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Kansal Fibres Ltd.

BSE: 531205 Sector: Others
NSE: N.A. ISIN Code: INE179O01015
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Kansal Fibres Ltd. (KANSALFIBRES) - Auditors Report

Company auditors report

Auditors Report

To

The Members of

KANSAL FIBRES LIMITED

1. We have audited the attached Balance Sheet of KANSAL FIBRES LIMITED as at 31stMarch 2014 the Profit and Loss Account of the company and also the Cash FlowStatement for the year ended on that date both annexed thereto. These financialstatements are the responsibility of the Company’s Management. Our responsibility isto express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement .Anaudit includes examining on a test basis evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management as well as evaluating the overallfinancial statements presentation. We believe that our audit provides a reasonable basisfor our opinion.

3. As required by the Companies (Auditor’s Report) (Amendment) Order 2003("the order") issued by the Central Government of India in terms of sub-section(4A) of section 227 of the Companies Act 1956 we enclose in the annexure a statement onthe matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above 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 and Profit and Loss Account and Cash Flow Statement dealt with bythis report are in agreement with the books of account

d. In our opinion the balance sheet the Profit and Loss Account and the cash flowstatement dealt with by this report comply with the accounting standards referred to inSection 211(3C) of the Companies Act 1956;

e. We draw attention to note 2 in the financial statements. The company incurred a netloss of Rs. 62288730/- during the year ended 31st March 2014 and on thatdate. The accumulated loss of the company exceeds its paid-up capital. These factors alongwith other matters as set forth in Notes raise substantial doubt about the ability of thecompany to continue as a going concern in future.

f. Except as stated in (e) above In our opinion and to the best of our information andaccording to the explanations given to us the said financial statements read togetherwith the significant accounting policies and other notes thereon give the informationrequired by the Companies Act 1956 in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India. ;

i) In case of Balance Sheet of the state of Company’s affairs as at 31stMarch 2014;

ii) In the case of Profit and Loss Account of the loss of the company for the yearended on that date; and

iii) In the case of the cash flow statement of the cash flows of the Company for theyear ended on that date.

For Raj Gupta & Co.

Chartered Accountants

FRN. 000203N

Sd/-

(CA R.K.Gupta)

Partner

M. No. 017039

Place: Ludhiana

Dated: 30/05/2014

ANNEXURE TO AUDITORS’ REPORT

RE: KANSAL FIBRES LIMITED

(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As explained to us most of the fixed assets have been physically verified by themanagement during the year in a phased manner which in our opinion is reasonable havingregard to the size of the company. No material discrepancies were noticed on suchverification.

(c) The company has not disposed off a substantial part of its fixed assets during theyear.

(ii) According to information and explanations given to us the company held noinventories during the year. As such clause (ii)-a b and c are not applicable.

(iii) (a) According to the information and explanations given to us the company hasnot granted any loan secured or unsecured to companies firms or other parties coveredin the register maintained under Section 301 of the Companies Act 1956. Hence clause(iii)-(b) (c) and (d) are not applicable.

(b) The company has taken an unsecured loan from a party listed in the registermaintained u/s 301 of the Companies Act 1956. The maximum amount outstanding during theyear was Rs. 4429597/-. Based on the information and explanations given to us there areno stipulations regarding repayment of the principal amount and the payment of interest onthe loan. Other terms and conditions of the loan in our opinion are not prima facieprejudicial to the interests of the company.

(iv) In our opinion based on our observations and the information and explanationsgiven to us the company has in place adequate internal control systems commensurate withits size and the nature of its business with regard to rendering of services. During thecourse of our audit we have not observed any continuing failure to correct majorweaknesses in the internal control system. There were no transactions relating to purchaseof inventory fixed assets and the sale of goods during the year.

(v) (a) Based on the information and explanations given to us we are of the opinionthat the particulars of contracts or arrangements referred to in Section 301 of theCompanies act 1956 have been entered into the register maintained under that section.

(b) In our opinion and according to the information and explanations given to us thetransactions made in pursuance of such contracts or arrangements have been made at priceswhich are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted any deposits from the public.

(vii) In our opinion the company has an internal audit system commensurate with thesize and nature of its business.

(viii) The requirements relating to the maintenance of the cost records in terms ofSection 209 (I) (d) of the Companies Act 1956 are not applicable to the company.

(ix) Based on our examination of the records of the company and information andexplanations given to us there were no arrears of undisputed statutory dues outstandingas on 31st March 2014 for more than six months from the date they becomepayable.

(x) The Company has accumulated losses of Rs. 62288730/- at the end of the financialyear. The accumulate losses are more than 50% of the company’s net worth. The companyhas incurred cash losses during the financial year covered by the audit and in theimmediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of dues to a financial institution or banks ordebenture holders.

(xii) As explained to us the Company has granted loans and advances on the basis ofsecurity by way of pledge of shares debentures and other securities. Therefore theprovisions of clause (xii) of the order are not applicable to the company.

(xiii) The company is not a Chit Fund or a Nidhi mutual benefit fund/society.Therefore the provisions of Clause 4 (xiii) of the order are not applicable to thecompany.

(xiv) Based on the information and explanations given to us and the records of thecompany examined by us the company is not dealing in or trading in shares securitiesdebentures and other investments. Therefore the provisions of clause (xiv) of the orderare not applicable to the company.

(xv) Based on our examination of records of the company and information and explanationgiven to us the company has not given a guarantee in respect of loans taken by othersfrom banks and financial institutions.

(xvi) In the absence of any term loans availed by the company the provision of clause4 (xvi) of the order are not applicable.

(xvii) In the absence of short-term funds raised by the company the provisions ofclause 4(xvii) of the order are not applicable.

(xviii) According to the information and explanations given to us the company has notmade preferential allotment of shares to parties and companies covered in the registermaintained under section 301 of the Companies act 1956.

(xix) According to the information and explanations given to us the company has notissued debentures during the year. Accordingly the provisions of clause 4(xix) of theorder are not applicable to the company.

(xx) According to the information and explanations given to us the company has notraised any money by way of public issue during the year. Accordingly the provisions ofclause 4(xx) of the order are not applicable to the company.

(xxi) According to the information and explanations given to us and to the best of ourknowledge and belief no fraud on or by the company has been noticed or reported by thecompany during the year.

For Raj Gupta & Co.

Chartered Accountants

FRN. 000203N

Sd/-

(CA R.K.Gupta)

Partner

M. No. 017039

Place: Ludhiana

Dated: 30/05/2014