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.
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
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
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
(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)
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
(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
(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
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
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
(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
(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
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
(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:-
STATUTE NATURE OF
DUES PERIOD AMOUNT
(IN LACS RS.)
Act Excise Duty 1995-96 1.44 Assistant
Act Excise Duty 1998-2001 1.83 CESTAT
Act Excise Duty 2000-2001 1.74 CESTAT
Act Excise Duty 2003-04 41.59 CESTAT
Act Excise Duty 2004-05 0.35 Commissioner
Act Excise Duty 2005-06 21.33 CESTAT
Act Excise Duty 2008-09 1.32 Commissioner
HP Sales Tax
Act Entry Tax 2010-11 to
2014-15 333.27 The High Court
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
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.
Firm''s Registration No. 301051E
Place : New Delhi (N.K. LODHA)
Date : 26.05.2015 Partner
Membership No.: 85155