Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Cosco (India) Limited (âthe Companyâ), which comprise the balance sheet as at 31 March 2018, the statement of profit and loss and the cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended, 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 standalone 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 the Companies (Indian Accounting Standards) Rules 2015. 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 standalone 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 thereunder.
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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31 March 2018 and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Emphasis of Matter
- Attention is drawn to the Note No. 7.2 & 7.4 regarding non moving inventories, Note No 8.2 regarding provision for expected credit loss, Note No 11.1 regarding land compensation receivable, Note No. 18.1 trade payable to MSME, Note No 19.1(b) regarding other liabilities, and Note No 42.2 regarding value of investment in erstwhile subsidiary of company.
- The Internal Audit system of the company needs to be strengthened in scope, coverage and compliance.
Our opinion is not qualified in respect of these matters
Report on Other Legal and Regulatory Requirements
I. 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 âAnnexure Aâ, a statement on the matters specified in the paragraph 3 and 4 of the order.
II. 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 including other comprehensive income, statement of changes in equity and the statement of cash flow dealt with by this Report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015;
(e) on the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 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, 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;
ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure - A to the Auditorsâ Report
The Annexure referred to in Independent Auditorsâ Report to the members of the Company on the standalone financial statements for the year ended 31st March 2018, we report that:
(i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company and certificate provided by the bank, the title deeds of immovable properties are held in the name of the Company. Original copy of title deed has not been produced as the same is deposited as security with bank under loan agreement as confirmed by the management & Bank.
(ii) In respect of its inventories:
(a) As explained to us, the inventories of finished goods, semi-finished goods, stores, spare parts and raw materials were physically verified at the end of the year by the Management. In case of inventories lying with third parties, certificates of stocks holding have been received.
(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
(iii) The Company has not granted loans to parties covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ). Thus, paragraph 3(iii) of the Order is not applicable to the Company
(iv) In our opinion and according to the information and explanations given to us, the Company has not given any loans and made any investment within the meaning of section 185 & 186 of the Act. Thus, paragraph 3(iv) of the Order is not applicable to the Company.
(v) According to the information and explanation given to us, the company has not accepted any deposits from the public. Thus, paragraph 3(v) of the Order is not applicable to the Company.
(vi) It has been certified by the management that company is not required to maintain the cost records prescribed under sub section (1) of the section 148 of the companies Act, 2013, since the same has not been specified by the Central Government. We have relied upon the assertions of the management.
(vii) In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has generally been 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, cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at 31.03.2018 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, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess which have not been deposited as at 31.03.2018 on account of any dispute.
(viii) 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 during the year.
(ix) The company has not obtained any term loan during the year, so this para of order is not applicable.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our 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.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(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 where applicable and 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 given 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. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
Annexure - B to the Auditorsâ Report 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 Cosco (India) Limited (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the standalone 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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, except in certain areas as stated below an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 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.
- Inventory Levels : needs to be monitored more effectively.
- The documentation and MIS : need improvement in respect of Annual procurement & Expense budget, Procurement Budgeting & Planning of Traded Goods, Quotation Management, Negotiation & Selection, Contract labour management,
- Dealers selection and Appointment: needs improvement to prevent appointment of non credit worth ness dealer.
- HR (attendance monitoring & performance review): needs improvement w.r.t. modification of attendance sheet to prevent excess payment of salary.
- Fixed Assets Physical verification: needs improvement to see all items of fixed assets are physically verified in scale of 3 years.
For V. P. Jain & Associates
Chartered Accountants
Firmâs registration number: 015260N
Swati Madan
Partner
Membership number: 521697
Place: New Delhi
Date: 30th May 2018
Mar 31, 2016
To the members of Cosco (India) Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Cosco (India) Limited (''the Company''), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s 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 standalone 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone 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. 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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31 March 2016 and its profit and its cash flows for the year ended on that date.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 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 âAnnexure Aâ, 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;
(d) in our opinion, the aforesaid standalone 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 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 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 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;
ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure - A to the Auditors'' Report
The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2016, we report that:
(i) In respect of fixed assets:
a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets
The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
b) According to the information and explanations given to us and on the basis of our examination of the records of the Company and certificate provided by the bank, the title deeds of immovable properties are held in the name of the Company. Original copy of title deed has not been produced as the same is deposited as security with bank under loan agreement as confirmed by the management & Bank.
(ii) In respect of its inventories:
a) As explained to us, the inventories of finished goods, semi-finished goods, stores, spare parts and raw materials were physically verified at the end of the year by the Management. In case of inventories lying with third parties, certificates of stocks holding have been received.
b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
(iii) The Company has not granted loans to parties covered in the register maintained under section 189 of the Companies Act, 2013 (''the Act''). Thus, paragraph 3(iii) of the Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has not given any loans and made any investment within the meaning of section 185 & 186 of the Act. Thus, paragraph 3(iv) of the Order is not applicable to the Company.
(v) According to the information and explanation given to us, the company has not accepted any deposits from the public. Thus, paragraph 3(v) of the Order is not applicable to the Company.
(vi) It has been certified by the management that company is not required to maintain the cost records prescribed under sub section (1) of section 148 of the Companies Act, 2013, since the same has not been specified by the Central Government. We have relied upon the assertions of the management.
vii) In respect of statutory dues:
a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has generally been 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, cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at 31.03.2016 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, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess which have not been deposited as at 31.03.2016 on account of any dispute.
(viii) 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 during the year.
(ix) The company has not obtained any term loan during the year, so this para of order is not applicable.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our 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.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(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 where applicable and 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 given 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. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure - B to the Auditors'' Report
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 Cosco (India) Limited (âthe Companyâ) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s 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 (''ICAI''). 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 company''s 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s 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 auditor''s 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 Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s 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 company''s 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 company''s 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 31 March 2016, 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 Madan & Associates
Chartered Accountants
Firm''s registration number: 000185N
M. K. Madan
Proprietor
Membership number: 082214
Place: New Delhi
Date: 30th May 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Cosco (India) Limited ('the Company'), which comprise the balance sheet
as at 31 March 2015, the statement of profit and loss and the cash flow
statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ('the Act') with respect
to the preparation and presentation of these standalone 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.
Auditors' Responsibility
Our responsibility is to express an opinion on these standalone
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 thereunder.
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 standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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 31 March 2015 and its profit and its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ('the
Order') issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
(a) 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 standalone 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 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
(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.
ii. the Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Auditors' Report
[The Annexure referred to in our Independent Auditors' Report to the
members of the Company on the standalone financial statements for the
year ended 31 March 2015, we report that:]
(i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner,
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. In accordance with this
programme, certain fixed assets were verified by the management during
the year. According to the information and explanations given to us, no
material discrepancies were noticed on such verification.
(ii) In respect of its inventories:
(a) As explained to us, the inventories of finished goods,
semi-finished goods, stores, spare parts and raw materials were
physically verified at the end of the year by the Management. In case
of inventories lying with third parties, certificates of stocks holding
have been received.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
((iii) According to the information and explanations given to us, The
Company has not granted any loans secured or unsecured to companies,
firms, or other parties covered in the register maintained under
section 189 of the Companies Act, 2013 ('the Act').
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory, fixed assets and for the sale
of goods. We have not observed any continuing failure to correct major
weaknesses in internal control.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2014
prescribed by the Central Government under Section 148(1) of the
Companies Act, 2013 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the records with a view to determining
whether they are accurate or complete.
(vii) In respect of statutory dues:
(a) According to the information and explanations given to us, the
Company has generally been regular in depositing undisputed dues,
including Provident Fund, ESI, Investor Education and Protection Fund,
Income-tax, Tax deducted at sources, tax collected at source,
Professional Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues applicable to it
with the appropriate authorities. There were no undisputed amounts
payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty,
Cess and other material statutory dues in arrears as at 31 March, 2015
for a period of more than six months from the date they became payable.
(b) There are no material dues of Income tax, Sales Tax Wealth tax,
Service tax, Duty of Customs, Duty of excise, Value Add tax and cess
which have not been deposited with the appropriate authorities on
account of any dispute.
(c) the amounts which were required to be transferred to the investor
education and protection fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules there under
has been transferred to such fund within time.
(viii) The Company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses in the financial
year and in the immediately preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks, financial institutions and debenture holders.
(x) In our opinion and according to the information and the
explanations given to us, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xi) The company has not obtained any term loan during the year, so
this para of order is not applicable.
(xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For Madan & Associates
Chartered Accountants
Firm's Reg. No.000185N
(C.A. M.K. Madan)
M.No. 082214
Proprietor
Place : New Delhi
Date : 30th May, 2015
Mar 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of COSCO (INDIA)
LIMITED ("the Company"), which comprise the Balance Sheet as at 31
March, 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s 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 Section 211(3C)
of the Companies Act, 1956 ("the Act") and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
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 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 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 the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31March,2014;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the 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 Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Act.
(e) On the basis of the written representations received from the
directors as on 31 March, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on 31March, 2014
from being appointed as a director in terms of Section 274(1) (g) of
the Act.
Annexure to the Independent Auditors'' Report
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date]
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and location of the fixed assets.
(b) Some of the fixed assets were physically verified during the year
by the Management in accordance with a regular programme of
verification which, in our opinion, provides for physical verification
of all the fixed assets at reasonable intervals. According to the
information and explanations given to us, no material discrepancies
were noticed on such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of its inventory:
(a) As explained to us, the inventories of finished goods,
semi-finished goods, stores, spare parts and raw materials were
physically verified at the end of the year by the Management. In case
of inventories lying with third parties, certificates of stocks holding
have been received.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) In respect of loans, secured or unsecured, granted / taken to /
from the parties listed in register U/S 301:
(a) According to the information and explanations given to us, the
Company has not granted any loans to companies, firms or other parties
covered in the Register under Section 301 of the Companies Act, 1956.
(b) The company has taken loans from companies and directors at
different rates of interest. Total no of parties from whom loan taken
is 9 and the amount outstanding at the year end is Rs 2048.34 lacs. The
maximum outstanding during the year was Rs 2051.53 lacs.
(c) In our opinion, the rates of interest of such loans are, prima
facie not prejudicial to the interests of the Company and other terms
and conditions of loans are not stipulated.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory, fixed assets and for the sale
of goods. We have not observed any continuing failure to correct major
weaknesses in internal control.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) The company has not entered into transactions exceeding value of Rs
5 lacs each with the parties listed in the register under section 301
of the companies Act, 1956.
(vi) The company has not received any public deposits during the year.
(vii) Company has appointed external firm of Chartered Accountants as
Internal Auditors. Internal auditor has issued audit report in respect
of factory and head office on quarterly basis. We have gone through the
scope of work, Audit Reports and compliance thereof. In our opinion the
internal audit needs to be further strengthened to report on internal
controls / checks operating in the organisation to make it commensurate
with the size and nature of company''s business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the records with a view to determining
whether they are accurate or complete.
(ix) In respect of statutory dues:
(a) According to the information and explanations given to us, the
Company has generally been regular in depositing undisputed dues,
including Provident Fund, ESI, Investor Education and Protection Fund,
Income-tax, Tax deducted at sources, tax collected at source,
Professional Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues applicable to it
with the appropriate authorities.
(b) According to the information and explanations given to us, there
were no undisputed amounts payable in respect of Income-tax, Wealth
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
in arrears as at 31 March, 2014 for a period of more than six months
from the date they became payable.
(x) The company does not have the accumulated losses at the end of
financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks, financial institutions and debenture holders.
(xii) Since the company has not granted any loans or advances on the
basis of security by way of pledge of shares, debentures and other
securities, so para 4 (xii) of order is not applicable.
(xiii) As company is not a nidhi, chit fund or mutual benefit company,
so paragraph 4 (xiii) of the order is not applicable.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments , so para 4(xiv) of order is not
applicable.
(xv) In our opinion, and according to the information and the
explanation given to us, the company has not given any guarantee for
loans taken by others from banks or financial institutions during the
year
(xvi) The company has not obtained any term loan during the year, so
this para of order is not applicable.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year 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 and
companies covered in the Register maintained under Section 301 of the
Companies Act, 1956.
(xix) Since the company has not issued any debentures during the year,
so para 4(xix) of order is not applicable.
(xx) Since the company has not raised money by public issue during the
previous year, so paragraph 4(xx) of the order is not applicable.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For Madan & Associates
Chartered Accountants
Firm''s Reg. No.000185N
Place : New Delhi (C.A. M.K. Madan)
M.No. 082214
Date : 30th May, 2014 Proprietor
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of COSCO (INDIA)
LIMITED ("the Company"), which comprise the Balance Sheet as at 31
March, 2013, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s 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 Section 211(3C)
of the Companies Act,. 1956 ("the Act") and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
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 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 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 the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Emphasis of Matter
Attention is drawn to Note 9.2 to the financial statements, whereby
company has recognised liability of Rs. 299.81 Lacs in the accounts on
the basis that realisation from the subsidiary company''s (since
desubsidarised) assets / claim amount would be utilised for meeting the
other liabilities (Other than Bank) of the subsidiary and there will
not be any amount left to be received by the company. Since the claim
amount / realisation from the assets of subsidiary are not yet
ascertained, we have relied upon the assertions of the management.
Our opinion is not qualified in respect of this matter. Report on
Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003("the
Order") issued by the Central Government in "terms of Section 227(4A)
of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the 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 Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211 (3C) of the Act.
(e) On the basis of the written representations received from the
directors as on 31 March, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2013
from being appointed as a director in terms of Section 274(1) (g) of
the Act.
Annexure to the Independent Auditors'' Report
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date]
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and location of the fixed assets.
(b) Some of the fixed assets were physically verified during the year
by the Management in accordance with a regular programme of
verification which, in our opinion, provides for physical verification
of all the fixed assets at reasonable intervals. According to the
information and explanations given to us, no material discrepancies
were noticed on such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of its inventory:
(a) As explained to us, the inventories of finished goods,
semi-finished goods, stores, spare parts and raw materials were
physically verified at the end of the year by the Management. In case
of inventories lying with third parties, certificates of stocks holding
have been received.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business. ,
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) In respect of loans, secured or unsecured, granted/taken to /from
the parties listed in register U/S 301 :
(a) According to the information and explanations given to us, the
Company has not granted any loans to companies, firms or other parties
covered in the Register under Section 301 of the Companies Act, 1956.
(b) The company has taken loans from companies and directors at
different rates of interest. Total no of parties from whom loan taken
is 9 and the amount outstanding at the year end is X 1869.93 lacs. The
maximum outstanding during the year was Rs. 1880.94 laces.
(c) In our opinion, the rates of interest of such loans are, prima
facie not prejudicial to the interests of the Company and other terms
and conditions of loans are not stipulated.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory, fixed assets and for the sale
of goods. We have not observed any continuing failure to correct major
weaknesses in internal control.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained underthe said
Section have been so entered.
(b) The company has not entered into transactions exceeding value of Rs.
5 lacs each with the parties listed in the register undersection 301
ofthecompaniesAct, 1956.
(vi) The company has not received any public deposits during the year.
(vii) Company has appointed external firm of Chartered Accountants as
Internal Auditors. Internal auditor has issued audit report in respect
of factory and head office on quarterly basis. We have gone through the
scope of work, Audit Reports and compliance thereof. In our opinion the
internal audit needs to be further strengthened to report on internal
controls / checks operating in the organisation to make it commensurate
with the size and nature of company''s business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1 )(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the records with a view to determining
whether they are accurate or complete.
(ix) In respect of statutory dues:
(a) According to the information and explanations given to us, the
Company has generally been regular in depositing undisputed dues,
including Provident Fund, ESI, Investor Education and Protection Fund,
Income-tax, Tax deducted at sources, tax collected at source,
Professional Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues applicable to it
with the appropriate authorities.
(b) According to the information and explanations given to us, there
were no undisputed amounts payable in respect of Income-tax, Wealth
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
in arrears as at 31 March, 2013 for a period of more than six months
from the date they became payable, except property tax of f 12.07 lacs
which has not been deposited as on 31 st March, 2013 on account of
dispute with Municipal Corporation Gurgaon.
(x) The company does not have the accumulated losses at the end of
financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks, financial institutions and debenture holders.
(xii) Since the company has not granted any loans or advances on the
basis of security by way of pledge of shares, debentures and other
securities, so para 4 (xii) of order is not applicable.
(xiii) As company is not a nidhi, chit fund or mutual benefit company,
so paragraph 4 (xiii) of the order is not applicable.
(xiv) The company is not dealing or trading in shares, securities,
debentures and other investments, so para 4(xiv) of order is not
applicable.
(xv) The company had given guarantee of US $ 20.05 lacs to State Bank
of India Colombo in respect of loans granted by the Bank to Company''s
erstwhile subsidiary. In view of the continued suffering of losses and
suspension of operations and underutilised assets of erstwhile
subsidiary vested in secretary to the Treasury of Govt. Of Sri Lanka
under revival of Underperforming Enterprises or underutilised Assets
Act No 43 of 2011 Company had accounted for Rs. 637.67 lacs in financial
year 2011 -12 and Rs. 299.81 Lacs during the year under audit as
corporate guarantee obligation as explained in Note No 9.2.
(xvi) The company has not obtained any term loan during the year, so
this para of order is not applicable.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year 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 and
companies covered in the Register maintained under Section 301 of the
Companies Act, 1956.
(xix) Since the company has not issued any debentures during the year,
so para 4(xix) of order is not applicable.
(xx) Since the company has not raised money by public issue during the
previous year, so paragraph 4(xx) of the order is not applicable.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For Madan & Associates
Chartered Accountants
Firm''s Reg. No.000185N
Place: New Delhi (C.A. M.K. Madan)
M.No. 082214
Date: 30th May, 2013 Proprietor
Mar 31, 2012
1. We have audited the Balance Sheet of COSCO (INDIA) LIMTED ("the
Company") as at 31st March' 2012' the statement of Profit & Loss and
the Cash Flow Statement of the Company for the year ended on that date'
annexed thereto. These financial statements are the responsibility of
the company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining' on a test basis' evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management' as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order' 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act' 19561 we enclose in the annexure a statement on the
matters specified in paragraphs 4 & 5 of the Said Order.
4. Further to our comments in the Annexure referred to in the
paragraph 3 above' we report as follows:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion' proper books of account as required by law have
been kept by the Company so far' as appears from our examination of the
books;
c. the Balance Sheet' the Statement of Profit & Loss and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. in our opinion the Balance Sheet' the 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;
e. on the basis of written representations received from the directors
as on 31st March' 2012 and taken on record by the Board of Directors'
we report that none of Directors is disqualified as on 31st March' 2012
from being appointed as a director in terms of clause (g) of sub
section (1) of Section 274 of the Companies Act' 1956.
f. in our opinion and to the best of our information and according to
the explanation given to us' the said financial statements read
together with notes thereon (particularly note no. 30.1 reg. Corporate
Obligations- Emphasis of Matter) and Accounting Policies' give the
information required by the Companies Act' 1956 in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(i) in the case of the Balance Sheet' of the state of affairs of the
company as at 31st March' 2012;
(ii) in the case of the Statement of Profit & 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 3 of our
report of even date)
(i) (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As informed' the company has a programme of physical verification
of all major fixed assets overa period 2-3 years and as per programme'
dies' computers & printers' Moulds and Machinery purchased in last
three years at Factory were physically verified during the year.
(c) Since there is no disposal of substantial part of fixed assets
during the year' paragraph 4 (i) (c) of the Companies (Auditors'
Report) Order'2003 (hereinafter referred to as the Order) is not
applicable.
(ii) (a) The inventories have been physically verified by the
management at close of the year.
(b) In our opinion and according to the information and explanations
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 the nature of its business.
(c) On the basis of our examination of the records of inventory' we are
of the opinion that the company is maintaining proper records of
inventory. According to the information and explanations given to us'
no material discrepancies were noticed on physical verification between
the physical stock and the book records.
(iii) (a) The Company had advanced interest free loan of Rs. 284.88 lacs
to its subsidiary company in the earlier years which has been written
off during the year due to subsidiary company's continued suffering of
operational losses.
(b) The company has taken loans from companies' Directors and others
(shareholders/Directors' relatives) at differential rates of interest.
The other terms and conditions of loans are not stipulated. In our
opinion the rates of interest are not prima facie prejudicial to the
interest of the company. Total no. of parties from whom loans are taken
is 9 and the amount outstanding at the year end is Rs. 1710.21 lacs. The
maximum amount outstanding during the year was Rs. 1748.36 lacs.
(c) As stated in para (iii) (b) above' the terms of repayment are not
specified. Of the interest outstanding at the beginning of the year of
Rs. 188.99 lacs' Company has paid Rs. 130.31 lacs during the year.
(iv) in our opinion and according to the information and explanations
given to us there are adequate internal control procedures commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods. We
have not observed any continuing failure to correct major weaknesses in
internal controls.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act' 1956' to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangement that need to be entered
in the register maintained under section 301 of the Companies Act' 1956
have been so entered.
(b) The company has not entered into transactions exceeding value of f
5 lacs each with the parties listed in the register under section 301
of the Companies Act' 1956.
(vi) The Company has not received public deposits during the year.
(vii) Company has appointed External Firm of Chartered Accountants as
Internal Auditors. Internal Audit has issued Audit Reports in respect
of Factory and Head Office on quarterly basis. We have gone through the
scope of work' Audit Reports and compliance thereof. In our opinion the
Internal Audit needs to be further strengthened to report on Internal
controls / checks operating in the organization to make it commensurate
with the size and nature of company's business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules' 2011
prescribed by the the Central Government under section 209(1 )(d) of
the Companies Act' 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have' however' not
made a detailed examination of the records with a view to determining
whether they are accurate or complete.
(ix) According to the information and explanations given to us and
according to the records of the company in respect of
statutory dues:'
(a) The company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund'
investor education and protection fund' employees' state insurance'
income tax' tax deducted at source' tax collected at source'
professional tax' sales tax' custom duty' excise duty' service tax'
octroi charges' property tax' water tax' license fees' works contract
tax' cess and other material statutory dues applicable to it. There
were no undisputed amounts in respect of the statutory dues referred to
above were outstanding as at March 31'2012 for a period of more than
six months from the date they became payable.
(b) According to the information and explanations given to us' Property
Tax of Rs. 444854/- has not been deposited as on 31st March' 2012 on
account of dispute with Municipal Corporation Gurgaon.
(x) Company does not have the accumulated losses at the end of the
financial year. Company has suffered cash losses of Rs. 340.80 Lacs
during the year but NIL in the immediately proceeding financial year.
(xi) As per information given to us' company has not defaulted in
repayment of dues to a financial institution or bank or debenture
holder.
(xii) Since the company has not granted any loans or advances on the
basis of security by way of pledge of shares' debentures and other
securities' paragraph 4 (xii) of the Order is not applicable.
(xiii) As the company is not a nidhi/mutual benefit fund/society'
paragraph 4 (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares' securities'
debentures and other investments.
(xv) The company had given guarantee of US $ 20.05 lacs equivalent to
INR of f 1019.92 lacs to State Bank of India Colombo in respect of
loans granted by the Bank to Company's subsidiary. In view of the
continued sufferings of losses and suspension of operations'
underutilized assets of subsidiary as detailed in note no. 12.2 stand
vested in the Secretary to the Treasury of Govt' of Sri Lanka under
Revival of Underperforming Enterprises or Underutilized Assets Act. No.
43 of 2011. As detailed in note no. 30.1 Company has accounted for
637.67 lacs during the year under Audit. Company is of the view that
there may not accrue any further liability of remaining amount in view
of realisable value of Subsidiary's net asset and Banker's accepting
the one time settlement offer of Company.
(xvi) During the year the company has not raised term loans.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company' no funds
raised on short term basis have been used for long term investments.
(xviii)According to the information and explanations given to us' the
company has not made any preferential allotment of shares during the
year to parties and companies covered in the register maintained under
section 301 of the Act.
(xix) Since the company has not issued any debentures during the year'
paragraph 4 (xix) of the Order is not applicable.
(xx) Since the company has not raised any money during the year by way
of public issue' paragraph 4(xx) of the Order is not applicable.
(xxi) Based upon the audit procedures performed and the information and
explanations given by the management' we report that no fraud on or by
the company has been noticed or reported during the year.
For Madan & Associates
Chartered Accountants
Firm's Reg. No.000185N
Place : New Delhi (C.A. M.K. Madan)
M.No. 082214
Date: 3rd September' 2012 Proprietor
Mar 31, 2010
We have audited the Balance Sheet of Cosco (India) Ltd. as at 31st
March, 2010 and also the Profit & Loss Account and the cash flow
statement of the Company for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
We report that :-
1. As required by the Companies (Auditors Report) Order, 2003, issued
by the Central Government in terms of Section 227 (4A) of the Companies
Act, 1956, we enclose in the annexure a statement on the matters
specified in paragraphs 4 & 5 of the Said Order.
Attention of the Members is drawn to the following:
(i) Note No. 5 Reference is invited to Note No. 5 of Notes on Accounts
regarding valuation of slow moving / non moving stocks
of Rs. 109.19 Lakh. Management has informed, on the
basis of internal technical I commercial evaluation
of these stocks, these are usable / salable.
Management has further represented that these stocks
have been valued at cost and realizable value in
respect of these stocks will not be less than cost.
We have relied upon the management as the matter is
technical & subjective and therefore are unable to
quantify the provision of loss if any.
(ii) Nofe No. 26 Reg. Investments in immovable properties amounting to
Rs. 1,26,24,129/- made in earlier years for which
builder / developer has not made allocation of the
property till date. In view of the long over due of
the amount/ non allocation of property, we are unable
to comment upon the recoverability of the amount.
(iii) Note No.
29/34 Companys exposure in the wholly owned subsidiary as
at 31.03.2010 is (a) Investment in the Equity shares
Rs. 5,86,47,778/- (b) Loans & Advances Rs.
2,89,48,160/- and (c) Sundry Debtors Rs. 32,16,996/-.
The subsidiary companys operations have been
suspended and in view of the same operational viability
of the subsidiary Company is under pressure. The
management has represented that it is likely to
restart the production in view of the favourable
political environment in Sri Lanka and global
economic recovery.
Considering the facts and representations of company
and in view of absence of the information regarding
the fair value of the Assets of the company by an
independent Agency, we have relied upon the Management
of the company and therefore are unable to comment
upon the recovery of the investments /Advances /
Sundry Debtors as stated.
(iv) Inventories as at 31.03.10 includes repairable health & fitness &
other equipment valued at cost less 50% at Rs. 16,54,976/-; old models
of fitness equipment valued at cost less 50% at Rs. 1,05,619/-; spares
in respect of health equipment valued at sale price minus average
margin of profit of 50% at Rs.41,87,452/- and synthetic panel sets
valued at Rs.1,02,55,7101-(as estimated by management). Management has
certified that these stocks have been valued at fair prices and net
realizable value in respect of these stocks would not be less than the
price at which they are valued. In absence of complete information
about disposal of these stocks and other particulars, we have relied
upon the Certificate of the Management and therefore are unable to
comment on the same.
2. Further to our comments in the annexure referred to in the
paragraph 1 above.
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far, as appears from our examination of the
books.
(c) The Balance Sheet, Profit & 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 & Loss A/c. 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) We have been informed by the Company that none of the Directors is
disqualified as on 31.3.2010 from being appointed as director under
clause (g) of sub section (1) of section 274 of the Companies Act,
1956.
(f) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts read together with notes
thereon and Accounting Policies and subject to remarks in sub para (i)
to (iv) as mentioned above and subject to non provision of accumulated
loss of Rs. 1296.25 Lacs (1279.99 lacs) including current year loss of
Rs. 147.90 lacs (460.36 lacs) in wholly owned subsidiary (note no.29);
give the information required by the Companies Act, 1956 in the manner
so required and give a true and fair view in conformity with the
accounting principles generally accepted in India.
(i) In case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2010 and
(ii) In case of the Profit & 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.
(g) We further report that had the remarks given by us in para (f)
above been considered, loss for the year would have been Rs. 1247.58
lacs (1197.99 lacs) against the reported figure of prof it of Rs.48.67
lacs (82 lacs), the reserves & surplus would have been Rs.187.31 lacs
(154.90 Lacs) against the reported figure of Rs.1483.56 lacs (1434.89
lacs).
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS REPORT TO THE
MEMBERS OF COSCO (INDIA) LTD. ON THE ACCOUNTS FOR THE YEAR ENDED MARCH
31, 2009
(i) (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As informed, the company has a programme of physical verification
of all major fixed assets over a period 2-3 years and as per programme,
dies, computers & printers, Moulds and Machinery purchased in last
three years at Factory were physically verified during the year.
(c) Since there is no disposal of substantial part of fixed assets
during the year, paragraph 4 (i) (c) of the Companies (Auditors
Report) Order,2003 (hereinafter referred to as the Order) is not
applicable.
(ii) (a) The inventories have been physically verified by the
management at close of the year.
(b) In our opinion and according to the information and explanations
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 the nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. According to the information and explanations given to us,
no material discrepancies were noticed on physical verification between
the physical stock and the book records.
(iii) (a) The company has taken loans from companies, Directors and
others (shareholders/Directors relatives) as per interest rates stated
in note no. 28 of Notes on Accounts (Schedule S). The other terms and
conditions of loans are not stipulated. In our opinion the rates of
interest are not prima facie prejudicial to the interest of the
company. Total no. of parties from whom loans are taken is 9 and the
amount outstanding at the year end is Rs.1420.81 lacs. The maximum
amount outstanding during the year was Rs.1517.27 lacs. Company has
advanced interest free loan of Rs. 289.48 lacs to its wholly owned
subsidiary.
(b) As stated in para(iii) (a) above, the terms of repayment are not
specified. Of the interest outstanding at the beginning of the year of
Rs. 149.23 lacs, Company has paid Rs. 38.50 lacs during the year.
(c) In view of the comments in para (iii) (a) & (b) above, the
requirements of para 4 (iii) (d) of the order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us there are adequate internal control procedures commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods. We
have not observed any continuing failure to correct major weaknesses in
internal controls except as stated.
(v) (a) To the best of our knowledge and belief and according to the
information and explanation given to us, we are of the opinion that the
transactions that need to be entered in the register maintained under
section 301 of the Companies Act, 1956 have been so entered.
(b) The company has not entered into transactions exceeding value of
Rs.5 lacs each with the parties listed in the register under section
301 of the Companies Act, 1956.
(vi) The Company has not received public deposits during the year.
(vii) Company has appointed External Firm of Chartered Accountants as
Internal Auditors. Internal Audit has issued Audit Reports in respect
of Factory and Head Office on quarterly basis. We have gone through the
scope of work, Audit Reports and compliance thereof. In our opinion the
Internal Audits scope of work needs to be enhanced to report on
Internal controls / checks operating in the organization, participation
in the physical verification of Fixed Assets and to cover branches, to
make it commensurate with the size and nature of companys business.
(viii) The Central Government has not prescribed the maintenance of
cost records under section 209 (1) (d) of the Companies Act, 1956 in
respect of any of the products of the company.
(ix) (a) According to the information and explanations given to us and
according to the records of the company, the company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including provident fund, investor education and protection fund,
employees state insurance, income tax, tax deducted at source , tax
collected at source, professional tax, sales tax, custom duty, excise
duty, service tax, octroi charges, property tax, water tax, license
fees, works contract tax, cess and other material statutory dues
applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts in respect of the statutory dues referred to above
were outstanding as at March 31, 2010 for a period of more than six
months from the date they became payable.
According to the information and explanations given to us, there is no
disputed liability outstanding in respect of statutory dues comprising
of Sales tax/ income tax / Custom tax / Wealth tax / Cess as at March
31, 2010.
(x) Considering our remarks in para (i to iv) of main report and para
(xv) of this annexure, we are unable to comment on the net worth of the
company.
(xi) As per information given to us, company has not defaulted in
repayment of dues to a financial institution or bank or debenture
holder.
(xii) Since the company has not granted any loans or advances on the
basis of security by way of pledge of shares, debentures and other
securities, paragraph 4 (xii) of the Order is not applicable.
(xiii) As the company is not a nidhi/mutual benefit fund/society,
paragraph 4 (xiii) of the Order is not applicable.
(xiv) The Company has made inter-corporate investments in its wholly
owned subsidiary company in Sri Lanka and made investments/traded in
shares of other bodies corporate in earlier year. The company has
categorized the investments of shares in other bodies corporate as long
term and current investments. The Internal Auditor of the company has
confirmed that the required records / register have been maintained by
the company on computer system on day to day basis and the same have
been found to be in order.
(xv) The company has given guarantee of US $ 20.05 Lacs (20.05 Lacs)
equivalent to INR of Rs.900.04 lacs (1019.74 lacs) to State bank of
India Colombo in respect of loans granted by the Bank to Companys
subsidiary. In view of the continued sufferings of losses and
suspension of operations, subsidiary companys viability as a going
concern is under pressure. Company has informed that the realizable
value of fixed assets is more than the secured debt of wholly owned
subsidiary and therefore company does not foresee any liability on that
Account. We have relied upon the representation of the management and
therefore are unable to comment upon whether there would be any
devolvement of liability on the company due to issuance of guarantee.
(xvi) During the year the company has not raised term loans.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, no funds
raised on short term basis have been used for long term investments.
(xviii) According to the information and explanations given to us, the
company has not made any preferential allotment of shares during the
year to parties and companies covered in the register maintained under
section 301 of the Act.
(xix) Since the company has not issued any debentures during the year,
paragraph 4 (xix) of the Order is not applicable.
(xx) Since the company has not raised any money during the year by way
of public issue, paragraph 4(xx) of the Order is not applicable.
(xxi) Based upon the audit procedures performed and the information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the year.
For R.N. BAHL & Co.
Chartered Accountants
Firms Registration No.000185N
(C.A. R.N. BAHL)
M. No. 2277
Partner
Place : New Delhi
Date : 28th August, 2010