Mar 31, 2023
Radha Madhav Corporation Limited,
Report on Audit of the AS Financial Statements
Opinion
We have audited the accompanying Ind AS financial statements of Radha Madhav Corporation Limited (''the Company''), which comprise the Balance Sheet as at 31st March, 2023; the Statement of Profit and Loss (including other comprehensive income), the Cash Flows Statement and the Statement of Changes in Equity for the year then ended and a summary of the Significant Accounting Policies and other Explanatory Information (herein after referred to as "Ind AS financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Companies Act, 2013 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, 2023;
(ii) in the case of the Statement of Profit and Loss (comprising of Other Comprehensive Income), of the Loss for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date and
(iv) the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Ind AS financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India, and we have fulfilled our other ethical responsibilities in accordance with the provisions of the Companies Act, 2013. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
1) Related to Going Concern:
Due to recurring losses the Company''s Net Worth is fully eroded and has a negative net worth of Rs.11.490 million indicating the existence of uncertainty that may cast doubt about the Company''s ability to continue as a Going Concern. The company was under Corporate Insolvency Resolution Process since 22/10/2020 & IRP/RP of the Company were evaluating various options like including starting a new line of business, monetizing its assets, sell of its marketing business., restructuring its liabilities and recommencement of its operations, sale by the promoters to a strategic partner with further equity infusion. The Company has received a Prospective Resolution Applicant (PRA) and his resolution plan for revival/restructuring of the Company has been approved by COC and Honorable NCLT vide their order dated 01.08.2022. We refer to Note No. 41 of the Financial Statements, considering the matters set out in the said Note, these Financial Statements are prepared on a going concern basis. Our Opinion is not modified in respect of the said matter.
2) Related to write off Assets/Liabilities
The assets and liabilities standing on the date of initiation of Corporate Insolvency Resolution Process (CIRP) have been write off as per the amount offered on different heads in the approved resolution plan. Our Opinion is not modified in respect of the said matter
3) Related to Receivables and Payables:
The Outstanding balances as at the end under consideration in respect of sundry debtors, loans & advances and sundry creditors are subject to confirmation from respective parties and consequential reconciliation and adjustments arising there from if any. Consequential impact thereof on the financial results is not ascertainable. Company is in process of obtaining such confirmation which has resulted into departure from standard on auditing. Our Opinion is not modified in respect of the said matter.
4) Related to Inventory Records:
Company has not maintained proper records of inventory of trading goods and its physical verification cannot be ascertained. Our Opinion is not modified in respect of the said matter.
Key Audit Matters
In view of all our emphasis of matters, according to us it was difficult to ascertain the key audit matters. We, therefore, did not identify any matter to be reported further here.
Responsibilities of the Management and Those Charged with Governance for the Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued thereunder.
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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Ind AS financial statements, the Board of Directors of the company are responsible for assessing the ability of the company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors of the company are also responsible for overseeing the financial reporting process of the company
Auditors'' Responsibility
Our objectives are to obtain reasonable assurance about whether the Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
> Identify and assess the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
> Obtain an understanding of internal controls relevant to the audit 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.
> Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
> Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the company to cease to continue as a going concern.
> Evaluate the overall presentation, structure and content of the Ind AS financial statements, including the disclosures, and whether the Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("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", a statement on the matters specified in paragraphs 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 purpose of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Companies ( Indian Accounting Standards) Rules, 2015 as amended;
e. On the basis of written representations received from the directors as on 31st march, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 from being appointed as a director in terms of Section164(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 "Annexure B".
g. In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
h. With respect to other matters to be included in the Auditors'' 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 Ind AS 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 Investors Education and Protection Fund by the Company.
For Ajay Shobha & Co
Chartered Accountants FRN: 317031E
Digitally signed
AJAY by AJAY GUPTA
Date:
II DT A 2023.12.08 VJWI 1 /'' 13:21:47 05''30''
Ajay Gupta Partner M. No; 053071
UDIN: 23053071BGVWNL2652
Place; Mumbai Date: 08.12.2023
Mar 31, 2018
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Radha Madhav Corporation Limited, which comprise the Balance Sheet as at March 31, 2018, the statement of Profit and Loss and the cash flow statement for the year ended on that date, and a summary of the significant accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive Income, Cash Flow and the statement of changes in Equity 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, 2015 as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITORS'' RESPONSIBILITY
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, subject to the effect in the financial statements of the matters referred to in the preceding paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
i. in the case of the Balance sheet, of the state of affairs of the Company as at March 31, 2018,
ii. in the case of Statement of Profit and Loss, the profit of the Company for the year ended on that date.
iii. in the case of Cash Flow Statement, of the cash flow for the year ended on that date.
EMPHASIS MATTERS
We draw attention to following matter :
a. The Outstanding balances as at the end under consideration in respect of sundry debtors, loans
& advances and sundry creditors are subject to confirmation from respective parties and consequential reconciliation and adjustments arising there from if any. Consequential impact thereof on the financial results is not ascertainable. Company is in process of obtaining such confirmation since last many years which has resulted into departure from standard on auditing.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1 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 Companies (Indian Accounting Standards) Rules, 2015 as amended; except as stated in Para b under the heading basis for qualified opinion.
(e) on the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act; and
(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 "Annexure A".
(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 has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. 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 B a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
ANNEXUREA
To the Independent Auditor''s Report of even date on the Standalone Financial Statements of Radha Madhav Corporation Limited
(Referred to in paragraph 1 (f) under ''Report on Other Legal and Regulatory Requirements'' of our report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013. ("THE ACT")
We were engaged to audit the internal financial controls over financial reporting of Radha Madhav Corporation Limited ("the Company") as of March 31, 2018 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. 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 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 judgement, 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 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 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, to the best of our information and according to the explanations given to us, the Company need to further improve the Internal Financial control in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting as at March 31, 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.
ANNEXURE-B
To the Independent Auditor''s Report of even date on the Standalone Financial Statements of Radha Madhav Corporation Limited
On the basis of checks as considered appropriate and in terms of the information and explanations given to us, we report as under:
1. FIXED ASSETS:
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out and no material discrepancies were noticed on such verification. In our opinion the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.
2. INVENTORIES:
As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable and maintaining proper records of inventory except for material lying on shop floor (work in process) and trading goods.
3. LOANS:
As per the information furnished, the Company has not granted any loans, secured or unsecured, to companies, firms Limited liability partnership or other parties covered in the register maintained under Section 189 of the Companies Act.
(b) As 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, the Clause (iii)(a) (iii)(b) and (iii)(c) are not applicable.
4. LOANS, INVESTMENT GUARANTEES, AND SECURITY :
The company has not given any loans, investments guarantees, and security, hence the provisions of section 185 and 186 of the Companies Act, 2013 are not applicable .
5. PUBLIC DEPOSITS:
The Company has not accepted any deposits during the period from the public within the meaning of the provision of Section 73 to 76 or any other relevant provisions of the Companies Act, and rules made there under. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or other Tribunal.
6. COST RECORDS:
According to the information and explanations given to us the Central Government has not prescribed the maintenance of Cost Records Under Section 148 (1) of the Companies Act 2003, in respect of the Company''s products.
7. STATUTORY DUES:
(a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, contribution to employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise-duty, cess and other statutory dues wherever applicable. There were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.
(b) According to the records of the Company, no dues of sales tax, income- tax, customs, wealth-tax, service tax, excise duty, cess which have not been deposited on account of disputes except as mentioned below;
Nature of dues |
Disputed liability (in millions) |
Unpaid disputed liability (in millions) |
Authority where dispute is pending |
Excise & Service Tax |
14.45 |
11.45 |
High Court |
Excise & Service Tax |
7.80 |
7.80 |
Customs, Excise & Service Tax Appellate tribunal |
Excise & Service Tax |
778 |
7.52 |
Commissioner (Appeal)Central Excise & Customs |
Sales Tax |
19.09 |
19.09 |
Deputy Commissioner commercial Tax office |
Provident Fund |
12.28 |
8.59 |
Employee''s Provident Fund Appellate Tribunal |
(c) According to the information and explanations given to us no amount required to be transferred to investor education and protection fund in accordance with the relevant provision of the Companies Act, 2013 and rule made there under has been transferred to such fund.
8. REPAYMENT OF DUES OF FINANCIAL INSTITUTIONS:
Based on our Audit procedures and the information and explanation given by the management, we are of the opinion that the Company has defaulted in repayment of dues to Financial Institutions as on 31.03.2017, detailed as under:
Default in Payment
particulars |
period of default |
amount (H million) |
Dues to Banks |
||
Principal |
78 months |
846.68 |
Interest |
NA |
Nil |
Total |
846.68 |
Note Company has settled and paid all the dues of Bank of Baroda till May 30, 2018 as per OTS sanctioned by the bank.
9. END USE OF FUND :
Since the company has not raised moneys by way of initial public offer or further public offer (including debt instrument) and term loans this clause is not applicable.
10. FRAUD ON OR BY THE COMPANY:
As per the information and explanations given to us, no fraud on or by the Company has been noticed or reported during this period.
11. MANAGERIAL REMUNERATION:
No Managerial remuneration has been paid or provided, this clause is not applicable
12. NIDHI COMPANY :
The company is not a Nidhi Company hence this clause is not applicable
13. RELATED PARTIES TRANSACTION:
Based upon the audit procedures performed and according to the information and explanations given to us, All transactions with related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial statements etc. as required by the applicable accounting standards.
14. PREFERNTIAL ALLOTMENT:
During the year company has converted outstanding warrant issued on preferential basis in 2016-17 in to Equity Share and the requirement of Section 42 of Companies Act, 2013 have been complied with and the amount raised has been used for the purpose for which the funds were raised.
15. NON CASH TRANSACTION
The company has not entered into any non-cash transactions with directors or persons connected with him.
16 REGISTRATION UNDER RBI ACT
The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For KARTIK JOSHI & ASSOCIATES
FRN No.132326W
(KARTIK JOSHI)
Partner
Place:- Vapi Chartered Accountants
Date:- May 30, 2018 Membership No.138152
Mar 31, 2016
To,
The Members of
Radha Madhav Corporation Limited Report on the Financial Statements
We have audited the accompanying financial statements of Radha Madhav Corporation Limited, which comprise the Balance Sheet as at 31st March 2016, the statement of Profit and Loss and the cash flow statement for the year ended on that date, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Basis for Qualified Opinion
a) The Outstanding balances as at the end of the year under consideration in respect of sundry debtors, loans & advances and sundry creditors are subject to confirmation from respective parties and consequential reconciliation and adjustments arising there from if any. Consequential impact thereof on the financial statements is not ascertainable. Company is in the process of obtaining such confirmation since last many year which has resulted into departure from standards on auditing
b) Non provision/non accounting of interest of Rs.768.70 million for the year under consideration and Rs.2630.98 million till the date of Balance Sheet including reversal of interest of Rs..645.75 million in preceding year, payable to the Banks/ financial institutes/ Asset Reconstruction Company from whom various secured loans have been obtained, which has resulted into non observance of basic accounting assumption. This matter was also qualified in our report on the financial statement from the year ended 31st march 2014.
Above mention Para b has effect of showing higher EPS before / after extraordinary by Rs.11.99 and diluted EPS before extraordinary items Rs.11.99 and consequential effect on showing accumulated losses lower by Rs.2630.99 million.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, subject to the effect in the financial statements of the matters referred to in the preceding paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
i. in the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2016,
ii. in the case of Statement of Profit and Loss, the profit of the Company for the year ended on that date.
iii. in the case of Cash Flow Statement, of the cash flow for the year ended on that date.
Emphasis Matters
We draw attention to following matter in the notes of the financial statements:
a) Financial statement which indicates that the company has accumulated losses and its net worth has been fully eroded, the companyâs current liabilities exceeded its current assets as at the balance sheet date. These factors raise doubts about, the company''s ability to continue as a going concern which is dependent upon infusion of long terms funds for its future operations. However, the financial statement of the company have been prepared on a going concern basis.
b) We could not attend the physical verification of inventory done by the management on account of unplanned stock verification by the management. No working papers relating to physical verification of inventory done by the management were made available to us for audit, but management has in its representation stated that âActual physical count or weight or measurement that was taken on 01/04/2016 under our supervision and in accordance with written instructions, and proper adjustment has been made for receipts of material, stores etc. and deliveries of material".
c) The company do not have adequate internal financial control over financial reporting & operative effectiveness of such control.
d) Company has not carried out physical verification of trading goods lying at the premises of various franchisees/depot located across India.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2015 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; except as stated in Para b under the heading basis for qualified opinion
(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; and
(f) 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:
(g) the company has adequate internal financial control system in place and the operating effectiveness
i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements
ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE
On the basis of checks as considered appropriate and in terms of the information and explanations given to us, we report as under:
1. FIXED ASSETS:
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out and no material discrepancies were noticed on such verification. In our opinion the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.
2. INVENTORIES:
(a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.
(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory except for material lying on shop floor (work in process) and stock in trade. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account except stock in trade. We cannot comment whether any material discrepancies noticed on physically verification of inventory have been properly dealt with books of account as no records are maintained by the company .
3. LOANS:
(a) As per the information furnished, 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.
(b) As 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 , the Clause (iii)(a) and (iii)(b) are not applicable.
4. INTERNAL CONTROL SYSTEM:
In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls of the company.
5. PUBLIC DEPOSITS:
The Company has not accepted any deposits during the period from the public within the meaning of the provision of Section 73 to 76 or any other relevant provisions of the Companies Act, and rules made there under. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or other Tribunal.
6. COST RECORDS:
According to the information and explanations given to us the Central Government has not prescribed the maintenance of Cost Records Under Section 148 (1) of the Companies Act 2003, in respect of the Companyâs products.
7. STATUTORY DUES:.
(a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, contribution to employeesâ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise-duty, cess and other statutory dues wherever applicable except the due tabulated as under, which were outstanding as at 31st March 2016 for a period of more than six months from the date they became payable .
SR. NO. |
PARTICULARS |
AMOUNT (In millions) |
1 |
Service Tax |
2.29 |
2 |
Provident Fund Contribution |
1.93 |
3 |
ESIC Contribution |
0.33 |
4 |
VAT & CST |
0.44 |
5 |
Excise Duty |
0.24 |
(b) According to the records of the Company, no dues of sales tax, income- tax, customs, wealth-tax, service tax, excise duty, cess which have not been deposited on account of disputes except as mentioned below;
Nature of Dues |
Disputed Liability (in millions) |
Unpaid disputed Liability (in millions) |
Authority where dispute is pending |
Excise & Service Tax |
14.45 |
11.45 |
High Court |
Excise & Service Tax |
7.80 |
7.80 |
Customs, Excise & Service Tax Appellate tribunal |
Excise & Service Tax |
7.78 |
7.52 |
Commissioner (Appeal)Central Excise & Customs |
Sales Tax |
14.94 |
14.94 |
Deputy Commissioner commercial Tax office |
Provident Fund |
12.28 |
8.59 |
Employee''s Provident Fund Appellate Tribunal |
(c) According to the information and explanations given to us no amount required to be transferred to investor education and protection fund in accordance with the relevant provision of the Companies Act, 2013 and rule made there under has been transferred to such fund.
8. ACCUMULATED LOSSES:
The accumulated losses of the Company are more than fifty percent of its net worth at the end of the financial period. The Company has not incurred cash losses during the financial period covered by our audit and immediately preceding financial period.
9. REPAYMENT OF DUES OF FINANCIAL INSTITUTIONS:
Based on our Audit procedures and the information and explanation given by the management , we are of the opinion that the Company has defaulted in repayment of dues to Financial Institutions/ Alchemist Asset Reconstruction Company Ltd. / Bank as on 31.03.2016.
Default in Payment
Particulars |
Period of Default |
Amount (RS. In millions) |
Dues to Banks |
|
|
Principal |
54 months |
2562.45 |
Interest (not accounted/provided in Books of accounts |
55 months |
2630.98 |
|
Total |
5193.43 |
10. GUARANTEE:
According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.
11. UTILIZATION OF TERM LOAN FUND:
The company has not obtained any term loan during the year covered by our report.
12. FRAUD ON OR BY THE COMPANY:
As per the information and explanations given to us, no fraud on or by the Company has been noticed or reported during this period.
For H. P. SHAH ASSOCIATES
Frn. No. 109588W
H. P. SHAH
PROPRIETOR Place: Vapi
CHARTERED ACCOUNTANTS Date : 30.05.2016
Mar 31, 2015
Report on the Financial Statements
We have audited the accompanying financial statements of Radha Madhav
Corporation Limited, which comprise the Balance Sheet as at 31st March
2015, the statement of Profit and Loss and the cash flow statement for
the year ended on that date, and a summary of the significant
accounting policies and other explanatory information. Management's
Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these financial statements that
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement. An audit involves performing procedures to
obtain audit evidence about the amounts and the disclosures in the
financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal
financial control relevant to the Company's preparation of the
financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on whether the Company has in
place an adequate internal financial controls system over financial
reporting and the operating effectiveness of such controls. An audit
also includes evaluating the appropriateness of the accounting policies
used and the reasonableness of the accounting estimates made by the
Company's Directors, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
a) Regarding preparation of accounts on the basis of going concern in
spite of brought forward losses of Rs.4204.03 millions which has
resulted into negative net worth of Rs.1286.20 millions as at 31st
March, 2015. The company also has working capital deficiency. These
factors raise doubts about, the company's ability to continue as a
going concern which is dependent upon infusion of long terms funds for
its future operations. The accompanying financial statements do not
include any adjustments relating to the recoverability and
classification of assets and classification of liabilities that might
result, should the company be unable to continue as a going concern
b) The Outstanding balances as at the end of the year under
consideration in respect of sundry debtors, loans & advances and sundry
creditors are subject to confirmation from respective parties and
consequential reconciliation and adjustments arising there from if any.
Consequential impact thereof on the financial statements is not
ascertainable.
c) Non provision/non accounting of interest payable to the Banks/
financial institutes/ Asset Reconstruction Company from whom various
secured loans have been obtained of Rs 658.38 million for the year
under consideration and Rs 1862.29 million till the date of Balance
Sheet including reversal of interest of Rs.645.75 million in preceding
year.
d) During the period under consideration one of the secured creditor
State Bank of India has assign the financial assistance granted by it
to Alchemist Asset Reconstruction Company Limited (AARCL) u/s 5 of
SERFAESI Act, together with all underlying securities, rights, title
and interest in respect thereof. The company has on the basis of its
offer letter of the company which is pending approval from the said
AARCL has accounted for gain on settlement of dues of Rs. 980.46
million.
e) Above mention para. c & d has effect of showing higher EPS before /
after extraordinary by Rs. 28.86 and diluted EPS before extraordinary
items Rs.27.89 and consequential effect on showing accumulated losses
lower by Rs 2842.75 million.
In our opinion and to the best of our information and according to the
explanations given to us, subject to the effect in the financial
statements of the matters referred to in the preceding paragraph, the
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i. in the case of the Balance sheet, of the state of affairs of the
Company as at 31st March, 2015,
ii. in the case of Statement of Profit and Loss, the profit of the
Company for the year ended on that date.
iii. in the case of Cash Flow Statement, of the cash flow for the year
ended on that date.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 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 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 has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any on
long-term contracts including derivative contracts and
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
On the basis of checks as considered appropriate and in terms of the
information and explanations given to us, we report as under:
1. FIXED ASSETS:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) As per the information and explanations given to us, physical
verification of fixed assets has been carried out in terms of the
phased programme of verification of its fixed assets adopted by the
Company and no material discrepancies were noticed on such
verification. In our opinion the frequency of verification is
reasonable, having regard to the size of the Company and nature of its
business.
2. INVENTORIES:
(a) As per the information furnished, the inventories have been
physically verified during the year by the management. In our opinion,
having regard to the nature and location of stocks, the frequency of
the physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, procedures of physical verification of inventory followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory except for
material lying on shop floor (work in process) and stock in trade. In
our opinion, discrepancies noticed on physical verification of stocks
were not material in relation to the operations of the Company and the
same have been properly dealt with in the books of account.
3. LOANS:
(a) As per the information furnished, 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.
(b) As 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 , the Clause (iii)(a) and
(iii)(b) are not applicable.
4. INTERNAL CONTROL SYSTEM:
In our opinion and according to the information and explanations given
to us, there are adequate internal control systems commensurate with
the size of the Company and the nature of its business with regard to
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal controls of the company.
6. PUBLIC DEPOSITS:
The Company has not accepted any deposits during the period from the
public within the meaning of the provision of Section 73 to 76 or any
other relevant provisions of the Companies Act, and rules made there
under. No order has been passed by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any court or other
Tribunal.
8. COST RECORDS:
According to the information and explanations given to us the Central
Government has not prescribed the maintenance of Cost Records Under
Section 148 (1) of the Companies Act 2003, in respect of the Company's
products.
9. STATUTORY DUES:
(a) According to the information and explanations given to us and the
records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees' state
insurance, income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise-duty cess and other statutory dues wherever applicable
except the due tabulated as which were outstanding as at 31st March
2015 for a period of more than six months from the date they became
payable .
SR.
NO. PARTICULARS AMOUNT (In millions)
1 Service Tax 0.88
2 Provident Fund Contnbution 1.93
3 ESIC Contribution 0.33
4 VAT & CST 0.44
(b) According to the records of the Company, no dues of sales tax,
income- tax, customs, wealth-tax, service tax, excise duty, cess which
have not been deposited on account of disputes except as mentioned
below;
Nature of Dues Disputed Unpaid
disputed Authority where dispute
is pending
Liability Liability
(in
millions) (in
millions)
Excise & 14.45 11.45 High Court
Service Tax
Excise & 7.80 7.80 Customs, Excise &
Service Tax
Service Tax Appellate tribunal
Excise & 7.78 7.52 Commissions (Appeal)
Service Tax Central Excise &
Customs
Sales Tax 14.94 14.94 Deputy Commission
commercial Tax office
Provident Fund 12.28 12.28 Employee's Provident
Fund Appellate Tribunal
(c) According to the information and explanations given to us no amount
required to be transferred to investor education and protection fund in
accordance with the relevant provision of the Companies Act, 2013 and
rule made there under has been transferred to such fund.
10. ACCUMULATED LOSSES:
The accumulated losses of the Company are more than fifty percent of
its net worth at the end of the financial period. The Company has not
incurred cash losses during the financial year covered by our audit but
has incurred cash losses during the immediately preceding financial
year.
11. REPAYMENT OF DUES OF FINANCIAL INSTITUTIONS:
Based on our Audit procedures and the information and explanation given
by the management , we are of the opinion that the Company has
defaulted in repayment of dues to Financial Institutions as on
31.03.2015.
Default in Payment
Particulars Period of Default Amount (RS. In
millions)
Dues to Banks
Principal 42 months 2562.45
Interest (not accounted/
provided in Books of accounts 43 months 1862.29
Total 4424.73
15. GUARANTEE:
According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks and
financial institutions.
16. UTILIZATION OF TERM LOAN FUND:
In our opinion, the company has not obtained any term loan during the
year covered by our report.
21. FRAUD ON OR BY THE COMPANY:
As per the information and explanations given to us, no fraud on or by
the Company has been noticed or reported during this period except for
Forgery of cheques of Rs. 6.00 million by a supplier, company has filed
Forgery case under Negotiable Instrument Act against the supplier.
For H. P. SHAH ASSOCIATES
FRN. No. 109588W
Sd/-
H. P. SHAH
PROPRIETOR
CHARTERED ACCOUNTANTS Place : Vapi
MEMBERSHIP No. 39093 Date : 19.05.2015
Mar 31, 2014
We have audited the accompanying financial statements of Radha Madhav
Corporation Limited, which comprise the Balance Sheet as at 31st March
2014, the statement of Profit and Loss and the cash flow statement for
the year ended on that date, 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 and financial performance of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
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. 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
Subject to:
a) Note No. 33 regarding preparation of accounts on the basis of going
concern in spite of loss of Rs. 793.56 million incurred during the year
and brought forward losses of Rs.3410.47 millions which has resulted
into negative net worth of Rs.2931.92 millions as at 31st March, 2014.
The company also has working capital deficiency. These factors raise
doubts about, the company''s ability to continue as a going concern
which is dependent upon infusion of long terms funds for its future
operations. The accompanying financial statements do not include any
adjustments relating to the recoverability and classification of assets
and classification of liabilities that might result, should the company
be unable to continue as a going concern.
b) The Outstanding balances as at the year end under consideration in
respect of some sundry debtors, loans & advances and sundry creditors
are subject to confirmation from respective parties and consequential
reconciliation and adjustments arising there from if any. Consequential
impact thereof on the financial statements is not ascertainable.
c) Interest on various loans accounted by the Company of Rs. 645.75
millions in prior years has been reversed by way of credit to statement
of profit & Loss for the period starting from the date of its treatment
by bank as Non Performing Assets.
d) non provision/non accounting of interest paid/payable to the Banks
from whom various secured loans have been obtained amounting to Rs
558.16 millions for the year under consideration and Rs1057.85 millions
till the date of Balance Sheet.
In our opinion and to the best of our information and according to the
explanations given to us, subject to the effect in the financial
statements of the matters referred to in the preceding paragraph, the
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i. in the case of the Balance sheet, of the state of affairs of the
Company as at 31st March, 2014,
ii. in the case of Profit and Loss Statement, the Loss of the Company
for the year ended on that date.
iii. in the case of Cash Flow Statement, of the cash flow for the year
ended on that date.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we give in the Annexure a
statement on the matters specified paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b) In our opinion, proper books of accounts as required by law, have
been kept by the Company, so far as it appears from examination of such
books.
c) The Balance Sheet and 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, statement of Profit and Loss 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 (which continue to be applicable in respect of
section 133 of the Companies Act 2013 in terms of general circular
15/2013 dt. 13th September, 2013 of the Ministry of Corporate Affairs)
and other recognized accounting practice and policies.
e) On the basis of written representations received from the directors,
as on 31st March, 2014 and taken on record by the Board of Directors
none of the directors is disqualified as on 31st March, 2014 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, nor cess is
due and payable by the Company.
ANNEXURE
On the basis of checks as considered appropriate and in terms of the
information and explanations given to us, we report as under:
1. FIXED ASSETS:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) As per the information and explanations given to us, physical
verification of fixed assets has been carried out in terms of the
phased programme of verification of its fixed assets adopted by the
Company and no material discrepancies were noticed on such
verification. In our opinion the frequency of verification is
reasonable, having regard to the size of the Company and nature of its
business.
(c) During the period, the Company has not disposed of any
substantial/major part of fixed assets.
2. INVENTORIES:
(a) As per the information furnished, the inventories have been
physically verified during the year by the management. In our opinion,
having regard to the nature and location of stocks, the frequency of
the physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, procedures of physical verification of inventory followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory except for
material lying on shop floor (work in process). In our opinion,
discrepancies noticed on physical verification of stocks were not
material in relation to the operations of the Company and the same have
been properly dealt with in the books of account.
3. LOANS:
(a) As per the information furnished, the Company has not granted nor
taken any loans, secured or unsecured, to/from companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act 1956.
(b) As the Company has not granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act 1956, the
Clause (iii)(b), (iii)(c) and (iii)(d) are not applicable.
4. INTERNAL CONTROL SYSTEM:
In our opinion and according to the information and explanations given
to us, there are adequate internal control systems commensurate with
the size of the Company and the nature of its business with regard to
purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal controls of the company.
5. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTY:
(a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the particulars of contracts or arrangement with related
party that need to be entered into the Register maintained under
Section 301 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transaction made in pursuance of contracts or
arrangements entered in the Register maintained under Section 301 and
exceeding the value of five lakh rupees in respect of any party during
the period, have been made at prices which are reasonable having regard
to prevailing market prices at the relevant time.
6. PUBLIC DEPOSITS:
The Company has not accepted any deposits during the period from the
public within the meaning of the provision of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956, and rules made
there under. Hence the Clause (vi) of the order is not applicable No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any court or other Tribunal.
7. INTERNAL AUDIT SYSTEM:
The Company does not have an internal audit system commensurate with
the size of the company and nature of its business.
8. COST RECORDS:
We have broadly reviewed the books of account maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained,
9. STATUTORY DUES:
(a) According to the information and explanations given to us and the
records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees'' state
insurance, income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise-duty, cess and other statutory dues wherever applicable
except the due tabulated as which were outstanding as at 31st March
2014 for a period of more than six months from the date they became
payable .
SR.
NO. PARTICULARS AMOUNT (In millions)
1 Service Tax 0.66
2 Provident Fund Contribution 1.62
3 ESIC Contribution 0.27
4 VAT & CST 0.38
(b) According to the records of the Company, no dues of sales tax,
income- tax, customs, wealth-tax, service tax, excise duty, cess which
have not been deposited on account of disputes except as mentioned
below;
Nature of Dues Disputed Unpaid disputed Authority where dispute
Liability Liability (in is pending
(in millions) millions)
Excise & Service 22.81 19.81 Customs, Excise &
Tax Service Tax Appellate
tribunal
Excise & Service 1.63 1.63 Commissions
Tax (Appeal)Central Excise
& Customs
Sales Tax 5.68 4.53 Deputy Commission
commercial Tax office
Provident Fund 36.26 36.26 Regional PF
commissioner Sub
Regional office.
10. ACCUMULATED LOSSES:
The accumulated losses of the Company are more than fifty percent of
its net worth at the end of the financial period. The Company has
incurred cash losses during the financial period covered by our audit
and also during the immediately preceding financial period.
11. REPAYMENT OF DUES OF FINANCIAL INSTITUTIONS:
Based on our Audit procedures and the information and explanation given
by the management , we are of the opinion that the Company has
defaulted in repayment of dues to banks as on 31.03.2014.
Default in Payment
Particulars Period of Amount
Default (RS. In millions)
Dues to Banks
Principal 30 months 2547.70
Interest (not 31 months 1058.06
accounted/provided
in Books of accounts
Total 3605.76
12. LOANS & ADVANCES AGAINST SHARES, DEBENTURES AND OTHER SECURITIES:
Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. CHIT FUND COMPANY OR NIDHI/MUTUAL BENEFIT FUND/SOCIETY:
Clause (xiii) of the Order is not applicable to the Company as the
Company as is not a chit fund Company or nidhi/mutual benefit
fund/society.
14. MAINTENANCE OF RECORDS FOR DEALING/TRADING IN SHARES, SECURITIES,
DEBENTURES & OTHER INVESTMENTS:
The Company is not dealing or trading in shares, securities, debenture
or other investments hence the Clause (xiv) of the Order is not
applicable to the Company.
15. GUARANTEE:
According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks and
financial institutions.
16. UTILIZATION OF TERM LOAN FUND:
In our opinion, the term loans have been applied for the purpose for
which they were raised.
17. MISMATCH BETWEEN SHORT TERM/LONG TERM FUNDS:
According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that the company has utilized fund raised on short-term bases
for Investment on Long Term bases to the extent of Rs. 800.74 millions.
18. PREFERENTIAL ALLOTMENT OF SHARES:
According to the information and explanations given to us the Company
has not made preferential allotment of shares to parties covered in the
Register maintained under section 301 of the Act.
19. CREATION OF SECURITIES FOR ISSUE OF DEBENTURE:
According to the information and explanations given to us during the
period covered by our audit report, the Company has not issued any
secured debenture.
20. END USE OF MONEY RAISED BY PUBLIC ISSUE:
The Company has not raised any money by public issues during the period
covered by our report.
21. FRAUD ON OR BY THE COMPANY:
As per the information and explanations given to us, no fraud on or by
the Company has been noticed or reported during this period.
*Note: Share/warrant Application Money
-Terms and conditions: There are no defined terms and conditions
as the share application money were brought in by the promoters in
terms of covenants Finance availed from bankers.
-No. of shares proposed to be issued: It could not be ascertained as
the price of shares is to be determined at the time of issue as per
Regulation 76 of SEBI (ICDR) 2009. -The amount of premium: The premium
could not be worked out as it depends of the working the issue price of
shares determined as per
Regulation 76 of SEBI (ICDR) 2009.
-The period before which shares are to be allotted: The period could
not be defined as it depends upon various prior approvals of
regulatory authority before allotment.
-Whether the company has sufficient authorized share capital to cover
the share capital amount on allotment of shares out of share
applicationmoney.: Yes.
-Interest accrued on amount due for refund.: The share application
money (amount) is not due for refund as defined under section 73 of
The Companies Act, 1956 and therefore there is no interest
-The period for which the share application money has been pending
Beyond the period for allotment as mentioned in the share application
form along with the reasons for such share application money being
pending: The period is not defined as it depends upon various prior
approvals of regulatory authority therefore no such period is defined
in share application form.
Depreciation on Tangible Fixed Assets is provided on Written Down Value
Method at the rates and in manner prescribed in Schedule XIV to the
Companies Act, 1956 except on the office equipment (other than Air
condisnor) having gross value of Rs. 1.78 million depreciation
calculated @ 52.70% (previous year @ 52.70%) on WDV basis. Depreciation
on additions to assets during the year is provided on pro-rata basis.
Reversal of Interest:
Interest on various loan accounted by the company of Rs. 645.75 million
has been reversed, for the period starting from the date of its
treatment by the bank as Non performing assets.
Labour Claim and Awards:
Labour claim/awards of Rs. 268.61 million has been granted by the
competent authority.
Impairment Loss:
While carrying the exercise of identifing the impairment loss if any in
carrying amount of fixed assets, looking to the past trend, future
prospect and Valuation Report of Registered Valuer Mr. Yogeshkumar J.
Joshi of Joshi & Associates dtd. 06-05-2014, company has identified
impairment loss in carrying amount of Rs. 520.93 million during the
year.
For H. P. SHAH ASSOCIATES
FRN No.109588W
Sd/-
H. P. SHAH
PROPRIETOR Place : Vapi
CHARTERED ACCOUNTANTS Date : 29.05.2014
MEMBERSHIP No. 39093
Mar 31, 2013
We have audited the attached Balance Sheet of Radha Madhav Corporation
Limited as at 31st March 2013, the statement of Profit and Loss Account
for the period ended on that date and the cash flow statement for the
period ended on that date annexed hereto. These financial statements
are the responsibility of the Company's management. Our responsibility
is to ex- press 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 esti- mates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2003 issued by
the Central Government of India in terms of sub-section (4A) of section
227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that:
a) We have obtained all the information and explanations, which to the
best of our knowl- edge and belief were necessary for the purpose of
our audit.
b) In our opinion, proper books of accounts as required by law, have
been kept by the Com- pany, so far as it appears from examination of
such books.
c) The Balance Sheet and the Profit & Loss Account referred to in this
report are in agree- ment with the books of accounts.
d) In our opinion the Balance sheet and Profit & Loss Account, comply
with the Accounting Standards as referred to in sub section (3C) of
section 211 of the Companies Act, 1956, to the extent applicable.
e) On the basis of written representations received from the directors,
as on 31st March 2013 and taken on record by the Board of Directors, we
report that none of the direc- tors is disqualified as on 31st March
2013 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
f) As stated in Note No. 15 to the financial statement, inadequate
provisions have been made for Bad and Doubtful Debts to the extent of
Rs.113.97 millions which has resulted into loss for the year, provision
for Bad and Doubtful Debts, Balance in profit and loss statement being
understated by Rs. 113.97 millions.
I n our opinion, and to the best of our information and according to
the explanation given to us, the said Balance Sheet and the Statement
of Profit & Loss Account read together with the notes thereon give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i. in so far as it relates to the Balance sheet, of the state of
affairs of the Company as at 31st March, 2013,
ii. in so far as it relates to the Statement of Profit and Loss
Account, the Loss of the Company for the period ended on that date, and
iii. in the case of Cash Flow Statement, of the cash flow for the
period ended on that date.
ANNEXURE
On the basis of checks as considered appropriate and in terms of the
information and explanations given to us, we report as under:
1. FIXED ASSETS:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) As per the information and explanations given to us, physical
verification of fixed assets has been carried out in terms of the
phased programme of verification of its fixed assets adopted by the
Company and no material discrepancies were noticed on such
verification. In our opin- ion the frequency of verification is
reasonable, having regard to the size of the Company and nature of its
business.
(c) A uring the period, the Company has not disposed of any
substantial/major part of fixed assets.
2. INVENTORIES:
(a) As per the information furnished, the inventories have been
physically verified during the pe- riod by the management. In our
opinion, having regard to the nature and location of stocks, the
frequency of the physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, procedures of physical verification of inventory followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory except for
material lying on shop floor (work in process). In our opinion,
discrepancies noticed on physical verification of stocks were not
material in relation to the operations of the Company and the same have
been properly dealt with in the books of account.
3. LOANS:
(a) As per the information furnished, the Company has not granted nor
taken any loans, secured or unsecured, to/from companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act 1956.
(b) As the Company has not granted nor taken any loans, secured or
unsecured to/from compa- nies, firms or other parties covered in the
register maintained under section 301 of the Compa- nies Act 1956, the
Clause (iii)(b), (iii)(c) and (iii)(d) are not applicable.
4. INTERNAL CONTROL SYSTEM:
In our opinion and according to the information and explanations given
to us, there are adequate internal control systems commensurate with the
size of the Company and the nature of its business with regard to
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal controls of the company.
5. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTY:
(a) Based on the audit procedures applied by us and according to the
information and explana- tions provided by the management, we are of
the opinion that the particulars of contracts or arrangement with
related party that need to be entered into the Register maintained
under Section 301 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transaction made in pursuance of contracts or
arrangements entered in the Register maintained under Section 301 and
exceeding the value of five lakh rupees in respect of any party during
the pe- riod, have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
6. PUBLIC DEPOSITS:
The Company has not accepted any deposits during the period from the
public within the meaning of the provision of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956, and rules made
there under. Hence the Clause (vi) of the order is not applicable No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any court or other Tribunal.
7. INTERNAL AUDIT SYSTEM:
The Company has an internal audit system commensurate with the size of
the company and nature of its business. The internal Audit is being
conducted by a firm of Chartered Accountants appointed by the
management.
8. COST RECORDS:
We have broadly reviewed the books of account maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained,
9. STATUTORY DUES:
(a) According to the information and explanations given to us and the
records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees' state
insurance, income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise-duty, cess and other statu- tory dues wherever applicable
except as mentioned below. According to the information and
explanations given to us, no undisputed arrears of statutory dues were
outstanding as at 31st March 2013 for a period of more than six months
from the date they became payable except as mentioned below;
SR. NO. PARTICULARS AMOUNT (In millions)
1 Service Tax 0.01
2 Provident Fund Contribution 0.71
3 ESIC Contribution 0.12
4 VAT & CST 0.19
(b) According to the records of the Company, no dues of sales tax,
income- tax, customs, wealth- tax, service tax, excise duty, cess which
have not been deposited on account of disputes except the excise
liability of Rs.15.36 millions out of which unpaid liability is
Rs.12.36 millions. Dispute is pending before Excise and Custom
Appellate Tribunal and disputed unpaid income tax liability of Rs. 0.91
miilions, disputed is pending before commissioner of Income Tax
(Appeals)
10. ACCUMULATED LOSSES:
The accumulated losses of the Company are more than fifty percent of
its net worth at the end of the financial period. The Company has
incurred cash losses during the financial period covered by our audit
and also during the immediately preceding financial period.
11. REPAYMENT OF DUES OF FINANCIAL INSTITUTIONS:
Based on our Audit procedures and the information and explanation given
by the management, we are of the opinion that the Company has defaulted
in repayment of dues to a financial Institution, banks or debenture
holder as on 31.03.2013.
Default in Payment
Particulars Period of Default Amount (Rs. In Millions)
Dues to Banks
Principal 18 months 2549.97
Interest 19 months 644.76
Total 3194.73
12. LOANS & ADVANCES AGAINST SHARES, DEBENTURES AND OTHER SECURITIES:
Based on our examination of the records and the information and
explanations given to us, the Com- pany has not granted any loans
and/or advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. CHIT FUND COMPANY OR NIDHI/MUTUAL BENEFIT FUND/SOCIETY:
Clause (xiii) of the Order is not applicable to the Company as the
Company as is not a chit fund Com- pany or nidhi/mutual benefit
fund/society.
14. MAINTENANCE OF RECORDS FOR DEALING/TRADING IN SHARES, SECURITIES,
DEBENTURES & OTHER INVESTMENTS:
Che Company is not dealing or trading in shares, securities, debenture
or other investments hence the Clause (xiv) of the Order is not
applicable to the Company.
15. GUARANTEE:
According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks and
financial institutions.
16. UTILIZATION OF TERM LOAN FUND:
In our opinion, the term loans have been applied for the purpose for
which they were raised.
17. MISMATCH BETWEEN SHORT TERM/LONG TERM FUNDS:
According to the information and explanations given to us and on an
overall examination of the Bal- ance Sheet of the Company, we are of
the opinion that the company has utilized fund raised on short- term
bases for Investment on Long Term bases to the extent of Rs. 2636.19
millions.
18. PREFERENTIAL ALLOTMENT OF SHARES:
According to the information and explanations given to us the Company
has not made preferential allotment of shares to parties covered in the
Register maintained under section 301 of the Act.
19. CREATION OF SECURITIES FOR ISSUE OF DEBENTURE:
According to the information and explanations given to us during the
period covered by our audit report, the Company has not issued any
secured debenture.
20. END USE OF MONEY RAISED BY PUBLIC ISSUE:
The Company has not raised any money by public issues during the period
covered by our report.
21. FRAUD ON OR BY THE COMPANY:
As per the information and explanations given to us, no fraud on or by
the Company has been noticed or reported during this period.
For H. P SHAH ASSOCIATES
FRN. No. 109588W
sd
H. P. SHAH
PROPRIETOR Place: Vapi
CHARTERED ACCOUNTANTS Date : 24.05.2013
MEMBERSHIP No. 39093
Jun 30, 2012
We have audited the attached Balance Sheet of Radha Madhav Corporation
Limited as at 30th June 2012, the statement of Profit and Loss Account
for the 15 months period ended on that date and the cash flow statement
for the 15 months period ended on that date annexed hereto. These
financial statements are the responsibility of the Company's management.
Our responsi- bility 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 statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditor's Report) Order, 2003 issued by
the Central Government of India in terms of sub-Section (4A) of Section
227 of the Companies Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that:
a) We have obtained all the Information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of
our audit.
b) In our opinion, proper books of accounts as required by law, have
been kept by the Company, so far as it appears from examination of
such books.
c) The Balance Sheet and the Profit Loss Account and cash flow statement
referred to in this report are in agreement with the books of accounts.
d) In our opinion the Balance sheet, Profit & Loss Statement and cash
flow statement com- ply with the Accounting Standards as referred to in
sub Section (3C) of Section 211 of the Companies Act, 1956, to the extent
applicable except as mentioned in para f to i.
e) On the basis of written representations received from the directors,
as on 31st March 2012 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 30th June 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) As stated in Note No 16 to the Financial Statement, Inadequate
provisions have been made for Bad and Doubtful Debts to the extent of
Rs. 73.93 millions which has resulted into the loss for the year,
Provision for Bad and Doubtful Debts, Balance in Profit and Loss
Statement being understated by Rs. 73.93 millions.
g) As stated in Note No 15 to the Financial Statement, Valuation of
Inventories for the year has not been carried out by the company as per
the provision of AS 2 and as per the accounting policy followed by
Company according to which Work in progress has been valued at Rs.
654.61 millions but on the basis of Information and explanation given by
the Management and physical condition of Work in progress noticed while
attending the Physical Verification of Inventories and had this accounting
policy been followed, the Valuation of Work in progress would have been
Rs. 519.11 millions, this Overvaluation of Rs.135.50 millions in work in
progress has resulted into understatement of Loss and over statement of
inventories to the same extent.
h) Note No. 32 regarding preparation of accounts on the basis of going
concern in spite of loss of Rs. 644.55 millions incurred during the
year and brought forward losses of Rs. 783.88 millions which has
resulted into negative net worth of Rs.156.32 millions as at 30th June,
2012. The company also has working capital deficiency. These factors
raise doubts about, the company's ability to continue as a going concern
which is dependent upon infusion of long terms funds for its future
operations. The accompanying financial statements do not include any
adjustments relating to the recoverability and classification of assets
carrying amount and classification of liabilities that might result,
should the company be unable to continue as a going concern.
i) The Outstanding balances as at 30th June, 2012 in respect of some
sundry debtors, loans & advances and sundry creditors are subject to
confirmation from respective parties and consequential reconciliation and
adjustments arising there from if any. Consequential im- pact thereof on
the financial statements is not ascertainable
In our opinion, and to the best of our Information and according to the
explanation given to us, the said account, subject to our comments in
paragraph 2 (f to i) above consequential effect thereof is not
ascertainable and read together with significant accounting policies and
notes thereon, give the Information required by the Companies Act, 1956
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
i. in the case of the Balance sheet, of the state of affairs of the
Company as at 30th June, 2012,
ii. in the case of Profit and Loss Statement, the Loss of the Company
for the 15 months period ended on that date.
iii. in the case of Cash Flow Statement, of the cash flow for the 15
months period ended on that date.
ANNEXURE
On the basis of checks as considered appropriate and in terms of the
Information and explanations given to us, we report as under:
1. FIXED ASSETS:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) As per the Information and explanations given to us, physical
Verification of fixed assets has been carried out in terms of the phased
programme of Verification of its fixed assets adopted by the Company and
no material discrepancies were noticed on such Verification. In our opin-
ion the frequency of Verification is reasonable, having regard to the
size of the Company and nature of its business.
(c) During the period, the Company has not disposed of any
substantial/major part of fixed assets.
2. INVENTORIES:
(a) As per the Information furnished, the inventories have been
physically verified during the period by the management. In our
opinion, having regard to the nature and Location of stocks, the
frequency of the physical Verification is reasonable.
(b) In our opinion and according to the Information and explanations
given to us, procedures of physical Verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory except for
material lying on shop floor. In our opinion, discrepancies noticed on
physical Verification of stocks were not material in relation to the
operations of the Company and the same have been properly dealt with in
the books of account.
3. LOANS:
(a) As per the Information furnished, the Company has not granted nor
taken any loans, secured or unsecured, to/from companies, firms or other
parties covered in the register maintained under Section 301 of the
Companies Act 1956.
(b) As the Company has not granted nor taken any loans, secured or
unsecured to/from compa- nies, firms or other parties covered in the
register maintained under Section 301 of the Compa- nies Act 1956 the
Clause (iii)(b), (iii)(c) and (iii)(d) are not applicable.
4. INTERNAL CONTROL SYSTEM:
In our opinion and according to the Information and explanations given to
us, there are adequate internal control systems commensurate with the
size of the Company and the nature of its business with regard to
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal controls of the company.
5. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTY:
(a) Based on the audit procedures applied by us and according to the
Information and explanations provided by the management, we are of the
opinion that the particulars of contracts or arrangement with related
party that need to be entered into the Register maintained under Section
301 have been so entered.
(b) In our opinion and according to the Information and explanations
given to us, the transaction made in pursuance of contracts or
arrangements entered in the Register maintained under Section 301 and
exceeding the value of five lakh rupees in respect of any party during
the period, have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
6. PUBLIC DEPOSITS:
The Company has not accepted any deposits during the period from the
public within the meaning of the provision of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956, and rules made
there under. Hence the Clause (vi) of the order is not applicable No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any court or other Tribunal.
7. INTERNAL AUDIT SYSTEM:
The Company has an internal audit system commensurate with the size of
the company and nature of its business. The internal Audit is being
conducted by a firm of Chartered Accountants appointed by the
management.
8. COST RECORDS:
We have broadly reviewed the books of account and records maintained by
the Company pursuant to the rules made by the Central Government for
the maintenance of cost records under Section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained.
9. STATUTORY DUES:
(a) According to the Information and explanations given to us and the
records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty,
excise-duty, cess and other statutory dues wherever applicable.
According to the Information and explanations given to us, no undisputed
arrears of statutory dues were outstanding as at 31st March 2012 for a
period of more than six months from the date they became payable.
(b) According to the records of the Company, no dues of sales tax,
income- tax, customs, wealth- tax, service tax, excise duty, cess which
have not been deposited on account of disputes except the excise duty
liability of Rs.15.36 millions out of which unpaid liability is
Rs.12.36 millions. Dispute is pending before Excise and Custom
Appellate Tribunal and disputed unpaid income tax liability of Rs. 0.91
millions, disputed is pending before commissioner of Income Ta x
(Appeals).
10. ACCUMULATED LOSSES:
The accumulated losses of the Company are more than ffy percent of its
net worth at the end of the financial period. The Company has incurred
cash losses during the financial year covered by our audit and also
during the immediately preceding financial year.
11. REPAYMENT OF DUES OF FINANCIAL INSTITUTIONS:
The Company has defaulted in repayment of dues to Banks from April 2010
and subsequently approached its lenders for restructuring of debt
liabilities through Corporate Debt Restructuring Cell. Re- structuring
proposal of the Company was approved by the CDR Cell on 18th November,
2010 and was implemented during March and April 2011. Even afiter this
CDR the Company defaulted in payment of liabilities. According to the
records examine by us and the Information and explanation given to us the
delay/default in repayment of dues to Bank is given below; Delay in
Payments
Particulars Due Date Date of Payments Amount
(Rs Delay in No.
in Mill
-ions) of month
Dues to Banks
PRINCIPAL ON THE LAST
DAY WITHIN 90 DAYS 12.90 UP TO 3
of Every
Quarter from due date months
Interest On the last
day Within 5 months 17.46 Up to 5
of Every
month from due date months
Total 30.36
Default in Payment
Particulars Period of Default Amount (Rs. In Millions)
Dues to Banks
Principal 9 months 234.89
Interest 10 months 185.28
Total 420.17
12. LOANS & ADVANCES AGAINST SHARES, DEBENTURES AND OTHER SECURITIES:
Based on our examination of the records and the Information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other Securities.
13. CHIT FUND COMPANY OR NIDHI/MUTUAL BENEFIT FUND/SOCIETY:
Clause (xiii) of the Order is not applicable to the Company as the
Company as it is not a chit fund Company or nidhi/mutual benefit
fund/society.
14. MAINTENANCE OF RECORDS FOR DEALING/TRADING IN SHARES, SECURITIES,
DEBENTURES & OTHER INVESTMENTS:
The Company is not dealing or trading in shares, Securities, debenture
or other investments hence the Clause (xiv) of the Order is not
applicable to the Company.
15. GUARANTEE:
According to the Information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks and
financial institutions.
16. UTILIZATION OF TERM LOAN FUND:
In our opinion, the term loans have been applied for the purpose for
which they were raised.
17. MISMATCH BETWEEN SHORT TERM/LONG TERM FUNDS:
According to the Information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that the company has utlized fund raised on short- term bases
for Investment on Long Term bases to the extent of Rs. 234.58 millions.
18. PREFERENTIAL ALLOTIMENT OF SHARES:
According to the Information and explanations given to us the Company has
not made preferential allotment of shares to parties covered in the
Register maintained under Section 301 of the Act.
19. CREATION OF SECURITIES FOR ISSUE OF DEBENTURE:
According to the Information and explanations given to us during the
period covered by our audit report, the Company has not issued any
secured debenture.
20. END USE OF MONEY RAISED BY PUBLIC ISSUE:
The Company has not raised any money by public issues during the period
covered by our report.
21. FRAUD ON OR BY THE COMPANY:
As per the Information and explanations given to us, no fraud on or by
the Company has been noticed or reported during this period.
For H. P. SHAH ASSOCIATES
FRN. No. 109588W
sd/-
H. P. SHAH
PROPRIETOR
Place : Vapi
CHARTERED ACCOUNTANTS
Date : 28.07.2012
MEMBERSHIP No. 39093
Mar 31, 2010
We have audited the attached Balance Sheet of Radha Madhav Corporation
Limited as at 31st March 2010 and the Profit and Loss Account for the
year ended on that date annexed thereto and also the cash flow
statement for the year ended on that date. 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 atest basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors Report) Order, 2003 issued by
the Central Government of India in terms of sub- section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
Further to our comments in the Annexure referred to above, we report
that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b) In our opinion, proper books of accounts as required by law, have
been kept by the Company, so far as it appears from examination of such
books.
c) The Balance Sheet and the Profit & Loss Account referred to in this
report are in agreement with the books of accounts.
d) In our opinion the Balance sheet and Profit & Loss Account, comply
with the Accounting Standards as referred to in sub section (3C) of
section 21 1 of the Companies Act, 1956, to the extent applicable.
e) On the basis of written representations received from the directors,
as on 31st March 2010 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March 2010
from being appointed
as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956;
In our opinion, and to the best of our information and according to the
explanation given to us, the said Balance Sheet and the Profit & Loss
Account read together with the notes thereon give the information
required by the Companies Act, 1 956, in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
i. in so far as it relates to the Balance sheet, of the state of
affairs of the Company as at 31 st March, 201 0,
ii. in so far as it relates to the Profit and Loss Account, the Loss of
the Company for the year ended on that date, and
iii. in the case of Cash Flow Statement, of the cash flow for the year
ended on that date
ANNEXURE
On the basis of checks as considered appropriate and in terms of the
information and explanations given to us, we report as under:
1. FIXED ASSETS:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) As per the information and explanations given to us, physical
verification of fixed assets has been carried out in terms of the
phased programme of verification of its fixed assets adopted by the
Company and no material discrepancies were noticed on such
verification. In our opinion the frequency of verification is
reasonable, having regard to the size of the Company and nature of its
business.
(c) During the year, the Company has not disposed of any
substantial/major part of fixed assets.
2. INVENTORIES:
(a) As per the information furnished, the inventories have been
physically verified during the year by the management. In our opinion,
having regard to the nature and location of stocks, the frequency of
the physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, procedures of physical verification of inventory followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory except for
material lying on shop floor. In our opinion, discrepancies noticed on
physical verification of stocks were not material in relation to the
operations of the Company and the same have been properly dealt with in
the books of account.
3. LOANS:
(a) As per the information furnished, the Company has not granted nor
taken any loans, secured or unsecured, to/from companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act 1 956.
(b) As the Company has not granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act 1 956 the
Clause (iii)(b), (iii)(c) and (iii)(d) are not applicable.
4. INTERNAL CONTROL SYSTEM:
In our opinion and according to the information and explanations given
to us, there are adequate internal control systems commensurate with
the size of the Company and the nature of its business with regard to
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal controls of the company.
5. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTY:
(a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the particulars of contracts or arrangement with related
party that need to be entered into the Register maintained under
Section 301 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transaction made in pursuance of contracts or
arrangements entered in the Register maintained under Section 301 and
exceeding the value of five lakh rupees in respect of any party during
the year, have been made at prices which are reasonable having regard
to prevailing market prices at the relevant time.
6. PUBLIC DEPOSITS:
The Company has not accepted any deposits during the year from the
public within the meaning of the provision of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1 956, and rules made
there under. Hence the Clause (vi) of the order is not applicable No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any court or other Tribunal.
7. INTERNAL AUDIT SYSTEM:
The Company has an internal audit system commensurate with the size of
the company and nature of its business. The internal Audit is being
conducted by a firm of Chartered Accountants appointed by the
management.
8. COST RECORDS:
As explained to us the Central Government has not prescribed the
maintenance of Cost Records Under Section 209(1 )(d) of the Companies
Act 1 956, in respect of the Companys products.
9. STATUTORY DUES:
(a) According to the information and explanations
given to us and the records examined by us, the
Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees state insurance,
income-tax, sales- tax, wealth-tax, service tax, customs duty, excise-
duty, cess and other statutory dues wherever applicable. According to
the information and explanations given to us, no undisputed arrears of
statutory dues were outstanding as at 31st March 2010 for a period of
more than six months from the date they became payable.
(b) According to the records of the Company, no dues of sales tax,
income- tax, customs, wealth-tax, service tax, excise duty, cess which
have not been deposited on account of disputes except the excise
liability of Rs.l .54 crore out of which unpaid liability is Rs.l.24
crore. Dispute is pending before Excise and Custom Appellate Tribunal.
10. ACCUMULATED LOSSES:
There are accumulated losses of the Company as on 31st March 2010 of
Rs.25.20 crore. The Company has incurred cash losses during the
financial year covered by our audit and not during the immediately
preceding financial year.
1 1. REPAYMENT OF DUES OF FINANCIAL INSTITUTIONS:
Based on our audit procedures and the information and explanations
given by the management, we are of the opinion that the Company has not
defaulted in repayment of dues to a financial institution, bank or
debenture holder.
12. LOANS & ADVANCES AGAINST SHARES, DEBENTURES AND OTHER SECURITIES:
Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. CHIT FUND COMPANY OR NIDHI/MUTUAL BENEFIT FUND/SOCIETY:
Clause (xiii) of the Order is not applicable to the Company as the
Company as is not a chit fund Company or nidhi/ mutual benefit
fund/society.
14. MAINTENANCE OF RECORDS FOR DEALING/ TRADING IN SHARES, SECURITIES,
DEBENTURES & OTHER INVESTMENTS:
The Company is not dealing or trading in shares, securities, debenture
or other investments hence the Clause (xiv) of the Order is not
applicable to the Company.
15. GUARANTEE:
According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks and
financial institutions.
1 6. UTILIZATION OF TERM LOAN FUND:
In our opinion, the term loans have been applied for the purpose for
which they were raised.
17. MISMATCH BETWEEN SHORT TERM/LONG TERM FUNDS:
According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that the company has utilized fund raised on short-term bases
for Investment on Long Term bases to the extent of Rs.38.37 crore.
1 8. PREFERENTIAL ALLOTMENT OF SHARES:
According to the information and explanations given to us the Company
has not made preferential allotment of shares to parties covered in the
Register maintained under section 301 of the Act.
19. CREATION OF SECURITIES FOR ISSUE OF DEBENTURE:
According to the information and explanations given to us during the
year covered by our audit report, the Company has not issued any
secured debenture.
20. END USE OF MONEY RAISED BY PUBLIC ISSUE:
The Company has not raised any money by public issues during the year
covered by our report.
21. FRAUD ON OR BY THE COMPANY:
As per the information and explanations given to us, no fraud on or by
the Company has been noticed or reported during this year.
For H.P. SHAH ASSOCIATES
Sd/-
H. P. SHAH
Place :Vapi CHARTERED ACCOUNTANTS
Date : 28th May, 2010. MEMBERSHIP No. 39093
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