Mar 31, 2018
INDEPENDENT AUDITORâS REPORT TO THE MEMBERS OF WINSOME TEXTILE INDUSTRIES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Winsome Textile Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2018, 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.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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.
Auditorâs 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 auditorâs 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 Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, 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 2018 and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
Without qualifying our opinion, we draw attention to note 25 regarding remuneration paid/provided to Managing Director during the year ended 31st March, 2018 which has exceeded the limit prescribed under section 197 read with schedule V to the Companies Act, 2013, by Rs. 28.29 Lakhs. As informed to us, the Company is in the process of filing waiver application with the Central Government for the above excess remuneration and pending application and receipt of the approval, no adjustments to financial statements have been made to show this amount as recoverable.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) 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, a statement on the matters specified in the paragraph 3 and 4 of the order.
2. As required by Section 143 (3) of the Act, we report that:
(a) 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) 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, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account subject to note no.31in the notes to the accounts;
(d) in our opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act;
(e) on the basis of the written representations received from the directors as on 31st March 2018 taken
on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and
(g) with respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has, to the extent ascertainable, disclosed the impact of pending litigations on its financial position in its financial statements - Refer clause (i) of Note 14 and Note 17 to the financial statements;
ii. the Company does not have any material foreseeable losses on long term contracts including derivative contracts which would impact its financial position;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
The Annexure referred to in Independent Auditorsâ Report to the members of the Company on the financial statements for the year ended 31st March 2018, we report that:
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) According to the information and explanations given to us, all the assets have been physically verified by the management according to the programme of periodical verification in phased manner 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) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) According to the information and explanations given to us, the management has conducted physical verification of inventory at reasonable intervals during the year which, in our opinion, is reasonable having regard to the size of the company and nature of its business. No material discrepancies were noticed on such verification.
(iii) According to the information and explanations given to us, the Company has not granted secured/ unsecured loans to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ).
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and securities made by the company.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Companies Act, 2013 Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended).
(vi) As certified by a Cost Accountant, the company has maintained cost records for the year under review, as prescribed under sub-section (1) of Section 148 to the extent applicable to the company. We have, however, not made a detailed examination of such records.
(vii) (a) According to the records of the company, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, Goods and Service Tax, duty of customs, Cess and other material statutory dues, as applicable, and no such statutory dues were outstanding as at the last day of the financial year under review for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of income-tax, Goods and Service Tax, duty of customs and cess, as applicable, which have not been deposited on account of any dispute, except the following:
Name of Statute |
Nature of Dues |
Period |
Amount uppaid (In Lacs Rs.) |
Forum |
Central Excise Act |
Excise Duty |
1996-97 to 1997-98 |
1.44 |
Assistant Commissioner |
Central Excise Act |
Excise Duty |
2008-09 to 2009-10 |
1.19 |
CESTAT |
Customs |
Custom Duty |
2015-16 |
1.20 |
Commissioner (Appeal) |
HP Sales Tax Act |
Entry Tax |
2010-11 to 2017-18 |
452.02 |
The High Court of Shimla |
(viii) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government. The company does not have any outstanding debentures during the year.
(ix) In our opinion and according to the information and explanation given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year under review. Further term loans have been applied for the purposes for which those were raised.
(x) According to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the course of the audit.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act subject to note no.25 in the notes to the accounts.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act and the details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him.
(xvi) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (âTHE ACTâ)
We have audited the internal financial controls over financial reporting of Winsome Textile Industries Limited (âthe Companyâ) as of 31st March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITORSâ RESPONSIBILITY
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
IN our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For B. CHHAWCHARIA & CO.
Chartered Accountants
Firm Registration No: 305123E
Abhishek Gupta
Partner
Membership No. 529082
Place: New Delhi
Date: 25th May, 2018
Mar 31, 2016
Report on the Financial Statements
We have audited the accompanying financial statements of Winsome Textile Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2016, 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.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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.
Auditorâs 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 auditorâs 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 Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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
Attention is drawn to:
(i) Note no. 27.3 regarding non-provisioning against Receivables amounting to Rs.1089.44 Lacs [from a erstwhile associate body corporate , whose net worth has been fully eroded], which is in the opinion of management is good and recoverable as stated in the said note and our inability to comment thereon.
We further report that the profit for the year, the balance in reserve & surplus and receivable are without considering item mentioned above, the effect of which could not be determined. Our opinion was also qualified on the financial statements for the year ended 31st March 2015 in respect of matter reported above.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, 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 31stMarch, 2016, and its profit and its cash flows for the year ended on that date.
1. Emphasis of Matter
Attention is drawn to:
(i) The company has not considered impairment testing of Fixed Assets of Hydro Power Project at Manuni, HP, which has been capitalized during the year w.e.f . 25th Sept 2015 but could not be put to use due to certain disputes with the HP State Electricity Board Limited ( Gross block Rs. 3838.67 lacs ) ( WDV Rs. 3762.21 lacs ). The matter is sub judice before the High Court of HP and in view of the management, no impairment testing, as per AS-28 is necessary as they are confident about earliest start of operation as well as recoverability of amount so far invested. (Note No. 27.4)
(ii) Balances of certain receivables, loans and advances, trade payables and other liabilities are subject to confirmation/reconciliation. (Note No. 27.8)
(iii) As per the past practice, Consumption of raw materials have been accounted for as balancing figure as assessed and estimated by the management. [Note No. 27.19(a)]
Our opinion is not modified in respect of matters stated above.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of audit, we give in the Annexure âAâ a statement on the matters specified in the paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) 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) 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, the 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 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 above, in our opinion, may not have adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors as on 31stMarch, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on31stMarch, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(g) As required by section 143(3)(i) of the Companies Act, 2013, and based on the checking of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, our report on the Internal Financial Controls over Financial Reporting is as per Annexure âBâ.
(h) With respect to the other matters to be included in the Auditorâs 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 position in its financial statements - refer Note no. 27.1((A) (ii)) and 27.4 to the financial statements
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any; on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE - A REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING âREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSâ OF OUR REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF WINSOME TEXTILE INDUSTRIES LTD. FOR THE YEAR ENDED 31ST MARCH, 2016.
1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management according to the programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such physical verification were not material.
(c) As per the records and information and explanations given to us, title deeds of immovable properties are in the name of the Company.
2. The inventories of the Company (except stock in transit), have been physically verified by the management at reasonable intervals and the procedures of physical verification of inventory followed by the Management are reasonable {to be read with note no.27.19(a)(ii)) in relation to the size of the Company and nature of its business. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.
3. According to the records and information and explanations made available to us, the Company has not granted any loans, secured or unsecured to companies, firms, LLP and other parties covered in the register maintained under section 189 of the Companies Act, 2013.
4. According to the information, explanations and representations provided by the management and based upon audit procedures performed, we are of the opinion that in respect of loans, investments, guarantees and security ; if any; the Company has complied with the provisions of the Section 185 and 186 of the Companies Act, 2013.
5. In According to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Section 73 to76 of the Act or any other relevant provisions of the Act and the rules framed there under. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or other tribunal in this regard.
6. 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 under Section 148(1) of the Act in respect of the Companyâs products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.
7. (a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including provident fund,, employeesâ state insurance, income tax, sales tax, service tax, custom duty, excise duty, value added tax , entry tax, cess and other material statutory dues with the appropriate authorities to the extent applicable and there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31st March, 2016.
(b) According to the records and information & explanations given to us, there are no dues in respect of income tax, duty of excise and value added tax that have not been deposited with the appropriate authorities on account of any dispute and the dues in respect of income tax, sales tax, service tax, excise duty, value added tax, entry tax, cess and custom duty that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below: -
NAME OF STATUTE |
NATURE OF DUES |
PERIOD |
AMOUNT UNPAID ( IN LACS RS.) |
FORUM |
|
|
|
|
|
Central Excise Act |
Excise Duty |
1995-96 |
1.44 |
Assistant Commissioner |
Central Excise Act |
Excise Duty |
1998-01 |
1.83 |
CESTAT |
Central Excise Act |
Excise Duty |
2000-01 |
1.74 |
CESTAT |
Central Excise Act |
Excise Duty |
2004-05 |
0.35 |
Commissioner (Appeal) |
Central Excise Act |
Excise Duty |
2005-06 |
21.33 |
CESTAT |
Central Excise Act |
Excise Duty |
2008-09 |
1.32 |
Commissioner (Appeal) |
HP Sales Tax Act |
Entry Tax |
2010-11 to 2014-15 |
400.38 |
The High Court of Shimla |
8. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of loans and borrowings to financial institutions, banks, government (both State and Central). The company did not have any outstanding debentures during the year.
9. On the basis of information and explanations given to us, term loans have been applied for the purposes for which they were obtained. The company did not raise any money by way of initial / further public offer.
10. Based on the audit procedure performed and on the basis of information and explanations provided by the management, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the course of the audit.
11. On the basis of records and information and explanations made available and based on our examination of the records of the company, the company has paid/ provided managerial remuneration, in accordance with the requisite approvals mandated under Section 197 read with Schedule V of the Act (note no. 27.22 (3)(ii)).
12. The Company is not a chit fund or a nidhi /mutual benefit fund /society, therefore, the provisions of clause 4 (xii) of the said Order are not applicable to the Company, hence we are not offering any comment.
13. As per the information and explanations and records made available by the management of the Company and audit procedure performed, for the related parties transactions entered during the year, the Company has complied with the provisions of Section 177 and 188 of the Act, where applicable. As explained and as per records / details, the related parties transactions have been disclosed as per the applicable Accounting Standards.
14. According to the information and explanations given to us, the Company has not made any preferential allotment of shares or fully / partly convertible debentures during the year in terms of provisions of Section 42 of the Act.
15. On the basis of records made available to us and according to information and explanations given to us, the Company has not entered into non-cash transactions with the directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
16. The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934, as the provision of section is not applicable to the Company.
For LODHA & CO.
Chartered Accountants
Firm Registration Number: 301051E
N.K. Lodha
Partner
Membership No: 85155
Place: New Delhi
Date: 27/5/2016
Mar 31, 2015
We have audited the accompanying financial statements of WINSOME
TEXTILE INDUSTRIES LIMITED ("the Company"), which comprise the Balance
Sheet as at 31stMarch, 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 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:-
Attention is drawn to :
(i) Note No.26.3 regarding non-provisioning against receivables
amounting to Rs. 1089.44 lacs which in the opinion of management is
good and recoverable as stated in the said notes and our inability to
comment thereon.
(ii) Note no. 26.7 regarding non provision for shortfall in recovery
(amount unascertainable) against overdue debt of Rs. 66.27 lacs
(Previous Year Rs. 85.15 lacs) as stated in the said note for which
legal and other persuasive action for recovery has been initiated, in
the opinion of the management these debts are good and recoverable as
stated in the said note and our inability to comment thereon.
We further report that the profit for the year, the balance in reserve
& surplus, receivable, loans & advances and profit for the year are
without considering items mentioned in (i) & (ii) above, the effect of
which could not be determined.
Our opinion was also qualified on the financial statements for the year
ended 31st March 2014 in respect of overdue debts reported in (ii)
above.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described under the head "Basis for Qualified Opinion" paragraph, 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 profit
and its cash flows for the year ended on that date.
Emphasis of Matter
(i) Note no. 26.8 regarding balances of certain receivables, loans and
advances (including capital advances), trade payables and other
liabilities are subject to confirmation/reconciliation.
Our opinion is not qualified in respect of above matter.
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, and on the basis of such
checks of the books and records of the Company as we considered
appropriate and according to the information and explanations given to
us during the course of audit, we give in the Annexure a statement on
the matters specified in the paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) 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) 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, the 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 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) On the basis of the written representations received from the
directors as on 31stMarch, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on31stMarch, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) 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 position in its financial statements - Refer Note no.
26.1((A)(ii)), (B) and 26.4 to the financial statements.
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses; if any,
on long term contracts including derivative contracts. (Refer note
26.27 (B)).
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure referred to in paragraph 1 under the heading "Report on Other
Legal and Regulatory Requirements" of our report of even date for the
year ended 31st March 2015.
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management
according to the programme of periodical physical verification in
phased manner which in our opinion is reasonable having regard to the
size of the Company and the nature of its fixed assets. The
discrepancies noticed on such physical verification were not material.
2. (a) The inventories of the Company (except stock in transit) have
been physically verified by the management at reasonable intervals.
(b) The procedures of physical verification of inventory followed by
the management are reasonable (read with note no. 26.19(a)(ii)) and
adequate in relation to the size of the Company and nature of its
business.
(c) The Company is maintaining proper records of inventories (in case
of process stock, records are updated on monthly basis physical
verification of stock). As per records and information made available
the discrepancies noticed on such physical verification of inventory as
compared to book records were not material.
3. (a) As per the information and explanation provided to us, the
Company has not granted any loan, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
189 of the Companies Act, 2013. Accordingly, provision of clause 3 of
the Order is not applicable.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased are of special nature and suitable alternatives sources do
not exist for obtaining comparable quotations or where user department
has shown specific preference, where as explained , rates were
determined considering the quality , volume , nature of the items and
market conditions prevailing at that time , 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 which needs to be further
strengthen (read with note no. 26.13 regarding MSME and 26.19(a)
regarding accounting of consumption based on the balancing figure as
stated in the said note) . Based on the audit procedure performed and
on the basis of information and explanations provided by the
management, during the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
5. According to the information and explanations given to us, the
Company has not accepted any deposits from the public within the
provisions of Section 73 to76 of the Act or any other relevant
provisions of the Act and the rules framed there under. According to
the information and explanations given to us, no order has been passed
by the Company Law Board or National Company Law Tribunal or Reserve
Bank of India or any Court or other tribunal in this regard.
6. 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 under section 148(1) of the Act in respect
of the company's products to which the said rules are made applicable
and are of the opinion that prima facie, the prescribed records have
been made and maintained. We have, however, not made a detailed
examination of the said records with a view to determine whether they
are accurate or complete.
7. (a) According to the records of the Company, the Company is
generally regular in depositing 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 and cess and other material statutory dues with the appropriate
authorities to the extent applicable and there were no undisputed
statutory dues payable for a period of more than six months from the
date they became payable as at 31stMarch, 2015 TDS of Rs.0.93 lacs
(since paid).
(b) According to the records and information & explanations given to
us, there are no dues in respect of Income tax , Wealth Tax or Cess
that have not been deposited with the appropriate authorities to the
extent applicable on account of any dispute and the dues in respect of
Sales tax , Excise duty , Custom duty , Service tax and Entry tax that
have not been deposited with the appropriate authorities on account of
dispute and the forum where the dispute is pending are given below:-
NAME OF
STATUTE NATURE OF
DUES PERIOD AMOUNT
UNPAID FORUM
(IN LACS RS.)
Central Excise
Act Excise Duty 1995-96 1.44 Assistant
Commissioner
Central Excise
Act Excise Duty 1998-2001 1.83 CESTAT
Central Excise
Act Excise Duty 2000-2001 1.74 CESTAT
Central Excise
Act Excise Duty 2003-04 41.59 CESTAT
Central Excise
Act Excise Duty 2004-05 0.35 Commissioner
(Appeal)
Central Excise
Act Excise Duty 2005-06 21.33 CESTAT
Central Excise
Act Excise Duty 2008-09 1.32 Commissioner
(Appeal)
HP Sales Tax
Act Entry Tax 2010-11 to
2014-15 333.27 The High Court
of Shimla
Refer Note no. 26.1(A) (ii).
(c) According to the records of the Company and information and
explanations given to us, the amount required to be transferred to
investor education and protection fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules made there
under has been transferred to such fund within time.
8. The Company does not have accumulated losses at the end of the
financial year and has not incurred cash losses in the current
financial year & in the immediately preceding financial year.
9. In our opinion, on the basis of audit procedure and according to
the information and explanations given to us, the Company has not
defaulted in repayment of dues to financial institutions or banks. The
company did not have any outstanding debentures during the year.
10. According to the information and explanations given to us the
company has not given any guarantee for loan taken by others from
banks.
11. On the basis of information and explanations given to us, term
loans were applied for the purpose for which the loans were obtained.
12. Based on the audit procedure performed and on the basis of
information and explanations provided by the management, no material
fraud on or by the Company has been noticed or reported during the
course of our audit.
For Lodha & Co.
Chartered Accountants
Firm's Registration No. 301051E
Place : New Delhi (N.K. LODHA)
Date : 26.05.2015 Partner
Membership No.: 85155
Mar 31, 2014
We have audited the Accompanying financial statements of Winsome
Textile Industries Limited, which comprise the balance sheet as at 31st
March 2014, and the statement of the profit and loss and 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
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 dated 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 un 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 audit opinion.
Basis for Qualified Opinion:-
Attention is drawn to :
Note no. 27.7(i) regarding non provision for shortfall in recovery
(amount unascertainable) against overdue debt of Rs. 85.15 lacs as
stated in the said note for which legal and other persuasive action for
recovery has been initiated, in the opinion of the management these
debts are good and recoverable as stated in the said note and our
inability to comment thereon.
We further report that the profit for the year, the balance in reserve
& surplus, receivable and profit for the year are without considering
items mentioned in (i) above, the effect of which could not be
determined.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described under the head "Basis for Qualified Opinion" paragraph, the
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a. In the case of the balance sheet, of the state of the affairs of
the Company as at 31st March 2014,
b. In case of the statement of the profit and loss, of the profit for
the year ended on that date, and
c. In case of the cash flow statement, of the cash flows for the year
ended on that date.
Emphasis of Matter
Note no. 27.7(ii) regarding balances of certain receivables, loans and
advances (including capital advances), trade and other payables are
subject to confirmation/reconciliation.
Report on other legal and the 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 the Annexure a
statement on the, matters specified in the 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 purposes 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 Sleet, Statement of Profit & Loss and Cash Flow
Statement referred to in this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in Section 211(3C) of the Companies
Act, 1956 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;
e. On the basis of the written representations received from the
Directors and taken on records by the Board of Directors, we report
that none of the directors of the Company is disqualified as on 31st
March 2014 from being appointed as a Director of the Company in terms
of clause (g) of subsection (1) of section 274 of the Companies Act,
1956.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph 1 of our Report of even date on Winsome
Textile Industries Limited for the year ended 31st March, 2014)
i. (a) The Company has maintained records in respect of fixed assets
showing full particulars including quantitative details and situation
of fixed assets except in respect of certain fixed assets (and also
at new project location), where the same are in process of compilation
/updation.
(b) As per information & explanations given to us, physical
verification of the certain fixed assets are in process, according to
the regular programme of physical verification once in every three
years, in phased manner, which in our opinion is reasonable having
regard to the size of the Company and the nature of its fixed assets.
(c) As per the records and information and explanation given to us,
fixed assets disposed off during the year were not substantial.
ii. (a) As explained to us, the inventories of the Company (except
stock lying with the third parties; and in transit) have been
physically verified by the management during the year.
(b) In our Opinion and according to information & explanation given to
us, the procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and nature of its business.
(c) According to the information and explanation given to us, we are of
the opinion that the Company is maintaining proper records of
inventories (In case of process stock, records are updated on monthly
physical verification of stock). As per records and information made
available the discrepancies noticed on verification between the
physical stock and the book records were not material in relation to
the operation of the Company.
iii. As per the information and explanations given to us the Company
has neither granted nor taken during the year
any loans, secured or unsecured to and from companies, firms or other
parties listed in the register maintained under section 301 of the Act.
Accordingly, the provisions of clause 4 (iii) (b) to (d) and (f) & (g)
of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanation
that some of the items purchased are of special nature and suitable
alternative sources do not exist for obtaining comparable quotation or
where user department has shown specific preference, where, as
explained, rates were determined considering the quality, volume,
nature of the items and market conditions prevailing at that time,
there are internal control system commensurate with size of the Company
and nature of its business with regard to the purchase of inventory,
fixed assets, services and for the sale of goods and services which
needs to be further strengthen (read with note no. 27.2, 27.7 and
27.11). Based on the audit procedure performed and information &
explanation provided by the management, during the course of our audit,
we have not observed any continuing failure to correct major weaknesses
in internal control system nor been identified by the management.
v. a) According to the information and explanations provided by the
management and based on the audit
procedure performed, we are of the opinion that the particulars of the
contracts or arrangements referred to in Section 301 of the Act have
been entered in the register required to be maintained under that
section; and b) In our opinion and according to the information and
explanation given to us, having regard to para iv above, the
transactions made in pursuance of such contracts or arrangements
(exceeding the value of Rs. 5 Lacs in respect of each party during the
financial year) have been made at prices which are generally reasonable
having regard to the prevailing market prices at the relevant time.
vi. 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 and 58AA Act and the rules
framed there under and directives issued by the Reserve bank of India
and other relevant provisions of the Act. We have been informed that
no order has been passed by the Company Law Board or National Company
Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal in this regard. vii. In our opinion, the Company has an
internal audit system commensurate with the size of the Company and
nature of its business. viii. We have broadly reviewed the books of
account maintained by the Company as prescribed by the Central
Government for the maintenance of cost records under section 209 (1)
(d) of the Companies Act, 1956 and are of the opinion that prima facie
the prescribed records have been made and maintained. We have, however,
not made a detailed examination of the said records with view to
determine whether they are accurate and complete.
ix. (a) According to the records of the Company, the Company in
generally regular in depositing with appropriate
authorities undisputed statutory dues {(excepts Sales Tax read with
note no. 27.7(ii)} including Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income Tax, Wealth Tax,
Service tax, Custom Duty, Excise Duty, Cess and other material
statutory dues applicable to it. According to the information and
explanations given to us, there are no undisputed statutory dues
payable for a period more than six months from the date they became
payable as at 31.03.2014. (b) According to the records and information
and explanations given to us, there are no dues in respect of Income
Tax, Custom Duty, Wealth Tax, Service Tax, Sales Tax and Cess that have
not been deposited on account of any dispute. In our opinion and
according to the information and explanations given to us, the dues in
respect of Excise duty that have not been deposited with the
appropriate authorities on account of dispute and the forum where the
disputes are pending are given below:
Name of Statute Nature of Dues Amount Period to which
(Rs. in Lacs) amount relates
Central Excise Act Excise Duty 1.44 1995-96
Excise Duty 62.92 2003-04,
2005-06
Excise Duty 3.57 2003-04, 2004-05
Excise Duty 1.67 2004-05, 2008-09
Name of the Statute Forum where dispute
is pending
Central Excise Act Asst. Commissioner
CESTAT
CESTAT
Commissioner Appeal
x. The Company does not have accumulated losses at the end of the
financial year and has not incurred any cash losses during the current
and immediately preceding previous year.
xi. In our opinion, based on the audit procedures and according to
information & explanation given to us, the Company has generally not
defaulted in repayment of dues to financial institution and banks.
xii. Based on our examination of the records and the information and
explanation given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares, debentures
andother securities.
xiii. Clause (xiii) of the order is not applicable
to the Company as the Company is not a Chit Fund Company or
nidhi/mutual benefit fund/society.
xiv. In our opinion and according to the information and explanations
provided to us, the Company is not dealing in or trading in shares,
securities, debentures and other investment.
xv. According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks and
financial institution. xvi. According to the information and
explanations given to us, the term loans were applied for the purpose for
which the loans were obtained.
xvii. According to the information and explanations given to us and on
an overall examination of the financial statements, we are of the opinion
that no funds raised on short term basis have been used for long term
investment.
xviii. According to the information and explanations given
to us, the Company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under Section 301 of the Act in the current year.
xix. No debenture has been issued /outstanding during the year hence
the provision of clause 4 (xix) of the said order are not applicable.
xx. According to the information and explanations given to us, during
the year the Company has not raised fund through public issue.
xxi. To the best of our knowledge and belief,based on the audit
procedure performed and on the basis of information and explanations
provided by the management, no material fraud on or by the Company has
been noticed or reported during the course of the audit.
For Lodha & Co.
Chartered Accountants
Firm Registration No. 301051E
Place : New Delhi N.K. Lodha
Date : 28.05.2014 (Partner)
Membership No.: 85155
Mar 31, 2013
Report on the financial statements
We have audited the accompanying financial statements of Winsome
Textile Industries Limited, which comprise the balance sheet as at 31st
March 2013, and the statement of the profit and loss and 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
Management is responsible for the preparation of these financial
statements that give a true and the 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 accounting standards referred to in sub section (3C) of
section 211 of the Companies Act, 1956("the ActÂ). 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 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 Institute of Chartered
Accountant of India. Those standards require that we comply with the
ethical requirements and plan and perform the audit to obtain the
reasonable assurance about whether the financial statements are free
from material misstatements.
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 assessment of
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 the management,
as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for audit opinion.
Emphasis of Matter
1) During the year 2010-11, the Company had issued and allotted
12,90,000 nos. GDR''s entitling 6,45,00,000 (now 64,50,000 equity shares
of Rs.10/- each) nos. equity shares of Re.1/- each at price of Rs.6.94
per share (including premium of Rs.5.94, now premium is Rs.59.40 on
Rs.10/- per share).
As on 31.03.2012, Rs.4,586.69 lacs (including exchange gain) was
pending to be received in India against above issue made, during the
year Rs.777.14 lacs, as explained, have been received/credited to
account of the company in India. As stated in the note no. 2.3 balance
amount of Rs. 4147.07 lacs as on 31st March 2013 (excluding amount
lying in bank outside India of Rs. 13.35 lacs) is invested outside
India with a money market fund.
2) Balances of receivable, loans and advances, trade payable and other
liabilities (read with note no. 2.4) are subject to confirmation and
reconciliation (note no 2.5(ii))
Our report is not qualified in respect of above matters.
Basis for Qualified Opinion:-
i. Attention is drawn to Note no. 2.5 (i) regarding non provision for
shortfall in recovery (amount unascertainable) against overdue debt of
Rs. 232.70 lacs as stated in the said note for which legal and other
persuasive action for recovery has been initiated, in the opinion of
the management these debts are good and recoverable as stated in the
said note and our inability to comment thereon.
We further report that the profit for the year, the balance in reserve
& surplus, receivable and profit for the year are without considering
items mentioned in (i) above, the effect of which could not be
determined.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described under the head "Basis for Qualified Opinion paragraph, the
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a. In the case of the balance sheet, of the state of the affairs of
the company as at 31st March 2013,
b. In case of the statement of the profit and loss, of the profit for
the year ended on that date, and
c. In case of the cash flow statement, of the cash flows for the year
ended on that date.
Report on other legal and the regulatory requirements:
1. As required by the Companies (Auditor''s Report) Order, 2003("the
OrderÂ) issued by the Central Government of
India in terms of sub-section (4A) of section 227 of the Act, we give
the Annexure a statement on the, manners specified in the 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 purposes 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 & Loss and Cash Flow
Statement referred to in this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement referred to in this report comply with the
Accounting Standards referred to in sub-section (3C) of section 211 of
Companies Act, 1956;
e. On the basis of the written representations received from the
Directors and taken on records by the Board of Directors, we report
that none of the directors of the Company is disqualified as on 31st
March 2013 from being appointed as a Director of the Company 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 1 of our Report of even date on Winsome
Textile Industries Limited for the year ended 31st March, 2013)
i. (a) The Company has maintained records in respect of fixed assets
showing full particulars including quantitative details and situation
of fixed assets except in respect of certain fixed assets (and also at
new project location), where the same are in process of compilation
/updation.
(b) As per information & explanations given to us, physical
verification of the certain fixed assets are in process, according to
the regular programme of physical verification once in every three
years, in phased manner, which in our opinion is reasonable having
regard to the size of the company and the nature of its fixed assets.
(c) As per the records and information and explanation given to us,
fixed assets disposed off during the year were not substantial.
ii. (a) As explained to us, the inventories of the Company (except
stock lying with the third parties; and in transit) have been
physically verified by the management during the year.
(b) In our Opinion and according to information & explanation given to
us, the procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and nature of its business.
(c) According to the information and explanation given to us, we are of
the opinion that the company is maintaining proper records of
inventories (In case of process stock, records are updated on monthly
physical verification of stock). As per records and information made
available the discrepancies noticed on verification between the
physical stock and the book records were not material in relation to
the operation of the company.
iii. As per the information and explanations given to us the Company
has neither granted nor taken during the year any loans, secured or
unsecured to and from companies, firms or other parties listed in the
register maintained under section 301 of the Act. Accordingly, the
provisions of clause 4 (iii) (b) to (d) and (f) & (g) of the Order are
not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased are of special nature and suitable alternative sources do not
exist for obtaining comparable quotation or where user department has
shown specific preference, where, as explained, rates were determined
considering the quality, volume, nature of the items and market
conditions prevailing at that time, there are internal control system
commensurate with size of the company and nature of its business with
regard to the purchase of inventory, fixed assets, services and for the
sale of goods and services (read with note no. 2.2, 2.5, 2.9 & 2.18).
Based on the audit procedure performed and information & explanation
provided by the management, during the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system nor been identified by the management.
v. a) According to the information and explanations provided by the
management and based on the audit procedure performed, we are of the
opinion that the particulars of the contracts or arrangements referred
to in Section 301 of the Act have been entered in the register required
to be maintained under that section; and b) In our opinion and
according to the information and explanation given to us, having regard
to para iv above, the transactions made in pursuance of such contracts
or arrangements (exceeding the value of Rs. 5 Lacs in respect of each
party during the financial year) have been made at prices which are
generally reasonable having regard to the prevailing market prices at
the relevant time. vi. 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 and 58AA Act and the rules
framed there under and directives issued by the Reserve bank of India
and other relevant provisions of the Act. We have been informed that
no order has been passed by the Company Law Board or National Company
Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal in this regard. vii. In our opinion, the Company has an
internal audit system commensurate with the size of the Company and
nature of its business. viii. We have broadly reviewed the books of
account maintained by the company as prescribed by the Central
Government for the maintenance of cost records under section 209 (1)
(d) of the Companies Act, 1956 and are of the opinion that prima facie
the prescribed records have been made and maintained. We have, however,
not made a detailed examination of the said records with view to
determine whether they are accurate and complete. ix. (a) According
to the records of the Company, the company in generally regular in
depositing with appropriate authorities 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, Cess and other material statutory dues
applicable to it. According to the information and explanations given
to us, there are no undisputed statutory dues payable for a period more
than six months from the date they became payable as at 31.03.2013.
(b) According to the records and information and explanations given to
us, there are no dues in respect of Income Tax, Custom Duty, Wealth
Tax, Service Tax, Sales Tax and Cess that have not been deposited on
account of any dispute.
x. The Company does not have accumulated losses at the end of the
financial year and has not incurred any cash losses during the current
and immediately preceding previous year.
xi. In our opinion, based on the audit procedures and according to
information & explanation given to us, the Company has generally not
defaulted in repayment of dues to financial institution and banks.
xii. Based on our examination of the records and the information and
explanation given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiii. Clause (xiii) of the order is not applicable to the company as
the company is not a Chit Fund Company or nidhi/mutual benefit
fund/society.
xiv. In our opinion and according to the informations and explanations
provided to us, the company is not dealing in or trading in shares,
securities, debentures and other investment.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks and financial institution.
xvi. According to the information and explanations given to us, the
term loans were applied for the purpose for which the loans were
obtained.
xvii. According to the information and explanations given to us and on
an overall examination of the financial statements, we are of the
opinion that no funds raised on short term basis have been used for
long term investment.
xviii. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties or
companies covered in the register maintained under Section 301 of the
Act in the current year.
xix. No debenture has been issued /outstanding during the year hence
the provision of clause 4 (xix) of the said order are not applicable.
xx. According to the information and explanations given to us, during
the year the Company has not raised fund through public issue.
xxi. To the best of our knowledge and belief, based on the audit
procedure performed and on the basis of information and explanations
provided by the management, no material fraud on or by the Company has
been noticed or reported during the course of the audit.
For Lodha & Co.
Firm Regn. No. 301051E
Chartered Accountants
Place : New Delhi N.K. LODHA
Date : 29.05.2013 (Partner)
Membership No.: 85155
Mar 31, 2012
We have audited the attached Balance Sheet of Winsome Textile
Industries Limited as at 31st March 2012, the statement of Profit and
loss and also the Cash Flow Statement of the Company for the year ended
on that date annexed thereto. These financial statements are the
responsibility of Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
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 misstatements. 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.
1. As required by the Companies (Auditor's Report) Order, 2003 ('The
Order') as amended by the Companies Auditor's Report) Order, 2004
issued by the Central Government of ndia in terms of Section 227
(4A) of the ompanies Act, 1956 ('The Act'), we enclose in the
Annexure a statement in the matters specified in the paragraphs
4 & 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph 1
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 purposes 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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) 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.
e) On the basis of written representation received from the Directors
of the Company and taken on the Record by the Board of Directors, we
report that none of the Directors of the Company is disqualified as on
31.03.2012 from being appointed as Director in terms of clause (g)
sub-section (1) of section 274 of the Companies Act, 1956.
f) Attention is invited to note no. 2.5(i) regarding non provision for
shortfall in recovery (amount unascertainable) against overdue debt of
Rs. 185.74 lacs as stated in the said note for which legal and other
persuasive action for recovery has been initiated, as in the opinion of
the management these debts are good and recoverable as stated in the
said note and our inability to comment thereon.
We further report that the profit for the year, the balance in reserve
and surplus and debtors are without considering items mentioned above,
the effect of which could not be determined.
Subject to para (f) above, in our opinion and to the best of our
information and according to the explanations given to us, the said
account subject to and read with note no. 2.3 and 2.5 (ii) and read
together with other notes on accounts give the information as 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:
(i) in the case of Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2012;
(ii) in the case of the statement of Profit and Loss, of the loss of
the Company for the year ended on that date;
and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 1 of our Report of even date on Winsome
Textile Industries Limited for the year ended 31st March, 2012)
i. (a) The Company has maintained records in respect of fixed assets
showing full particulars including
quantitative details and situation of fixed assets except in respect of
certain fixed assets (and also at new project location), where the same
are in process of compilation / updating.
(b) As per information & explanations given to us, physical
verification of the certain fixed assets are in process, according to
the regular programmed of physical verification once in every three
years, in phased manner, which in our opinion is reasonable having
regard to the size of the company and the nature of its fixed assets.
(c) As per the records and information and explanation given to us,
fixed assets disposed off during the year were not substantial.
ii. (a) As explained to us, the inventories of the Company (except
stock lying with the third parties; and in transit)
have been physically verified by the management during the year.
(b) In our Opinion and according to information & explanation given to
us, the procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and nature of its business.
(c) According to the information and explanation given to us, we are of
the opinion that the company is maintaining proper records of
inventories (In case of process stock, records are updated on monthly
physical verification of stock). As per records and information made
available the discrepancies noticed on verification between the
physical stock and the book records were not material in relation to
the operation of the company.
iii. As per the information and explanations given to us the Company
has neither granted nor taken during the year any loans, secured or
unsecured to and from Companies, firms or other parties listed in the
register maintained under section 301 of the Act Accordingly, the
provisions of clause 4 (iii) (b) to (d) and (f) & (g) of the Order are
not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased are of special nature and suitable alternative sources do not
exist for obtaining comparable quotation or where user department has
shown specific preference, where, as explained, rates were determined
considering the quality, volume, nature of the items and market
conditions prevailing at that time, there are internal control system
commensurate with size of the company and nature of its business with
regard to the purchase of inventory, fixed assets, services and for the
sale of goods and services (read with note no. 2.5, 2.09 & 2.14). Based
on the audit procedure performed and information. & explanation
provided by the management, during the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system nor been identified by the management
v. a) According to the information and explanations provided by the
management and based on the audit
procedure performed, we are of the opinion that the particulars of the
contracts or arrangements referred to in Section 301 of the Act have
been entered in the register required to be maintained under that
section; and
b) In our opinion and according to the information and explanation
given to us, having regard to para iv above, the transactions made in
pursuance of such contracts or arrangements (exceeding the value of Rs.
5 Lacs in respect of each party during the financial year) have been
made at prices which are generally reasonable having regard to the
prevailing market prices at the relevant time.(Read with Para iv above)
vi. 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 and 58AA Act and the rules framed there under
and directives issued by the Reserve bank of India and other relevant
provisions of the Act We have been informed that no order has been
passed by the Company Law Board or National Company Law Tribunal or
Reserve Bank of India or any Court or any other Tribunal in this
regard.
vii. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
viii. We have broadly reviewed the books of account maintained by the
company as prescribed by the Central Government for the maintenance of
cost records under section 209 (1) (d) of the Companies Act, 1956 and
are of the opinion that prima facie the prescribed records have been
made and maintained. We have, however, not made a detailed examination
of the said records with view to determine whether they are accurate
and complete.
ix. (a) According to the records of the Company, the company in
generally regular in depositing with appropriate
authorities 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, Cess and other material statutory dues
applicable to it. According to the information and explanations given
to us, there are no undisputed statutory dues payable for a period more
than six months from the date they became payable as at 31.03.2012.
(b) According to the records and information and explanations given to
us, there are no dues in respect of Income Tax, Custom Duty, Wealth
Tax, Service Tax and Cess that have not been deposited on account of
any dispute. In our opinion and according to the information and
explanation given to us, the dues in respect of Sales Tax and Excise
duty that have not been deposited with the appropriate authorities on
account of dispute and the forum where the disputes are pending are
given below:
Name of
Statute# Nature of
Dues Amount Period to which Forum where
dispute
(Rs. in
Lacs) amount relates is pending
Central
Excise Act Cenvat Credit 1.44 1995-96 Asst
Commissioner
Cenvat
Credit Cenvat Credit 62.92 2003-04 and CESTAT
2005-06
Excise Duty 3.57 2002-03,2003-04 CESTAT
2006-07
# (Excluding excise show cause notices)
This para is to be read with note no. 2.1 (a) in respect of Income Tax
matters for the . Assessment Year 2006- 07 to 2009-10 where appeal is
pending before Appellate authorities.
x. The Company does not have accumulated losses at the end of the
financial year and has not incurred any cash losses during the current
and immediately preceding previous year.
xi. In our opinion, based on the audit procedures and according to
information & explanation given to us, the Company has generally not
defaulted in repayment of dues to financial institution.
xii. Based on our examination of the records and the information and
explanation given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiii. Clause (xiii) of the order is not applicable to the company as
the company is not a Chit Fund Company or niche/ mutual benefit fund
society.
xiv. In our opinion and according to the information's and explanations
provided to us, the company is not dealing in or trading in shares,
securities, debentures and other investment.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks and financial institution.
xvi. According to the information and explanations given to us, the
term loans were applied for the purpose for which the loans were
obtained.
xvii. On the basis of information and explanations given to us and on
overall examination of the balance sheet of the Company, we are of the
opinion that prima facie at balance sheet date fund temporary has not
been deployed for long term purpose, as explained by the management of
the company.
xviii. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties or
Companies covered in the register maintained under Section 301 of the
Act in the current year.
xix. No debenture has been issued / outstanding during the year hence
the provision of clause 4 (xix) of the said order are not applicable.
xx. According to the information and explanations given to us, during
the year the Company has not raised fund through public issue. ( read
with note no. 2.3)
xxi. To the best of our knowledge and belief, based on the audit
procedure performed and on the basis of information and explanations
provided by the management, no material fraud on or by the Company has
been noticed or reported during the course of the audit.
For Lodha & Co.
Chartered Accountants
Firm Regn. No. 301051E
Place : New Delhi N.K. LODHA
Date : 30.05.2012 Partner
Membership No.: 85155
Mar 31, 2011
We have (audited the attached Balance Sheet of Winsome Textile
Industries Limited as at 31st March 2011, the Profit and loss Account
and also the Cash Flow Statement of the Company for the year ended on
that date annexed thereto. These financial statements are the
responsibility of Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
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 misstatements. 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.
1. As required by the Companies (Auditors Report) Order, 2003 (The
Order) as amended by the Companies (Auditors Report) Order, 2004
issued by the Central Government of India in terms of Section 227 (4A)
of the Companies Act, 1956 (The Act), we enclose in the Annexure a
statement on the matters specified in the para- graphs 4 & 5 of the
said Order.
2. Further to our comments in the Annexure referred to in paragraph 1
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 purposes 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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) 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.
e) On the basis of written representation received from the directors
of the Company and taken on the Record by the Board of Directors, we
report that none of the directors of the Company is disqualified as on
31.03.2011 from being appointed as director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
f) Attention is invited to note no. 7 of schedule 14B regarding non
provision for shortfall in recovery (amount unascertainable) against
overdue debt of Rs. 203.40 lacs as stated in the said note for which
legal and other persuasive action for recovery has been initiated, as
in the opinion of the management these debts are good and recoverable
as stated in the said note and our inability to comment thereon.
We further report that the profit for the year, the balance in reserve
and surplus and debtors are without considering items mentioned above,
the effect of which could not be determined.
Subject to para (f) above, In our opinion and to the best of our
information and according to the explanations given to us, the said
account subject to and read with note no. 17 of & 5 schedule 14B, and
read together with other notes on accounts give the information as
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:
(i) in the case of Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2011;
(ii) in the case of Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 1 of our Report of even date on Winsome
Textile Industries Limited for the year ended 31st March, 2011)
i. (a) The Company has maintained records in respect of fixed assets
showing full particulars including quantitative details and situation
of fixed assets except in respect ot certain fixed assets, where the
same are in process of compilation/updation.
(b) As per information & explanations given to us, physical
verification of the certain fixed assets have been taken up which is in
process, according to the regular programme of physical verification
once in every three years, in phased manner, which in our opinion is
reasonable having regard to the size of the company and the nature of
its fixed assets.
(c) As per the records and information and explanation given to us,
fixed assets disposed off during the year were not substantial.
ii. (a) As explained to us, the inventories of the Company (except
stock lying with the third partiesj and in transit) have been
physically verified by the management during the year.
(b) In our opinion and according to information & explanation given to
us, the procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and nature of its business.
(c) According to the information and explanation given to us, we are of
the opinion that the company is maintaining proper records of
inventories (In case of process stock, records are updated on monthly
physical verification of stock). As per records and information made
available the discrepancies noticed on verification between the
physical stock and the book records were not material in relation to
the operation of the company.
iii. As per the information and explanations given to us the Company
has neither granted nor taken during the year any loans, secured or
unsecured to and from companies, firms or other parties listed in the
register maintained under section 301 of the Act. Accordingly, the
provisions of clause 4 (iii) (b) to (d) and (f) & (g) of the Order are
not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased are of special nature ana suitable alternative sources do not
exist for obtaining comparable quotation or where user department has
shown specific preference, where, as explained, rates were determined
considering the quality, volume, nature of the items and market
conditions prevailing at that time, there are internal control system
commensurate with size of the company and nature of its business with
regard to the purchase of inventory, fixed assets, services and for the
sale of goods and services which needs to be further strengthened (read
with note no. 12 & 17 of schedule 14B). Based on the audit procedure
performed and information & explanation provided by the management,
during the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system nor been
identified by the management.
v (a) According to the information and explanations provided by the
management and based on the audit procedure performed, we are of the
opinion that the particulars of the contracts or arrangements referred
to in Section 301 of the Act have been entered in the register required
to be maintained under that section; and
(b) In our opinion and according to the information and explanation
given to us, having regard to para iv above, the transactions made in
pursuance of such contracts or arrangements (exceeding the value of Rs.
5 Lacs in respect of each party during the financial year) have been
made at prices which are generally reasonable having regard to the
prevailing market prices at the relevant time.
vi. 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 and 58AA Act and the rules framed there under
and directives issued by the Reserve bank of India and other relevant
provisions of the Act. We have been informed that no order has been
passed by the Company Law Board or National Company Law Tribunal or
Reserve Bank of India or any Court or any other Tribunal in this
regard.
vii. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business
which needs to be further strengthened.
viii. We have broadly reviewed the books of account maintained by the
company as prescribed by the Central Government for the maintenance of
cost records under section 209 (1) (d) of the Companies Act, 1956 and
are of the opinion that prima facie the prescribed records have been
made and maintained. We have, however, not made a detailed examination
of the said records with view to determine whether they are accurate
and complete.
ix. (a) According to the records of the Company, the company in
generally regular in depositing with appropriate authorities 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, Cess and other
material statutory dues applicable to it. According to the information
and explanations given to us, there are no undisputed statutory dues
payable for a period more than six months from the date they became
payable as at 31.03.2011.
(b) According to the records and information and explanations given to
us, there are no dues in respect of Custom Duty, Wealth Tax and Cess
that have not been deposited on account of any dispute. In our opinion
and according to the information and explanations given to us, the dues
in respect of Sales Tax, Excise duty, Entry Tax, Service Tax and Income
Tax that have not been deposited with the appropriate authorities on
account of dispute and the forum where the disputes are pending are
given below:
Name of the Statute# Nature of Dues Amount
(Rs. in lacs)
Central Excise Act Cenvat Credit 0.95
Cenvat Credit 1.44
Cenvat Credit 68.04
Excise Duty 20.37
Excise Duty 0.63
Excise Duty 33.87
Excise Duty 91.26
Finance Act 1994 Service Tax 4.62
The Himachal Entry Tax 52.08
Pradesh Tax on
Entry of Goods into
Local Area Act, 2010
Name of the Statute# Period to which Forum where dispute
is pending
amount relates
Central Excise Act 1995-96 Commissioner (A)
1995-96 Asst. Commissioner
2003-04, 2004-05 CESTAT
2005-06
2002-03, 2003-04 CESTAT
2006-07
2006-07 Commissioner (A)
2008-2009 High Court
2008-09 Additional
Commissioner
Finance Act 1994 2005-06 CESTAT
The Himachal 2010-2011 High Court
Pradesh Tax on
Entry of Goods into
Local Area Act, 2010
# (excluding excise show cause notices)
This para is to be read with note no.1 (B) of schedule 14B in respect
of Income Tax matters for the Assessment Year 2006-07 to 2009-10 where
appeal is pending before Appellate authorities.
x The Company does not have accumulated losses at the end of the
financial year and has not incurred any cash losses during the current
and immediately preceding previous year.
xi. In our opinion, based on the audit procedures and according to
information & explanation given to us, the Company has generally not
defaulted in repayment of dues to banks and financial institution.
xii. Based on our examination of the records and the information and
explanation given to us, the Company has not granted any loans and / or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiii. Clause (xiii) of the order is not applicable to the company as
the company is not a Chit Fund Company or nidhi/ mutual benefit fund /
society.
xiv. In our opinion and according to the informations and explanations
provided to us, the company is not dealing in or trading in shares,
securities, debentures and other investment.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks and financial institution.
xvi. According to the information and explanations given to us, the
term loans were applied for the purpose for which the loans were
obtained.
xvii. On the basis of information and explanations given to us and on
overall examination of the balance sheet of the Company, we are of the
opinion that prima facie no fund raised on short-term basis, which have
been used for long term investment.
xviii. According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties or
companies covered in the register maintained under Section 301 of the
Act. (read with note no, 4 (ii) of Schedule 14B).
xix. No debenture has been issued / outstanding during the year hence
the provision of clause 4 (xix) of the said order are not applicable.
xx. According to the information and explanations given to us, during
the year the Company has raised money through a GDR issue, pending
compliance the money is parked in a separate bank Escrow account,
(refer note no. 5 of schedule 14 B).
xxi. To the best of our knowledge and belief, based on the audit
procedure performed and on the basis of .information and explanations
provided by the management, no material fraud on or by the Company has
been noticed or reported during the course of the audit.
For Lodha & Co.
Chartered Accountants
Firm Regn. No. 301051E
N.K. Lodha
Partner
M. No. 85155
Place: New Delhi
Date : 16.05.2011
Mar 31, 2010
We have audited the attached Balance Sheet of Winsome Textile
Industries Limited as at 31st March 2010, the Profit and loss Account
and also the Cash Flow Statement of the Company for the year ended on
that date annexed thereto. These financial statements are the
responsibility of Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
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 misstatements. 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.
1. As required by the Companies (Auditors Report) Order, 2003 (The
Order) as amended by the Companies (Auditors Report) Order, 2004
issued by the Central Government of India in terms of Section 227 (4A)
of the Companies Act, 1956 (The Act), we enclose in the Annexure a
statement on the matters specified in the paragraphs 4 & 5 of the said
Order.
2. Further to our comments in the Annexure referred to in paragraph 1
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 purposes 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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) 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.
e) On the basis of written representation received from the directors
of the Company and taken on the Record by the Board of Directors, we
report that none of the directors of the Company is disqualified as on
31.03.2010 from being appointed as director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
f) Attention is drawn on nofe no.3 of schedule 15B regarding
depreciation on certain Plant & Machinery is provided as per the rates
applicable to the continuous process plant for the reasons as stated in
the said note.
g) Further Attention is invited to:
(i) Note no. 7 of schedule 758 regarding non provision for shortfall in
recovery (amount unascertained) against overdue debt for which legal
and other persuasive action for recovery has been initiated, as in the
opinion of the management these debts are good and recoverable as
stated in the said note and our inability to comment thereon.
(ii) Note no. 19 (B) of schedule 15B regarding remuneration paid to a
director as stated in the said note is subject to the approval of the
Central Government.
We further report that the profit for the year, the balance in reserve
and surplus and debtors are without considering items mentioned above,
the effect of which could not be determined.
Subject to para (g) above, In our opinion and to the best of our
information and according to the explanations given to us, the said
account subject to and read with note no. 17 of schedule 15B,
Significant Accounting Policies and read together with other notes on
accounts give the information as 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:
(i) in the case of Balance Sheet, of the State of Affairs of the
Company as at 31 st March, 2010;
(ii) in the case of Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 1 of our Report of even date on Winsome
Textile Industries Limited for the year ended 31st March, 2010)
i. (a) The Company has maintained records in respect of fixed assets
showing full particulars including quantitative details and situation
of fixed assets except in respect of certain fixed assets, where the
same are in process of compilation updation.
(b) As per information & explanations given to us, physical
verification of the certain fixed assets are in process, according to
the regular programme of physical verification once in every three
years, in phased manner, which in our opinion is reasonable having
regard to the size of the company and the nature of its fixed assets.
(c) As per the records and information and explanation given to us,
fixed assets disposed off during the year were not substantial.
ii. (a) As explained to us, the inventories of the Company (except
stock lying with the third parties, job workers and in transit) have
been physically verified by the management during the year.
(b) In our opinion and according to information & explanation given to
us, the procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and nature of its business.
(c) According to the information and explanation given to us, we are of
the opinion that the company is maintaining proper records of
inventories (In case of process stock, records are updated on monthly
physical verification of stock). As per records and information made
available the discrepancies noticed on verification between the
physical stock and the book records were not material in relation to
the operation of the company.
iii. As per the information and explanations given to us the Company
has neither granted nor taken during the year any loans, secured or
unsecured to and from companies, firms or other parties listed in the
register maintained under section 301 of the Act. Accordingly, the
provisions of clause 4 (iii) (b) to (d) and (f) & (g) of the Order are
not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased are of special nature and suitable alternative sources do not
exist for obtaining comparable quotation or where user department has
shown specific preference, where, as explained, rates were determined
considering the quality, volume, nature of the items and market
conditions prevailing at that time, there are internal control system
commensurate with size of the company and nature of its business with
regard to the purchase of inventory, fixed assets, services and for the
sale of goods and services which needs to be further strengthened (read
with note no. 12 & 17 of schedule 15B). Based on the audit procedure
performed and information & explanation provided by the management,
during the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system nor been
identified by the management.
v. (a) According to the information and explanations provided by the
management and based on the audit procedure performed, we are of the
opinion that the particulars of the contracts or arrangements referred
to in Section 301 of the Act have been entered in the register required
to be maintained under that section; and
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of such contracts or
arrangements (exceeding the value of Rs. 5 Lacs in respect of each
party during the financial year) have been made at prices which are
generally reasonable having regard to the prevailing market prices at
the relevant time.
vi. 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 and 58AA Act and the rules framed there under
and directives issued by the Reserve bank of India and other relevant
provisions of the Act. We have been informed that no order has been
passed by the company Law Board or National Company Law Tribunal or
Reserve Bank of India or any Court or any other Tribunal in this
regard.
vii. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business
which needs to be further strengthened.
viii. We have broadly reviewed the books of account maintained by the
company as prescribed by the Central Government for the maintenance of
cost records under section 209 (1) (d) of the Companies Act, 1956 and
are of the opinion that prima facie the prescribed records have been
made and maintained. We have, however, not made a detailed examination
of the said records with view to determine whether they are accurate
and complete.
ix. (a) According to the records of the company, the company in
generally regular in depositing with appropriate authorities 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, Cess and other
material statutory dues applicable to it. According to the information
and explanations given to us, there are no undisputed statutory dues
payable for a period more than six months from the date they became
payable as at 31.03.2010.
(b) According to the records and information and explanations given to
us. there are no dues in respect of Income Tax, Custom Duty. Wealth
Tax, Service Tax and Cess that have not been deposited on account of
any dispute. In our opinion and according to the information and
explanations given to us, the dues in respect of Sales Tax and Excise
duty that have not been deposited with the appropriate authorities on
account of dispute and the forum where the disputes are pending are
given below:
Name of Statute# Nature of Dues Amount Period to which Forum where
dispute is
pending
(Rs. in
Lacs) amount relates
Central Excise Act Cenvat Credit 0.95 1995-96 Commissioner
(A)
Cenvat Credit 1.44 1995-96 Asstt.
Commissioner
Cenvat Credit 68.04 2003-04,2004-05, CESTAT
2005-06
Excise Duty 96.23 2002-03,2003-04 CESTAT
2004-06,2006-07
Excise Duty 0.63 2006-07 Commissioner
(A)
Excise Duty 33.87 2008-09 High Court
Excise Duty 91.26 2008-09 Additional
Commissioner
Finance Act 1994 Service Tax 4.62 2005-06 CESTAT
#(excluding excise show cause notices)
This para is to be read with note no. 1 of Schedule 15B.
x. The Company does not have accumulated losses at the end of
financial year and in the current financial
year Company has not incurred cash losses, however Company had incurred
cash loss in the immediate preceding financial year.
xi. In our opinion, based on the audit procedures and according to
information & explanation given to us, the Company has generally not
defaulted in repayment of dues to financial institution, except in the
first quarter where debt restructuring was under consideration and read
with note no 6 (i) of schedule 15B.
xii. Based on our examination of the records and the information and
explanation given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiii. Clause (xiii) of the order is not applicable to the company as
the company is not a Chit Fund Company or nidhi/mutual benefit
fund/society.
xiv. In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investment.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks and financial institution.
xvi. According to the information and explanations given to us, the
term loans were applied for the purpose for which the loans were
obtained.
xvii. On the basis of information and explanations given to us and on
overall examination of the balance sheet of the Company, we are of the
opinion that prima facie no fund raised on short-term basis, which have
been used for long term investment.
xviii. According to the information and explanations given to us,
during the year Company has made preferential allotment of 94,00.000
equity shares to 2 (two) Companies namely M/s Roselab Commodities
Private Limited and M/s Kailashpati Vinimay Private Limited covered in
the register maintained under Section 301 of the Act (read with note
no. 5 (A) (i) of Schedule 15B).
xix. No debenture has been issued outstanding during the year hence
the provision of clause 4 (xix) of the said order are not applicable.
xx. The Company has not raised any money through a public issue during
the year.
xxi. To the best of our knowledge and belief, based on the audit
procedure performed and on the basis of information and explanations
provided by the management, no material fraud on or by the Company has
been noticed or reported during the course of the audit.
For Lodha & Co.
Chartered Accountants
Firm Regn. No. 301051E
Place : New Delhi N.K. LODHA
Date : 27.05.2010 Partner
Membership No.: 85155
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