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Bombay Rayon Fashions
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« Mar 13
Auditor's Report (Bombay Rayon Fashions) Year End : Mar '14
We have audited the accompanying financial statements of Bombay Rayon
 Fashions Limited, which comprise the Balance Sheet as at March 31,
 2014, and 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
 
 Management is responsible for 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 Standards referred to in sub-section (3C) of section 211
 of the Companies Act, 1956 (the act) read with the general circular
 15/2013 dated 13th September 2013 of the ministry of corporate affairs
 in respect of section 133 of the Companies Act, 2013. This
 responsibility includes the design, implementation and maintenance of
 internal control 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 conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. 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 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 control relevant to the Company''s preparation and
 fair presentation of the financial statements in order to design audit
 procedures that are appropriate in the circumstances, but not for the
 purpose of expressing an opinion on the effectiveness of the entity''s
 internal control. An audit also includes evaluating the appropriateness
 of accounting policies used and the reasonableness of the accounting
 estimates made by management, 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.
 
 Report on Other Legal and Regulatory Requirements
 
 As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Act, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 As required by section 227(3) of the Act, we report that:
 
 a.  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;
 
 b.  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;
 
 c.  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
 
 d.  In our opinion, the Balance Sheet, Statement of Profit and Loss,
 and Cash Flow Statement comply with the Accounting Standards referred
 to in sub-section (3c) of section 211 of The Companies Act, 1956 read
 with the general circular 15/2013 dated 13th September 2013 of the
 ministry of corporate affairs in respect of section 133 o f the
 Companies Act, 2013.
 
 e.  On the basis of written representations received from the directors
 as on March 31, 2014, and taken on record by the Board of Directors,
 none of the directors is disqualified as on March 31, 2014, from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of the Companies Act, 1956.
 
 Attention is invited to Note No. 27 regarding an amount of v 258.36
 crores written off as valuation difference post an extensive exercise
 of review of inventories undertaken by the management to put it at
 present realizable values as an extra-ordinary item.
 
 Attention is invited to Note No 28 regarding accounting for loss as
 foreign exchange fluctuation amounting to v 90.92 crores on outstanding
 foreign exchange working capital limits due to exchange rate difference
 as an extra –ordinary item.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the 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 March 31, 2014
 
 (b) In the case of 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.
 
 Annexure to the Auditor''s Report of Even Date
 (Referred to in paragraph 1 thereof)
 
 1.  In respect of fixed assets:
 
 a) The company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 b) The fixed assets have been physically verified by the management at
 reasonable intervals during the year. We are informed that no material
 discrepancies were noticed by the management on such verification.
 
 c) Based on our scrutiny of the records of the company and the
 information & explanation received by us, we report that there were
 sale of fixed assets during the year but the fixed assets disposed off
 did not constitute a substantial part of the fixed assets of the
 company.
 
 2.  In respect of inventories
 
 a) As explained to us physical verification of inventories has been
 conducted during the year by the management at reasonable intervals.
 
 b) In our opinion, the procedures of physical verification of
 inventories followed by the management are reasonable and adequate in
 relation to the size of the company and nature of its business.
 
 c) In our opinion and according to the information and explanation
 given to us, the Company is maintaining proper records of its
 inventories. During the year an extensive exercise of review of
 inventories undertaken to put it at present realizable values and v
 258.36 crores was written off as valuation difference under
 extra-ordinary item.
 
 3.  In respect of loans, unsecured, granted and taken.
 
 a) The Company has granted interest free advances to four subsidiary
 companies covered in the register maintained u/s 301 of the Companies
 Act, 1956, the maximum amount outstanding at any time during the year
 is v 547.28 Crores and the year balance is v 542.67 Crores.
 
 b) In our opinion and according to the information and explanations
 given to us, other terms and conditions are not prima facie prejudicial
 to the interest of the Company.
 
 c) In respect of the said advances amounting to v 210 Crores is
 repayable within the period of one year and remaining over a period of
 5 to 7 years.
 
 d) In respect of the said loan, there are no overdue amounts.
 
 e) During the year the company has taken loan from one party covered in
 the register maintained u/s 301 of the Companies Act, 1956. The maximum
 amount outstanding at any time during the year and year end balance is
 v 89.19 Crores.
 
 f) The Company has taken interest free loan and the other term and
 condition are prima facie not prejudicial to the interest of the
 Company.
 
 g) There is no overdrawn amount of loan taken.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is adequate internal control system 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 and
 fixed assets. Further, on the basis of our examination of the books and
 records of the company, carried out in accordance with the auditing
 standards generally accepted in India and according to the information
 and explanations given to us, we have neither come across nor have we
 been informed of any continuing failure to correct weaknesses in the
 aforesaid internal control system.
 
 5.  In respect of the contracts or arrangements referred to in Section
 301 of the Companies Act, 1956:
 
 a) In our opinion and according to the information and explanations
 given to us the particulars of contracts or arrangements referred to in
 section 301 of the Act have been entered into the register required to
 be maintained under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Act and exceeding the value of Rupees five lakhs in respect of any
 party during the year, have been made at prices, which are prima facie
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 6.  According to the information and explanations given to us, the
 Company has not accepted any deposits from public.
 
 7.  In our opinion the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  As per the information and explanations provided to us, we are of
 the opinion that in pursuant to prescribed rules by the central
 government, the company has maintained cost records u/s. 209(1) (d) of
 the Companies Act, 1956 however we have not done a detailed examination
 of the same.
 
 9.  In respect of statutory dues:
 
 a) Undisputed statutory dues including provident fund, employee state
 insurance income tax, sales tax, service tax, custom duty, excise duty,
 cess and other material statutory dues have not been regular deposited
 with the appropriate authorities.
 
 b) Accordingly to the information and explanation given undisputed
 amounts payable in respect of TDS, TCS, Provident Fund, Employees State
 Insurance, Service Tax and other statutory dues applicable to it which
 were outstanding as at the last day of the financial year for a period
 of more than six months from the date they became payable is as under:-
 
 Sr. No.  Name of Head                        Amount(v In crores )
 
 1        Tax Deducted at Source                   2.43
 
 2        Provident Fund                           7.94
 
 3        Professional Tax                         0.53
 
 4        Employee State Insurance 
          Corporation                              0.55
 
 5        Service Tax                              1.14
 
 6        Property tax                             1.01
 
          TOTAL                                   13.60
 
 c) According to the records of the company, there are no disputed dues
 of Income Tax, sales tax, customs duty, wealth tax, service tax and
 excise duty / cess except as under:
 
 Name of the Statute Amount (Rs. In Crores) Period for which it Forum where 
                                                              dispute is
                                                relates        pending
 
 Income Tax Act, 1961    0.10                A Y 2008-09      CIT (A)-41, 
                                                              Mumbai
 
 Income Tax Act, 1961    0.62                A Y 2009-10      ITAT Mumbai
 
 Income Tax Act, 1961    3.15                A Y 2010-11      ITAT Mumbai
 
 Income Tax Act, 1961    0.91                A Y 2010-11      CIT (A)-41, 
                                                              Mumbai
 
 
 10.  The company has no accumulated losses at the end of the financial
 year. The company has incurred cash loss of v 344.02 crores (after
 considering Extra ordinary items of v 349.28 crores) in the current
 financial. However, it has not incurred cash losses in the immediately
 preceding financial year covered by our audit.
 
 11.  In our opinion and according to the information and explanations
 given to us, there have been delay in repayment of dues to financial
 institution and banks during the year, which have been subsequently
 rescheduled by way of Corporate Debt Restructuring (CDR) Scheme, and
 accordingly, the company could be said to have not defaulted in
 repayment of principal and interest to CDR lenders as on the Balance
 Sheet date as per terms of CDR Scheme.
 
 12.  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 or other securities.
 
 13.  In our opinion, and to the best of our information and according
 to the explanations provided by the management, we are of the opinion
 that the company is neither a Chit Fund nor a nidhi/mutual benefit
 society. Hence, in our opinion, the requirements of para 4 (xiii) of
 the Order do not apply to the company.
 
 14.  As per records of the company and information and explanations
 given to us by the management, company is not dealing or trading in
 shares, securities, debentures and other investments.
 
 15.  According to the information and explanations given to us the
 company has not given any guarantee for loans taken by others from
 banks or financial institutions.
 
 16.  According to the records of the Company, the Company has applied
 the term loans for the purposes of which it was taken during the year.
 
 17.  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 has been used for long-term
 investment by the company.
 
 18.  According to the records of the company and the information
 provided by the management, the company has not made any preferential
 allotment of shares to parties and companies covered in the register
 maintained under section 301 of the Act.
 
 19.  During the period covered by audit report the company has not
 issued any debentures.
 
 20.  During the year the company has not raised any money by way of
 public issue.
 
 21.  Based upon the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the Company has been noticed or reported during the course of our
 audit.
 
 
                                      For V. K. BESWAL & ASSOCIATES
                                        CHARTERED ACCOUNTANTS
                                             FIRM REGN NO 101083W
 
                                               CA K.V. BESWAL   
                                                     PARTNER 
 Place : Mumbai                             Membership Number: 131054
 Dated : 5.06.2014                           Firm Regn. No.: 101083W
Source : Dion Global Solutions Limited
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