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S.Kumars Nationwide Ltd.

BSE: 514304 Sector: Industrials
NSE: SKUMARSYNF ISIN Code: INE772A01016
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S.Kumars Nationwide Ltd. (SKUMARSYNF) - Auditors Report

Company auditors report

S. KUMARS NATIONWIDE LIMITED ANNUAL REPORT 2011-2012 AUDITORS' REPORT To The Members of S. Kumars Nationwide Limited 1. We have audited the attached Balance Sheet of S. Kumars Nationwide Limited ('the Company') as at 31st March, 2012 and the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor's Report) Order, 2003, (as amended), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the paragraph 3 above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; iii. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; iv. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; v. Pursuant to Circular No. 8/2002 dated March 22, 2002 issued by the Department of Company Affairs, Ministry of Law, Justice & Company Affairs, Government of India, directors nominated by the Public Financial Institutions/Banks/Central & State Government are not liable to be disqualified for appointment as directors under the provisions of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956. In respect of other directors, on the basis of the written representations received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; vi. Without qualifying our opinion, we draw attention to Note No.27 regarding the change in accounting policy with respect to amortization of recompense expense amounting to Rs. 14,310.31 lacs as on 1st April, 2011 pertaining to earlier years which has been adjusted against accumulated surplus under the head 'Reserves & Surplus.' vii. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with notes there on, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012 ; b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date. For Haribhakti & Co. Chartered Accountants Firm Registration No.103523W Rakesh Rathi Place: Mumbai Partner Date : 30th May, 2012 Membership No.45228 ANNEXURE TO AUDITORS' REPORT [Referred to in paragraph 3 of the Auditors' Report of even date to the members of S. Kumars Nationwide Limited on the financial statements for the year ended 31st March, 2012] (i)(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has a regular programme of verification of fixed assets wherein all fixed assets are verified once in a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification. (c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year. (ii)(a) The inventories (excluding stocks with third parties) have been physically verified by the management during the year. In respect of inventories lying with third parties, these have substantially been confirmed by them along with certification of physical verification of such inventories from an independent CA firm. In our opinion, the frequency of verification is reasonable. (b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year. (iii)(a) The Company has granted loan to a company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year end balance of loans granted to such company was Rs. 41.35 lacs. (b) In our opinion and according to the information and explanations given to us, the terms and conditions for such interest free loans are not, prima facie, prejudicial to the interest of the Company and the said loan is repayable on demand. Accordingly, the provision stated in paragraph 4(iii)(c) of the order is not applicable. (d) There is no overdue amount of loans granted to the Company listed in the register maintained under Section 301 of the Companies Act, 1956. (e) The Company has taken loans or advances in the nature of loans amounting to Rs. 8,921.05 lacs during the year from two companies listed in the register maintained under Section 301 of the Act. The maximum amount involved during the year was Rs. 66,702 lacs (including interest bearing loan amounting to Rs. 27,500 lacs) and the year ended balances of all loans or advances in the nature of loans taken from the said companies were Rs. 31,231.05 lacs. (f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company. (g) In respect of the aforesaid loans, the Company is regular in repaying the principal amounts as stipulated and has been regular in payment of interest. (iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct any major weaknesses in internal control system of the Company. (v)(a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under Section 301 have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time. (vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under. (vii) In our opinion the Company has an internal audit system commensurate with the size and nature of its business. (viii) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. (ix)(a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess have not been regularly deposited with the appropriate authorities. According to the information and explanations given to us, such undisputed dues of the Company which were outstanding, at the year end for a period of more than six months from the date they became payable aggregate Rs.4,917.26 lacs. (b) According to the records of the Company, the statutory dues of Rs.546.95 lacs that have not been deposited on account of disputes pending before appropriate authorities are as under: Name of the Nature of Amount Period to which Forum where Statute dues (Rs. in the amount dispute is lacs) relates pending Income Tax Income Tax 29.75 FY 2008-09 CIT (A) Act, 1961 Income Tax TDS 517.20 FY 2006-07, 07-08 CIT (A) (TDS) Act, 1961 and 08-09 (x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year. (xi) The Company has defaulted in repayment of dues to banks and financial institution. As at balance sheet date, the dues include principal aggregating Rs.7,033.54 lacs and interest aggregating Rs. 3,340.29 lacs which are for a period ranging from one to six months, out of which Rs.5,431.10 lacs have since been repaid. (xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company. (xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company. (xv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company. (xvi) In our opinion, the term loans have been applied for the purpose for which the loans were raised. (xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment. (xviii) According to the information and explanations given to us, the Company has made preferential allotment of shares to a company covered in the register maintained under section 301 of the Act. In our opinion, the price, at which shares have been issued, is not prejudicial to the interest of the Company. (xix) According to the information and explanations given to us, no debentures have been issued by the Company during the year. (xx) The Company has not raised money by way of public issue during the year. (xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management. For Haribhakti & Co. Chartered Accountants Firm Registration No.103523W Rakesh Rathi Place: Mumbai Partner Date : 30th May, 2012 Membership No.45228