TO THE MEMBERS OF M/S CHITRADURGA SPINTEX LIMITED
Report on the Financial Statements
I have audited the accompanying financial statements of M/s Chitradurga SpintexLimited ("the Company") which comprise the balance sheet as at 31st March2015 and the statement of profit and loss and cash flow statement for the year then endedand a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the matters in sec 134(5) of the Companies Act 2013("the Act") with respect to the preparation of financial statements that give atrue and fair view of the financial position financial performance and cash flows of thecompany in accordance with accounting principles generally accepted in India includingthe Accounting Standards specified u/s 133 of the Act read with Rule 7 of the Companies(Account) Rules 2014. This responsibility also includes the maintenance of adequateaccounting records in accordance with the provision of the Act for safeguarding the assetsof the Company and for preventing and detecting the frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design and implementation and maintenanceof internal financial controls that were operating effectively for ensuring the accuracyand completeness of the accounting records relevant to the preparation and presentationof the financial statements that give a true and fair view and are free from materialmisstatements whether due to fraud or error.
My responsibility is to express an opinion on these financial statements based on myaudit.
I have taken into account the provisions of the Act and matters which are required tobe included in the audit report under the provisions of the Act and Rules made thereunder.
I conducted my audit in accordance with the Standards on Auditing specified u/s 143(10)of the Act issued by the Institute of Chartered Accountants of India. Those Standardsrequire that I comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management aswell as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate toprovide a basis for my audit opinion.
Basis of Qualified Opinion
The accounting of gratuity on payment basis as per policy is contrary to generallyaccepted Accounting standards issued by the Institute of Chartered Accountants of India.The effect of the same on statement on profit & Loss is unascertained.
We draw the attention to the fact that the company is having accumulated loss of Rs359.04 Lakhs as at the year ended 31-03-2015 which is more than 50% of its net worth thecompany has to be treated as sick as per the provision of SICA 1985. The company not yetstarted any particular business as stated in postal ballot on 30-10-2008 and as thecompany has sold all its fixed assets and there are no revenue generated during the yearexcept from interest income along with other matters set out in the notes of thefinancial statements the substantial doubt arise whether the company will be able tocontinue as going concern.
In my opinion and to the best of my information and according to the explanations givento me except for the effect of the matter described in the basis for qualified opinionparagraph the financial statements give the information required by the Act in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:
(i) in the case of the balance sheet of the state of affairs of the Company as at 31stMarch 2015;
(ii) in the case of the statement of profit and loss of the profit for the year endedon that date.
(iii) in the case of the Cash flow statement of the cash flow for the year ended onthat date
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 215 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act I give in the Annexure a statement on the matters specified in paragraphs 3 and 4of the Order.
2. As required by section 143(3) of the Act I report that:
a. I have obtained all the information and explanations which to the best of myknowledge and belief were necessary for the purpose of my audit;
b. in my opinion proper books of account as required by law have been kept by theCompany so far as appears from my examination of those books;
c. the Balance Sheet and Statement of Profit and Loss dealt with by this Report are inagreement with the books of account;
d. in my opinion the Balance Sheet and Statement of Profit and Loss comply with theAccounting Standards referred to in section 133 of the Act read with Rule 7 of theCompanies(Accounts) Rules 2014; and
e. On the basis of written representations received from the directors as on 31stMarch 2015 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2015 from being appointed as a director in terms ofsection 164 of the Companies Act 2013.
CHETAN N. DEDHIA
Membership No: 044402
Annexure to the Auditors' Report
The Annexure referred to in our report to the members of Chitradurga Spintex Limited('The Company') for the year ended 31 March 2015 and on the basis of such checks as Iconsidered appropriate and according to the information and explanations given to usduring the course of our audit I report that:
1 As the Company does not hold any fixed assets for the year the requirement of clause(i) of paragraph 3 of the Order is not applicable to the company.
2. As the Company does not hold any inventories for the year the requirement of clause(ii) of paragraph 3 of the Order is not applicable to the company.
3. The company has not granted any loans secured or unsecured to/from companies firmsor other parties covered in the register maintained u/s 189 of the Act
4. The Company has not purchased any goods or fixed assets and effected any salesduring the year thus requirement of clause (iv) of the Order are not applicable to theCompany.
5. According to the information and explanation given to us the Company has notaccepted any deposits from the public. Therefore the provisions of Clause (v) of paragraph3 of the Order are not applicable to the Company.
6. As informed to us the Central Government has not prescribed maintenance of CostRecords under subsection (1) of the section 48 of the Act.
7. a According to the records of the Company undisputed statutory dues includingProvident fund employees' state insurance income tax sales tax wealth tax customsduty excise duty cess and other material statutory dues have been generally regularlydeposited with the appropriate authorities. According to the information and explanationsgiven to us no undisputed amounts payable in respect of the aforesaid dues wereoutstanding as at March 31 2015 for a period of more than six months from the date ofbecoming payable.
b According to the information and explanation given to us there are no disputedamounts payable in respect of income tax Sales tax Wealth tax Customs duty Excise dutyand Cess outstanding as at the year end except Entry Tax of Rs 3.91 Lakhs for the year1992-93.
c There has not been an occasion in the case of the company during the year under thereport to transfer any sums to the Investor Education and Protection fund in accordancewith the relevant provisions of the Companies Act 1956(1 of 1956) and rules made thereunder.
8. The Company has accumulated loss of Rs.359.03 lakhs as at the end of the financialyear which is more than fifty per cent of its net worth and it has make profit of Rs. 2.66lakhs in the current year and had incurred a profit of Rs.56.17 lakhs immediatelypreceding financial year.
9. According to information and explanation given to us and the records examined by usthe Company has not defaulted in repayment of dues to a financial institution or bank ordebenture holder.
10. In our opinion and according to information and explanation given to us companyhas not given any guarantee for loans taken by others from bank financial institution.
11. In our opinion and based on information and explanations given to us by themanagement term loans were applied by the Company for the purpose for which they wereobtained.
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.
CHETAN N. DEDHIA
Membership No : 044402
Place : Mumbai
Date : 29-May-2015