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Winsome Textile Industries

BSE: 514470|ISIN: INE837B01031|SECTOR: Textiles - Spinning - Synthetic Blended
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« Mar 14
Auditor's Report (Winsome Textile Industries) Year End : Mar '15
We have audited the accompanying financial statements of WINSOME
 TEXTILE INDUSTRIES LIMITED (the Company), which comprise the Balance
 Sheet as at 31stMarch, 2015, the Statement of Profit and Loss, the Cash
 Flow Statement for the year then ended, and a summary of the
 significant accounting policies and other explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 The Company''s Board of Directors is responsible for the matters stated
 in Section 134(5) of the Companies Act, 2013 (the Act) with respect
 to 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 the Accounting Standards
 specified under Section 133 of the Act, read with Rule 7 of the
 Companies (Accounts) Rules , 2014.This responsibility also includes
 maintenance of adequate accounting records in accordance with the
 provisions 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 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 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 Standards on Auditing
 specified under Section 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 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 financial control relevant
 to the Company''s preparation of the financial statements that give a
 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 includes 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.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion on the financial
 statements.
 
 Basis for Qualified Opinion:-
 
 Attention is drawn to :
 
 (i) Note No.26.3 regarding non-provisioning against receivables
 amounting to Rs. 1089.44 lacs which in the opinion of management is
 good and recoverable as stated in the said notes and our inability to
 comment thereon.
 
 (ii) Note no. 26.7 regarding non provision for shortfall in recovery
 (amount unascertainable) against overdue debt of Rs. 66.27 lacs
 (Previous Year Rs. 85.15 lacs) as stated in the said note for which
 legal and other persuasive action for recovery has been initiated, in
 the opinion of the management these debts are good and recoverable as
 stated in the said note and our inability to comment thereon.
 
 We further report that the profit for the year, the balance in reserve
 & surplus, receivable, loans & advances and profit for the year are
 without considering items mentioned in (i) & (ii) above, the effect of
 which could not be determined.
 
 Our opinion was also qualified on the financial statements for the year
 ended 31st March 2014 in respect of overdue debts reported in (ii)
 above.
 
 
 Opinion
 
 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 under the head 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, of the
 state of affairs of the Company as at 31st March, 2015, and its profit
 and its cash flows for the year ended on that date.
 
 Emphasis of Matter
 
 (i) Note no. 26.8 regarding balances of certain receivables, loans and
 advances (including capital advances), trade payables and other
 liabilities are subject to confirmation/reconciliation.
 
 Our opinion is not qualified in respect of above matter.
 
 Report on other legal and Regulatory Requirements:
 
 1.  As required by the Companies (Auditor''s Report) Order, 2015 (the
 Order) issued by the Central Government of India in terms of
 sub-section (11) of section 143 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 explanations given to
 us during the course of audit, we give in the Annexure a statement on
 the matters specified in the paragraphs 3 and 4 of the Order.
 
 2.  As required by Section 143 (3) of the Act, we report that:
 
 (a) We have sought and 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 it appears from our examination of
 those books.
 
 (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) In our opinion, the aforesaid financial statements comply with the
 Accounting Standards specified under Section 133 of the Act, read with
 Rule 7 of the Companies (Accounts) Rules,2014.
 
 (e) On the basis of the written representations received from the
 directors as on 31stMarch, 2015 taken on record by the Board of
 Directors, none of the directors is disqualified as on31stMarch, 2015
 from being appointed as a director in terms of Section 164 (2) of the
 Act.
 
 (f) With respect to the other matters to be included in the Auditor''s
 Report in accordance with Rule 11 of the Companies (Audit and Auditors)
 Rules, 2014, in our opinion and to the best of our information and
 according to the explanations given to us:
 
 i. The Company has disclosed the impact of pending litigations on its
 financial position in its financial statements - Refer Note no.
 26.1((A)(ii)), (B) and 26.4 to the financial statements.
 
 ii. The Company has made provision, as required under the applicable
 law or accounting standards, for material foreseeable losses; if any,
 on long term contracts including derivative contracts. (Refer note
 26.27 (B)).
 
 iii. There has been no delay in transferring amounts, required to be
 transferred, to the Investor Education and Protection Fund by the
 Company.
 
 Annexure referred to in paragraph 1 under the heading Report on Other
 Legal and Regulatory Requirements of our report of even date for the
 year ended 31st March 2015.
 
 1.  (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
 according to the programme of periodical physical verification in
 phased manner which in our opinion is reasonable having regard to the
 size of the Company and the nature of its fixed assets. The
 discrepancies noticed on such physical verification were not material.
 
 2.  (a) The inventories of the Company (except stock in transit) have
 been physically verified by the management at reasonable intervals.
 
 (b) The procedures of physical verification of inventory followed by
 the management are reasonable (read with note no. 26.19(a)(ii)) and
 adequate in relation to the size of the Company and nature of its
 business.
 
 (c) The Company is maintaining proper records of inventories (in case
 of process stock, records are updated on monthly basis physical
 verification of stock). As per records and information made available
 the discrepancies noticed on such physical verification of inventory as
 compared to book records were not material.
 
 3.  (a) As per the information and explanation provided to us, the
 Company has not granted any loan, secured or unsecured to companies,
 firms or other parties covered in the register maintained under Section
 189 of the Companies Act, 2013. Accordingly, provision of clause 3 of
 the Order is not applicable.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that some of the items
 purchased are of special nature and suitable alternatives sources do
 not exist for obtaining comparable quotations or where user department
 has shown specific preference, where as explained , rates were
 determined considering the quality , volume , nature of the items and
 market conditions prevailing at that time , there are adequate internal
 control systems 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 services which needs to be further
 strengthen (read with note no. 26.13 regarding MSME and 26.19(a)
 regarding accounting of consumption based on the balancing figure as
 stated in the said note) . Based on the audit procedure performed and
 on the basis of information and explanations provided by the
 management, during the course of audit, we have not observed any
 continuing failure to correct major weaknesses in internal control
 system.
 
 5.  According to the information and explanations given to us, the
 Company has not accepted any deposits from the public within the
 provisions of Section 73 to76 of the Act or any other relevant
 provisions of the Act and the rules framed there under. According to
 the information and explanations given to us, no order has been passed
 by the Company Law Board or National Company Law Tribunal or Reserve
 Bank of India or any Court or other tribunal in this regard.
 
 6.  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 148(1) of the Act in respect
 of the company''s products to which the said rules are made applicable
 and are of the opinion that prima facie, the prescribed records have
 been made and maintained. We have, however, not made a detailed
 examination of the said records with a view to determine whether they
 are accurate or complete.
 
 7.  (a) According to the records of the Company, the Company is
 generally regular in depositing undisputed statutory dues including
 provident fund, employees'' state insurance, income-tax, sales- tax,
 wealth tax, service tax, duty of customs, duty of excise, value added
 tax and cess and other material statutory dues with the appropriate
 authorities to the extent applicable and there were no undisputed
 statutory dues payable for a period of more than six months from the
 date they became payable as at 31stMarch, 2015 TDS of Rs.0.93 lacs
 (since paid).
 
 (b) According to the records and information & explanations given to
 us, there are no dues in respect of Income tax , Wealth Tax or Cess
 that have not been deposited with the appropriate authorities to the
 extent applicable on account of any dispute and the dues in respect of
 Sales tax , Excise duty , Custom duty , Service tax and Entry tax that
 have not been deposited with the appropriate authorities on account of
 dispute and the forum where the dispute is pending are given below:-
 
 NAME OF
 STATUTE          NATURE OF 
                  DUES           PERIOD       AMOUNT
                                              UNPAID        FORUM
                                             (IN LACS RS.)
 
 Central Excise 
 Act             Excise Duty    1995-96        1.44       Assistant
                                                          Commissioner
 
 Central Excise  
 Act             Excise Duty    1998-2001      1.83       CESTAT
 
 Central Excise 
 Act             Excise Duty    2000-2001      1.74       CESTAT
 
 Central Excise 
 Act             Excise Duty    2003-04       41.59       CESTAT
 
 Central Excise 
 Act             Excise Duty    2004-05        0.35       Commissioner
                                                         (Appeal)
 
 Central Excise 
 Act             Excise Duty    2005-06       21.33       CESTAT
 
 Central Excise 
 Act             Excise Duty    2008-09        1.32       Commissioner
                                                         (Appeal)
 
 HP Sales Tax 
 Act             Entry Tax      2010-11 to 
                                2014-15      333.27       The High Court
                                                          of Shimla
 
 Refer Note no. 26.1(A) (ii).
 
 (c) According to the records of the Company and information and
 explanations given to us, the amount required to be transferred to
 investor education and protection fund in accordance with the relevant
 provisions of the Companies Act, 1956 (1 of 1956) and rules made there
 under has been transferred to such fund within time.
 
 8.  The Company does not have accumulated losses at the end of the
 financial year and has not incurred cash losses in the current
 financial year & in the immediately preceding financial year.
 
 9.  In our opinion, on the basis of audit procedure and according to
 the information and explanations given to us, the Company has not
 defaulted in repayment of dues to financial institutions or banks. The
 company did not have any outstanding debentures during the year.
 
 10.  According to the information and explanations given to us the
 company has not given any guarantee for loan taken by others from
 banks.
 
 11.  On the basis of information and explanations given to us, term
 loans were applied for the purpose for which the loans were obtained.
 
 12.  Based on the audit procedure performed and on the basis of
 information and explanations provided by the management, no material
 fraud on or by the Company has been noticed or reported during the
 course of our audit.
 
                                                       For Lodha & Co.
            
                                                 Chartered Accountants 
                                       Firm''s Registration No. 301051E
 
 Place : New Delhi                                      (N.K. LODHA)
 
 Date : 26.05.2015                                         Partner
 
                                                 Membership No.: 85155
Source : Dion Global Solutions Limited
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