THE MEMBERS OF
CARNATION INDUSTRIES LIMITED
We have audited the accompanying financial statements of CARNATION INDUSTRIES LIMITED('the company') which comprise the balance sheet as at 31 March 2015 the statement ofprofit and loss and the cash flow statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Management's Responsibility for the financial statements
The Company's Board of directors is responsible for the matters stated in section134(5) of the companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143 (10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2015 and its profit/loss and its cash flows for the year ended on that date.
Emphasis of Matters
We draw attention to the following matter in the Notes to the financial statements:
(i) Note 16(a) to the financial statements which describes the overdue receivables froma related party.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2015 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Act we give in the Annexure a statement on the matters specified in the paragraph 3and 4 of the Order to the extent applicable.
2. As required by Section 143 (3) of Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof 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 thecompany so far as it appears from our examination of those books;
(c) The balance sheet the statement of profit and loss and the cash flow statementdealt with by this Report are in agreement with the books of accounts;
(d) In our opinion the aforesaid financial statements comply with the accountingstandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
(e) On the basis of the written representations received from the directors as on 31March 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2015 from being appointed as a director in terms of section164(2) of the Act; and
(f) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements - Refer Note 28(ii) to the financial statements;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts- Refer Note 28(xv) to the financial statements;
iii. There has been no delay transferring amounts required to be transferred to theInvestor Education and protection Fund by the company.
For JAIN & BAGARIA
B. K. Agarwal
FRN : 310045E
27/8A Waterloo Street
Kolkata - 700 069
Dated : 26th May 2015
Annexure to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors Report to the members of thecompany on the financial statements for the year ended 31 March 2015 we report that:
1. The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets. As informed to us all fixed assets(except lying with outside parties) have been physically verified by the management atreasonable intervals and no material discrepancies were noticed on such verification.
2. The management has conducted physical verification of inventory at the end of theyear (except stock lying with outside parties). The procedures of physical verification ofinventory followed by the management are reasonable and adequate in relation to the sizeof the Company and the nature of its business. The company is maintaining proper recordsof inventory and no material discrepancies were noticed on such physical verification.
3. The Company has not granted any loan secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013.
4. In our opinion and according to the information and explanations given to us thereare adequate internal control procedures commensurate with the size of the Company and thenature of its business for the purchase of inventory and fixed assets and for the sale ofgoods. Further on the basis of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India we haveneither come across nor have we been informed of any instance of a continuing failure tocorrect major weakness in the aforesaid internal control procedures.
5. The Company has not accepted any deposits from the public.
6. The Central Government has prescribed the maintenance of cost records under section148(1) of the Companies Act 2013 for the products of the company. We have broadlyreviewed such records maintained by the company and are of the opinion that prima faciethe prescribed records have been made and maintained. We have however not made a detailedexamination of the said records with a view to determine whether they are accurate orcomplete.
7. According to the records of the Company the Company is generally regular indepositing undisputed statutory dues including Provident Fund Employees' State InsuranceIncome Tax Sales-Tax Wealth Tax Service Tax Custom Duty Excise Duty Value Added TaxCess and Other Statutory Dues applicable to it with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof Income Tax Wealth Tax Sales Tax Service Tax Custom Duty Excise Duty and ValueAdded Tax were outstanding at the year end for a period of more than six months from thedate they became payable.
Further according to the records of the Company there are no dues outstanding of SalesTax Income Tax Custom Duties Wealth Tax Service Tax Excise Duty Value Added TaxCess on Account of any dispute other than the following:
|Name of the Status ||Nature of Dues ||Amount (Rs.) ||For ||um Where Dispute is Pending |
|West Bengal Value Added Tax Act 2003 ||Value Added Tax for the Financial Year 2007-2008 ||100.13 lacs ||Befo Com Appl Boar ||re the West Bengal mercial Taxes ellate & Revisional d. |
|Cental Excise Act 1944 ||Duty and Penalty ||136.56 lacs ||Befo (App Cent ||re the Commissioner eal - I & II) of ral Excise. |
According to the information and explanations given to us the amounts which wererequired to be transferred to the investor education and protection fund in accordancewith the relevant provisions of the Companies Act 1956 (1 of 1956) and rules there underhas been transferred to such fund within time.
8. The Company does not have any accumulated losses at the end of the financial yearand has not incurred cash losses in the financial year and in the immediately precedingfinancial year.
9. Based on our audit procedures and on the information and explanations given by themanagement we are of the opinion that the company has not defaulted in repayment of duesto bank.
10. In our opinion and according to the information and the explanations given to usthe company has not given any guarantee for loans taken by others from banks or financialinstitutions.
11. The term loans were applied for the purpose for which the loans were obtained.
12. According to the information and explanations given to us no material fraud on orby the Company has been noticed or reported during the course of our audit.
For JAIN & BAGARIA
B. K. Agarwal
FRN : 310045E
27/8A Waterloo Street
Kolkata - 700 069
Dated : 26th May 2015