We have audited the attached Financial Statements of Karan Woo-sin
Limited as at 31st March, 2014 which comprise the Balance Sheet as at
31st March, 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended and summary of significant accounting
policies and other explanatory information.
2. Management''s Responsibility for the Financial Statements and the
statements an- nexed there to Management is responsible for 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 in- cluding Accounting Standards referred to in
Section 211(3C) of the Companies Act,1956(the Act'''') read with the
General Circular 15/2013 dated 13th September 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act 2013.
This responsibility includes the design, implementation and maintenance
of internal con- trol relevant to the preparation and presentation of
the Financial Statements and the statements annexed thereto that give a
true and fair view and are free from material misstatements, whether
due to fraud or error.
3. Auditor''s Responsibility
Our responsibility is to express an opinion on the said Financial
Statements annexed thereto 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 of
material mis- statement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the Financial Statements. The procedures
selected depend upon our judg- ment, including the assessment of risks
of material misstatements of the Financial State- ments, whether due to
fraud and error. In making those risk assessments, we consider internal
control relevant to the Company''s preparation and fair presentation of
the Finan- cial Statements in order to design audit procedures that are
appropriate in the circum- stances. 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 financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements together
with the schedules attached and read with the accounting policies and
Notes forming part of accounts 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 31st March, 2014;
b. In the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
c. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
5. Report on other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2003 issued by
the Central Government of India as amended by the Companies (Auditor''s
Report) (Amendment) Order, 2004 in terms of sub-section (4A) of section
227 of the Act, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said order.
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 knowl- edge 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 and Statement of Profit and Loss dealt with by
this report are in agreement with the books of account.
d. In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with Accounting Standards notified
under the Act read with the General Circular 15/2013 dated 13th
September 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act 2013.
e. On the Basis of the written representations received from the
directors as on 31st March, 2014, taken on record by the board of
directors, none of the directors is dis- qualified as on 31st March,
2014, from being appointed as director in terms of Section 274(1)(g) of
ANNEXURE TO THE AUDITOR''S REPORT
(Refer our report of even date)
1 a. The company has maintained proper records of fixed assets showing
full particulars, including quantitative details and location.
b. The company has a regular program of physical verification of its
fixed assets which, in our opinion, is reasonable having regard to the
size of the company and nature of its assets. No material discrepancies
were identified on such verification.
c. None of the fixed assets affecting the going concern were disposed
off during the year.
2. a. Physical verification has been conducted by the management at
reasonable periods in respect of inventory.
b. In our opinion, the procedures of physical verification of stocks
followed by the man- agement are reasonable and adequate in relation to
the size of the company and the nature of its business.
c. The company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification of
3. The Company has not granted any loans, secured or unsecured to
Companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, clauses
4(iii) (a) to (d) of the Order are not applicable to the Company.
a. The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties which would have been listed in the
register maintained under section 301 of the Companies Act, 1956 except
unsecured loans from one director and one others where the maximum
amount outstanding during the year was Rs.121.64 Lakhs and the year
ending balance of unsecured loans taken from such parties was Rs.121.64
b. The terms and conditions of such loans are prima facie not
prejudicial to the interest of the Company.
c. The parties from whom loans and advances in the nature of loans have
been taken were repaid as stipulated.
4. In our opinion and according to information and explanations given
to us, there are ad- equate internal control procedures commensurate
with the size of the company and the nature of its business, through
personal supervision of management, in respect of pur- chases of goods
and other assets and for the sale of goods. During the course of our
audit, we have not observed any major weakness in the internal
5. a. In our opinion and according to the information and explanations
given to us, the transactions that need to be entered in the register
in pursuance of section 301 of the Act have been entered.
b. The transactions have been made at prices which are reasonable with
regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. The company is not required to maintain cost records under section
209 (1) (d) of the Companies Act, 1956, for any of the products of the
9. a. According to the information and explanations given to us, and
on the basis of our examination of the books of account, the Company
has been regular in depositing with appropriate authorities undisputed
statutory dues including Service Tax, Excise Duty, Provident Fund, ESI
and Income Tax Deducted at Source.
b. According to the information and explanations given to us, details
of disputed Income Tax and Sales tax which have not been deposited as
on 31st March, 2014 on account of any dispute are given below:
Name of Statute Nature of Amount Period to
dues (Rs. in Lakhs) which the
Income Tax Act, Income Tax 6.67 2009-10
Name of Statute Forum where dispute is pending
Income Tax Act 1961 Assistant Commissioner,
10. The Company has accumulated losses at the end of the financial
year, which is more than 50% of its net worth. The Company has incurred
cash losses in the current financial year and in the year immediately
preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Com- pany has not defaulted in repayment of dues to
financial institutions, banks or debenture holders.
12. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, clause 4(xii) of the order is not applicable.
13. The Company is not a chit fund, nidhi, mutual benefit fund, or a
society. Accordingly clause 4(xiii) of the order is not applicable.
14. According to the information and explanations given to us and based
on our verification, the Company is not dealing or trading in shares,
securities, debentures and other invest- ments. Accordingly, clause
4(xiv) of the order is not applicable.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions. Accordingly, clause 4(xv) of the order
is not applicable.
16. According to the information and explanations given to us and on
the basis of our exami- nation of the books of account, the term loans
obtained by the Company were applied for the purpose for which such
loans were obtained.
17. According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we are of the
opinion that no funds raised on short- term basis have been used for
18. The Company has not made any preferential allotment of shares to
parties and compa- nies covered in the register maintained under
section 301 of the Act. Accordingly, clause 4(xviii) of the order is
19. The Company has not issued any debentures. Accordingly, clause
4(xix) of the order is not applicable.
20. The Company has not raised any money by public issues during the
year. Accordingly, clause 4(xx) of the order is not applicable.
21. According to the information and explanations given to us, no fraud
on or by the Com- pany has been noticed or reported during the year.
For Niranjan & Narayan
Place: Hyderabad, M. Niranjan
Date: 12th May, 2014 Partner