| We have audited the accompanying financial statements of ADINATH
TEXTILES LIMITED ("the Company"), which comprise the Balance Sheet
as at 31st March, 2015, the Statement of Profit and Loss, the Cash
Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these financial statements that give a
true and fair view of the financial position, financial performance
and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014. This responsibility also
includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the Company
and for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent and design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included
in the audit report under the provisions of the Act and the rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on whether the Company has in place an adequate
internal financial controls system over financial reporting and the
operating effectiveness of such controls. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company's
Directors, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
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
1. As required by the Companies (Audit Report) Order, 2015 ("the
order"), issued by central government of India in terms of
sub-section (11) of section 143 of the Companies act, 2013, we give in
Annexure a statement on the matters specified in paragraphs 3 and 4 of
the Order.
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 best of 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 the Company 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 Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
2015 from being appointed as a director in terms of Section 164(2) of
the Act.
f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial statements as referred to in Note No. 27 to the financial
statements.
ii. The Company did not have any long-term contracts including
derivative contracts on which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to
the investor Education and Protection Fund by the Company.
Annexure to the Auditors' Report
The Annexure referred to in our report to the members of Adinath
Textiles Limited ('the Company') for the year ended 31 March 2015.
We report that:
(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 physical verification of
its fixed assets by which fixed assets are verified in a phased manner
over a period of three years. In accordance with this programme,
certain fixed assets were verified during the year and no material
discrepancies were noticed on such verification. In our opinion, this
periodicity of physical verification is reasonable having regard to
the size of the Company and the nature of its assets.
(ii) (a) The inventory has been physically verified during the year,
by the management. In our opinion the frequency of verification is
reasonable.
(b) The procedure of physical verification of inventories followed by
the management, are reasonable & adequate in relation to the size of
the company & the nature of business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks &
the book records were not material.
(iii) (a) According to the information and explanations given to us
and on the basis of our examination of the books of account, the
Company has not granted any loans, secured or unsecured, to companies,
firms or other parties listed in the register maintained under Section
189 of the Companies Act, 2013. Consequently, the provisions of
clauses iii (b) and iii (c) of paragraph 3 of the order are not
applicable to the Company.
(iv) In our opinio n and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with
regard to purchase of fixed assets and sale of services. The
activities of the Company do not involve purchase of inventory and the
sale of goods. We have not observed any major weakness in the internal
control system during the course of the audit.
(v) In our opinion and according to the information and explanations
given to us, the company has not accepted deposit with the provisions
of sections 73 to 76 or any other relevant provisions of the Act. No
order has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any court or any other Tribunal.
Therefore, the provisions of clause (v) paragraph 3 of the Companies
(Auditor's Report) Order, 2015, are not applicable to the company.
(vi) As per information & explanation given by the management,
maintenance of cost records is not required to be maintained as
required as per Rule 3 of Companies (Cost Records and Audit) Amendment
Rules, 2014.
(vi i) (a) According to the information and explanations give n to us,
following are the undisputed amounts payable in respect of Statutory
dues including Provident Fund, Sales-tax, are in arrears as at 31
March 2015 for a period of more than six months from the date they
became payable.
Nature of Dues Amount in (Rs.)
Sales Tax 2277956
Entry Tax 237798
Interest on PF/ESI/ Sales Tax 1847720
(b) According to the information and explanations given to us, the
disputed statutory dues aggregating to Rs. 1500000/- that have not
been deposited on account of matters pending before the appellate
authorities in respect of custom duty and excise duty are as follows.
Sr. Forum where Nature Disputed
No. dispute is pending of Dues Amount (Rs.)
1. Commissioner Central Penalty 10,00,000**
Excise & Customs,
Chandigarh
** Note: However Rs. 500000/- has been deposited under protest.
(c) According to the information and explanations given to us, there
were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company in accordance with the
relevant provisions of the Companies Act, 1956 (1 of 1956) and rules
made there under.
(viii) In our opinion and according to the information and
explanations given to us, the Company does not have accumulated losses
at the end of the financial year and have not incurred cash losses in
the financial year and in the immediately preceding financial year.
(ix) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(x) Based on our examination of documents and records and according to
the information and explanations given to us, the Company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xi) The Company did not have any term loans outstanding during the
year.
(xii) According to the information and explanations given to us, no
material fraud on or by the company has been noticed or reported
during the course of our audit.
For DASS KHANNA & Co.
Chartered Accountants
Firm's Reg. No. 000402N
Place : Ludhiana CA RAKESH SONI
Date : 28-05-2015 Partner
Membership No. 083142 |