The Members of
Radha Madhav Corporation Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Radha Madhav CorporationLimited which comprise the Balance Sheet as at 31st March 2016 thestatement of Profit and Loss and the cash flow statement for the year ended on that dateand a summary of the 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 preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting 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 materialmisstatement whether due to fraud or error.
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 the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
Basis for Qualified Opinion
a) The Outstanding balances as at the end of the year under consideration in respect ofsundry debtors loans & advances and sundry creditors are subject to confirmation fromrespective parties and consequential reconciliation and adjustments arising there from ifany. Consequential impact thereof on the financial statements is not ascertainable.Company is in the process of obtaining such confirmation since last many year which hasresulted into departure from standards on auditing
b) Non provision/non accounting of interest of Rs 768.70 million for the year underconsideration and Rs 2630.98 million till the date of Balance Sheet including reversal ofinterest of Rs. 645.75 million in preceding year payable to the Banks/ financialinstitutes/ Asset Reconstruction Company from whom various secured loans have beenobtained which has resulted into non observance of basic accounting assumption. Thismatter was also qualified in our report on the financial statement from the year ended 31stmarch 2014.
Above mention para b has effect of showing higher EPS before / after extraordinary byRs. 11.99 and diluted EPS before extraordinary items Rs.11.99 and consequential effect onshowing accumulated losses lower by Rs 2630.99 million.
In our opinion and to the best of our information and according to the explanationsgiven to us subject to the effect in the financial statements of the matters referred toin the preceding 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:
i. in the case of the Balance sheet of the state of affairs of the Company as at 31stMarch 2016
ii. in the case of Statement of Profit and Loss the profit of the Company for the yearended on that date.
iii. in the case of Cash Flow Statement of the cash flow for the year ended on thatdate.
We draw attention to following matter in the notes of the financial statements:
a) Financial statement which indicates that the company has accumulated losses and itsnet worth has been fully eroded the companys current liabilities exceeded itscurrent assets as at the balance sheet date. These factors raise doubts about thecompanys ability to continue as a going concern which is dependent upon infusion oflong terms funds for its future operations. However the financial statement of thecompany have been prepared on a going concern basis.
b) We could not attend the physical verification of inventory done by the management onaccount of unplanned stock verification by the management. No working papers relating tophysical verification of inventory done by the management were made available to us foraudit but management has in its representation stated that
"Actual physical count or weight or measurement that was taken on 01/04/2016 underour supervision and in accordance with written instructions and proper adjustment hasbeen made for receipts of material stores etc. and deliveries of material".
c) The company do not have adequate internal financial control over financial reporting& operative effectiveness of such control.
d) Company has not carried out physical verification of trading goods lying at thepremises of various franchisees/depot located across India.
Report on other Legal and Regulatory Requirements
1. 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 Act we give in the Annexure a statement on the matters specified inthe paragraph 3 and 4 of the Order to the extent applicable.
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 financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014; except as stated in Para b under the heading basis for qualifiedopinion
(e) on the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act; and
(f) with respect to the other matters to be included in the Auditors 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:
(g) the company has adequate internal financial control system in place and theoperating effectiveness
i. the Company has disclosed the impact of pending litigations on its financialposition in its financial statements
ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts and
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
|For H. P. SHAH ASSOCIATES || |
|FRN No.109588W || |
| ||H. P. SHAH |
|PROPRIETOR ||Place : Vapi |
|CHARTERED ACCOUNTANTS ||Date : 30.05.2016 |
|MEMBERSHIP No. 39093 || |
On the basis of checks as considered appropriate and in terms of the information andexplanations given to us we report as under:
1. FIXED ASSETS:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As per the information and explanations given to us physical verification of fixedassets has been carried out and no material discrepancies were noticed on suchverification. In our opinion the frequency of verification is reasonable having regard tothe size of the Company and nature of its business.
(a) As per the information furnished the inventories have been physically verifiedduring the year by the management. In our opinion having regard to the nature andlocation of stocks the frequency of the physical verification is reasonable.
(b) In our opinion and according to the information and explanations given to usprocedures of physical verification of inventory followed by the management are reasonableand adequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory except for material lying onshop floor (work in process) and stock in trade. In our opinion discrepancies noticed onphysical verification of stocks were not material in relation to the operations of theCompany and the same have been properly dealt with in the books of account except stock intrade. We cannot comment whether any material discrepancies noticed on physicallyverification of inventory have been properly dealt with books of account as no records aremaintained by the company .
(a) As per the information furnished the Company has not granted any loans secured orunsecured to companies firms or other parties covered in the register maintained underSection 189 of the Companies Act.
(b) As the Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under section 189 of the Companies Act the Clause (iii)(a) and (iii)(b) are not applicable.
4. INTERNAL CONTROL SYSTEM:
In our opinion and according to the information and explanations given to us there areadequate internal control systems commensurate with the size of the Company and the natureof its business with regard to purchase of inventory and fixed assets and for the sale ofgoods and services. During the course of our audit no major weakness has been noticed inthe internal controls of the company.
5. PUBLIC DEPOSITS:
The Company has not accepted any deposits during the period from the public within themeaning of the provision of Section 73 to 76 or any other relevant provisions of theCompanies Act and rules made there under. No order has been passed by the Company LawBoard or National Company Law Tribunal or Reserve Bank of India or any court or otherTribunal.
6. COST RECORDS:
According to the information and explanations given to us the Central Government hasnot prescribed the maintenance of Cost Records Under Section 148 (1) of the Companies Act2003 in respect of the Companys products.
7. STATUTORY DUES:.
(a) According to the information and explanations given to us and the records examinedby us the Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund investor education and protection fundcontribution to employees state insurance income-tax sales-tax wealth-taxservice tax customs duty excise-duty cess and other statutory dues wherever applicableexcept the due tabulated as under which were outstanding as at 31st March 2016for a period of more than six months from the date they became payable .
|SR . NO. PARTICULARS ||AMOUNT (In millions) |
|1 Service Tax ||2.29 |
|2 Provident Fund Contribution ||1.93 |
|3 ESIC Contribution ||0.33 |
|4 VAT & CST ||0.44 |
|5 Excise Duty ||0.24 |
(b) According to the records of the Company no dues of sales tax income- taxcustoms wealth-tax service tax excise duty cess which have not been deposited onaccount of disputes except as mentioned below;
|Nature of Dues ||Disputed Liability (in millions) ||Unpaid Liability millions) ||disputed (in ||Authority where dispute is pending |
|Excise & Service Tax ||14.45 ||11.45 || ||High Court |
|Excise & Service Tax ||7.80 ||7.80 || ||Customs Excise & Service Tax Appellate tribunal |
|Excise & Service Tax ||7.78 ||7.52 || ||Commissioner (Appeal)Central Excise & Customs |
|Sales Tax ||14.94 ||14.94 || ||Deputy Commissioner commercial Tax office |
|Provident Fund ||12.28 ||8.59 || ||Employee's Provident Fund Appellate Tribunal |
(c) According to the information and explanations given to us no amount required to betransferred to investor education and protection fund in accordance with the relevantprovision of the Companies Act 2013 and rule made there under has been transferred tosuch fund.
8. ACCUMULATED LOSSES:
The accumulated losses of the Company are more than fifty percent of its net worth atthe end of the financial period. The Company has not incurred cash losses during thefinancial period covered by our audit and immediately preceding financial period.
9. REPAYMENT OF DUES OF FINANCIAL INSTITUTIONS:
Based on our Audit procedures and the information and explanation given by themanagement we are of the opinion that the Company has defaulted in repayment of dues toFinancial Institutions/ Alchemist Asset Reconstruction Company Ltd. / Bank as on31.03.2016.
Default in Payment
|Particulars Dues to Banks ||Period of Default ||Amount (RS. In millions) |
|Principal ||54 months ||2562.45 |
|Interest (not accounted/provided in Books of accounts ||55 months ||2630.98 |
| ||Total ||5193.43 |
According to the information and explanations given to us the Company has not givenany guarantee for loans taken by others from banks and financial institutions.
11. UTILIZATION OF TERM LOAN FUND:
The company has not obtained any term loan during the year covered by our report.
12. FRAUD ON OR BY THE COMPANY:
As per the information and explanations given to us no fraud on or by the Company hasbeen noticed or reported during this period.
|For H. P. SHAH ASSOCIATES || |
|FRN No.109588W || |
|H. ||P. SHAH |
|PROPRIETOR ||Place : Vapi |
|CHARTERED ACCOUNTANTS ||Date : 30.05.2016 |
|MEMBERSHIP No. 39093 || |