We have audited the accompanying financial statements of Comfort Intech
Limited (the Company), which comprise the Balance Sheet as at March
31, 2014, 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 Principles generally accepted in India including
Accounting Standards referred to in Section 211(3C) of the Companies
Act, 1956 (the Act). 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.
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 misstatements.
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 judgement, 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. 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
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
1. Contravention of Accounting Standard 15 on Accounting for
retirement benefits of employees.
As stated in Note 1 (I) of Significant Accounting Policies followed by
the company the Company is not making any provision for Gratuity and
leave encashment as the same is accounted for on payment basis. This is
in Contravention of Accounting Standard 15 on Accounting for retirement
benefits of employees.
2. In respect of advance of Rs. 3,17,98,134/- outstanding as on
31/03/2014 (advance given to Mr Amit Dahanukar ) is shown as capital
advance for purchase of property. In absence of proper documents for
the advance given, in our opinion this amount should be treated as loss
asset and 100% provision for loss asset amounting to Rs.3,17,98,134/-
should be made instead of 10% made by the company.
3. Amount outstanding as on 31/03/2014 with M/s Pawankumar Sanwarmal
Rs.42,02,83,250/- is classified by the company as substandard Asset.
Out of this amount interest cheque of Rs.2,09,87,500/- appears in
reconciliation as on date. This is in contradiction to Income
Recognition and Asset Classification Norms prescribed by RBI in respect
of NBFCs hence this amount of Rs.2,09,87,500/- should be reversed.
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion Paragraph, 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 March 31, 2014;
b) in the case of the Profit and Loss Account, 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 Matter
We draw your attention to :
There was a violation of RBI Guidelines on exposure norms in the case
of Shri. Pawan Kumar Sawarmal where the exposure was
Rs.42,02,83,250/-as on 31st Mach 2014. The owned fund of the company as
on 31st March 2013 stood at Rs.90.34 crore.
Therefore the single and group exposure limits of 15% and 25% worked
out to Rs.13.55 crore and Rs.22.59 crore.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of Section
227(4A) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. 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
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
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) Except for the effects of the matters described in the Basis for
Qualified Opinion Paragraph, in our opinion, the Balance Sheet, the
Statement of Profit and Loss, and the Cash Flow Statement comply with
the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
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 of Section 274(1)g of the
Companies Act, 1956.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
Annexure to Independent Auditor''s Report
Referred to in paragraph 1 under the heading of Report on other Legal
and Regulatory Requirements of our report of even date.
1. In respect of its Fixed Assets
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
(b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, no fixed asset has been disposed off during the year and
going concern status of the company is not affected.
2. In respect of its inventories:
(a) the stock in trade of shares and securities held in the physical
format has been physically verified and those held in dematerialized
format have been verified from the relevant statements received from
the depositories during the year, by the management. Also the stock of
properties acquired in satisfaction of claims have been physically
verified during the year by the management.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of shares,
securities and stock of properties acquired in satisfaction of claims
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion and on the basis of our examination of the records,
the Company is generally maintaining proper records of its inventories.
No material discrepancy was noticed on physical verification of shares,
securities and stock of properties acquired in satisfaction of claims
by the management as compared to book records.
3. (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 granted interest free unsecured loan to one party 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
such loan aggregate to Rs 1,50,00,000/- and Rs 1,50,00,000/-
(b) Except for the fact that this loan is interest free , in our
opinion and according to the information and explanations given to us,
the other terms and conditions of loan given are not prima facie
prejudicial to the interest of the Company.
(c) No stipulations for repayments have been prescribed and as such no
comments regarding receipt of principal amount are being made.
(d) As no stipulations for repayments have been prescribed, the clause
regarding overdue amount is not applicable.
(e) According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
taken loans from companies, firms or other parties listed in the
register maintained under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventories (share and securities) &
fixed assets and payment for expenses & for sale of Shares and
securities. During the course of our audit, no major instance of
continuing failure to correct any weaknesses in the internal controls
has been noticed.
5. a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, the
particulars of contracts or arrangements referred to in section 301 of
the Act have been entered in the register required to be maintained
under that section.
b) In our opinion and according to the information and explanations
given to us, these contracts or arrangement have been made at prices
which are reasonable having regard to the prevailing market prices at
the relevant time, where no similar transactions were taken place
during the year with other parties, we are unable to comment whether
the same is on prevailing market prices or not.
6. The Company has not accepted any deposits from the public covered
under section 58A and 58AA of the Companies Act, 1956.
7. As per information & explanations given by the management, the
Company has an internal audit system commensurate with its size and the
nature of its business.
8. As per information & explanation given by the management,
maintenance of cost records has not been prescribed by the Central
Government under clause (d) of sub-section (1) of section 209 of the
9. (a) According to the records of the company, undisputed statutory
dues including Income-tax, Service Tax, cess to the extent applicable
and any other statutory dues have generally been regularly deposited
with the appropriate authorities. According to the information and
explanations given to us there were no outstanding statutory dues as on
31st of March, 2014 for a period of more than six months from the date
they became payable.
(b) According to the information and explanations given to us, there
are no amounts payable in respect of income tax, wealth tax, service
tax, which have not been deposited on account of any disputes.
10. The Company does not have any accumulated loss and has not
incurred cash loss during the financial year covered by our audit and
in the immediately preceding financial year.
11. 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 bank.
12. According to the information and explanations given to us, the
Company has maintained adequate documents and records in respect of
loans and advances granted on the basis of security by way of pledge of
shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi /mutual benefit fund /
society. Therefore, the provision of this clause of the Companies
(Auditor''s Report) Order, 2003 (as amended) is not applicable to the
14. According to information and explanations given to us, the Company
is trading in Shares, Mutual funds & other Investments. Proper records
& timely entries have been maintained in this regard & further
investments specified are held in its own name.
15. According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.
16. The company has not obtained any term loan during the year.
Accordingly this clause is not applicable to the company.
17. Based on the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company as at 31st
March, 2014, we report that no funds raised on short-term basis have
been used for long-term investment by the Company.
18. Based on the audit procedures performed and the information and
explanations given to us by the management, we report that the Company
has not made any preferential allotment of shares during the year.
19. The Company has no outstanding debentures during the period under
20. The Company has not raised any money by public issue during the
21. Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud on or by the Company
has been noticed or reported during the year, nor have we been informed
of such case by the management.
For Bansal Bansal and Co.
Membership No. :107624
Date: 30th May, 2014