| We have audited the accompanying financial statements of Simplex Mills
Company Limited ('the Company'), which comprise the Balance Sheet as at
31st March, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of 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 and presentation 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 thereunder.
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,
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2015;
b) in the case of the Statement of Profit and Loss, of the Loss for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the
financial statements:
1. During the year, the Company has accumulated losses and its net
worth has been fully eroded. This situation, along with other matters
set forth in Note no. 26, indicate the existence of an uncertainty that
may cast doubt about the Company's ability to continue as a going
concern. However, the financial statements of the Company have been
prepared on a going concern basis for the reason stated in the said
note.
Our opinion is not modified in respect of the aforesaid matter.
Report on Other Legal and Regulatory Requirements
2. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in Paragraphs 4 and 5 of the Order.
3. 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; and
(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 position in its financial statements - refer note 24 to the
financial statements;
ii. The Company did not have any long- term contracts including
derivative contracts for 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 Independent Auditors' Report
The Annexure referred to in our report to the members of the Company on
the financial statements for the year ended 31st 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. According to information and explanation given to us, during the
year, the management conducted physical verification of certain fixed
assets in accordance with its policy of physical verification in a
phased manner. In our opinion, such frequency is reasonable having
regard to the size of the Company and the nature of its fixed assets.
As explained to us, the discrepancies noticed on physical verification
as compared to book records maintained, were not material and have been
properly dealt with in the books of account.
ii. a. As explained to us,management conducted physical verification of
stocks of raw materials, finished goods and stores and spares at
reasonable intervals during the year, as also as at the balance sheet
date.
b. In our opinion and according to the information and explanations
given to us, the procedures followed by the management for physical
verification of inventory during the year, are reasonable and adequate
in relation to the size of the Company and nature of its business.
c. On the basis of our examination of inventory records, we are of the
opinion that the Company has maintained proper records of inventory.
Discrepancies noticed on physical verification of inventory as compared
to the book records were not material and have been properly dealt with
in the books of account.
iii. The Company has not granted loans to any parties covered in the
register maintained under section 189 of the Companies Act, 2013 ('the
Act'). Accordingly, paragraph 3(iii)(a&b) of the Order is not
applicable to the Company in respect of receipt of the principal amount
and interest.
iv. In our opinion and according to information and explanation given
to us, during the year under report, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business for the purchase of inventory and fixed assets,
and for the sale of goods. Further, on the basis of our examination of
books and records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures.
v. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public,
to which the directives issued by the Reserve Bank of India and the
provisions of Section 73 to 76 or any other relevant provisions of the
Companies Act, 2013 or the rules framed there under apply.
vi. As per information and explanation given to us, by the management,
the provisions for maintenance of the cost records under Section 148(1)
of the Act are not applicable to the Company as there is no
manufacturing activity during the year under review.
vii. a. According to the information and explanations given to us, the
Company was regular during the year in depositing undisputed statutory
dues including Provident Fund, Income tax, Sales tax, Customs duty and
Excise duty with the appropriate authorities. According to the
information and explanation given to us, as at the balance sheet date,
the Company has no undisputed statutory dues of a material nature which
remained unpaid for a period exceeding six months from the date on
which they were payable.
b. According to the information and explanation given to us, as at the
balance sheet date, the Company has not deposited dues of excise duty
aggregating to Rs. 3,03,04,158/- on account of the following disputes
pending before authorities:
Period to which Pending before (Rs. )
dues relate
1984-85 and Assistant Commissioner 49,13,695
1995 to 1996
1981-84,1981-95, CESTAT 1,52,86,878
and 2004
1981 to 1984 High Court 59,53,030
2002-2003 Supreme Court 41,50,555
Total 3,03,04,158
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 in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules there
under.
viii. The accumulated losses of the Company have exceeded fifty
percent of its net worth as at the end of the year covered by our
audit. The Company has incurred cash losses during the year as well as
in the immediately preceding year.
ix. According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to financial
institutions, banks or debenture holders during the year.
x. According to the information and the explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions as at the Balance sheet date.
xi. According to the information and the explanations given to us, the
Company has not taken any term loan during the year.
xii. To the best of our knowledge and belief and according to the
information and explanations given to us, there have been no cases of
fraud on or by the Company noticed or reported during the year under
report.
For Vijay Rungta & Co.
Chartered Accountants
(Firm Registration No.111427W)
Ajay J. Rungta
Partner
Mumbai, 27th May, 2015 Membership No.F- 40333
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