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Dhanada Corporation Ltd.

BSE: 531198 Sector: Services
NSE: N.A. ISIN Code: INE041F01015
BSE LIVE 11:01 | 18 Sep 3.82 -0.20
(-4.98%)
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4.02

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4.02

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3.82

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 4.02
PREVIOUS CLOSE 4.02
VOLUME 125
52-Week high 5.60
52-Week low 3.43
P/E
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.22
Sell Qty 382.00
OPEN 4.02
CLOSE 4.02
VOLUME 125
52-Week high 5.60
52-Week low 3.43
P/E
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.22
Sell Qty 382.00

Dhanada Corporation Ltd. (DHANADACORP) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

DHANADA COPORATION LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of DHANADACORPORATION LIMITED (The Company) which comprises the Balance Sheet as at 31st March2016 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 Standalone 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 preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting 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 the materialmisstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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 ofthe financial statements whether due to fraud or error. In making those risk assessments;the auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity withaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 and its loss and its cash flows for the year ended on that date.

Emphasis of Matters;

Without qualifying our report we draw your attention to;

1. Note 26 B (1). As per clause no. 4.4.6 of the Scheme of Arrangement and Amalgamationsanctioned by Hon’ble Bombay High Court ("Court") vide their judgmentdated 16th July 2009 the allotment of shares against purchase of land shall bedone after the conveyance deeds are executed and registered. However the management hasissued 1796254 equity shares having face value of Re.1 along-with premium of Rs. 5.94per share to Dr. Laxman V. Kulkarni without executing and registering the conveyance deed.The outcome of the said event is uncertain and we are unable to comment upon it.

2. Note No. 26B (15) to the financial statements relating to investments in shares ofsubsidiary company’s of Rs.22078373/- (Previous Year Rs.44156747/-) afterproviding for diminution of Rs.22078373/- (Previous Year Rs.44156747/-) at the endof the year that are due from subsidiary company’s whose net worth have eroded. Themanagement’s assessment on the recoverability from the financial assets of thesecompanies is subject to uncertainties and which if do not materialize could significantlyimpact the carrying values of the aforesaid investments in shares of subsidiary companies.

3. As the Company has defaulted in repayment of term loans of financial institutions.The recovery proceeding as per the provisions of Securitisation and Reconstruction ofFinancial Assets and Enforcement of Security Interest Act 2002 will be applicable. ReferNote No. 3 to the Financial Statements regarding long term borrowings.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 issued by theCentral Government of India in terms of sub-section (11) of Section 143 of the Act wegive in the Annexure-A a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. As required by section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by 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 account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of 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 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

g) With respect to the other matters to be included in the Auditor’s 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 26 B – 16 and 17 to thefinancial statement.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For G. K. Chandavarkar & Co.
Chartered Accountants
(Firm Registration No.115924W)
G. K. Chandavarkar
Place: Pune (Proprietor)
Date : 30th May 2016 M. No. 044537

With reference to paragraph 1 of report on other legal and other regulatoryrequirements of our report to the shareholders of Dhanada Corporation Ltd. of evendate.

i. a. The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of the fixed assets.

b. Most of the fixed assets have been physically verified by the management during theyear and as examined by us no material discrepancies have been noticed on suchverification.

ii. a. As explained to us the inventories were physically verified during the year bythe management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us theProcedures of physical verification of inventories followed by the management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c. In our opinion and according to the information and explanations given to us theCompany has maintained adequate records of its inventories and no material discrepancieswere noticed on physical verification.

iii. The Company has not granted any loans to parties covered in the registermaintained under Section 189 of the Companies Act 2013.

iv. In our opinion and according to the information and explanations given to us theCompany has not given loans made investments or given guarantees which are covered by theprovisions of Section 185 and 186 of the Act.

v. According to the information and explanations given to us the Company has notaccepted deposits from the public during the year and hence the directives issued by theReserve Bank India and the provisions of section 73 to 76 or any other relevant provisionsof the Companies Act 2013 and the rules framed there under are not applicable to it.

vi. According to the information and explanations given to us the Central Governmenthas not prescribed maintenance of cost record under sub-section 1 of section 148 underCompanies Act 2013 read with the rule 3 of the Companies (Cost Record and Audit Rules2014).

vii. a. The Company has been generally regular in depositing undisputed statutory duesin respect of Provident Fund Employee’s State Insurance (ESI) Income Tax ValueAdded Tax Service Tax Luxury Tax and other material statutory dues with appropriateauthorities.

According to the information and explanation given to us no undisputed amounts payablein respect of statutory due were in arrears as at 31st March 2016 for a periodof more than six month from the date they became payable except in case of Sales TaxDeferral liability of Rs. 2104188/- which is not paid. Appropriate interest is also duetill the actual date of payment.

b. In case of disputed liabilities;

1. The Company has disputed Sales tax liability against Assessment orders passed bySales Tax Officer Aurangabad and matter is pending as detailed below:

Name of the Statute Nature of Dues Amount Period Forum Where dispute is pending
Bombay Sales Tax Act 1959 Sales Tax 5000 1998-1999 Dy. Commissioner of Sales Tax(Appeal) Aurangabad
Bombay Sales Tax Act 1959 Sales Tax 57536 1999-2000 Dy. Commissioner of Sales Tax(Appeal) Aurangabad
Bombay Sales Tax Act 1959 Sales Tax 88239 2000-2001 Dy. Commissioner of Sales Tax(Appeal) Aurangabad

2. The Company has disputed Sales tax liability against Rectification Orders passed bySales Tax officer Aurangabad and matter is pending as detailed below:

Name of the Statute Nature of Dues Amount Part Payment made Period Forum Where dispute is pending
Bombay Sales Tax Act 1959 Sales Tax 2542314 150000 1998-1999 Dy. Commissioner of Sales Tax (Appeal) Aurangabad
Bombay Sales Tax Act 1959 Sales Tax 1779156 125000 1999-2000 Dy. Commissioner of Sales Tax (Appeal) Aurangabad
Bombay Sales Tax Act 1959 Sales Tax 919859 100000 2000-2001 Dy. Commissioner of Sales Tax (Appeal) Aurangabad
Bombay Sales Tax Act 1959 Sales Tax 14049 2000 2001-2002 Dy. Commissioner of Sales Tax(Appeal) Aurangabad

3. Sales Tax Refund Cases:

Name of the Statute Nature of Dues Amount Payment Against Demand Period Forum Where dispute is pending
Maharashtra Value Added Tax 2002 VAT Refund 160494 202023 2007-08 Dy. Commissioner of Sales Tax(Appeal) Aurangabad
Maharashtra Value Added Tax 2002 VAT Refund 1922195 Nil 2008-09 Dy. Commissioner of Sales Tax(Appeal) Aurangabad

4. Income Tax Cases:

Name of the Statute Nature of Dues Amount Part Payment made F.Y. Forum Where dispute is pending
Income Tax Act 1961 Assessment dues 19601345 Nil 2011-12 Commissioner of Income Tax (Appeals) – Aurangabad
Income Tax Act 1961 Assessment dues 7434315 Nil 2012-13 Commissioner of Income Tax (Appeals) – Aurangabad

viii. In our opinion and according to the information and explanations given to us theCompany has defaulted in repayment of dues as details given below:

Particulars Amount of default as at the Balance Sheet date Period of default Remark if any
Bank of Maharashtra 23439547/- Since 2014-15 Symbolic possession has been taken on mortgaged assets (Refer Note 3)
Phoenix ARC Pvt. Ltd. 80612484/- Since 2012-13 Symbolic possession has been taken on mortgaged assets (Refer Note 3)

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments).

As informed to us the term loans were applied for the purposes for which those areraised.

x. In our opinion and according to the information and explanation given to us havingregards to the nature of the Company’s business no fraud on or by the Company wasnoticed or reported during the year.

xi. The Company has not paid managerial remuneration during the year. Thereforeprovisions of section 197 read with schedule V to the Company’s Act 2013 are notapplicable.

xii. The Company is not a nidhi company as hence reportsing under clause (xii) of theCARO 2016 Order is not applicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with Directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi. As informed to us the Company is not required to be registered under Section 45-lA of the Reserve Bank of lndia Act 1934.

For G. K. Chandavarkar & Co.
Chartered Accountants
(Firm Registration No.115924W)
G. K. Chandavarkar
Place: Pune (Proprietor)
Date : 30th May 2016 M. No. 044537

ANNEXURE-B TO THE AUDITORS’ REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of DhanadaCorporation Limited ("the Company") as of 31st March 2016 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany’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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For G. K. Chandavarkar & Co.
Chartered Accountants
(Firm Registration No.115924W)
G. K. Chandavarkar
Place: Pune (Proprietor)
Date : 30th May 2016 M. No. 044537