1. We have audited the attached Balance sheet of M/s. Kumar Wire Cloth
Manufacturing Company Limited as at 31st March'' 2012'' the Profit & Loss
Account & 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 the 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 materials misstatements. An audit
includes examining on a test basis'' evidence supporting the amounts and
disclosure in the financial statements. 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
3. As required by the Companies (Auditors Report) Order'' 2003'' issued
by the Central Government of India in terms of sub-section (4 a) of
section 227 of the Companies Act'' 1956'' and on the basis of the books
and records of the company as we considered appropriate and according
to the information and explanations given to us'' we enclose in the
Annexure a statement on the matters specified in paragraph 4 and 5 of
the said Order.
4. Further to our comments in the Annexure referred to above'' we
(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 took 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 and the Profit & Loss Account dealt by this
report are in agreement with the books of account;
(d) In our opinion'' the Balance Sheet and Profit & Loss Account dealt
by this report comply with the accounting standards referred to in
sub-section (30 of section 211 of the Companies Act'' 1956;
(e) On the basis of written representations received from the
directors'' as on 31 * March'' 2012 and taken on record by the Board of
Directors'' we report that none of the Directors is disqualified as on
31 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;
if) In our opinion'' and to the best of our information and according to
the explanations given to us'' the said accounts read together with
Significant Accounting Policies and Notes 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;
i. in the case Sheet'' of the stale of affairs of the
company as at 31 March 2012
ii. In case of the Profit & Loss Account'' of the Profit for the
year ended on that date and
iii. tn the case of cash flow statement of the cash flow for the year
ended on that date
ANNEXURE REFERRED TO IN THE PARAGRAPH 3 OF THE AUDITOR''S REPORT OF EVEN
MEMBERS OF M/S. KUMAR WIRE CLOTH MANUFACTURING COMPANY LIMITED ON THE
STATEMENTS FOR THE YEAR ENDED 31st MARCH'' 2012.
I. In respect of Fixed Assets :
(a) The company has maintained proper records showing full particulars''
including quantitative details and situation af fixed assets i
(fes) Tte management at reasonable intervals has physically verified
all the fixed assets but no material discrepancies were noticed.
(c) No substantial parts of fixed assets have been disposed off during
the year. The going concern concept is not affected.
II. In respect of inventory
(a) According to the information and explanations given to us the
inventories have been physically verified by the management at
(b) According to the information and explanations given to us the
procedure for physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and its nature of business.
(c) The company is maintaining proper records of inventory and as
explained to us there were no material discrepancies'' noticed on
physical verification of inventory as compared to the book records.
III. In respect of Loans:
(a) The company has not granted any loan to the company or any other
person'' covered in the register maintained under section 301 of the
(b) Since no Loan is given'' hence the question of interest'' repayment
and other terms does not arise.
(c) The Company has not taken any loan whether secured or unsecured
during the year from companies'' firm or other parties covered in the
register maintained 301 of the Companies Act'' 1956. Hence this clause
in not applicable.
(d) Since no Loan is given'' hence the question of interest'' repayment
and other terms does not arise.
IV. The Company has an adequate internal control procedure
commensurate with the size and nature of business of the company with
regard to purchase of materials'' fixed assets and for the sale of goods
V. (a) According to information and explanations given to us'' we are
of the opinion that contracts and arrangements need to be entered into
register in pursuance ui section 301. of the Act'' have been : o
(b) in our opinion and according io ibr_- information and explanation
given to us'' the transaction made ii - pursuance of contracts or
arrangements of any in the registered maintained under section 301 of
tht Companies Act'' 1956 and cvceding the value of five lakhs rupees in
respect of any party during the year have been made af prices which arc
reasonable having regard to prevaiiing market prices at the relevant
VI. The company has not accepted deposits contemplated under Sec.58A
of the Companies Act'' 1956 from the public.
VII. The company does not have any formal internal audit system''
however the control procedure instituted by the management ensure
reasonable internal checking of ‘*5 f’naricial transactions.
VIII. We have been informed that the maintenance of cost records has
not been prescribed by the Central Govt'' under Clause (d) of the
Sub-sec. 209 of the Companies Act'' 1956.
IX. In respect of statutory dues :
(a) According to information and explanations given to us the Company
is generally regular in depositing undisputed statutory dues as per the
scheme defined by BIFR including Provident Fund'' Investor education and
Protection Fund Employees State Insurance Income Tax'' Wealth Tax'' Sales
Tax'' Service Tax'' Custom Duty'' Excise duty'' Cess with the appropriate
authorities. However as per the Draft Rehabiliation scheme sanctioned
by BIFR vide its order dated February 25'' 2010'' following are the
undisputed statutory dues :
(b) Particulars Amount (Rs.)
Sales Tax 3564335/-
Interest on Sales Tax 5906618/-
Income Tax 1586988/-
Interest on Income Tax 5619173/- .
(c) According to the information and explanations given to us'' there
are no disputed dues in respect of Custom Duty'' Sales Tax'' Excise duty''
Wealth Tax. The details of dues in relation to Incomei Tax'' which have
not been deposited as on 31a March 2012 on account of dispute is given
Statute Nature of
Dues Forum where Period to
which the Amount Involved
of Income Tax
X. The Company has not incurred cash loss in the financial year but
incurred cash loss fn the previous financial year.
XI. According to the information and explanations given to us'' during
the year the company has not defaulted in repayment of dues to the
banks or financial institutions.
XII. 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 4 (xiii) of
the Companies (Auditor''s Report) Order 2003 are not applicable to the
XIV. The company is not dealing trading in shares'' securities''
debentures and other investments. Therefore the provisions of clause 4
(xiv) of the Companies (Auditor''s Report) Order 2003 are not applicable
to the Company.
XV. In our opinion and according to the information and explanations
given to us'' the company has not takin any term loan during the year.
XVI. The Company has given the guarantee of'' 30 Lakhs for loan taken by
Vishal Chairs Limited.
XVII. According to information and explanations given to us and on an
overall examination of the balance sheet of the Company the funds
raised on short term basis'' prima facie have not been used for long
XVIII. The company has not made any preferential allotment of shares
to parties and companies covered in the register maintained u/s 301 of
the Act. However the company has received Rs. 150 Lacs as share
application as per the direction of BIRF. The allotment in respect of
said share application money is pending.
XIX. The Company has not issued any debentures.
XX. The Company has not raised any money through by way of public
issue during the year.
XXI. As informed to us the fraud on or by the Company has not been
noticed or reported during the year.
For AMAR BAFNA & ASSOCIATES
M No. 048639
Date: May 30'' 2012
Source : Dion Global Solutions Limited
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