The Members of
PASUPATI SPINNING & WEAVING MILLS LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Pasupati Spinning WeavingMills Limited ("the Company") which comprise the Balance Sheet as at 31 March2015 the Statement of Profit and Loss and Cash Flow Statement for the year then ended anda summary of significant accounting policies and other explanatory information.
Managements responsibility for the Financial Statements
The Companys 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 financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
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 accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we 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 theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditors judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompanys preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Companys Directors as wellas evaluating the overall presentation of the financial statements. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the financial statements.
Basis of Qualified Opinion
The company has claimed additional compensation in respect of part of factory landacquired. The additional compensation demand is Rs.61464287 (including amount uptoprevious year Rs. 61464287) which according to the management shall be accounted for asand when received. Had the additional compensation been accounted for the profit for theyear and other current assets would have been higher by the said amount.(Refer Note no. 12of the accompanying notes to the financial statements).
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the basis for qualifiedopinion paragraph above the aforesaid financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2015 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory requirements
As required by the Companies (Auditors Report) Order 2015 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Companies Act 2013 we give in the Annexure a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
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 financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) As per information and explanations given to us we report that as on 31.3.2015 noneof the directors of the company are disqualified from being appointed as a director of thecompany under Section 164((2) of the Companies Act 2013 As the company had not redeemedits debentures on due dates and as the default continued for more than a year directorsof the company were not qualified for being appointed as directors of any other publiccompany in terms of provision of Section 164(2) of the Companies Act 2013 as amended bythe companies Amendment Act 2000. Board for Industrial and Financial Reconstruction(BIFR) has sanctioned rehabilitation scheme for the company vide its order dated17.2.2012. The said scheme has approved payments of the settled amount todebenture-holders in instalments. The payment as approved by BIFR has been made and thereis no default in such payment. Besides four of the directors have been appointed afterthe scheme has been sanctioned. They have certified that they are not disqualified frombeing appointed as a director in any other company.
f) In our opinion the internal financial controls over financial reporting of theCompany and the operating effectiveness of such controls are adequate. g) With respect tothe other matters to be included in the Auditors Report in accordance with Rule 11of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation 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 21 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For B.K.Shroff & Co.
Firm Reg. No. : 302166E
Membership No. 06329
Place: New Delhi
Date : May 28 2015
Annexure referred to in paragraph (1) under the heading of "Report on Other Legaland Regulatory requirements" 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) All the fixed assets have been physically verified by the management according to aregular program which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets. No material discrepancies with respect to bookrecords were noticed on such verification.
(ii) (a) Physical verification of inventory (except material in transit and lying withthird party) has been conducted by the management at reasonable intervals. In our opinionthe frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the company and nature of its business.
(c) The company is maintaining proper records of inventory. Discrepancies noticed onverification of inventory as compared to book records were not material.
(iii) The company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act and as suchclauses (iii) (a) and (b) of the order are not applicable to the company.
(iv) In our opinion and according to the information and explanations given to usthere are adequate internal control procedures commensurate with the size of the companyand the nature of its business for the purchase of inventory and fixed assets and for saleof goods and services. During the course of our audit no major weakness has been noticedin the internal control system.
(v) According to the information and explanation given to us the company has notaccepted any deposit from the public. Therefore the provisions of clause (v) of the orderare not applicable to the company. (vi) We have broadly reviewed the books of accountmaintained by the company pursuant to the order made by the Central Government for themaintenance of cost records under section 148(1) of the Act and we are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.However we have not made a detailed examination of such accounts and records.
(vii) (a) The company is generally regular in depositing with the appropriateauthorities undisputed statutory dues including provident fund employees state insuranceincome tax sales tax wealth tax service tax duty of custom duty of excise valueadded tax cess and any other statutory dues applicable to it. According to theinformation and explanations given to us undisputed amounts payable in respect thereofoutstanding as at 31st March2015 for a period of more than six months from the date theybecame payable are as under:-
|Name of the statue ||Nature of dues ||Amount (Rs.) ||Period to which ||amount relates |
|Income Tax Act ||Tax deducted at source ||555089 ||31.03.2014 || |
(b) According to the records of the company dues of income-tax or Sales tax orwealth-tax or service tax or duty of custom or duty of excise or value added tax or cesswhich have not been deposited on account of any dispute are as under:-
|Name of the statue ||Nature of dues ||Amount (Rs.) ||Forum where pending |
|Central Excise Act ||Excise Duty ||2670382 ||Honble Supreme Court |
|Central Excise Act ||Excise Duty ||2583953 ||Central Excise & Service Tax Tribunal |
|Haryana Value Added Tax Act ||VAT ||4222661 ||Sales Tax Tribunal |
|Service Tax Act ||Service Tax ||229316 ||Central Excise & Service Tax Tribunal |
|Income Tax Act 1961 ||Income Tax ||465270 ||Income Tax Tribunal |
(c) No amount was required to be transferred to investor education and protection fundin accordance with the relevant provisions of the Companies Act 1956 and rules made thereunder.
(viii) There were no accumulated losses at the end of the financial year. The companyhas not incurred any cash losses during the financial year and in the immediatelyproceeding financial year.
(ix) In our opinion and according to the information and explanations given to us thedelay in repayment of dues to a financial institution or bank or debenture holders are asunder :
|Nature of Limit ||Name of the Bank ||Limit (Rs. in lacs) ||Balance as per Bank (Rs. in lacs) ||Excess (Rs. in lacs) ||Remarks |
|Cash Credit ||Canara Bank ||457.50 ||462.40 ||4.90 ||Due to interest charged by bank on 31.03.2015 and paid subsequently |
| ||State Bank of Patiala ||104.00 ||104.93 ||0.93 || |
| ||ING Vysya Bank Ltd ||187.25 ||191.31 ||4.06 || |
|Packing Credit ||State Bank of Patiala ||317.00 ||319.54 ||2.54 || |
|Nature of Limit ||Name of the Bank ||Amount overdue (Rs.) ||Due Date ||Remarks || |
|Bill discounted/ purchased ||Bank of Baroda ||2261158 ||13.03.2015 ||Realized on 06.04.2015 || |
| ||State Bank of Patiala ||5201022 ||30.03.2015 ||Realized on 08.04.2015 || |
(x) In our opinion the company has not given guarantee for loans taken by others frombanks or financial institutions. (xi) In our opinion the term loans have been applied forthe purposes for which they were obtained.
(xii) According to the information and explanations given to us no fraud on or by thecompany has been noticed or reported during the course of our audit.
For B.K.Shroff & Co.
Reg. No. : 302166E
Membership No. 06329
Place: New Delhi
Date : May 28 2015