Report on the Financial Statements
We have audited the accompanying financial statements of Shakti Press
Limited which comprise the Balance Sheet as at 30th June, 2013,
statement of Profit and Loss Account and the Cash Flow Statement of the
Company for the year ended and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements Management is
responsible for preparation of these financial statement that gives a
true and fair view of the financial position and financial performance
of the Company in accordance with the Accounting Standard referred to
in sub section (3c) of section 211 of the Companies Act 1956. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statement that gives a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility to express an opinion these financial statements
based on our audit. We have conducted our audit in accordance with the
standard on Auditing issued by the Institute of Chartered Accountants
of India. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit involve performing procedure
to obtain audit evidence about the amount and disclosure in the
financial statements. The procedure selected depend on the Auditor''s
judgments, including the assessment of the risk of material
misstatement of the financial statements, whether due to fraud or
error. In making those risk assessment the auditor consider internal
control relevant to the Company''s preparation and fair presentation of
the financial statements in order to design audid procedure that are
appropriate in the circumstance. An audit also includes evaluation the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the managements as well as evaluation
the overall presentation of the financial statement
1. We believe that our audit provides a reasonable basis for our
opinion, and report that:
a) As told by management 3,44,00,000/- worth of debtors are more than
five years old and considered unrecoverable , but no provision of bad
debts has been passed in the books.
b) The details of quantitative inventory not being fully maintained,
more particularly in terms of raw material consumption, work in
progress and finished goods output, it is not possible for us to
ascertain the exact valuation hence we are relying on the valuation of
the inventory provided by the management.
c) The bank credit facilities availed from SBI have become NPA (Non
performing Asset) as per RBI Guidelines (Prudential Norms) and
consequently the said bank has stopped charging interest from 01.07.08.
As a result the company has provided for interest on estimation basis
w.e.f. 01.07.08 on its credit facilities with SBI.
d) The balance of SBI CC A/c appearing in the books of accounts of the
company are not in accordance with the bank statements provided to us
and are subject to reconciliation in process.
e) The TDS is payable by the Company amounting to Rs.16,05,050/- ever
since 2008-09 but no proper explanation is received and no requisite
effective steps taken by the management.
f) The management has passed the wrong entry in the year 2008-09 of
Excise Receivable worth Rs. 41,47,368.61/- and Interest Receivable
worth Rs.38,08,282.98/- in the year 2007-08 but they have not taken any
corrective steps to rectify these entries till date.
g) The company has not amortised Brand over its useful life, it seems
that they have not been following the provisions of AS-26.The quantum
of such amortization should be Rs. 2,05,00,000/- as on 30.6.2013.
h) The Company has paid retention money deposit of worth
Rs.2,11,090.70/- and earnest money deposit of worth Rs.2,93.472/- ever
since 2009-10 and earlier years but the individual party wise break-up
is not available with the management. Hence, the recovery is doubtful.
i) The management has not been recognizing deferred tax asset/liability
it seems that provisions of AS-22 has not been followed.
j) Impairmentis not recognized to the extent that the recoverable
amount of assets is less than its carrying amount and is charged to
profit & loss a/c as prescribed in AS 28
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, they said financial statements together with
the notes thereon, give the information required by the Companies Act,
1956 in the manner so required and give a true and fair view subject to
and to the extent as pointed in the Annexure to this report and Note
1(j) of Schedule 15 to Notes to Accounts and Para 2 above forming a
part of Auditors Report, in conformity with the accounting principles
generally accepted in India.
a) in the case of Balance Sheet, of the state of affairs of the Company
as at 30th June, 2013.
b) in the case of Profit and Loss Account, of the loss of the Company
for the year ended on that date.
Report on other legal and regulatory Requirement
1. As required by the Companies (Auditor''s Report) order 2003, issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, we give in the annexure a statement
on matter specified in paragraphs 4 and 5 of others.
2. As required by section 227 of Act, we report that:
a) We have obtained all the information and explanation which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appear from our examination of those
books
c) The Balance Sheet and Statement of Profit & Loss, dealt with by this
Report are in agreement with the books of account.
d) In our opinion , the Balance Sheet and Statement of Profit and Loss
comply with the Accounting Standard referred to in section (3c) of
section 211 of the Companies Act 1956;
e) On basis of written representation received from the Directors s on
30th June 2013 and taken on record by the Board of Directors, none of
the Directors is disqualified as on 30th June 2013, from being
appointed as Directors in terms of clause (g) of sub section(1) of
section (274) of the Companies Act 1956.
f) Since the Central Government has not issued any notification as to
rate at which the cess is to be paid under section 441 of the Companies
Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
(Referred to in Paragraph No.3 of the Auditor''s Report of even date)
(i) a) In our opinion and according to the information and explanation
given to us. Company is maintaining proper record showing full
particulars including quantitative details and situation of fixed
Assets.
b) Fixed assets have been physically verified by the management at
reasonable intervals any material discrepancies noticed have been
properly dealt with.
c) In our opinion and according to the information and explanation
given to us no substantial part of fixed assets has been disposed off
during the year.
(ii) a) In our opinion and according to the information and explanation
given to us physical verification of inventory has been conducted at
reasonable intervals by the management
b) In our opinion and according to the information and explanation
given to us procedure of physical verification followed by the
management is reasonable and adequate in relation to size of the
company and the nature of its business.
c) On inspection of the records maintained we are of the opinion that
the records in respect of inventory (Raw Material), Work in Progress
and Finished Goods are not maintained fully in accordance with the
normally accepted practices. We are relying on value of closing stocks
as certified and provided by the management.
(iii) (a) The Company had taken loan from other Companies covered in
register maintained under section 301 of the Companies Act, 1956.Such
register has not maintained by management. (b) The Company has not
given loan to other Companies / firms or other parties listed in the
register maintained under section 301 of the companies Act, 1956.
(c) In our opinion and according to the information and explanations
given to us, internal control procedures are inadequate commensurate
with the size of the company and the nature of its business with regard
to purchase of inventory, fixed assets, sale of goods, debtor,
creditors and cash. Further there is no adequate theft / loss insurance
cover for this high cash balance. Further still the balances of
outstanding Debtors and Creditors are unconfirmed but only
3,44,00,000/- considered good by the management. During the course of
our audit, except for our remarks on cash balance and Debtors and
Creditors, high level of inventory as above, we have observed
continuing failure to correct major weaknesses in the internal
controls.
iv) (a) According to the information and explanations given to us, we
are of the opinion that all the transactions that need to be entered
into the register maintained under section 301 of the Companies Act,
1956 have been so entered.
(b) In our opinion, transactions exceeding the value of Rs 5 Lacs have
been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
(v) In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by
Reserve Bank of India and the provisions of Section 58 A and 58 AA or
any other relevant provisions of the Companies Act, 1956 and the rules
framed there under in respect of deposits. As per the information and
explanations given to us no order has been passed by Company Law Board
or National Company Law Tribunal or Reserve Bank of India or any court
or any other Tribunal in this respect.
(vi) The Central Government has prescribed maintenance of cost records
under section 209(1) (d) of the Companies Act, 1956 for any products of
the company. Accordingly the Company has appointed Cost Auditor,
However no cost Audit Report has been received, till date of Audit.
(vii) (a) Except on few occasions the Company is generally irregular in
depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education protection fund,
employees'' state insurance, income tax, sales tax, wealth tax, custom
duty, excise duty, cess and other material statutory dues applicable to
it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty, excise duty and cess were in arrears, as at
30.06.2013 for a period of more than six months from the date they
became payable. Except for those items refered to Notes to Accounts in
Schedule 15 Item No. 2(2). In respect of Sales tax, the company has not
availed Sales Tax Exemption under 1993, Package scheme of Incentives of
issued by the government of Maharashtra State vide its sanctioned
letter COE No.440012/S/914/E-3/LM/1823 & 1824 dated 24/10/2008.
(c) According to the information and explanation given to us, there is
no disputed amount payable in respect of statutory dues.
(viii) In our opinion and according to the information and explanations
given to us, the company has defaulted in repayment of dues to a
financial institution, bank and its account with SBI has classified as
NPA.
(ix) We are of the opinion that the company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(x) In our opinion, the company is not a chit fund or a nidhi mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
company.
(xi) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the company.
(xii) In our opinion, the company has not given any guarantees for
loans taken by others from banks or financial institutions.
(xiii) Based on information and explanation given to us by the
Management, in our opinion, the Term Loans have been applied for the
purpose for which they were raised.
(xiv) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that the no funds raised on short-term basis have been used for
long-term investment. No long-term funds have been used to finance
short-term assets except permanent working capital.
(xv) According to the information and explanations given to us, during
the period covered by our audit report, the company had not issued any
debentures.
(xvi) There was no public issue during the year, but increase in
capital by way of Share Application money against private placement of
equity shares to Lenders and Creditors.
(xvii) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For L.B. HAJARE & CO.,
CHARTERED ACCOUNTANTS,
Place : Nagpur L.B. HAJARE
Date :29/08/2013 (PROPRIETOR)
M.No. 039940
