Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of SHALIMAR WIRES INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of the Significant Accounting Policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies act, 2013 ("the Act") with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
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 judgements 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and the matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143(11) of the Act.
We conducted our audit of the Standalone Financial Statements 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 Standalone Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Financial Statements. The procedures selected depend on the auditorâs judgement, including assessment of the risks of material misstatement of the standalone 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 standalone 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 standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Standalone Financial Statements.
Basis for Qualified Opinion
(a) No provision has been made for Claims Receivable remaining outstanding for long, amounting to Rs. 26.98 lacs (Refer Note No. 8)
(b) The Accounting Standard on Contingent Liabilities have not been fully complied with as disclosed in Footnote No. 2 to 4 of Note No. 35, the quantum of non-provision in respect whereof is not ascertained pending settlement / disposal of disputes.
(c) Non-provision of Items indicated in (a) and (b) above constitute a departure from the Indian Accounting Standards referred to in Section 133 of the Act. Without considering Item Nos. (c) above, whose impact on the Company''s Statement of Profit and Loss is presently non-ascertainable, had the provisions indicated in Item Nos. (a) been made,
(i) The Profit for the year would have decreased by Rs. 26.98 lacs
(ii) Other Non-Current Assets would have decreased by Rs. 26.98 lacs
(iii) The Retained Earnings would have been lower by Rs. 26.98 lacs.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph above, the aforesaid Standalone Financial Statements give the information by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018 and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Emphasis of Matters
We draw your attention to the following matter in the Notes to the Standalone Financial Statements:
1. Note No. 35 to the financial statements, which describe the uncertainty related to the outcome of the lawsuits indicated therein.
Our opinion is not modified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
i) As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Sub-section (11) of Section 143 of the Act, we enclose in the Annexure - A, a statement on the matters specified in the said Order, to the extent applicable to the Company.
ii) As required by Section 143(3) of the Act, based on our audit we report that
a) We have sought and, except for the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph above, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement Cash Flows dealt with by this Report are in agreement with the books of account;
d) Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act.;
e) The matters described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;
f) On the basis of written representations received from the Directors as on 31st March, 2018 taken on record by the Board of Directors, none of the Director is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
g) 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. Our report expresses a qualified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting in the matters of Sales.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with amended Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position, wherever ascertainable -Refer Note No. 35
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable loss.
iii. The Order dated 10th June, 2010, of the erstwhile Board for Industrial and Financial Reconstruction, has exempted the Company from transferring any amount to the Investor Education and Protection Fund.
The Annexure referred to in our report to the members of Shalimar Wires Industries Limited for the year ended 31st March, 2018.
We report that :
(i) (a) Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets; |
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. |
(b) Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account; |
(b) The fixed assets have been physically verified under a phased program of physical verification. To the best of our knowledge, no material discrepancies were noticed on such verification. |
(c) Whether the title deeds of immovable properties are held in the name of the company. If not, provide the details thereof; |
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties, which remain deposited with the ICICI Bank, are held in the name of the Company, subject to charges created in favour of the lenders of the Company. |
(ii) Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so, whether they have been properly dealt with in the books of account; |
(ii) The Inventories have been physically verified by the management at reasonable intervals during the year and discrepancies noticed on such physical verification, which were not material, have been properly dealt with in the books of account. |
(iii) Whether the company has granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. If so, |
(iii) During the year the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. |
(a) whether the terms and conditions of the grant of such loans are not prejudicial to the companyâs interest; |
(a) Not applicable |
(b) whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular; |
(b) Not applicable |
(c) if the amount is overdue, state the total amount overdue for more than ninety days, and whether reasonable steps have been taken by the company for recovery of the principal and interest; |
(c) Not applicable |
(iv) In respect of loans, investments, guarantees, and security whether provisions of section 185 and 186 of the Companies Act, 2013 have been complied with. If not, provide the details thereof. |
(iv) The Company has not given any loan within the meaning of Section 185 of the Act. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Section 186 of the Act, with regard to investments made. |
(v) In case the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act,2013 and the rules framed there under, where applicable, have been complied with? if not, the nature of such contraventions be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not? |
(v) The Company has not accepted any deposit within the meaning of Section 73 of the Companies Act. |
(vi) Where maintenance ofcost records has been specified bythe Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and whether such accounts and records have been so made and maintained. |
(vi) The Central Government has specified maintenance of cost records under Section 148 (1) of the Companies Act, 2013 for Metal Wire Cloth manufactured by the Company. We have broadly reviewed such accounts and records and we are of the opinion that the accounts and records have been made and maintained by the Company. However, we have not made any detailed examination of such records in order to ascertain whether those are complete and accurate. |
(vii) (a) Whether the company is regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated; |
(vii) (a) According to the records, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty and other statutory dues with appropriate authorities, except the following amounts which are outstanding as on 31st March 2018 for a period of more than six months from the date of becoming payable: |
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Name of Act |
Nature of Dues |
Years |
Amount (Rs) in Lacs) |
|||
CST ACT 1958 |
Sales Tax |
2003-04 |
0.72 |
|||
Bombay Stamp Act 1958. |
Stamp Duty and interest thereon |
2001-10 |
210.32 |
|||
As explained to us, the Company does not have any dues in respect of Wealth Tax, Service Tax and Cess. |
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(b) Where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not be treated as a dispute) |
(b) The disputed statutory dues aggregating to Rs 1207.16 Lacs (inclusive of amounts not provided in financial statement) that have not been deposited on account of matters pending before appropriate authorities are as under: |
|||||
Nature of dues |
Amount (Rs in Lacs) |
Year which it relates |
Forum |
|||
Vat & Penalty |
0.34 |
1980-81 |
The Additional Commissioner of Commercial Taxes, Kolkata |
|||
Vat , |
0.54 |
1993-94, |
The Additional Commissioner of Commercial Taxes, Kolkata |
|||
Tax , Penalty & Interest |
1.22 |
1988-89 |
The West Bengal Commercial Taxes Appellate & Revision Board, Kolkata |
|||
Nature of dues |
Amount (Rs in Lacs) |
Year which it relates |
Forum |
||
Tax & Penalty |
31.92 |
2000-01 to 2006-07 |
The West Bengal Taxation Tribunal |
||
Tax & Penalty |
0.44 |
2011-12 2012-13 |
The West Bengal Commercial Taxes Appellate & Revision Board, Kolkata |
||
CST , Interest & Penalty |
133.45 |
1995-96 to 2012-13 |
The Sr.Joint Commissioner of Commercial Taxes |
||
Central Excise Tax & Penalty |
70.66 |
1992, 1994, 1996, 2003, 2004 |
Commissioner (Appeals) Central Excise, Kolkata-IV |
||
Central Excise Tax & Penalty |
31.29 |
2006, 2009, 2010, 2011, 2012, 2013 |
Commissioner (Appeals) Central Excise, Kolkata-IV |
||
Central Excise Tax & Penalty |
108.55 |
2014 to 2016 |
Commissioner (Appeals) Central Excise, Kolkata-IV |
||
Central Excise Tax & Penalty |
11.23 |
1989-90 2005-06 |
Honâble High Court, Mumbai |
||
Central Excise Tax & Penalty |
4.34 |
2003-04 |
Commissioner (Appeals) Nashik |
||
Central Excise Tax & Penalty |
1.73 |
2002-03 |
Commissioner (Appeals) Nashik |
||
Central Excise Tax & Penalty |
82.04 |
2002-03 |
Commissioner of Central Excise & Custom (Appeals) Nashik |
||
Penalty of Custom Duty |
475.61 |
2002-03 |
Commissioner of Export (III) (JNPT) Nashik |
||
Penalty of Custom Duty |
15.60 |
2002-03 |
Commissioner of Custom(EP) (Appeals) Mumbai |
||
Sales Tax |
0.62 |
1999-2002 |
The Asst. Commissioner, Sales Tax, Delhi |
||
Sales Tax & Penalty |
5.50 |
1999-00 2002-03 |
The Asst. Commissioner, Sales Tax, Ahmedabad |
||
Sales Tax & Penalty |
213.50 |
2004 |
The Asst. Commissioner, Sales Tax, Nasik. |
||
Tax, Nasik Municipal Corpn. |
11.69 |
1989-90 &1991-92 |
Honâble High Court, Mumbai. |
||
Tax & Penalty Nasik Municipal Corpn. |
6.88 |
2007-08 2008-09 |
Honâble High Court, Mumbai |
||
(viii) Whether the company has defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to |
(viii) The Company has made following default in repayment of dues to Financial Institution and Debenture Holders: |
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be reported (in case of defaults to banks, financial institutions, and Government, lender wise details to be provided). |
Financial Institution |
Amount (Rs in lacs) |
Period of default |
||
Term Loan |
|||||
SICOM |
47.58 |
Mar ''10 to Mar ''14 |
|||
Sale Tax Loan (Under Sales Tax Deferral Scheme) |
269.06 |
Mar ''10 to Mar ''14 |
|||
Also Refer to Footnotes No (v) of Note No 17 to Financial Statements. |
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(ix) Whether moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not, the details together with delays or default and subsequent rectification, if any, as may be applicable, be reported; |
(ix) The Company did not raise any money by way of initial public offer of further public offer (including debt instruments) during the year. According to the information and explanations given to us, the Term Loan raised during the year had been applied for the purposes for which the same was raised. |
(x) Whether any fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated; |
(x) Based upon the audit procedure performed and the information and explanation given by the Company, we report that no fraud on or by the Company has been noticed or reported during the year that causes the financial statements materially misstated. |
(xi) Whether managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act? If not, state the amount involved and steps taken by the company for securing refund of the same; |
(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approval mandated by the provisions of Section 197 read with Schedule V of the Act. |
(xii) Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability; |
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable. |
(xiii) Whether all transactions with the 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; |
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable, and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards. |
(xiv) Whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so, as to whether the requirement of section 42 of the Companies Act, 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not, provide the details in respect of the amount involved and nature of non-compliance; |
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. |
(xv) Whether the company has entered into any non-cash transactions with directors or persons connected with him and if so, whether the provisions of section 192 of Companies Act, 2013 have been complied with; |
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable. |
(xvi) Whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and if so, whether the registration has been obtained. |
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. |
ANNEXURE - B TO THE AUDITORS'' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Shalimar Wires Industries Limited ("the Company") as of 31 March 2018 in conjunction with our audit of the Financial Statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The 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 (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A 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 companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the 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.
Qualified Opinion
According to the information and explanations given to us and based on our audit, the following material weakness has been identified as at 31 March, 2018:
a) The Company''s internal control system for customer acceptance, credit evaluation and establishing customer credit limits for sales need to be strengthened adequately so as to negate the potential possibility of recognising revenue without establishing reasonable certainty of ultimate collection.
A ''material weaknessâ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement on the Company''s annual or interim financial statements will not be prevented or detected on a timely basis.
In our opinion, except for the possible effects of the material weakness described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of 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 on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2018 Financial Statements of the Company, and the material weakness does not affect our opinion on the Financial Statements of the Company.
For KHANDELWAL RAY & CO.,
Chartered Accountants
FR No.302035E
(S. KHANDELWAL)
Place : Kolkata Partner
Date : 23.05.2018 (Membership No. 054451)
Mar 31, 2015
We have audited the accompanying Financial Statements of SHALIMAR WIRES
INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as
at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement, and a summary of the Significant Accounting Policies and
other explanatory information for the year then ended.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies act, 2013 ("the Act") with respect
to the preparation of these Financial Statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgements
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these Financial
Statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards, and matters which are required to be included
in the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgement, including
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 control 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 qualified audit opinion on the
Financial Statements.
Basis for Qualified Opinion
(a) No provision has been made against Long Term and Short Term Loans
and Advances given by the Company, which remained unrealised for long,
amounting to Rs. 40,617,747 and Rs.16,094,626 respectively (Refer Note
No.13 & 18)
(b) No provision has been made for Claims Receivable remaining
outstanding for long, amounting to Rs. 2,697,618. (Refer Note No. 14)
(c) No provision has been made for Trade Receivables, remaining
outstanding for long, amounting to Rs. 3,147,956. (Refer Note No. 16)
(d) No provision has been made for Interest on Debentures and Interest
on Term Loan payable to IDBI for Rs. 12,334,153 and Rs. 20,529,769
respectively due to reasons stated in Footnote No (b) (ii) to Note No.
4.
(e) The Accounting Standard on Contingent Liabilities have not been
fully complied with as disclosed in Footnote No. 2 to 4 of Note No. 28,
the quantum of non-provision in respect whereof is not ascertained
pending settlement / disposal of disputes.
(f) Non-provision of Items indicated in (a) to (e) above constitute a
departure from the Accounting Standards referred to in Section 133 of
the Act. Without considering Item Nos. (e) Above, whose impact on the
Company's Statement of Profit and Loss is presently non-ascertainable,
had the provisions indicated in Item Nos. (a) to (d) been made,
(i) The Loss for the year would have increased by Rs. 95,421,869
(ii) Long Term and Short Term Loans & Advances would have decreased by
Rs.40, 617,747 and Rs. 16,094,626 respectively
(iii) Other Non-Current Assets would have decreased by Rs. 2,697,681
(iv) Trade Receivables would have decreased by Rs. 3,147,956
(v) Other Current Liabilities would have increased by Rs. 32,863,922
and
(vi) The Shareholders' Fund would have been lower by Rs. 95,421,869
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion paragraph above, the
aforesaid Financial Statements give the information required by the Act
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India, of the
state of affairs of the Company as at 31st March, 2015 and its loss and
its cash flows for the year ended on that date.
Emphasis of Matters
We draw your attention to the following matters in the Notes to the
Financial Statements:
1. Note No. 28 to the financial statements, which describe the
uncertainty related to the outcome of the lawsuits indicated therein.
2. Note No. 30 to the financial statements which describe the change
in the method of calculating depreciation for the year, the accounting
treatment of the same and its impact on the financial statements.
3. Note No. 35 in the financial statements which indicates that the
Company has accumulated losses and its net worth has been fully eroded,
the Company has incurred net loss during the current and previous
years, and the Company's current liabilities exceeded its current
assets as at the Balance Sheet date. These conditions, along with other
matters set forth in Notes to Financial Statements, indicate the
existence of a material uncertainty that may cast significant doubt
about the Company's ability to continue as a going concern. However,
these Financial Statements of the Company have been prepared on a going
concern basis for the reasons stated in the said Note.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
i) As required by the Companies (Auditor's Report) Order, 2015 issued
by the Central Government in terms of Sub-section (11) of Section 143
of the Act, we enclose in the Annexure a statement on the matters
specified in the said Order, to the extent applicable to the Company.
ii) As required by Section 143(3) of the Act, we report that
a) We have sought and, except for the matters described in the Basis
for Qualified Opinion paragraph, obtained all the information and
explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit;
b) Except for the possible effects of the matters described in the
Basis for Qualified Opinion paragraph above, in our opinion proper
books of account as required by law have been kept by the Company so
far as appears from our examination of those books.
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) Except for the possible effects of the matters described in the
Basis for Qualified Opinion paragraph, in our opinion, the Balance
Sheet, Statement of Profit and Loss and Cash Flow Statement comply with
the Accounting Standards specified under Section 133 of the Act, read
with Rule 7 of the Companies(Accounts) Rules, 2014;
e) The matters described in the Basis for Qualified Opinion paragraph
above, in our opinion, may have an adverse effect on the functioning of
the Company;
f) The going concern matter described in sub-paragraph (3) under the
Emphasis of Matters paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company;
g) On the basis of written representations received from the Directors
as on 31st March, 2015 taken on record by the Board of Directors, none
of the Director is disqualified as on 31st March, 2015 from being
appointed as a director in terms of Section 164(2) of the Act.
h) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position, wherever ascertainable - Refer Note No. 28
ii. The Company did not have any long-term contracts including
derivative contracts for which there was any material foreseeable loss.
iii. The Board for Industrial and Financial Reconstruction, vide its
Order dated 10th June, 2010, has exempted the Company from transferring
any amount to the Investor Education and Protection Fund.
Annexure to the Auditors Report
The Annexure referred to in our report to the members of M/S, Shalimar
Wires Industries Limited for the year ended 31st March, 2015.
We report that :
(i) (a) Whether the company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) Whether these fixed assets have been physically verified by the
management at reasonable intervals; whether any material discrepancies
were noticed on such verification and if so, whether the same have been
properly dealt with in the books of account;
(b) The fixed assets, except those at the Strip & Wire Unit at Nasik,
which is under closure, have been physically verified under a phased
program of physical verification. To the best of our knowledge, no
material discrepancies were noticed on such verification.
(ii) (a) Whether physical verification of inventory has been conducted
at reasonable intervals by the management;
(ii) (a) The Inventories have been physically verified by the
management at reasonable intervals during the year.
(b) Are the procedures of physical verification of inventory followed
by the management reasonable and adequate in relation to the size of
the company and the nature of its business If not, the inadequacies in
such procedures should be reported;
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stocks followed
by the management is reasonable and adequate in relation to the size of
the Company and nature of its business.
(c) Whether the company is maintaining proper records of inventory and
whether any material discrepancies were noticed on physical
verification and if so, whether the same have been properly dealt with
in the books of account;
(c) On the basis of our examination, we are of the opinion that the
Company is maintaining proper records of inventory. Discrepancies
noticed on such physical verification, which were not material, have
been properly dealt with in the books of account.
(iii) Whether the company has granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act. If so,
(iii) The Company has granted Unsecured Loans to two companies covered
in the register maintained under Section 189 of the Companies Act,
2013.
(a) Whether receipt of the principal amount and interest are also
regular; and
(a) Receipt of principal amount and interest are not regular.
(b) If overdue amount is more than rupees one lakh, whether reasonable
steps have been taken by the company for recovery of the principal and
interest;
(b) The aforesaid loans to Related Parties Rs. 16,094,626 have become
overdue and are doubtful of recovery. As explained to us legal action
have been initiated by the Company in these regards.
(iv) Is there an adequate internal control system (iv) commensurate
with the size of the company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services? Whether there is a continuing failure to correct major
weaknesses in internal control system.
In our opinion and according to the information and explanations given
to us, there is an adequate internal control procedure commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control system.
(v) In case the company has accepted deposits, (v) whether the
directives issued by the Reserve Bank of India and the provisions of
sections 73 to 76 or any other relevant provisions of the Companies Act
and the rules framed there under, where applicable, have been complied
with? If not, the nature of contraventions should be stated; If an
order has been passed by Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any court or any other tribunal,
whether the same has been complied with or not?
The Company has not accepted any deposit within the meaning of Section
73 of the Companies Act.
(vi) Where maintenance of cost records has been specified by the
Central Government under sub-section (1) of section 148 of the
Companies Act, whether such accounts and records have been made and
maintained.
(vi) The Central Government has specified maintenance of cost records
under Section 148 (1) of the Companies Act, 2013 for Metal Wire Cloth
manufactured by the Company. We have broadly reviewed such accounts and
records and we are of the opinion that the accounts and records have
been made and maintained by the Company. However, we have not made any
detailed examination of such records in order to ascertain whether
those are correct or up to date.
(vii) (a) Is the company regular in depositing (vii) undisputed
statutory dues including provident fund, employees' state insurance,
income-tax, sales-tax, wealth tax, service tax, duty of customs, duty
of excise, value added tax, cess and any other statutory dues with the
appropriate authorities and if not, the extent of the arrears of
outstanding statutory dues as at the last day of the financial year
concerned for a period of more than six months from the date they
became payable, shall be indicated by the auditor
(a) According to the records, the Company is generally regular in
depositing undisputed statutory dues including Provident Fund,
Employees' State Insurance, Income Tax, Sales Tax, Custom Duty, Excise
Duty and other statutory dues with appropriate authorities, except the
following amounts relating to Discontinued Operation which are
outstanding as on 31st March 2015 for a period of more than six months
from the date of becoming payable:
Name of Act Nature of Dues Years Amount
(Rs) in Lacs)
CST ACT 1958 Sales Tax 2003-2004 0.72
Bombay Stamp Stamp Duty 2001-2010 210.32*
Act 1958. and interest
thereon
As explained to us, the Company does not have any dues in respect of
Wealth Tax, Service Tax and Cess.
* Also refer to Note No.36(b).
(b) In case dues of income tax or sales tax or wealth tax or service
tax or duty of customs or duty of excise or value added tax or cess
have not been deposited on account of any dispute, then the amounts
involved and the forum where dispute is pending shall be mentioned. (A
mere representation to the concerned Department shall not constitute a
dispute).
(b) The disputed statutory dues aggregating to Rs 4701.41 Lacs
(inclusive of amounts not provided in financial statement) that have
not been deposited on account of matters pending before appropriate
authorities are as under:
Nature of dues Amount Year which Forum
(Rs in Lacs) it relates
Tax & Penalty 0.11 1988-1989 The Additional
Commissioner
of Commercial
Taxes, Kolkata
Tax, Interest & 4.22 1998-99 & The Additional
Penalty 2002-2003 Commissioner
of Commercial
Taxes, Kolkata
Tax & Penalty 8.17 1980-81, The West Bengal
1993-94, Commercial
2000-01, Taxes Appellate
2003-04 & Revision Board,
2004-05 Kolkata
Tax & Penalty 4.73 2001-02 The West Bengal
Taxation Tribunal
Tax & Penalty 16.79 2005-06 The West Bengal
2006-07 Commercial
2007-08 Taxes Appellate
2008-09 & Revision Board,
Kolkata
Tax, Interest & 190.53 1999-00 The Sr.Joint
Penalty Commissioner
of Commercial
Taxes
Tax, Interest & 130.12 2004-05 The West Bengal
Penalty Commercial
Taxes Appellate
& Revision Board,
Kolkata
Tax / CST 34.07 1988-89 The Joint
2010 11 Commissioner
2011-12 Taxes, Kolkata
Tax, Interest & 529.26 1998-99 The Additional
Penalty 2002-03 Commissioner
of Commercial
Taxes, Kolkata
Tax, Interest & 340.56 1996-97 The Additional
Penalty 2001-02 Commissioner
of Commercial
Taxes, Kolkata
Tax, Interest & 795.60 1993-94 The West
Penalty 1995-96 Bengal
1995-96 Commercial
1997-98 Taxes Appellate &
2000-01 Board, Kolkata
2003-04
Tax & Penalty 75.08 2005-06 The West
2006-07 Bengal
2007-08 Commercial
Taxes Appellate
& Revision
Board, Kolkata.
Tax & Penalty 17.19 2008-09 The West
2009-10 Bengal
Commercial
Taxes Appellate
& Revision
Board, Kolkata
Tax & Penalty 1939.74 1987-97 Commissioner
1992-93 (Appeals)
1994-95 Central Excise,
1999-00 Kolkata-IV
2002-03
2003-04
2009-10
Tax 11.23 1989-90 Hon'ble High
2005-06 Court, Mumbai
Tax & Penalty 4.34 2003-04 Commissioner
(Appeals)
Nashik
Tax & Penalty 1.73 2002-03 CESTAT,Mumbai
Tax 0.62 1999-2002 The Asst.
Commissioner,
Sales Tax, Delhi
Tax & Penalty 5.50 1999-2000 The Asst.
2002-03 Commissioner,
Sales Tax,
Ahmedabad
Tax 573.25 2000-03 Commissioner,
Customs, Nasik
& Mumbai
Tax 11.69 1989-90 & Hon'ble High
1991-92 Court, Mumbai
Tax & Penalty 6.88 2007-08 Hon'ble High
2008-09 Court, Mumbai
(c) Whether the amount required to be transferred to investor education
protection fund in accordance with relevant provisions of the Companies
Act, 1956 (1 of 1956) and rules made thereunder has been transferred to
such fund within time.
(c) The Company is exempted from transferring any amount and to
Investor Education & Protection Fund vide the Order of the BIFR dated
10th June, 2010 .
(viii) Whether in case of a company which has (viii) been registered
for a period not less than five years, its accumulated losses at the
end of the financial year are not less than fifty per cent of its net
worth and whether it has incurred cash losses in such financial year
and in the immediately preceding financial year;
The accumulated losses of the company at the end of the financial year
have exceeded its net worth and also the company has incurrered cash
losses in the current financial year and in the immediately preceding
financial year.
(ix) Whether the company has defaulted in (ix) repayment of dues to a
financial institution or bank or debenture holders? If yes, the period
and amount of default to be reported;
The Company has made following defaults in repayment of dues to
Financial Institution and Debenture Holders:
Financial Institution Amount (Rs Period of default
in laces)
Term Loan
ARCIL-Term Loan 1709.00 Oct, 13 to March,15
IDBI-Term Loan 823.57 Sept, 13 to March, 15
SICOM 47.58 March 10 to March, 14
Sale Tax Loan (Under Sales Tax 269.06 March, 10 to March, 14
Deferral Scheme)
Debenture:
Non Convertible Debenture 10.12 Feb, 99 to Feb, 01
Finance Lease:
IDBI 83.63 2006-07 to 2014-15
Also Refer to Footnotes No (a) to (c) of Note No 4 and Note No 6 to
Financial Statements.
(x) Whether the company has given any (x) guarantee for loans taken by
others from bank or financial institutions, the terms and conditions
whereof are prejudicial to the interest of the company;
The Company has not given any guarantee for loans taken by others from
any bank or financial institution.
(xi) Whether term loans were applied for the (xi) purpose for which the
loans were obtained;
The Company has neither taken any term loan during the year nor applied
any part of the term loans taken in earlier years.
(xii) Whether any fraud on or by the company has been noticed or
reported during the year; If yes, the nature and the amount involved is
to be indicated
(xii) Based upon the audit procedure performed and the information and
explanation given by the Company, we report that no fraud on or by the
Company has been noticed or reported during the year that causes the
financial statements materially misstated.
For S. S. KOTHARI & CO.
Chartered Accountants
FR No. 302034E
P. K. BHATTACHARYA
Place : Kolkata Partner
Date : 27th May, 2015 (Membership No. 015899)
Mar 31, 2014
We have audited the accompanying financial statements of Shalimar Wires
Industries Limited (the Company), which comprise the Balance Sheet as
at 31st March, 2014 and the Statement of Profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"), read with the General
Circular 15/2013 dated 13th September, 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013.
This responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatements, whether due to fraud or error.
3. Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness
of the entity''s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
4. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the said financial statements, subject to our
comments in sub paragraphs (a) to (e) of Para 6 below together with its
concluding sub-paragraph (f) of the said Para regarding the impacts on
the various items of the financial statements, read with other notes
thereon, give the information required by the Companies Act, 1956 in
the manner so required and also subject to our observations in
Paragraph 6(f) herein below regarding non-provisions/non receipt of
confirmation as stated in Para 5 below, give a true and fair view in
conformity with the accounting principles generally accepted in India :
a. In the case of the Balance Sheet of the state of affairs of the
Company as at 31st March, 2014, and
b. In the case of the Statement of Profit and Loss of the profit for
the year ended on that date
c. In the case of Cash Flow Statement of the cash flows for the year
ended on that date.
5. Report on Other Legal and Regulatory Requirements
i) As required by the Companies (Auditor''s Report) Order, 2003("the
Order"), as amended, issued by the Central Government of India in
terms of sub-section (4A) of Section 227of the Act, we enclose in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of
the said order to the extent applicable to the company.
ii) As required by section 227(3) of the Act, we report that :
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account; and
d) In our opinion, the Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement dealt with
by this Report comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956, read with
the General Circular 15/2013 dated 13th September, 2013 of the Ministry
of Corporate Affairs in respect of Section 133 of the Companies Act,
2013; except compliance of Accounting Standard 29 regarding Contingent
Liabilities (Refer Foot Note No.2 to 4 of Note No-28, the quantum of
non-provision in respect whereof is not ascertained pending
settlement/disposal of appeals.
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, we
report that none of Directors are disqualified as on 31st March 2014
from being appointed as Directors in terms of section 274(1) (g) of the
Companies Act, 1956
6. Attention is invited to the following :
a) Refer Note No. 13 and 18 of the financial statement regarding
non-provision against Long Term and Short Term Loans and Advances given
amounting to Rs. 406.18 Lacs and Rs.159.22 Lacs respectively.
b) Refer Note No. 14 of the financial statement regarding non-provision
against Claim Receivable amounting to Rs. 26.98 Lacs.
c) Refer Note No.16 of the financial statement regarding non-provision
against Trade Receivable amounting to Rs.33.21 Lacs.
d) Refer Note No.30 of the financial statement regarding amount due
from Trade Receivables and Loans & Advances given and due to Trade
Payables are subject to confirmation from the respective parties.
e) Refer Note No.34 of the financial statement regarding preparation
and presentation of financial statements on a going concern basis for
reasons stated therein. The appropriateness of assumption of going
concern is critically dependent upon the Company''s ability to raise
requisite finance / generate cash flows in the near future to meet its
obligations.
f) The above non provisions constitute a departure from the accounting
standard refer to in sub section (3C) of section 211 of the Companies
Act. Without considering item nos (d) of Para 5 and (d) and (e) of Para
6 above, whose impact on the Company''s profit is presently non
ascertainable, had the management made the provisions in respect of
item nos (a), (b) and (c) of Para 6 above :
i) Profit for the year would have decreased by Rs. 625.59 lacs;
ii) Long Term and Short Term Loans and Advances would have decreased by
Rs. 406.18 Lacs and Rs.159.22 Lacs respectively;
iii) Other Non-Current Assets would have decreased by Rs. 26.98 Lacs;
iv) Trade Receivables would have decreased by Rs. 33.21 Lacs; and
v) The Shareholders'' Fund would have been lower by Rs. 625.59 Lacs.
ANNEXURE TO THE AUDITORS'' REPORT
Referred to in Independent Auditors'' Report to the members of
SHALIMAR WIRES INDUSTRIES LIMITED on the Financial Statements for the
year ended 31st March, 2014 :
i. a) The Company has maintained proper records showing full partic
-ulars, including quantitative details and situation of its fixed
assets.
b) The fixed assets, except those at the Strip & Wire Unit at Nasik,
which is under closure, have been physically verified under a phased
program of physical verification. To the best of our knowledge, no
material discrepancies were noticed on such verification.
c) The Company has not disposed off substantial part of fixed assets
during the year.
ii. a) The inventories, except those at the Strip & Wire Unit at Nasik,
which is under closure, have been physically verified during the year
by the management at reasonable intervals.
b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stocks followed
by the management is reasonable and adequate in relation to the size of
the Company and nature of its business.
c) On the basis of our examination, we are of the opinion that the
Company is maintaining proper records of inventory. No material
discrepancies were noticed on verification between the physical stocks
and the book records.
iii. a) The Company has granted unsecured loans to two parties covered
in the Register maintained under section 301 of the Companies Act,
1956. The maximum amount involved during the year was Rs. 159.22 Lacs
and the year end balance was Rs. 159.22 Lacs.
b) In our opinion and according to the information given to us, the
rate of interest and other terms and conditions of unsecured loans
given by the Company are prima facie not prejudicial to the interest of
the Company except that no interest is being charged on these loans
since 1st April, 2002.
c) Receipt of the principal amount and interest on the above loans are
not regular.
d) As explained to us, the aforesaid loans given have become overdue
and are doubtful. However, necessary legal action have been initiated
by the Company in these regards.
g) The Company has taken unsecured loans from a party covered in the
Register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs. 16.75 Lacs and
the year end balance was Rs. 16.75 Lacs.
h) The above loans are interest free and other terms and conditions
thereof are not prejudicial to the interests of the company.
i) There has been no repayment of the principal amount against the
aforesaid loans during the year. However, 90% of the original loan is
written back pursuant to BIFR order dated 10th June, 2010.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system, commensurate
with the size of the Company and the nature of its business for
purchase of inventory and fixed assets and also for the sale of goods.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system.
v. To the best of our information and explanations given to us, no
contracts or arrangements were entered into during the year as referred
to in section 301 of the Companies Act, 1956. Therefore, provisions of
clause (v) of paragraph 4 of the said order are not applicable to the
Company.
vi. The Company has not accepted any deposit within the meaning of
section 58A and 58AA or any other relevant provisions of the Companies
Act, 1956 and the rules framed there under.
vii. In our opinion, the internal audit system of the Company is
commensurate with the size of Company and nature of its business except
that no internal audit has been carried out during the year at the
Strip & Wire Unit at Nasik, which is under closure.
viii. The Central Government has not prescribed the maintenance of cost
records under section 209(1)(d) of the Companies Act, 1956 for any of
the products of the company.
ix. a) According to the records, the Company is generally regular in
depositing undisputed statutory dues
including Provident Fund, Employees'' State Insurance, Income Tax,
Sales Tax, Custom Duty, Excise Duty and other statutory dues with
appropriate authorities, except the following amounts which are
outstanding as on 31st March 2014 for a period of more than six months
from the date of becoming payable :
Name of Act Nature of Dues Years Amount not paid
(Rs. Lacs)
CST Act, 1956 Sales Tax 2003-2004 0.72
Bombay States Stamp Duty and 2001-2010 210.32
Stamps Act, 1958 Interest thereon
As explained to us, the Company does not have any dues in respect of
Wealth Tax, Service Tax and Cess.
b) The disputed statutory dues aggregating to Rs 4654.83 Lacs that have
not been deposited on account of matters pending before appropriate
authorities are as under :
Name of Act Nature of Dues Amount not Year to which it
paid due to Relates
dispute
(Rs.Lacs)
WBST Act, 1994 Tax & Penalty 0.11 1988-1989
WBST Act, 1994 TaxInterest & 4.22 1998-99,&2002-03
Penalty
WBST Act, 1994 Tax & Penalty 8.17 1980-81,1993-94, 2000-
01, 2003-04 & 2004-05
WBST Act, 1994 Tax & Penalty 4.73 2001-02
WBST Act, 1994 Tax & Penalty 16.79 2005-06 & 2006-07,
2007- 08 and 2008-09
CST Act, 1956 Tax, Interest 190.53 1999-00
& Penalty
CST Act, 1956 Tax, Interest 130.12 2004-05
& Penalty
CST Act, 1956 Tax 0.72 1988-89
CST Act, 1956 Tax, Penalty 529.26 1998-99 & 2002-03
& Interest
CST Act, 1956 Tax, Penalty 340.56 1996-97 & 2001-02
& Interest
CST Act, 1956 Tax, Penalty 795.60 1993-94, 1995-96,
& Interest 1997-98, 2000-01 &
2003-04
CST Act, 1956 Tax, Penalty 75.08 2005-06, 2006-07
& Interest 2007-08
CST Act, 1956 Tax, Penalty 17.19 2008-09
& Interest 2009-10
Central Excise Tax, Penalty 1917.86 1987-97,1992-93,
Act, 1944 & Interest 1994-95,1999-00,
2002-03,2003-04 &
2009-10
Central Excise Tax 11.23 1989-90 & 2005-2006
Act, 1944
Central Excise Tax & Penalty 4.34 2003-04
Act, 1944
Central Excise Tax 1.73 2002-03
Act, 1944
Central/Delhi Tax 0.62 1999-2002
Sales Act
Central/ Gujarat Tax & Penalty 5.50 1999-2000 & 2002-03
Sales Tax Act
Customs Act, 1962 Tax 573.25 2000-03
NMC Octroi Case no Tax 11.69 1989-90 &1991-92
476/1989 & 4/1992
NMC Octroi Case no Tax & Penalty 6.88 2007-08 &2008-09
476/1989 & 4/1992
Name of Act Forum
WBST Act, 1994 The Additional Commissioner of Commercial Taxes,
Kolkata
WBST Act, 1994 The Additional Commissioner of Commercial Taxes,
Kolkata
WBST Act, 1994 The West Bengal Commercial Taxes Appellate &
Revision Board, Kolkata.
WBST Act, 1994 The West Bengal Taxation Tribunal
WBST Act, 1994 The West Bengal Commercial Taxes Appellate & Revision
Board, Kolkata.
CST Act, 1956 The Sr. Joint Commissioner of Commercial Taxes.
CST Act, 1956 The West Bengal Commercial Taxes Appellate & Revision
Board, Kolkata.
CST Act, 1956 The Joint Commissioner of Commercial Taxes, Kolkata
CST Act, 1956 The Additional Commissioner of Commercial Taxes,
Kolkata
CST Act, 1956 The Additional Commissioner of Commercial Taxes,
Kolkata
CST Act, 1956 The West Bengal Commercial Taxes Appellate & Revision
Board, Kolkata.
CST Act, 1956 The West Bengal Commercial Taxes Appellate & Revision
Board, Kolkata.
CST Act, 1956 The West Bengal Commercial Taxes Appellate & Revision
Board, Kolkata.
Central Excise Commissioner (Appeals) Central Excise, Kolkata-IV
Act, 1944
Central Excise Hon''ble High Court, Mumbai
Act, 1944
Central Excise Commissioner (Appeals) Nashik
Act, 1944
Central Excise CESTAT, Mumbai
Act, 1944
Central/Delhi The Asst. Commissioner, Sales Tax, Delhi
Sales Tax Act
Central/ Gujarat The Asst. Commissioner, Sales Tax, Ahmedabad
Sales Tax Act
Customs Act,1962 Commissioner, Customs, Nasik & Mumbai
NMC Octroi Case Hon''ble High Court, Mumbai
No 476/1989
& 4/1992
NMC Octroi Case Hon''ble High Court, Mumbai
no 476/1989
& 4/1992
x. The accumulated losses of the Company have exceeded fifty percent of
its net worth though it has not incurred cash loss during the financial
year covered by our audit and in the immediately preceding financial
year.
xi. The Company has defaulted in repayment of dues of Rs.1162.55 lacs
(excluding SICOM and Sale Tax Loan dues) to financial institutions and
debenture holders.
xii. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other similar
securities.
xiii. The provisions of any special statute applicable to Chit Fund,
Nidhi or Mutual Benefit Society are not applicable to the Company.
xiv. The Company is not trading or dealing in shares, debentures. The
Company has maintained proper records of transactions and contracts in
respect of investment in shares and timely entries have been made
therein. All investments have been held by the Company in its own name.
xv. The Company has not given any guarantees for loans taken by others
from banks during the year.
xvi. The Company has neither taken any term loan during the year nor
applied during the year any part of the term loans taken in earlier
years.
xvii. According to the information and explanation given to us and on
an overall examination of the Balance Sheet of the company, we report
that short-term funds have not been used for long-term investment.
xviii. According to the information and explanations given to us,
during the year the Company has not made any preferential allotment of
shares to parties covered in the register maintained under section 301
of the Companies Act, 1956.
xix. The Company has not issued any debenture during the year.
xx. The Company has not raised any money during the year by public
issue.
xxi. Based upon the audit procedure performed and the information and
explanation given by the Company, we report that no fraud on or by the
Company has been noticed or reported during the year that causes the
financial statements materially misstated.
For S. S. KOTHARI & CO.
Chartered Accountants
FR. No. 302034E
CA. P. K. Bhattacharya
21, Old Court House Street Membership No. 015899
Kolkata, 19th May, 2014 Partner
Mar 31, 2012
1. We have audited the attached Balance Sheet of SHALIMAR WIRES
INDUSTRIES LIMITED as at 31st March 2012 and also the Statement
of Profit and Loss and Cash Flow Statement for the year ended on
that date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, and on the
basis of such checks as we considered appropriate and the information
and explanations given to us, we enclose in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the aforesaid Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
iii. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
iv. 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 except compliance of Accounting Standard 29
regarding Contingent Liabilities (refer Note No. 2.30 clause (i) and
(iii)), the quantum of non-provision in respect whereof is not
ascertained pending settlement/disposal of appeals.
v. On the basis of legal opinion and the written representations
received from the Board of Directors as on 31st March, 2012 and taken
on record by the Board of Directors, we report that none of the
Directors are disqualified as on 31st March, 2012 from being appointed
as a Director in terms of Clause (g) of sub- section (1) of section 274
of the Companies Act, 1956.
vi. Attention is drawn to the following notes in Notes on Accounts:
a) Note No.2.13, 2.14 and 2.18 regarding non-provision against Loans
and Advances given and Claims Receivable amounting to Rs. 592.37 Lacs
together with non accounting of Interest due thereon.
b) Note No.2.16 regarding non-provision against Sundry Debtors and
advances amounting to Rs. 28.75 Lacs.
c) Note No.2.30 clause (v) regarding amount due from Sundry Debtors and
Loans & Advances given and due to Sundry Creditors, in respect of which
we are unable to express our opinion, in the absence of confirmation
from the parties.
d) Note No.2.30 clause (ix) regarding preparation of accounts on going
concern basis although the Net Worth of the company has been fully
eroded.
Without considering item nos. (iv), (vi) (c) and (d) above, whose
impact on the company's loss is presently not ascertainable, and if
the impact of items vi (a) and (b) above had been considered, the
profit for the year would have been Rs. 573.97 Lacs as against the
reported profit of Rs. 1195.09 Lacs and the debit balance of Statement
of Profit and Loss would have been Rs. 19902.81 Lacs as against the
reported figure of Rs. 19281.69 Lacs.
Subject to the above and read together with other Notes appearing in
Notes to Accounts, in our opinion and to the best of our information
and according to the explanations given to us, the said accounts give
the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India :-
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
b) In the case of the Statement of Profit and Loss, of its PROFIT for
the year ended on that date and
c) In the case of Cash Flow Statement, of cash flows for the year ended
on that date.
ANNEXURE TO THE AUDITORS' REPORT
Referred to in Auditors' Report to the members of SHALIMAR WIRES
INDUSTRIES LIMITED on the Accounts for the year ended 31st March, 2012:
i. a) The Company has maintained proper records showing full
particulars, including quantitative details and
situation of its fixed assets.
b) The fixed assets, except those at the Strip & Wire Unit at Nashik,
which is under closure, have been physically verified under a phased
program of physical verification. To the best of our knowledge, no
material discrepancies were noticed on such verification.
c) The Company has not disposed off substantial part of fixed assets
during the year.
ii. a) The inventories, except those at the Strip & Wire Unit at
Nashik, which is under closure, have been
physically verified during the year by the management at reasonable
intervals.
b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stocks, followed
by the management are reasonable and adequate in relation to the size
of the Company and nature of its business.
c) On the basis of our examination, we are of the opinion that the
Company is maintaining proper records of inventory. No material
discrepancies were noticed on verification between the physical stocks
and the book records.
iii. a) The Company has granted unsecured loans to two parties covered
in the register maintained under section
301 of the Companies Act, 1956. The maximum amount involved during the
year was Rs. 159.22 Lacs and the year end balance was Rs. 159.22 Lacs.
b) In our opinion and according to the information given to us, the
rate of interest and other terms and conditions of unsecured loans
given by the Company are prima facie not prejudicial to the interest of
the Company except that no interest is being charged on these loans
since 1st April, 2002.
c) Receipt of the principal amount and interest on the above loans are
not regular.
d) As explained to us, the aforesaid loans given have become overdue
and are doubtful, however, necessary legal action have been initiated
by the Company in these regards.
e) The Company has taken unsecured loans from two parties covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs.16.75 Lacs and the
year end balance was Rs.16.75 Lacs.
f) The above loans are interest free and other terms and conditions
thereof are not prejudicial to the interests of the company.
g) There has been no repayment of the principal amount against the
aforesaid loans during the year. However, 90% of the original loan is
written back pursuant to BIFR order dated 10th June, 2010.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system, commensurate
with the size of the Company and the nature of its business for
purchase of inventory and fixed assets and also for the sale of goods.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system.
v. To the best of our information and explanations given to us, no
contracts or arrangements were entered into during the year as referred
to in section 301 of the Companies Act, 1956. Therefore, provisions of
clause (v) of paragraph 4 of the said order are not applicable to the
Company.
vi. The Company has not accepted any deposit within the meaning of
section 58A and 58AA or any other relevant provisions of the Companies
Act, 1956 and the rules framed thereunder.
vii. In our opinion, the internal audit system of the Company is
commensurate with the size of Company and nature of its business except
that no internal audit has been carried out during the year at the
Strip & Wire Unit at Nashik, which is under closure.
viii. We have broadly reviewed the books of account maintained by the
company in respect of products where pursuant to the rules made by the
Central Government, the maintenance of cost records has been prescribed
under section 209(1)(d) of the Act and are of the opinion that, prima
facie, the prescribed accounts and records have been made and
maintained. We, however, as not required, have not made a detailed
examination of such records.
ix. a) According to the records, the Company is generally regular in
depositing undisputed statutory dues including Provident Fund,
Employees' State Insurance, Income Tax, Sales Tax, Custom Duty, Excise
Duty and other statutory dues with appropriate authorities, except the
following amounts which are outstanding as on 31st March 2012 for a
period of more than six months from the date of becoming payable :
Sl. Name of Act Nature of Dues Year Amount not paid
No. (Rs. Lacs)
1 CST Act, 1956 Sales Tax 2003-2004 0.72
2 Bombay States
Stamps
Act, 1958 Stamp Duty and
Interest thereon 2001-2010 210.32
As explained to us, the Company does not have any dues in respect of
Wealth Tax, Service Tax and Cess.
b) The disputed statutory dues aggregating to Rs 4694.80 Lacs that have
not been deposited on account of matters pending before appropriate
authorities are as under :
Sl. Name of Act Nature Amt. not
paid Year to Forum
No. of Dues due to
dispute which it
(Rs. Lacs) Relates
1 WBST Act,
1994 Tax &
Penalty 0.11 1988-1989 The Assistant
Commissioner of
Commercial Taxes,
Kolkata
2 WBST Act,
1994 Tax,
Interest 4.22 1998-99 &
2002-03 The Additional
Commissioner of
& Penalty Commercial Taxes,
Kolkata
3 WBST Act,
1994 Tax &
Penalty 8.17 1980-81,
1993-94, The West Bengal
Commercial Taxes
2000-01,
2003-04 Appellate &
Revision Board,
& 2004-05 Kolkata.
4 WBST Act,
1994 Tax &
Penalty 4.73 2001-02 The High Court of
Calcutta
5 WBST Act,
1994 Tax &
Penalty 16.79 2005-06 &
2006-07 The West Bengal
Commercial
Taxes Appellate &
Revision
Board, Kolkata.
WBST Act,
1994 Tax &
Penalty 0.34 2008-09 Additional
Commissioner of
Commercial Taxes
6 CST Act,
1956 Tax,
Interest 190.53 1999-00 The Sr. Joint
Commissioner of
Sales Tax
& Penalty
CST Act,
1956 Tax,
Interest 130.12 2004-05 The West Bengal
Commercial Taxes
& Penalty Appellate &
Revision Board,
Kolkata.
7 CST Act,
1956 Tax 0.72 1988-89 The Assistant
Commissioner of
Commercial Taxes,
Kolkata
8 CST Act,
1956 Tax,
Penalty 529.26 1998-99 &
2002-03 The Additional
Commissioner of
&Interest Commercial Taxes,
Kolkata
9 CST Act,
1956 Tax,
Penalty 340.56 1996-97 &
2001-02 The High Court of
Calcutta
&Interest
10 CST Act,
1956 Tax,
Penalty 795.60 1993-94,
1995-96, The West Bengal
Commercial Taxes
&Interest 1997-98,
2000-01 Appellate &
Revision Board,
&2003-04 Kolkata.
11 CST Act,
1956 Tax &
Penalty 75.08 2005-06,
06-07 The West Bengal
Commercial Taxes
and 07-08 Appellate &
Revision Board,
Kolkata.
12 CST Act,
1956 Tax &
Penalty 11.07 2008-09 The Additional
Commissioner of
Commercial Taxes,
Kolkata
13 Central
Excise
Act, 1944 Tax &
Penalty 167.24 1992-93,
1994-95, Commissioner
(Appeals), C.E. ,
1999-00,
2002-03 Cal - IV, Kolkata
2003-04 &
2009-10
14 Central
Excise
Act, 1944 Tax &
Penalty 1744.69 1987-97 &
2000-03 Hon'ble Supreme
Court, New Delhi
15 Central
Excise
Act, 1944 Tax 11.23 1989-90 &
2005-2006 Hon'ble High
Court, Mumbai
16 Central
Excise
Act, 1944 Tax &
Penalty 4.34 2003-04 Commissioner
(Appeals) Nashik
17 Central
Excise
Act, 1944 Tax 1.73 2002-03 CESTAT, Mumbai
18 Central/
Delhi Sales Tax 0.62 1999-2002 The Asst.
Commissioner,
Sales Tax,
Tax Act Delhi
19 Central/
Gujarat
Sales Tax &
Penalty 5.50 1999-2000 &
2002-03 The Asst.
Commissioner,
Sales Tax,
Tax Act Ahmedabad
20 Customs
Act, 1962 Tax 639.16 2000-03 Commissioner,
Customs,
Nashik & Mumbai
21 Municipal
Tax Demands
Act. Tax 11.69 1982-89 Nashik Municipal
Corporation
4694.80
x. The accumulated losses of the Company have exceeded fifty percent
of its net worth though it has not incurred cash loss during the
financial year covered by our audit and in the immediately preceding
financial year.
xi. The Company has defaulted in repayment of dues of Rs. 1575.00 lacs
(excluding SICOM and Sales Tax Loan dues) to banks, financial
institutions and debenture holders, as referred in Note No.2.9 to the
Notes to Accounts.
xii. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other similar
securities.
xiii. The provisions of any special statute applicable to Chit Fund,
Nidhi or Mutual Benefit Society are not applicable to the Company.
xiv. The Company is not trading or dealing in shares, debentures. The
Company has maintained proper records of transactions and contracts in
respect of investment in shares and timely entries have been made
therein. All investments have been held by the Company in its own name.
xv. The Company has not given any guarantees for loans taken by others
from banks during the year.
xvi. The Company has neither taken any term loan during the year nor
applied during the year any part of the term loans taken in earlier
years.
xvii. According to the information and explanation given to us and on
an overall examination of the Balance Sheet of the company, we report
that short-term funds have not been used for long-term investment.
xviii. According to the information and explanations given to us, the
company has made preferential allotment of shares to parties covered in
the register maintained under section 301 of the Companies Act, 1956 in
accordance with the guidelines issued by Securities Exchange Board of
India and the price is not prejudicial to the interest of the company.
xix. The Company has not issued any debenture during the year.
xx. The Company has not raised any money during the year by public
issue.
xxi. Based upon the audit procedure performed and the information and
explanation given by the Company, we report that no fraud on or by the
Company has been noticed or reported during the year that causes the
financial statements materially misstated.
For G P. AGRAWAL & CO. For S. S. KOTHARI & CO.
Chartered Accountants Chartered Accountants
FR No. 302082E FR No. 302034E
CA Sunita Kedia CA A. Datta
Membership No. 60162 Membership No. 5634
Partner Partner
7A, Kiran Shankar Ray Road 21, Old Court House Street
Kolkata, 14th August, 2012 Kolkata, 14th August, 2012
Mar 31, 2010
1. We have audited the attached Balance Sheet ot SHALIMAR WIRES
INDUSTRIES LIMITED as at 31st March 2010 and also the Profit and Loss
Account and Cash Flow Statement for the year ended on that date, which
have been signed by us under reference to this report. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by the management as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, and on the
basis of such checks as we considered appropriate and the information
and explanations given to us, we enclose in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the aforesaid Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
ii. In our opinion, proper books of account have been kept by the
company as required by law so far as appears from our examination of
those books.
iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 except Accounting Standard 29 regarding Contingent
Liabilities (refer Note No. B 1 & B 26 of Schedule O), the quantum of
non-provision in respect whereof is not ascertained.
v. On the basis of legal opinion and the written representations
received from the Board of Directors as on 31st March, 2010 and taken
on record by the Board of Directors, we report that none of the
Directors are disqualified as on 31 st March, 2010 from being appointed
as a Director in terms of Clause (g) of sub-section (1) of section 274
of the Companies Act, 1956.
vi. Attention is drawn to the following notes in Schedule O of
Significant Accounting Policies and Notes on Accounts:
a) Note B 5 (b) regarding non-provision against Loans given amounting
to Rs. 565.39 Lacs.
b) Note B 6 regarding non-provision against Sundry Debtors and advances
amounting to Rs. 28.75 Lacs.
c) Note B 7 regarding amount due from Sundry Debtors and Loans &
Advances given and due to Sundry Creditors, in respect of which we are
unable to express our opinion, in the absence of confirmation from the
parties;
d) Note B 22 regarding non incorporation of effect of Scheme of
Rehabilitation sanctioned by the Honble Board For Industrial and
Financial Reconstruction for vide its order dated 10th June, 2010 in
the accounts (quantum unascertained).
e) Preparation of accounts on going concern basis although the Net
Worth of the company has been fully eroded.
Without considering item nos. (iv), (vi) (c), (d) and (e) above, whose
impact on the companys loss is presently not ascertainable, and if the
impact of items vi (a) and (b) above had been considered, the profit
for the year would have been Rs. 1452.66 Lacs as against the reported
profit of Rs. 2046.80 Lacs and the debit balance of Profit and Loss
account would have been Rs. 30212.77 Lacs as against the reported
figure of Rs. 29618.63 Lacs.
Subject to the above and read together with other Notes appearing in
Schedule O, in our opinion and to the best of our information and
according to the explanations given to us, the said accounts give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:-
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
b) In the case of the Profit and Loss Account, of its profit for the
year ended on that date and
c) In the case of Cash Flow Statement, of cash flows for the year ended
on that date.
ANNEXURE TO THE AUDITORSREPORT
Referred to in Auditors Report to the members of SHALIMAR WIRES
INDUSTRIES LIMITED on the Accounts for the year ended 31st March, 2010:
i. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
b) The fixed assets, except those at the Strip & Wire Unit at Nashik,
which is under closure, have been physically verified under a phased
program of physical verification. To the best of our knowledge, no
material discrepancies were noticed on such verification.
c) The Company has not disposed off substantial part of fixed assets
during the year.
ii. a) The inventories, except those at the Strip & Wire Unit at
Nashik, which is under closure, have been physically verified during
the year by the management at reasonable intervals.
b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stocks followed
by the management are reasonable and adequate in relation to the size
of the Company and nature of its business.
c) On the basis of our examination, we are of the opinion that the
Company is maintaining proper records of inventory. No material
discrepancies were noticed on verification between the physical stocks
and the book records.
iii. a) The Company has granted unsecured loans to two parties covered
in the register maintained under section 301 of the Companies Act,
1956. The maximum amount of loan outstanding during the year was Rs.
159.22 Lacs and the year end balance was Rs. 159.22 Lacs.
b) In our opinion and according to the information given to us, the
rate of interest and other terms and conditions of unsecured loans
given by the Company are prima facie not prejudicial to the interest of
the Company except that no interest is being charged on these loans
since 1st April, 2002. Receipt of principal amount and interest on the
above loans are not regular.
c) As explained to us, the aforesaid loans given have become overdue
and are doubtful, however, necessary legal action have been initiated
by the Company in these regards.
d) The Company has not taken any loans, secured or unsecured from
companies, firms or others parties covered in the register maintained
under section 301 of the Companies Act, 1956, except loans amounting to
Rs. 167.50 Lacs from a director and his relative. The maximum amount
of loan outstanding during the year was Rs. 167.50 Lacs and the year
end balance was Rs. 167.50 Lacs.
e) The above loans are interest free and other terms and conditions
thereof are not prejudicial to the interests of the company.
f) There has been no repayment of the principal amount against the
aforesaid loans during the year.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system, commensurate
with the size of the Company and the nature of its business for
purchase of inventory and fixed assets and also for the sale of goods.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system.
v. To the best of our information and explanations given to us, no
contracts or arrangements were entered into during the year as referred
to in section 301 of the Companies Act, 1956.
vi. The Company has not accepted any deposit within the meaning of
section 58A and 58AA or any other relevant provisions of the Companies
Act, 1956 and the rules framed there under.
vii. In our opinion, the internal audit system of the Company is
commensurate with the size of Company and nature of its business except
that no internal audit has been carried out during the year at the
Strip & Wire Unit at Nashik.
viii. The Central Government has not prescribed the maintenance of cost
records under section 209(1 )(d) of the Companies Act, 1956 for any of
the products of the company.
ix. a) According to the records, the Company is generally regular in
depositing undisputed statutory dues including Provident Fund,
Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise
Duty and other statutory dues with appropriate authorities, except in
respect of the following amounts to be deposited In the Investor
Education & Protection Fund and dues in respect of Strip & Wire Unit at
Nashik which are outstanding as on 31 st March 2010 for a period of
more than six months from the date of becoming payable.
Sl. Name of Act Nature of Dues Year Amount not paid
No. (Rs. Lacs)
1 Octroi Chgs. - NMC Octroi charges payable to 2001-2004 3.18
Nashik Municipal
Corporation
2 Property Tax Property Tax payable to 2005-2009 6.18
Nashik Municipal
Corporation
3 Central Excise Act,
1944 Excise Duty payable to
CEGAT 2003-2004 0.69
4 CST Act, 1956 Sales Tax 2003-2004 0.72
5 Bombay States Stamps
Act, 1958 Stamp Duty and Interest
thereon 2001-2010 425.19
6 Companies Act, 1956 Investor Education &
Protection 2009-2010 211.98
The BIFR has, vide its
recent Fund - Debenture
Redemption
approval of the
rehabilitation and Accrued Interest
Money
scheme advised the
relevant authorities
for exhemption
(reference Note
No. 22 of Schedule O)
As explained to us, the Company does not have any dues in respect of
Wealth Tax, Service Tax and Cess.
b) The disputed statutory dues aggregating to Rs 5092.79 Lacs that have
not been deposited on account of matters pending before appropriate
authorities are as under:
Sl. Name of Act Nature Amt. not paid Year to
No. of Dues due to dispute which it
(Rs. Lacs) Relates
1 WBST Act, 1994 Tax & Penalty 2.91 1999-00
2 WBST Act, 1994 Tax & Penalty 0.11 1988-1989
3 WBST Act, 1994 Tax, Interest 3.42 1998-99 & 2002-03
& Penalty
4 WBST Act, 1994 Tax & Penalty 4.82 1980-81,1993-94
1997-98,2000-01,
2003-04 & 2004-05
5 WBST Act, 1994 Tax & Penalty 4.82 2001-02
6 WBST Act, 1994 Tax & Penalty 22.22 2005-06 & 2006-07
7 CST Act, 1956 Tax, Interest 317.65 1999-00,2004-05,
& Penalty
8 CST Act, 1956 Tax 072 1988-89
9 CST Act, 1956 Tax 871.89 1996-97,1998-99
2001-02 & 2002-03
10 CST Act, 1956 Tax 779.60 1993-94,1995-96,
1997-98,2000-01
2003-04
II CST Act, 1956 Tax & Penalty 80.18 2005-06 & 2006-07
Name of Act Forum
WBSTAct, 1994 The Deputy Commissioner of
Commercial Taxes, Kolkata
WBSTAct, 1994 The Assistant Commissioner
of Commercial Taxes, Kolkata
WBSTAct, 1994 The Additional Commissioner of
Commercial Taxes, Kolkata
WBSTAct, 1994 The West Bengal Commercial Taxes
Appellate & Revision Board, Kolkata
WBSTAct, 1994 The West Bengal Taxation Tribunal
WBSTAct, 1994 The Sr. Joint Commissioner of S. Tax
CSTAct, 1956 The Deputy Commissioner of
Commercial Taxes, Kolkata
CSTAct, 1956 The Assistant Commissioner of
Commercial Taxes, Kolkata
CSTAct, 1956 The Additional Commissioner of
Commercial Taxes, Kolkata
CSTAct, 1956 The West Bengal Commercial Taxes
Appellate & Revision Board, Kolkata
CSTAct, 1956 The Sr. Joint Commissioner of S. Tax
SI. Name of Act Nature Amt. not paid Year to
No. of Dues due to dispute which it
(Rs. Lacs) Relates
12 Central Excise
Act, 1944 Tax & Penalty 139.87 1992-93,1994-95
2002-03, 2003-04
13 Central Excise
Act, 1944 Tax & Penalty 1724.69 1987-97 & 2000-03
14 Central Excise
Act, 1944 Tax 11.23 1989-90 & 2005-06
15 Central Excise
Act, 1944 Tax & Penalty 0.32 1994-95
16 Central Excise
Act, 1944 Penalty 0.15 2002-03
17 Central Excise
Act, 1944 Tax & Penalty 2.21 2003-04
18 Central Excise
Act, 1944 Tax 173 2002-03
19 Central/Delhi Tax 0.62 1999-2002
Sales Tax Act
20 Central/Gujarat
Sales Tax Tax & Penalty 5.50 1999-2000 & 2002-03
Act.
21 Foreign Exchange Penalty 22.40 1995-96
Management Act,
1999
22 Customs Act, 1962 Tax 1063.96 2000-03
23 Municipal Tax
Demands Tax 20.21 1982.89
24 Octroi MNC Octroi Duties 6.89 2007-09
Name of Act Forum
Central Excise Act, 1944 Commissioner (Appeals) CE Cal
- IV Kolkata
Central Excise Act, 1944 Hobble Supreme Court, New Delhi
Central Excise Act, 1944 Hobble High Court, Mumbai
Central Excise Act, 1944 CESAT, Kolkata
Central Excise Act, 1944 CEGAT, Mumbai
Central Excise Act, 1944 Commissioner (Appeals) Nashik
Central Excise Act, 1944 CESTAT, Mumbai
Central/Delhi Sales Tax Act The Asst. Commissioner,
Sales Tax, Delhi
Central/ Gujarat Sales Tax
Act. The Asst. Commissioner
Sales Tax, Ahmedabad
Foreign Exchange
Management Act, 1999 Special Director of Enforcement,
Enforcement, Directorate, Govt, of
India, New Delhi
Customs Act, 1962 Commissioner, Customs Nashik & Mumbai
Municipal Tax Demands Nashik Municipal Corporation Bombay
High Court
Octroi MNC Bombay High Court
x. The accumulated losses of the Company have exceeded fifty percent of
its net worth though it has not incurred cash loss during the financial
year covered by our audit and in the immediately preceding financial
year.
xi. The Company has defaulted in payment of dues to debenture-holders.
Amount in this regard as on Balance Sheet date was Rs. 2489.19 Lacs,
which is overdue from 13th August 1998 and onwards.
xii. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other similar
securities.
xiii. The provisions of any special statute applicable to Chit Fund,
Nidhi or Mutual Benefit Society are not applicable to the Company.
xiv. The Company is not trading or dealing in shares, debentures and
other investments. However, the investments made by the company are
held in its own name.
xv. The Company has not given any guarantees for loans taken by others
from banks during the year.
xvi. The Company has neither taken any term loan during the year nor
applied during the year any part of the term loans taken in earlier
years.
xvii. According to the information and explanation given to us and on
an overall examination of the Balance Sheet of the company, we report
that short-term funds have not been used for long-term investment.
xviii.The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956 during the year.
xix. The Company has not issued any debenture during the year.
xx. The Company has not raised any money during the year by public
issue.
xxi. Based upon the audit procedure performed and the information and
explanation given by the Company, we report that no fraud on or by the
Company has been noticed or reported during the year that causes the
financial statements materially misstated.
For G P. AGRAWAL & CO. For S. S. KOTHARI & CO.
Chartered Accountants Chartered Accountants
FR No. 302082E FR No. 302034E
CA Sunita Kedia CA A. Datta
Membership No. 60162 Membership No. 5634
Partner Partner
7A, Kiran Shankar Ray Road 21, Old Court House Street
Kolkata, 30th July, 2010 Kolkata, 30th July, 2010