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« Dec 12
Auditor's Report (Nakoda) Year End : Dec '13
1. We have audited the accompanying financial statements of NAKODA
 LIMITED which comprises the Balance Sheet as at 31st DECEMBER, 2013 and
 the statement of Profit & loss for the year ended, and a summary of
 significant accounting policies and other explanatory information,
 which we have signed under reference to this report.
 
 Management''s Responsibility for the Financial Statements:
 
 2.  The company''s Management is responsible for the preparation of
 these financial statements that give a true and fair view of the
 financial position, financial performance of the company in accordance
 with the Accounting Standard referred to in sub-section (3C) of section
 211 of ''the companies Act 1956'' of India. 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 free from material misstatement, whether
 due to fraud and error.
 
 Auditors'' Responsibility
 
 3.  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.
 
 4.  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. 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.
 
 5.  We believe that the audit evidence we have obtained is sufficient
 and appropriate to provide a basis for our audit opinion.
 
 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 December 31,2013;
 
 (b) in the case of the Profit and Loss Account, PROFIT for the year
 ended on that date; and Report on Other legal and Regulatory
 Requirements:
 
 1.  As required by the Companies (Auditor''s Report) order 2003, as
 amended by ''the Companies (Auditor''s Report) (Amendment) order 2004''
 issued by the Central Government of India in terms of sub section (4A)
 of section 227 of the Act and on the basis of such checks of the books
 and records of the Company as we considered appropriate and according
 to the information and explanation given to us, we give in that
 Annexure a statement on the matters specified in paragraph 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 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 appears from our examination of the
 books;
 
 (c) the Balance Sheet and the Profit and Loss Account dealt with by
 this report are in agreement with the books of account;
 
 (d) in our opinion, the Profit and Loss Account and the Balance Sheet
 comply with the Accounting Standards referred to in sub- section (3C)
 of Section 211 of the Companies Act, 1956;
 
 (e) on the basis of the written representations received from the
 directors as on 31st December, 2013 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st December, 2013 from being appointed as a director in terms of
 clause (g) of sub-section (1) of Section 274 of the Companies Act,
 1956.
 
 1.  (a) The company has maintained proper records showing full
 particulars including quantative details and situation of fixed assets
 on the basis of available information.
 
 (b) As explained to us, the fixed assets have been physically verified
 by the management during the year in phased periodical manner, which in
 our opinion is reasonable, having regard to the size of company and
 nature of its assets. No material discrepancies were noticed on such
 physical verification.
 
 (c) In our opinion, the company has not disposed off a substantial part
 of its fixed assets during the year and the going concern status of the
 Company is not affected.
 
 2.  (a) As explained to us, inventories have been physically verified
 during the year by the management at regular intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, 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) The company has maintained proper records of inventories. As
 explained to us there were no material discrepancies noticed on
 physical verification of inventories as compared to the book records.
 
 3.  The company has neither granted nor taken any loans secured or
 unsecured to/from the companies/firms or parties covered in the
 register maintained Under Section 301 of the companies act 1956 except
 below.
 
 (a)
 
 Sr  Name                                    O/s 
                                            (31/12/2013)  Remarks
 No
 
 1   Nakoda Financial Services Pvt Limited    12233500    Loan Given
 
 2   Nakoda Green Power Ltd                    8419219    Loan Given
 
 3   Nakoda Holdings Mauritius Ltd             1618917    Loan Given
 
 4   Indo Korean Petrochem Ltd.              844482715    Loan Given
 
 (b) The loan granted to the parties covered in the register maintained
 U/s 301 of the Companies Act 1956, are interest free loan.
 
 (c) Loan granted to the parties/Companies (As Covered under Sec 301)
 stated herein below are not revenue generating companies hence the
 repayment of loan in this scenario is doubtful.
 
 a.  Nakoda Financial Services Pvt Ltd.
 
 b.  Nakoda Green Power Limited.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business for the purchase of inventory, fixed assets and also for the
 sale of goods. During the course of our audit, we have not observed any
 major weaknesses in internal controls.
 
 5.  (a) According to the information and explanations given to us, the
 particulars of contracts or arrangements referred to in Section 301 of
 the Companies Act, 1956 that needed to be entered in the Register
 maintained under the said Section have been so entered.
 
 (b) In our opinion and according to the information and explanations
 made in pursuance of such contracts or arrangements and exceeding the
 value of Rupees Five Lakhs in respect of any party during the year have
 been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time.
 
 6.  The company has not accepted any deposit from the public.
 
 7.  In our opinion, the internal audit system of the company is
 commensurate with the size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209 (1) (d) of the Companies
 Act, 1956 and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained. We have not,
 however, made a detailed examination of the said records with a view to
 determine whether they are accurate or complete.
 
 9.  (a) According to the records of the company undisputed statutory
 dues including Provident Fund, Investor Education and Protection Fund,
 Income Tax, Sales Tax, Excise and Custom, Wealth Tax, Estate Duty have
 been generally regularly deposited with the appropriate authorities.
 
 (b) According to the information and explanation given to us, no
 undisputed amounts payable in respect of the aforesaid dues were
 outstanding as at 31st December 2013 for the period of more than six
 months for the date of becoming payable.
 
 (c) According to records of the company, following disputed statutory
 dues have not been deposited with appropriate authorities.
 
                                                         (Rs. In Lacs)
 
 Sr.
 No  Name of Statute    Nature of 
                        the dues      Forum where dispute
                                      is pending                Amount
 
 1   Central Excise 
     Act 1944           Excise Duty   CEGATE and Commissioner 
                                      of Excise                 24.18
 
 10.  The company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current and immediately
 preceding financial year.
 
 11.  Based on our audit procedures it is observed that there has been
 constant delays in payment of installment and interest of Term Loan ,
 Corporate Loan and Working capital Interest during the year . At the
 end of the year i.e as on 31/12/2013, such payments of Rs 24.62 Crore
 had remained outstanding.
 
 12.  According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 13.  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 (as amended) are not
 applicable to the Company.
 
 14.  In respect of dealing/trading in securities, in our opinion and
 according to the information and explanations given to us, proper
 records have been maintained of the transactions and contracts and
 timely entries have been made therein. The securities have been held by
 the Company in its own name.
 
 15.  According to the information and explanations given to us, the
 company has given guarantees for loans taken by others from bank or
 financial institutions and we are of the opinion that the terms and
 conditions thereof are not prima facie prejudicial to the interest of
 the Company.
 
 16.  According to information and explanations given to us and based on
 the documents and records produced to us, the company has applied the
 term loans for the purpose for which the loan were obtained.
 
 17.  According to the information and explanations given to us and an
 overall examination of the Balance Sheet and Cash Flow Statement of the
 company, we report that no funds raised on short-term basis have been
 used for long-term investment.
 
 18.  The company has not made preferential allotment of shares during
 the year to parties or companies covered in the register maintained
 under section 301 of the Companies Act, 1956
 
 19.  The company has not issued any debenture.
 
 20.  The company has raised Rs.37.30 Crore through promoter''s Group of
 Company''s and strategic investors.
 
 21.  Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no material fraud on or by the Company has been noticed or
 reported during the course of our audit except the proceeds of GDR
 issue made by the Company amounting to USD 24,250,000/- deposited in
 EURAM BANK, Austria are fraudulently adjusted by the Bank against the
 third party borrowings. We received various documentation raised by the
 company against the bank and explanation given by the management that
 the company made efforts to settle the issue.
 
                                          For N. M. SINGAPURI & CO.
 
                                             Chartered Accountants
 
                                                    (N.M.SINGAPURI)
 
                                                           Partner
 
 Place : Surat                                Membership No. 11601
 
 Date : 01.03.2014                        Registration No. 110264W
Source : Dion Global Solutions Limited
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