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Duncans Industries Ltd.

BSE: 590063 Sector: Agri and agri inputs
NSE: DUNCANSLTD ISIN Code: INE508A01022
BSE LIVE 15:29 | 12 Dec Stock Is Not Traded.
NSE 12:41 | 23 May Stock Is Not Traded.
OPEN 8.32
PREVIOUS CLOSE 8.74
VOLUME 3348
52-Week high 9.15
52-Week low 7.51
P/E
Mkt Cap.(Rs cr) 58
Buy Price 9.10
Buy Qty 76.00
Sell Price 9.14
Sell Qty 100.00
OPEN 8.32
CLOSE 8.74
VOLUME 3348
52-Week high 9.15
52-Week low 7.51
P/E
Mkt Cap.(Rs cr) 58
Buy Price 9.10
Buy Qty 76.00
Sell Price 9.14
Sell Qty 100.00

Duncans Industries Ltd. (DUNCANSLTD) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS

To

The Members of

Duncans Industries Limited

1. Report on the Financial Statements

We have audited the accompanying financial statements of Duncans Industries Limited("the Company") which comprise the Balance Sheet as at September 30 2014 theStatement of Profit and Loss the Cash Flow Statement significant accounting policies andother notes thereon for the year ended on that date.

2. Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the Accounting Standards referred to in sub-section (3C) ofsection 211 of the Companies Act 1956 ('the Act') read with the General Circular 15/2013dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133of the Companies Act 2013. This responsibility includes the design implementation andmaintenance of internal control relevant to the preparation and presentation of thefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

3. Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditors'judgment 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 but not for the purpose of expressing an opinion on the effectiveness ofthe entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement as well as evaluating the overall presentation of the financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified audit opinion.

4. Basis for Qualified Opinion

(I) Attention is invited to the following notes to the financial statements:

a) Note 10 (a) (i) and 10(b)(i) regarding shortfall in value of loans and advancesgiven to certain companies;

b) Note 19(i) regarding non ascertainment of impact of wage revision pendingnegotiations thereof;

c) Note 26 regarding non-provision of Rs. 811.67 lacs demanded by the appropriateauthorities as 'Salami' on renewal of lease in certain circumstances;

d) Note 27 regarding payment of managerial remuneration amounting to Rs.719.30 lacs(including Rs.196.68 lacs for the year) which is subject to approval of the CentralGovernment;

e) Note 28 regarding certain debit and credit balances including advances tradereceivables trade payables and other liabilities which are subject to confirmation andreconciliation thereof;

(II) Impacts with respect to Para a) to e) above are presently not ascertainable and assuch cannot be commented upon by us.

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion paragraph the financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:

(a) in the case of the Balance Sheet of the state of affairs of the Company as at 30thSeptember 2014;

(b) in the case of the Statement of Profit and Loss of the loss for the year ended onthat date; and

(c) in the case of the Cash Flow Statement of the cash flows for the year ended onthat date.

6. Emphasis of Matter

Without qualifying our opinion on this matter we draw attention to Note 24 (a) to thefinancial statements which indicate that inspite of the Company's networth becomingnegative the accounts have been prepared on going concern basis. The Company's ability tocontinue as a going concern is dependent upon the outcome of the measures as per BIFRscheme under implementation and other ameliorative steps and prospects thereof and assuch we are unable to comment on the same.

7. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order 2003 as amended by the Companies(Auditors' Report) (Amendment) Order 2004 ('the Order') issued by the Central Governmentof India in terms of sub-section (4A) of section 227 of the Act we give in the Annexure astatement on the matters specified in paragraphs 4 and 5 of the Order.

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 ourknowledge 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 appears from our examination of those books;

c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this report are in agreement with the books of account;

d. Except for the possible effects of the matters described in Para 4(I)(b) above underBasis for Qualified Opinion paragraph (Note 19(i) of the financial statements) in ouropinion the Balance Sheet Statement of Profit and Loss and Cash Flow Statement complywith the Accounting Standards referred to in Section 211 (3C) of the Act read with theGeneral Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs inrespect of Section 133 of the Companies Act 2013; and

e. As per the legal opinion received and on the basis of written representationsreceived from the directors as on September 30 2014 and taken on record by the Board ofDirectors none of the directors is disqualified as on September 30 2014 from beingappointed as a director in terms of clause (g) of sub-section (1) of section 274 of theAct.

For Lodha & Co.
Chartered Accountants
Firm ICAI Registration No: 301051E
R.P. Singh
Place: Kolkata Partner
Date: 18th November 2014 Membership No. 52438

ANNEXURE TO THE AUDITORS' REPORT REFERRED TO IN PARAGRAPH 6 THEREOF

i) a) The Company has maintained proper records to show full particulars includingquantitative details and situation of its fixed assets.

b) All the fixed assets have not been verified by the management during the year butaccording to the information and explanations given to us there is a regular programme ofverification which in our opinion is reasonable having regard to the size and the natureof its assets. In respect of assets verified during the year no material discrepancieshave been noticed.

c) In our opinion during the year the company has not disposed off substantial partof its fixed assets.

ii) a) The inventory as explained to us has been physically verified during the yearby the management in a phased manner. Necessary confirmations with respect to year endstock lying with third parties was not available. In respect of certain materials storedin heaps such verification has been done on the basis of visual estimation/survey and/ orvolumetric measurement technique.

b) In our opinion read together with Para (ii) (a) above the procedure of physicalverification of inventory followed by the management are reasonable and adequate inrelation to the size of the Company and nature of its business.

c) In our opinion the company has maintained proper records of its inventory and asexplained to us the discrepancies observed on such verification between the physicalstock and the book records were not material.

iii) a) During the year the Company has not granted any loan secured or unsecured toany company firm or other party covered in the Register maintained under Section 301 ofthe Act. In respect of unsecured loan given in earlier years (Note 10(b) (i) to thefinancial statements) recoverable from a company covered in the register maintained underSection 301 of the Act the aggregate maximum amount involved and the year end balance wasRs.1685 lacs.

b) The aforesaid loan as stated in Note 10(b) (i) to the financial statements isrepayable to the Company by March 2015 and is interest free and having regard to theexplanations given by the management of the same being strategic in nature the terms andconditions of the said loan is prima facie not prejudicial to the interest of the Company.

c) As stated above the aforesaid loan is repayable to the Company by March 2015.During the year the Company has not received any amount in this respect.

d) Having regard to Para (c) above there is no overdue amount of loan and accordinglyclause 4 (iii) (d) is not applicable to the company.

e) The Company during the year has not taken any loan secured or unsecured fromcompanies firms or other parties covered in the register maintained under section 301 ofthe Act. Accordingly clause 4 (iii) (e) to (g) of the order are not applicable to thecompany.

iv) In our opinion and having regard to the nature and exigencies of business and thepractices followed and the explanation that certain items purchased are of a specialnature and therefore in certain cases alternative quotations are not available there isan adequate internal control procedure commensurate with the size of the Company andnature of its business with regard to purchase of inventory fixed assets and with regardto sale of goods. During the course of our audit we have not observed any continuingfailure to correct the major weaknesses in internal controls.

v) According to information and explanation given to us and as per the records of thecompany there is no transaction that needs to be entered in the Register maintainedunder Section 301 of the Act. Accordingly the provisions of the clause 4 (v) (b) of thesaid order is not applicable to the Company.

vi) The Company has not accepted any deposits from public during the year within themeaning of the provisions of the section 58A 58AA or any other relevant provision of theAct and rules made thereunder. Deposits accepted in the earlier years have been repaid interms of the scheme sanctioned by Board for Industrial and Financial Reconstruction (BIFR)and to the extent lying unclaimed has been kept deposited in a separate bank account.

vii) The Company's internal audit has been conducted by independent consultants as perthe phased programme of verification. Internal audit reports with respect to areas coveredtill 31st March 2014 were received and the same was in progress for the remaining period.In our opinion the internal audit system in respect of the areas covered is commensuratewith the size and nature of the business of the Company.

viii) On the basis of records produced we are of the opinion that prima facie the costrecords and accounts prescribed by the Central Government under Section 209(1) (d) of theAct have been maintained. However we have not carried out any detailed examination ofsuch records with a view to determine whether they are accurate or complete.

ix) a) According to the information and explanations given to us undisputed dues withrespect to provident/pension fund (including interest thereon) tax deducted at source(including interest thereon) service tax works contract tax professional tax cess andother statutory payables as applicable were not deposited regularly with appropriateauthorities. The details of material statutory dues outstanding for a period exceeding sixmonths as provided for in the accounts are given below:

Statute Nature of Dues Amount (Rs. in Lacs) Period to which the amount relates to
The Income Tax Act 1961 Tax Deducted at Source (including interest) Tax collected at source 565.58 2011-14
5.35 2013-14
West Bengal Rural Employment & Production Act 1976 Cess on Green Leaf 219.04 2001-06 and 2011-12
2041.89 2010-13 (including Rs. 1908.62 lacs in respect of which instalment facility has been granted (Refer Note 25)
The Employee's Provident Funds and Miscellaneous Provisions Act 1952 Contribution to Provident and Pension Fund Interest on Provident and Pension Fund 705.19 2004-14
Employees' Contribution to Provident Fund 88.73 2013-14
West Bengal State Tax On Professions Trades Callings And Employments Act 1979 Professional Tax 0.39 2013-14
West Bengal Value Added Tax Act 2003 Works Contract Tax 3.76 2010-14
West Bengal Value Added Tax Act 2003 Purchase Tax 3.25 2004-14
Service Tax Service tax 3.43 2013-14

b) According to the information and explanations given to us there are no dues ofSales Tax Income Tax Custom Duty Wealth Tax Excise Duty Service Tax and Cess whichhave not been deposited on account of any dispute except as given below:

Statute Nature of Tax Forum where Dispute is Pending Amount (Rs. in Lacs) Period to which amount relates
The Income Tax Act 1961 Income Tax High Court CIT (Appeals) 47.32 1976-78 & 2005-07
41.51
The Central Sales Tax Act 1956 Central Sales Tax ACCT 2.41 2004-05
The West Bengal Sales Tax Act 1994 Sales Tax ACCT 12.16 1996-98 2001-02 2003-05
The West Bengal Value Added Tax 2003 VAT WBTT 15.77 2007-08
WBCT 8.84 2008-09
Additional Commissioner 21.86 2010-12

x) The accumulated losses of the Company as at the end of the financial year are morethan 50 percent of its net worth. The Company has incurred cash losses during thefinancial year and in the immediately preceding financial year covered by our audit.

xi) In our opinion and on the basis of information and explanations provided by themanagement except as given in Note 4(a) and (b) (iv) of the financial statements theCompany has not defaulted in repayment of dues if any to financial institutions banksand debenture holders.

xii) The Company has not granted any loan and advances on the basis of security by wayof pledge of shares debentures and other security.

xiii) In our opinion the Company is not a chit fund or nidhi/mutual benefitfund/society. Therefore the provisions of the clause 4 (xiii) of the said order are notapplicable to the Company.

xiv) In our opinion the Company is not dealing in or trading in shares securitiesdebentures and other investments. Accordingly the provision of clause 4 (xiv) of theOrder is not applicable to the Company.

xv) The Company has not given any guarantee during the year for loan taken by others.The guarantee of Rs. 830 lacs given in earlier years to group/associate companiesin respect of loans taken by them from bank considering the long term involvement withthose companies when issued was not prima facie prejudicial to the interest of theCompany.

xvi) As per the information and explanations given to us no fresh term loan has beentaken during the year.

xvii) According to the information and explanation given to us on an overallexamination of the Balance Sheet of the Company we report that funds amounting toRs.15572.98 lacs raised on short-term basis have been used for long term investment i.e.for fixed assets funding the losses etc of the Company.

xviii) The Company has made preferential allotment of shares at par to companiescovered in the Register maintained under Section 301 of the Act during the year.Considering the terms of rehabilitation sanctioned by BIFR the price at which the shareshave been issued is not prejudicial to the interest of the Company.

xix) The Company has not issued any secured debentures during the year. Accordinglyclause 4 (xix) of the order is not applicable to the company.

xx) The Company has not raised any money through a public issue during the year.

xxi) During the course of our examination of books and records of the Company carriedout in accordance with generally accepted auditing practices in India we have neithercome across any instances of fraud on or by the Company noticed and/or reported duringthe year nor have we been informed of any such case by the management.

For Lodha & Co.
Chartered Accountants
Firm ICAI Registration No: 301051E
R.P. Singh
Place: Kolkata Partner
Date: 18th November 2014 Membership No. 52438