We have audited the accompanying financial statements of Konark
Synthetic 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 year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Standalone 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 and presentation of the 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 the 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
In our opinion and to the best of our information and according to the
explanations given to us, 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 31 March 2015 and its profit and its cash flows for the year ended
on that date.
Emphasis of Matter:
We would like to draw the attention on the Company''s policy of
providing for gratuity as and when paid and not on the
basis of actuarial valuation as per AS 15. The same has been stated in
Note 27 of Notes to Accounts.
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, we
give in the Annexure a statement on the matters
specified in the paragraph 3 and 4 of the Order, to the extent
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
(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 standalone 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 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
(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 does not have any pending litigations and therefore no
impact or disclosure in relation to the same has been made in the
(ii) the Company does not see any foreseeable losses on long-term
contracts as on the balance sheet date and the Company has not entered
into any derivative contracts, therefore no provision has been made in
relation to the same;
iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year.
Annexure to the Independent Auditors'' Report
The Annexure referred to in our Independent Auditors'' Report to the
members of the Company on the financial
statements for the year ended 31 March 2015, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) The Company has a programme of physical verification of its fixed
assets by which fixed assets are verified. In accordance with this
programme, fixed assets were verified during the year and no material
discrepancies were noticed on such verification. In our opinion, the
periodicity of physical verification is reasonable having regard to the
size of the Company and the nature of its assets.
(ii) In respect of its inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is
b) In our opinion and according to the information and explanations
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 the nature of its business.
c) The Company has maintained proper records of inventories. As per the
information and explanation given to us, no material discrepancies were
noticed on physical verification
(iii) According to the information and explanations given to us, the
Company has granted unsecured loan to companies covered in the register
maintained under section 189 of the Companies Act and thus, paragraph 3
(iii) of the Order is not applicable.
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
granted unsecured loans to its subsidiaries/step down subsidiaries,
with or without interest, during the year of which details are as
No. of Parties Loan Given* Maximum Balance Closing Balance
5 253.86 1443.83 1415.57
* includes interest amount.
b) In our opinion, interest, whenever charged and other terms and
conditions of loans given by the company are not prima facie
prejudicial to the interest of the company.
c) In absence of any stipulated time period we are unable to comment on
the repayment of the principal amounts and interest whether paid in
time or not.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of fixed assets.
(v) The Company has not accepted any deposits from the public and thus,
paragraph 3(v) of the Order is not applicable.
(vi) The Central Government has prescribed the maintenance of cost
records under section 148(1) of the Companies Act, 2013. The company
has maintained such cost records which we have broadly reviewed.
However no detailed analysis of such records has been done by us.
(vii) a) According to the information and explanations 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 such as provident fund, income tax, and others as
applicable, have been regularly deposited during the year by the Company
with the appropriate authorities.
b) According to the records of the Company, and information and
explanations given to us there are no dues of Income tax / Sales Tax /
Wealth Tax / Service Tax/ Custom Duty/ Excise Duty/ Cess which has not
been deposited on account of disputes.
c) According to the audit carried by us and the information and
explanations given to us, the company having no amount of unpaid
dividend which is required to be transferred to the Investor Education
and Protection Fund in accordance with the relevant provisions of the
Companies Act, 1956.
(viii) The Company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses in the financial
year and in the immediately preceding financial year.
(ix) As per the information and explanations given to us and based on
our audit, the Company has not defaulted in repayment of dues to
financial institution or bank.
(x) In our opinion and according to the information and the
explanations given to us, the Company has given any guarantee of
Rs.5960/- Lac (P.Y-Rs.3190/- Lac) for loans taken by its subsidiaries
and step down subsidiaries. In our opinion guarantee given by the
company are prima facie not prejudicial to the interest of the company.
(xi) To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, term loans
availed by the Company were, prima facie, applied by the Company during
the year for the purposes for which the loans were obtained.
(xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For Bhuwania & Agrawal Associates
Firm''s registration number: 101483W
Membership No. 34659
Date : 30th May, 2015