Nakoda | Auditor's Report > Textiles - Processing > Auditor's Report from Nakoda - BSE: 521030, NSE: NAKODA
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Auditor's Report (Nakoda) Year End : Mar '15
We have audited the accompanying standalone financial statements of
 Nakoda Limited (''the company''), which comprise the balance sheet as at
 31st March 2015, the statement of profit and loss and the cash flow
 statement for the period of Fifteen month (i.e 01-01-2014 to the year
 ended on 31st March 2015) (15 Months), and a summary if significant
 accounting policies and other explanatory information.
 Management''s Responsibility for the Financial Statements:
 The company''s Board of Directors is responsible for the maters stated
 in Section 134(5) of the Companies Act 2013(''the Act'') with respect to
 the preparation and presentation of these standalone financial
 statements that give a true and fair view of the financial position,
 financial performance and cash flow 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 Campanies(Accounts) Rule, 2014. This responsibility also
 includes maintenance of adequate accounting records in accordance with
 the provision 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 misstatements, whether due to fraud or
 Auditor''s Responsibility
 Our responsibility is to express an opinion on theses 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 there under.
 We conducted our audit in accordance with the Standard on Auditing
 specified under 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 disclosuresS in the financial statements. The
 procedure selected depends on auditor''s judgment, Including the
 assessment of the risk of material misstatement of the financial
 statements whether due to fraud or error. In making those risk
 assessments, the auditor considers interna! financial control relevant
 to the company''s preparation of the financial statements that give 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 include 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.
 in our opinion and to the best of our information and accounting to the
 explanation given to us, the aforesaid standalone financial statement
 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 of the state of affairs of the Company as
 at 31 St March 2015 and its profit and its cash flows for the year
 ended on that date except the company has not provided depreciation
 provision on fixed assets in accordance with the rates specified in
 schedule 11 of Companies Act 2013 but calculated on straight line
 method at fate prescribed in Schedule XIV of Companies Act, 1956 and
 hence the loss may be understated or overstated to that extent in the
 financial statements.
 Report on other Legal and Regulatory Requirements:-
 As required by the Companies(Auditor''s Report) order ,2015 (''the
 order'') issued by the Centra! 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 the paragraph 3 and 4 of the
 order, to the extent possible.
 As required by section 143(3) of the Act, we report that:
 We have sought and obtained all the information and explanations which
 to the best of our knowledge and belief were necessary for the purpose
 of our audit.
 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; we have received the print of all the statements and ledgers for
 verification however access of accounting software was not done by us.
 The balance sheet, the statement of profit and loss and the cash flow
 statement dealt, with by this report are in agreement with the print of
 the Books of account produced before us.
 In our opinion , the aforesaid standalone financial statements comply
 with the Accounting Standards specified under section 133 of the Act,
 read with rule 7 of the Companies (Accounts) Rule 204;
 On the basis of the written representation 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
 With respect to the other matters to be included in the Auditor''s
 Report in accordance with the Rule 11 of the Companies (Audit and
 Auditors) Rule ,2014, in our opinion and to the best of our information
 and according to the explanation given to us:
 The company has disclosed the impact of pending litigation on its
 financial position in its financial statements- Refer Note 2 of Notes
 of Accounts.
 The company has made provision, as required under the applicable law or
 accounting standards, fdr material foreseeable losses, if any on long
 term contracts including derivatives contract.
 There has been delay in transferring amounts required to be
 transferred, to the Investor Education and Protection Fund by the
 Annexure to the Auditors'' Report
 The Annexure referred to in our Independent Auditors'' Report to the
 members of the Company on the standalone financial statements for the
 15 month period ended 31st March 2015, we report that:
 (a) The records of fixed assets showing particulars of quantitative
 detail and situation thereof were not available for our verification.
 (b) As per explanation given to us the company does not carry out the
 physical verification of the fixed assets at regular intervals.
 (c) on the basis of our verification of the record of the inventory we
 are of the opinion that the company is maintaining proper records of
 inventory other than the traded items. The management has conducted the
 physical verification in respect of finished goods, stores and spares
 and raw materials at reasonable intervals.
 (d) The procedure of the physical verification of stock followed by the
 management is reasonable and adequate to the size of the company and
 the nature of its business.
 (e) The material discrepancies noticed on physical verification of the
 inventories have been properly deait with in the books of accounts.
 (f) The company has granted interest free loans/advances without any
 stipulation of repayment thereof to Eleven bodies corporate listed in
 the register maintained U/s 189 of the Companies Act, 2013 (''the Act)
 In our opinion and according to the information and explanation given
 to us, there is adequate internal control procedure commensurate with
 the size of the Company and the nature of its business with regard to
 the purchase of fixed assets, inventory and sale of goods. During the
 course of our audit we have not observed any continuing failure to
 correct the major weaknesses in internal controts.
 The company has not accepted any deposit from public.
 We have broadly review the books of accounts maintained by the company
 pursuant to Rules made by the central government for maintainece of
 cost records under section 148 (1) of the Companies Act 2013, and are
 of the opinion that prima fade prescribed accounts have been made and
 (a) According to the information and explanation given to us and on the
 basis of our examination of the records of the Company, amounts
 deducted/accrued in the books of account in respect of undisputed
 statutory dues including Provident Fund, income tax, sales tax, wealth
 tax, service tax, custom duty value added tax, cess and other materia!
 statutory dues have been deposited during the period by the company
 with appropriate authorities,
 According to the information and explanation given to us , no
 undisputed amounts payable in respect of provident fund , sales tax,
 income tax, wealth tax, service tax, custom duty, or other material
 statutory dues were arrears as at 31st March 2015 for a period of more
 than six months from the date they became payable.
 (b) According to the information and explanations given to us, the
 following dues of income tax, excise, and sales tax have not been
 deposited by the Company on account of disputes:
 Name of Statute        Nature of dues                  Amount(Rs)
 Income Tax.            Penalty 271(1)(c)                2864146
 Income tax             143(1)(a)                        8046440
 SalesTax               Sales tax                        144722786
 Sales tax              SalesTax                         2189434
 Excise                 Excise duty and                  37317779
 Name of Statute       Period           Forum where dispute pending
 Income Tax.        2007-2008(A.Y.)       ITAT Ahmedabad
 Income tax         2013-2014 (A.Y)       ACIT 1(1)(2) Surat
 SalesTax           2009-2010             Joint Commissioner (Commercial
                                          Taxes) Vadodara
 Sales tax          2010-2011             Dy, Commissioner of Commercial
                                          Tax Surat
 Excise             Various Years         Appeal CESTAT, Surat
 According the explanation and information given to. us there is a delay
 in transfer of amount of unclaimed dividend to the Investor Education
 and Protection Fund in accordance with the relevant provisions of
 Companies Act 1956(1 of 1956) and rules there under.
 The accumulated losses of the company have exceeded the fifty percent
 of its net worth at the end of the financial year. The company has
 incurred cash losses of Rs.  40077.80 Lacs in current financial year.
 In arriving the accumulated losses and the net worth as above, we have
 considered the qualifications which are quantifiable in the audit
 reports of the year to which this loss is pertains.
 The company has defaulted in repayment of principle amount and interest
 accrued thereupon amounting to Rs 1784.11 Crores in respect of the loan
 amount borrowed from
 Canara Bank
 Axis Bank
 State bank of Patilala
 Bank of India
 Laxmi Vilas Bank
 Corporation Bank
 Central Bank of India
 Syndicate Bank
 Indian Overseas Bank
 IFCI Venture Capital Fund UCO bank
 Karuru Vaysaya Bank Union Bank of India
 Andhra Bank
 The defaults occur during the year were not cleared until the 31st
 March 2015 and was, thus due for more than six months as on that date.
 The company has given guarantee in connection with loans taken by
 others from financial institution, in our opinion, the terms and
 conditions of the guarantee given in connection with loan taken by
 Koncept Infotement Pvt Ltd from Reliance Capital since guarantee given
 to the institution the power to attach the assets of the company.
 According to the records of the company, the company has not obtained
 any term loans during the financial years. And hence, comments under
 the clause are not called for.
 According to the information and explanation given to us, no material
 fraud on or by the Company has been noticed or reported during the
 course of our audit.
 Date: 25.05.2015                            For N. M. Singapuri & Co.
 Place: Surat                                Chartered Accountants
                                             (N. M. Singapuri)
                                             Membership No.11601
                                             Firm Reg. No 110264W
Source : Dion Global Solutions Limited
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