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Winsome Textile Industries
BSE: 514470|ISIN: INE837B01031|SECTOR: Textiles - Spinning - Synthetic Blended
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« Mar 12
Auditor's Report (Winsome Textile Industries) Year End : Mar '13
Report on the financial statements
 
 We have audited the accompanying financial statements of Winsome
 Textile Industries Limited, which comprise the balance sheet as at 31st
 March 2013, and the statement of the profit and loss and 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
 
 Management is responsible for the preparation of these financial
 statements that give a true and the 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 sub section (3C) of
 section 211 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 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 conducted our audit in accordance
 with the Standards on Auditing issued by Institute of Chartered
 Accountant of India. Those standards require that we comply with the
 ethical requirements and plan and perform the audit to obtain the
 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 judgment, including assessment of
 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 the management,
 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 audit opinion.
 
 Emphasis of Matter
 
 1) During the year 2010-11, the Company had issued and allotted
 12,90,000 nos. GDR''s entitling 6,45,00,000 (now 64,50,000 equity shares
 of Rs.10/- each) nos. equity shares of Re.1/- each at price of Rs.6.94
 per share (including premium of Rs.5.94, now premium is Rs.59.40 on
 Rs.10/- per share).
 
 As on 31.03.2012, Rs.4,586.69 lacs (including exchange gain) was
 pending to be received in India against above issue made, during the
 year Rs.777.14 lacs, as explained, have been received/credited to
 account of the company in India. As stated in the note no. 2.3 balance
 amount of Rs. 4147.07 lacs as on 31st March 2013 (excluding amount
 lying in bank outside India of Rs. 13.35 lacs) is invested outside
 India with a money market fund.
 
 2) Balances of receivable, loans and advances, trade payable and other
 liabilities (read with note no. 2.4) are subject to confirmation and
 reconciliation (note no 2.5(ii))
 
 Our report is not qualified in respect of above matters.
 
 Basis for Qualified Opinion:-
 
 i.  Attention is drawn to Note no. 2.5 (i) regarding non provision for
 shortfall in recovery (amount unascertainable) against overdue debt of
 Rs. 232.70 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 and profit for the year are without considering
 items mentioned in (i) above, the effect of which could not be
 determined.
 
 Qualified 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 matter
 described under the head Basis for Qualified Opinion” paragraph, 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 the affairs of
 the company as at 31st March 2013,
 
 b.  In case of the statement of the profit and loss, of the profit for
 the year ended on that date, and
 
 c.  In case of the cash flow statement, of the cash flows for the year
 ended on that date.
 
 Report on other legal and the 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 sub-section (4A) of section 227 of the Act, we give
 the Annexure a statement on the, manners specified in the 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 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
 those books;
 
 c.  The Balance Sheet, Statement of Profit & Loss and Cash Flow
 Statement referred to in this report are in agreement with the books of
 account;
 
 d.  In our opinion, the Balance Sheet, Statement of Profit & Loss and
 Cash Flow Statement referred to in this report comply with the
 Accounting Standards referred to in sub-section (3C) of section 211 of
 Companies Act, 1956;
 
 e.  On the basis of the written representations received from the
 Directors and taken on records by the Board of Directors, we report
 that none of the directors of the Company is disqualified as on 31st
 March 2013 from being appointed as a Director of the Company in terms
 of clause (g) of sub-section (1) of section 274 of the Companies Act,
 1956.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 (Referred to in paragraph 1 of our Report of even date on Winsome
 Textile Industries Limited for the year ended 31st March, 2013)
 
 i.  (a) The Company has maintained records in respect of fixed assets
 showing full particulars including quantitative details and situation
 of fixed assets except in respect of certain fixed assets (and also at
 new project location), where the same are in process of compilation
 /updation.
 
 (b) As per information & explanations given to us, physical
 verification of the certain fixed assets are in process, according to
 the regular programme of physical verification once in every three
 years, in phased manner, which in our opinion is reasonable having
 regard to the size of the company and the nature of its fixed assets.
 
 (c) As per the records and information and explanation given to us,
 fixed assets disposed off during the year were not substantial.
 
 ii.  (a) As explained to us, the inventories of the Company (except
 stock lying with the third parties; and in transit) have been
 physically verified by the management during the year.
 
 (b) In our Opinion and according to information & explanation 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) According to the information and explanation given to us, we are of
 the opinion that the company is maintaining proper records of
 inventories (In case of process stock, records are updated on monthly
 physical verification of stock). As per records and information made
 available the discrepancies noticed on verification between the
 physical stock and the book records were not material in relation to
 the operation of the company.
 
 iii.  As per the information and explanations given to us the Company
 has neither granted nor taken during the year any loans, secured or
 unsecured to and from companies, firms or other parties listed in the
 register maintained under section 301 of the Act.  Accordingly, the
 provisions of clause 4 (iii) (b) to (d) and (f) & (g) of the Order are
 not applicable to the Company.
 
 iv.  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 alternative sources do not
 exist for obtaining comparable quotation 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 internal control system
 commensurate with size of the company and nature of its business with
 regard to the purchase of inventory, fixed assets, services and for the
 sale of goods and services (read with note no. 2.2, 2.5, 2.9 & 2.18).
 Based on the audit procedure performed and information & explanation
 provided by the management, during the course of our audit, we have not
 observed any continuing failure to correct major weaknesses in internal
 control system nor been identified by the management.
 
 v.  a) According to the information and explanations provided by the
 management and based on the audit procedure performed, we are of the
 opinion that the particulars of the contracts or arrangements referred
 to in Section 301 of the Act have been entered in the register required
 to be maintained under that section; and b) In our opinion and
 according to the information and explanation given to us, having regard
 to para iv above, the transactions made in pursuance of such contracts
 or arrangements (exceeding the value of Rs. 5 Lacs in respect of each
 party during the financial year) have been made at prices which are
 generally reasonable having regard to the prevailing market prices at
 the relevant time.  vi.  According to the information and explanations
 given to us, the Company has not accepted any deposits from
 
 the public within the meaning of Section 58A and 58AA Act and the rules
 framed there under and directives issued by the Reserve bank of India
 and other relevant provisions of the Act.  We have been informed that
 no order has been passed by the Company Law Board or National Company
 Law Tribunal or Reserve Bank of India or any Court or any other
 Tribunal in this regard.  vii.  In our opinion, the Company has an
 internal audit system commensurate with the size of the Company and
 nature of its business.  viii. We have broadly reviewed the books of
 account maintained by the company as prescribed 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 records have been made and maintained. We have, however,
 not made a detailed examination of the said records with view to
 determine whether they are accurate and complete.  ix.  (a) According
 to the records of the Company, the company in generally regular in
 depositing with appropriate authorities undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
 tax, Custom Duty, Excise Duty, Cess and other material statutory dues
 applicable to it. According to the information and explanations given
 to us, there are no undisputed statutory dues payable for a period more
 than six months from the date they became payable as at 31.03.2013.
 (b) According to the records and information and explanations given to
 us, there are no dues in respect of Income Tax, Custom Duty, Wealth
 Tax, Service Tax, Sales Tax and Cess that have not been deposited on
 account of any dispute. 
 
 x.  The Company does not have accumulated losses at the end of the
 financial year and has not incurred any cash losses during the current
 and immediately preceding previous year.
 
 xi.  In our opinion, based on the audit procedures and according to
 information & explanation given to us, the Company has generally not
 defaulted in repayment of dues to financial institution and banks.
 
 xii.  Based on our examination of the records and the information and
 explanation given to us, the Company has not granted any loans and/or
 advances on the basis of security by way of pledge of shares,
 debentures and other securities.  
 
 xiii.  Clause (xiii) of the order is not applicable to the company as
 the company is not a Chit Fund Company or nidhi/mutual benefit
 fund/society.
 
 xiv.  In our opinion and according to the informations and explanations
 provided to us, the company is not dealing in or trading in shares,
 securities, debentures and other investment.
 
 xv.  According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks and financial institution.
 
 xvi.  According to the information and explanations given to us, the
 term loans were applied for the purpose for which the loans were
 obtained.
 
 xvii.  According to the information and explanations given to us and on
 an overall examination of the financial statements, we are of the
 opinion that no funds raised on short term basis have been used for
 long term investment.
 
 xviii. According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares to parties or
 companies covered in the register maintained under Section 301 of the
 Act in the current year.
 
 xix.  No debenture has been issued /outstanding during the year hence
 the provision of clause 4 (xix) of the said order are not applicable.
 
 xx.  According to the information and explanations given to us, during
 the year the Company has not raised fund through public issue.
 
 xxi.  To the best of our knowledge and belief, 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 the audit.
 
                                    For Lodha & Co.
 
                                    Firm Regn. No. 301051E 
 
                                    Chartered Accountants
 
 Place : New Delhi                  N.K. LODHA
 
 Date : 29.05.2013                 (Partner)
 
                                    Membership No.: 85155
Source : Dion Global Solutions Limited
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