss and
the cash flow statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management''s 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 and cash flows 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 dates 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 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 subject to our
observations in para. 2(d) below (Report on other legal and regulatory
requirements) and give a 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 March 2014;
II. in the case of the statement of profit and loss, of the loss for
the year ended on that date; and
III. In the case of the cash flow statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. Subject to the audit observations as under and as required by the
Companies (Auditor''s Report) Order, 2003 ("the Order"), as
amended, 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 and subject to observations
as under, 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 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
subsection (3C) of section 211 of the Companies Act, 1956 read with
General Circular 15/2013 dated 13th September, 2013 of the Ministry of
Corporate Affairs in respect of section 133 of the Companies Act, 2013,
subject to our following observations that :-
i. As mentioned I stated in Note No.-14(Balance sheet) and Para 16
(iii) (accounting policies) of Note No. 29 regarding notes to accounts,
the company has valued the inventories at costlestimated cost inclusive
of taxes and duties instead of at Cost or realizable value whichever is
lower and exclusive of taxes paid, which are subsequently recoverable
from the taxing authorities, which is not in compliance with Accounting
Standard to valuation of inventories prescribe in the companies
(Accounting Standards) Rules 2006. In our opinion the old inventories
which are unusable for manufacturing purposes and are in obsolete
nature should have been valued at realizable value and provision for
loss in value should have been provided by the company. Further stock
in transit in hand valuing ''4,73,43,5921- is imported raw material
and was lying with the Central Warehousing Corporation. The company has
not obtained confirmation of the material lying in the Warehouse from
Central Warehousing Corporation.
ii. No Provisions have been made in the financial statements in respect
of the following items:-
(a) Provision for Interest in respect of delayedI non- payment to
suppliersI service providers which are registered under the provisions
of The Micro, Small or Medium Enterprises Development Act, 2006 as well
as in respect of delayed paymentsloutstanding payments in respect
various statutory dues such as provident fund, employees'' state
insurance, income tax, wealth tax, sales tax, excise duty, cess and
other statutory dues;
(b) Provision for doubtful debts and loans and advances amounting to
''181927873I- and ''5826525I- respectively which are considered
doubtful of recovery. In our opinion most of the doubtful debts and
loan and advances are bad in nature and the company should have made
the provision for the same.
(c) Short provision of labour compensation payable to workers with whom
the settlements were made during the year by ''8 lakhs. Consequent to
the above observations the loss is under stated.
(d) Provision of ''2,79,72,0001- and interest thereon on non- payment
on account of enhanced cost raised by HSIIDC in respect of factory plot
No. 46, Sector-3, IMT, Manesar, Gurgaon, Haryana.
iii. As mentioned in note 15 of the notes to accounts no 29 regarding
the balances of some of the sundry creditors and debtors, loans and
advances, price variance and rebate claims are subject to confirmation
I reconciliation and subsequent adjustments if any. As such we are
unable to express any opinion as to the effect their of on the
financial statements for the year.
e. On the basis of written representations received from the directors
as on 31 March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 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.
ANNEXURE TO THE AUDITOR''S REPORT
(The Annexure referred to in our report to the members of LUMAX
AUTOMOTIVE SYSTEMS LIMITED ( ''the company'') for the year ended 31st
March, 2014.
i. (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. However fixed assets have not been physically verified by the
management during the year, hence we are unable to comment on the
discrepancies, if any.
(b) In our opinion, the disposal of fixed assets during the year does
not affect the going concern assumption.
ii. (a) The Management has conducted physical verification of inventory
in respect of its working units at Manesar, Gurgaon and 12/2, Mathura
Road, Faridabad at reasonable intervals. However no physical
verification has been carried out in respect of the closed units at
Plot No. 78, Sector-6, Faridabad, Aurangabad unit and two Pune Units.
The stock values in respect of the closed units have been taken as per
values declared in the earlier financial statements.
(b) In our opinion and according to the information and explanation
given to us the procedures of physical verification of inventory
followed by the management at working units referred to above 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 and
subject to observation made in paras ii(a) and (b), we are of the
opinion that the Company is maintaining proper records. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operation of the
Company and the same have been properly dealt with in the books of
account.
iii. (a) The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
u/s 301 of the Act.
(b) The company has taken interest bearing unsecured loans from
Directors and companies covered in the register maintained u/s 301 of
the Act. The number of the parties and maximum amounts involved during
the year were eight and Rs.4,27,02,465/- and the year end balance of
loans taken from such parties was Rs.3,76,48,433/-. The rate of
interest and other terms and conditions of the loans taken are not
prima facie prejudicial to the interest of the Company. There is no
stipulation in respect of repayment of principal amounts and interest
thereon.
v. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems 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. Further, on the basis of examination of the books and records
of the Company, and according to the information and explanation given
to us, as per the checking carried out in accordance with the auditing
standards generally accepted in India, neither we have observed nor we
have been reported for any continuing failure to correct major
weaknesses in internal control systems.
v. (a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the particulars of contracts or arrangements referred to
in section 301 of the Act have been entered in the register required to
be maintained u/s 301 of the Act.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA or any other relevant
provisions of the Act.
vii. The Company has an internal audit system, which in our opinion, is
not adequate and needs to be enlarge to be commensurate with the size
of company and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records u/s 209(1 )(d) of the Companies Act, 1956
and are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made
detailed examination of the records with a view to determine whether
they are accurate or complete.
ix. (a) According to the records examined by us, undisputed statutory
dues including provident fund, investor education and protection fund,
employees'' state insurance, income tax, sales tax, wealth tax,
service tax, custom duty, excise duty and cess have not been regularly
deposited with the appropriate authorities and there have been serious
delays in large number of cases.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, employees'' state
insurance, income tax, sales tax, excise duty, cess and other statutory
dues which were outstanding, at the year end for a period of more than
six months from the date they became payable are Rs. 13,34,55,488/-
(c) According to the information and explanations given to us and the
records of the company examined by us, the particulars of dues of
Income Tax, Sales Tax, Wealth Tax, Services Tax, Customs duty and
Excise Duty as at 31-03-2013, which have not been deposited on account
of the dispute are as follows :
S.
No Name of the Nature of Amount('')
Statute Dues
1. Income Tax Income Tax 5,48,585
Act, 1961
2. Haryana Value VAT including 25.78 Lakhs
added tax (Local) interest
3. Central Sales CST including 67.09 Lakhs
Tax Act, 1956 interest
73.65 Lakhs
Name of the
Statute Period to Forum where the
which relate dispute is pending
Income Tax
Act, 1961 F.Y 2006-07 Review petition
pending with A.O.
Haryana Value
added tax (Local) F.Y. 2009-10 On account of non
submission of
statutory forms
Central Sales
Tax Act, 1956 F.Y. 2008-09 On account of non
submission of
F.Y. 2009-10 statutory forms
x . The company has no accumulated losses. However the company has
incurred cash losses in the current financial year and no cash losses
were incurred in the immediately preceding financial year.
xi. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks or financial
institution except the following:- (a) installments of the term loan
and interest with HSIIDC amounting to ''5,53,29,060/- as at the date
of balance sheet (b) default during the year with IDBI Bank of two
installments of ''20 lakh each for a period of 6 and 3 months which
were re-paid in the accounting year. There were no dues to debenture
holders during the year.
xii. According to the information and explanation given to us and based
on the documents and records produced to us, 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-fund or a nidhi/ mutual benefit
fund/society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditor''s Report) Order, 2003(As Amended) are not
applicable to the Company.
xiv. The Company is not dealing or trading in shares, securities,
debentures and other investments. The other provisions of clause 4(xiv)
of the Companies (Auditor''s Report) Order, 2003, (As amended) are not
applicable to the company.
xv. According to the information and explanations given to us the
Company has not given guarantee for loans taken by others from bank or
financial institutions.
xvi. According to the information and explanations given to us by the
management, the term loans were applied for the purpose for which the
loans were obtained.
xvii. Based on examination of documents, records and fund flow
statement made available to us and on the basis of information and
explanations given to us, the Company has not used funds raised on
short term basis for long term investment
xviii. The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained u/s 301 of the
Companies Act, 1956.
xix. The Company has neither issued nor had any outstanding debenture
during the year.
x x . The Company has not raised any money through a public issue
during the year.
xxi. Based upon the audit procedures performed for the purpose of
reporting a true and fair view of the financial statements and as per
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 course of our audit nor we have been informed of such cases by the
management.
FOR R.JAIN & SANJAY ASSOCIATES,
ICAI FIRM REGISTRATION NO.012377N,
CHARTERED ACCOUNTANTS
PLACE: NEW DELHI CA-R.K. JAIN
DATE : 30th MAY 2014 (PARTNER)
MEMBERSHIP NO: - 9981
Mar 31, 2013
Report on the Financial Statements We have audited the accompanying
financial statements of LUMAX AUTOMOTIVE SYSTEMS LIMITED (''the
Company'') which comprise the balance sheet as at 31 March 2013, the
statement of profit and loss and the cash flow statement for the year
then ended and a summary of significant accounting policies and other
explanatory information in which are incorporated accounts audited by
us and the branch accounts of two units at Pune were audited by another
auditor. The reports submitted by the branch auditor have been
considered by us in oreparation of this report.
Management''s 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 and cash flows 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"). 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.
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. 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
The branch auditors in their audit reports of Pune units have made the
following
opinion in respect of the audit of accounts of the said units.
"Due to labour unrest and other practical difficulties, the operations
at Pune Units I and II of the company were terminated during the year.
Further, the Account Records could not be taken out from the premises
of said units and therefore, could not be made available to us for the
purpose of Audit. Due to non availability of account records, and
other necessary documents, we could not perform any on-site Audit
procedures in accordance with generally accepted Auditing Standards in
India and therefore, are unable to comment on correctness of the
financial statements or otherwise. We are also unable to comment on
the adjustments or disclosures, if any, that might have been arisen or
required to be reported upon, had we performed on-site Audit
procedures." 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
subject to our observations in para. 2(d) below (Report on other legal
and regulatory requirements) and give a 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 March 2013;
II. in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
III. In the case of the cash flow statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. Subject to the audit observations and the opinion expressed in
earlier para. and as required by the Companies (Auditor''s Report)
Order, 2003 ("the Order"), as amended, 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 and subject to the opinion
para as above and observations as under , 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 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
subsection (3C) of section 211 of the Companies Act, 1956, subject to
our observations that
i. As mentioned / stated in Note No.-14(Balance sheet) and Para 16
(iii) (accounting policies) of Note No. 29 regarding notes to accounts,
the company has valued the inventories at cost/estimated cost inclusive
of taxes and duties instead of at Cost or realizable value whichever is
lower and exclusive of taxes paid, which are subsequently recoverable
from the taxing authorities, which is not in compliance with Accounting
Standard to valuation of inventories prescribe in the companies
(Accounting Standards) Rules 2006. In our opinion the old inventories
which are unusable for manufacturing purposes and are in obsolete
nature should have been valued at realizable value and provision for
loss in value should have been provided by the company.
ii. As stated in para 5 of note no.29(Notes to accounts), the payment
of managerial remuneration paid in excess is subject to sanction of
Govt. authorities.
iii. No Provision has been made for interest in respect of delayed/
non- payment to suppliers/ service providers which are registered under
the provisions of The Micro, Small or Medium Enterprises Development
Act, 2006 as well as in respect of delayed payments/ outstanding
payments in respect various statutory dues such as provident fund,
employees'' state insurance, income tax, wealth tax, sales tax, excise
duty, cess and other statutory dues;
iv. The company has not made any provision for doubtful debts amounting
to Rs.7,41,84,760/- which are considered doubtful of recovery. In our
opinion most of the doubtful debts are bad in nature and company should
have made the provision for the same;
v. As mentioned in note 15 of the notes to accounts no 29 regarding the
balances of some of the sundry creditors and debtors, loans and
advances and rebate claims are subject to confirmation / reconciliation
and subsequent adjustments if any. As such we are unable to express any
opinion as to the effect their of on the financial statements for the
year.
e. On the basis of written representations received from the directors
as on 31 March 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 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 AUDITOR''S REPORT
(The Annexure referred to in our report to the members of LUMAX
AUTOMOTIVE SYSTEMS LIMITED ( ''the company'') for the year ended 31st
March, 2013.
i . (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. All the fixed assets have not been physically verified by the
Management during the year but there is a regular programme of
verification which in our opinion is reasonable having regard to the
size of the Company and the nature of its fixed assets. We are informed
that no material discrepancies were noticed on verification. (b) In
our opinion, the disposal of fixed assets during the year does not
affect the going concern assumption.
ii. (a) The Management has conducted physical verification of inventory
at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us 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 records of inventory, we are
of the opinion that the Company is maintaining proper records. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operation of the
Company and the same have been properly dealt with in the books of
account.
iii. (a) The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
u/s 301 of the Act.
(b) The company has taken interest bearing unsecured loans from
Directors and companies covered in the register maintained u/s 301 of
the Act. The number of the parties and maximum amounts involved during
the year were eight and Rs.3,55,53,589/- and the year end balance of
loans taken from such parties was Rs.3,30,51,530/-. The rate of
interest and other terms and conditions of the loans taken are not
prima facie prejudicial to the interest of the Company. There is no
stipulation in respect of repayment of principal amounts and interest
thereon.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems 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. Further, on the basis of examination of the books and
records of the Company, and according to the information and
explanation given to us, as per the checking carried out in accordance
with the auditing standards generally accepted in India, neither we
have observed nor we have been reported for any continuing failure to
correct major weaknesses in internal control systems.
v . (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the particulars of contracts or arrangements referred
to in section 301 of the Act have been entered in the register required
to be maintained u/s 301 of the Act.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi . In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA or any other relevant
provisions of the Act.
vii . The Company has an internal audit system, which in our opinion,
is commensurate with its size of the Company and the nature of its
business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the maintenance of cost records u/s 209(1)(d) of the Companies Act, 1956
and are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made
detailed examination of the records with a view to determine whether
they are accurate or complete.
ix . (a) According to the records examined by us, undisputed
statutorily dues including provident fund, investor education and
protection fund, employees'' state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess have not been
regularly deposited with the appropriate authorities and there have
been serious delays in large number of cases.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, employees'' state
insurance, income tax, sales tax, excise duty, cess and other
statutory dues which were outstanding, at the year end for a period
of more than six months from the date they became payable are
Rs. 5,93,61,311/-
(c) According to the information and explanations given to us and
the records of the company examine by us, the particulars of dues
of Income Tax, Sales Tax, Wealth Tax, Services Tax, Customs duty and
Excise Duty as at 31-03-2013, which have not been deposited on account
of the dispute are as follows :
S.
No Name of the Nature of Amount Period to Forum where the
Statute Dues which relate dispute is pending
1. Income Tax Act, Income 1,07,35,896 F.Y.
2008-09 Commissioner
1961 Tax Income Tax
(Appeals)
New Delhi
2 Income Tax Act, Income Tax 5,48,585 F.Y
2006-07 Review
petition
1961 pending
with A.O.
x. The company has no accumulated losses and has not incurred cash
losses in the current financial year and in the immediately preceding
financial year.
xi. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks or financial
institution except the Installment of the Term Loan with HSIIDC of Rs.
76,45,000/- as at the balance sheet date. There were no dues to
debenture holders during the year.
xii. According to the information and explanation given to us and
based on the documents and records produced to us, 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-fund or a nidhi/ mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor''s Report) Order, 2003(As Amended) are not applicable to the
Company.
xiv. The Company is not dealing or trading in shares, securities,
debentures and other investments. The other provisions of clause 4(xiv)
of the Companies (Auditor''s Report) Order, 2003, (As amended) are not
applicable to the company.
xv . According to the information and explanations given to us the
Company has not given guarantee for loans taken by others from bank or
financial institutions.
xvi. According to the information and explanations given to us by
the management, the term loans were applied for the purpose for which
the loans were obtained.
xvii. Based on examination of documents, records and fund flow
statement made available to us and on the basis of information and
explanations given to us, the Company has not used funds raised on
short term basis for long term investment.
xviii. The Company has not made any preferential allotment of
shares to parties or companies covered in the register maintained u/s
301 of the Companies Act, 1956.
xix. The Company has neither issued nor had any outstanding
debenture during the year.
xx. The Company has not raised any money through a public issue
during the year.
xxi. Based upon the audit procedures performed for the purpose of
reporting a true and fair view of the financial statements and as per
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 course of our audit nor we have been informed of such cases by the
management.
FOR R.JAIN & SANJAY ASSOCIATES,
ICAI FIRM REGISTRATION NO.012377N,
CHARTERED ACCOUNTANTS
CA-R.K. JAIN
Place : New Delhi (PARTNER)
Date : 30/05/2013 MEMBERSHIP NO: - 9981
Mar 31, 2012
1. We have audited the attached Balance Sheet of LUMAX AUTOMOTIVE
SYSTEMS LIMITED, as at 31st March, 2012 and the annexed Profit & Loss
Account and Cash Flow Statement for the year ended on that date in
which are incorporated accounts audited by us and branch accounts
audited by another auditor. The reports submitted by the branch auditor
have been considered by us in the preparation of this report. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform our 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion. We report subject to notes appearing at Note 29,
particularly note No.16 of the said note regarding Significant
Accounting Policies as under:
3. As required by the Companies (Auditor's Report) Order, 2003, (as
amended) issued by the Central Government of India in terms of
Section227(4A) ofthe CompaniesAct, 1956, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 ofthe said
order.
4. Further to our comments, in the Annexure referred to above; 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 the law have
been kept by the Company so far as it appears from examination of those
books;
c) The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of accounts;
d) In our opinion, the balance sheet, profit and loss account and cash
flow statement comply with the mandatory accounting standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956;
subject to our observations that
(i) As mentioned / stated in Note-14 of balance sheet and 16
(iii) accounting policies of note no 29 regarding notes to accounts,
the company has valued the inventories at cost/ estimated cost
inclusive of taxes and duties instead of at Cost or realizable value
whichever is lower and exclusive of taxes paid, which is not in
compliance with Accounting Standard to valuation of inventories
prescribe in the companies (Accounting Standards) Rules 2006. In our
opinion the old inventories which are unusable for manufacturing
purposes and are in obsolete nature should have been valued at
realizable value andprovision for loss in value should have been
provided by the company.
(ii) No Provision has been made for interest in respect of delayed/ non
payment to suppliers/ service providers which are registered under the
provisions of The Micro, Small or Medium Enterprises Development Act,
2006 as well as in respect of delayed payments/outstanding payments in
respect various statutory dues such as provident fund, employees '
state insurance, income tax, sales tax, excise duty, cess and other
statutory dues,
(iii) The company has not made any provisionfor doubtful debts
amounting to Rs.6,98,92,459/- which are considered doubtful of
recovery. In our opinion most of the doubtful debts are bad in nature
and company should have made the provision for the same.
(iv) As mentioned in note 15 of the notes to accounts no 29 regarding
the balances of some of the sundry creditors and debtors, loans and
advances and rebate claims are subject to confirmation/reconciliation
andsubsequent adjustments if any. As such we are unable to express any
opinion as to the effect their of on the financial statements for the
year.
e) On the basis of written representations received from the directors
as on 31st March 2012, and taken on record by the board of directors,
we report that none of the directors is disqualified as on 31st March
2012 from being appointed as a director in terms of clause (g) of sub
section (1) of section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required subject
to our observations in para. 4(d) above and give a true and fair view:
a) In the case of the balance sheet, of the State of the Company's
affairs as at 31st March 2012;
b) In the case of the profit and loss account, of Profit 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 referred to in Paragraph 3 of our report of even date on the
accounts of Lumax Automotive Systems Limited for the year ended 31st
March, 2012.
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. All the fixed assets have not been physically verified by the
Management during the year but there is a regular programme of
verification which in our opinion is reasonable having regard to the
size of the Company and the nature of its fixed assets. We are informed
that no material discrepancies were noticed on verification.
(b) In our opinion, the disposal of fixed assets during the year does
not affect the going concern assumption.
ii. (a) The Management has conducted physical verification of
inventory at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us 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 records of inventory, we are
of the opinion that the Company is maintaining proper records. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operation of the
Company and the same have been properly dealt with in the books of
account.
iii. (a) The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
u/s 301 of the Act.
(b) The company has taken interest bearing unsecured loans from
Directors and companies covered in the register maintained u/s 301 of
the Act. The number of the parties and maximum amounts involved during
the year were seven and Rs.3,20,48,159/- and the year end balance of
loans taken from such parties was Rs.2,26,86,694/-. The rate of
interest and other terms and conditions of the loans taken are not
prima facie prejudicial to the interest of the Company. There is no
stipulation in respect of repayment of principal amounts and interest
thereon.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems 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. Further, on the basis of examination of the books and records
of the Company, and according to the information and explanation given
to us, as per the checking carried out in accordance with the auditing
standards generally accepted in India, neither we have observed nor we
have been reported for any continuing failure to correct major
weaknesses in internal control systems.
v. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the particulars of contracts or arrangements referred
to in section 301 of the Act have been entered in the register required
to be maintained u/s 301 of the Act.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA or any other relevant
provisions of the Act.
vii. The Company has an internal audit system, which in our opinion, is
commensurate with its size of the Company and the nature of its
business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records u/s 209(1)(d) of the Companies Act, 1956
and are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made
detailed examination of the records with a view to determine whether
they are accurate or complete.
ix. (a) According to the records examined by us, undisputed
statutorily dues including provident fund, investor education and
protection fund, employees' state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess have not been
regularly deposited with the appropriate authorities and there have
been delays in large number of cases.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, employees' state
insurance, income tax, sales tax, excise duty, cess and other statutory
dues which were outstanding, at the year end for a period of more than
six months from the date they became payable are Rs. 4,21,39,832/-
(c) According to the information and explanations given to us and the
records of the company examine by us, the particulars of dues of Income
Tax, Sales Tax, Wealth Tax, Services Tax, Customs duty and Excise Duty
as at 31-03- 2012, which have not been deposited on account of the
dispute are as follows :
S.
No Name of the
Statute Nature of
Dues Amount Period to Forum where the
which relate dispute is
pending
1. Income Tax
Act, 1961 Income Tax 52,37,331 F.Y 2008-09 Commissioner
Income Tax
(Appeals)
New Delhi
2 Income Tax
Act, 1961 Income Tax 5,48,585 F.Y 2006-07 Review petition
pending with A.O.
x. The company has no accumulated losses and has not incurred cash
losses in the current financial year and in the immediately proceeding
financial year.
xi. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks or financial
institution as at the balance sheet date. There were no dues to
debenture holders during the year.
xii. According to the information and explanation given to us and based
on the documents and records produced to us, 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-fund or a nidhi/ mutual benefit
fund/society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditor's Report) Order, 2003(As Amended) are not
applicable to the Company.
xiv. The Company is not dealing or trading in shares, securities,
debentures and other investments. The other provisions of clause 4(xiv)
of the Companies (Auditor's Report) Order, 2003, (As amended) are not
applicable to the company.
xv. According to the information and explanations given to us the
Company has not given guarantee for loans taken by others from bank or
financial institutions.
xvi. According to the information and explanations given to us by the
management, the term loans were applied for the purpose for which the
loans were obtained.
xvii. Based on examination of documents, records and fund flow
statement made available to us and on the basis of information and
explanations given to us, the Company has not used funds raised on
short term basis for long term investment.
xviii. The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained u/s 301 of
the Companies Act, 1956.
xix. The Company has neither issued nor had any outstanding debenture
during the year.
xx. The Company has not raised any money through a public issue during
the year.
xxi. Based upon the audit procedures performed for the purpose of
reporting a true and fair view of the financial statements and as per
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 course of our audit nor we have been informed of such cases by the
management.
FOR R.JAIN & SANJAY ASSOCIATES,
FIRM REGISTRATION NO.012377N,
CHARTERED ACCOUNTANTS
PLACE : NEW DELHI CA-SANJAY JAIN
DATE : 10/08/2012 (PARTNER)
MEMBERSHIP NO: - 88027
Mar 31, 2010
1. We have audited the attached Balance Sheet of LUMAX AUTOMOTIVE
SYSTEMS LIMITED, as at 31 st March, 2010 and the annexed Profit & Loss
Account and Cash Flow Statement for the year ended on that date in
which are incorporated accounts audited by us and branch accounts
audited by another auditor. The reports submitted by the branch auditor
have been considered by us in the preparation of this report. 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 auditing standards
generally accepted in India. Those standards require that we plan and
perform our 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion. We report subject to notes appearing in schedule
23, particularly note No.21 regarding Significant Accounting Policies
as under:
3. As required by the Companies (Auditors Report) Order, 2003, (as
amended) issued by the Central Government of India in terms of Section
227(4A) of the Companies Act, 1956, we give 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 above; 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 the law have
been kept by the Company so far as it appears from examination of those
books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the mandatory Accounting Standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956;
subject to our observations that
(i) A liability as per actuarial valuation on account of earned leaves
due to the employees amounting to Rs. 63.07 Lacs has not been provided
in the Accounting Statements, which is contrary to AS-15 on Employees
Benefits (Revised 2005)(refer note in Para 3 (ii) of schedule 23),
(ii) The company has not provided gratuity liability for the financial
years 2008-09 and 2009-10 and in the absence of actuarial valuation,
the impact on the profit is not ascertainable,
(iii) Inventories are valued inclusive of taxes and duties which is
contrary to the accounting standard AS-2(valuation of inventories),
wherein the inventories should be valued at lower of the cost or net
realizable value and exclusive of taxes paid which are subsequently
recoverable from the taxation authorities,
(iv) No Provision has been made for interest on delayed
payments/outstanding payments in respect of various statutory dues such
as provident fund, employees state insurance, income tax, sales tax,
excise duty, cess and other statutory dues, and
(v) The Branch Auditors D.R. Barve & Company, Chartered Accountants, in
their audit report has observed as under in respect of accounts of
Aurangabad(Maharashtra) unit audited by them:-
"The Aurangabad(Maharashtra) unit is locked due to labour problem &
based on order of Industrial Court since 5th March, 2010. Therefore
entire accounting record was not available for preparation &
verification of Financial Statements. Based on available information &
record the financial statements were prepared & verified. However, the
management is confident that the results based on actual record, bills,
vouchers etc. will not differ with material amount as compared to the
figures mentioned in the financial statements prepared. Also, the true
& fair view of state of affairs of the Aurangabad unit as at 31st
March, 2010 as well as "Loss" of the unit for the year ended 31st
March, 2010 will not differ with material amount based on actual facts
& figures.
e) On the basis of written representations received from the directors
as on 31st March 2010, and taken on record by the board of directors,
we report that none of the directors is disqualified as on 31st 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;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required subject
to our observations in para. 4(d) above and give a true and fair view:
a) In the case of the Balance Sheet, of the State of the Companys
affairs as at 31 st March 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 referred to in Paragraph 3 of our report of even date on the
accounts of Lumax Automotive Systems Limited for the year ended 31
March, 2010.
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. All the fixed assets have not been physically verified by the
Management during the year but there is a regular programme of
verification which in our opinion is reasonable having regard to the
size of the Company and the nature of its fixed assets. We are informed
that no material discrepancies were noticed on verification.
(b) In our opinion, the disposal of fixed assets during the year does
not affect the going concern assumption.
2. (a) The Management has conducted physical verification of inventory
at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us 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 records of inventory, we are
of the opinion that the Company is maintaining proper records. The
discrepancies noticed on verification between physical inventories and
book records were not material in relation to the operation of the
Company and the same have been properly dealt with in the books of
account.
3. (a) The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
u/s 301 of the Act.
(b) The company has taken interest bearing unsecured loans from
Directors and companies covered in the register maintained u/s 301 of
the Act. The number of the parties and maximum amounts involved during
the year were seven and Rs.6,14,77,964/- and the year end balance of
loans taken from such parties was 6,00,49,045/-. The rate of interest
and other terms and conditions of the loans taken are not prima facie
prejudicial to the interest of the Company. There is no stipulation in
respect of repayment of principal amounts and interest thereon.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems 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. Further, on the basis of examination of the books and records
of the Company, and according to the information and explanation given
to us, as per the checking carried out in accordance with the auditing
standards generally accepted in India, neither we have observed nor we
have been reported for any continuing failure to correct major
weaknesses in internal control systems.
5. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the particulars of contracts or arrangements referred
to in section 301 of the Act have been entered in the register required
to be maintained u/s 301 of the Act.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA or any other relevant
provisions of the Act.
7. The Company has an internal audit system, which in our opinion, is
commensurate with its size of the Company and the nature of its
business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records u/s 209(1)(d) of the Companies Act, 1956
and are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the records examined by us, undisputed statutorily
dues including provident fund, investor education and protection fund,
employees state insurance, income tax, sales tax, wealth tax, service
tax, custom duty, excise duty, cess have not been regularly deposited
with the appropriate authorities and there have been delays in large
number of cases.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, employees state
insurance, income tax, sales tax, excise duty, cess and other statutory
dues which were outstanding, at the year end for a period of more than
six months from the date they became payable are Rs. 2,66,10,474/-.
10. The company has no accumulated losses and has not incurred cash
losses in the current financial year and in the immediately preceeding
financial year.
11. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks or financial
institution. There were no dues to debenture holders during the year.
12. According to the information and explanation given to us and based
on the documents and records produced to us, the company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
13. 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(As Amended) are not applicable
to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. The other provisions of clause 4(xiv)
of the Companies (Auditors Report) Order, 2003, (As amended) are not
applicable to the company.
15. According to the information and explanations given to us the
Company has not given guarantee for loans taken by others from bank or
financial institutions.
16. According to the information and explanations given to us by the
management, the term loans were applied for the purpose for which the
loans were obtained.
17. Based on examination of documents , records and fund flow
statement made available to us and on the basis of information and
explanations given to us, the Company has not used funds raised on
short term basis for long term investment.
18. The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained u/s 301 of the
Companies Act, 1956.
19. The Company has neither issued nor had any outstanding debenture
during the year.
20. The Company has not raised any money through a public issue during
the year.
21. Based upon the audit procedures performed for the purpose of
reporting a true and fair view of the financial statements and as per
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 course of our audit nor we have been informed of such cases by the
management.
FOR R.JAIN & SANJAY ASSOCIATES,
CHARTERED ACCOUNTANTS
PLACE: NEW DELHI CA-SANJAY JAIN
DATE: 28th AUGUST, 2010 (PARTNER)
Membership No: - 88027
Firm Registration No.012377N
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