| We have audited the accompanying standalone financial statements of
DHANADA CORPORATION LIMITED (The Company), which comprises the Balance
Sheet as at 31st March 2015, the Statement of Profit and Loss and 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 of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash fows 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 the material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
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
there under.
We conducted our audit in accordance with the Standards on Auditing
specifed 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 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 standalone
financial statements.
Opinion
Without qualifying our report, we draw your attention to Note 26 B (1).
As per clause no. 4.4.6 of the Scheme of Arrangement and Amalgamation
sanctioned by Hon'ble Bombay High Court ("Court"), vide their judgment
dated 16th July 2009, the allotment of shares against purchase of land
shall be done after the conveyance deeds are executed and registered.
However the management has issued 17,96,254 equity shares having face
value of Re.1 along-with premium of Rs, 5.94 per share to Dr. Laxman V.
Kulkarni without executing and registering the conveyance deed. The
outcome of the said event is uncertain and we are unable to comment
upon it.
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its loss and its cash flows for the year ended
on that date.
i. in the case of the Balance Sheet, of the State of affairs of the
Company as at 31st March 2015; and ii. in the case of Statement of
Profit and Loss, of the Loss for the year ended on that date;
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 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 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 those
books.
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 Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014.
e) There are no observations and comments on financial transactions or
other matter which have adverse effects on the functioning of the
Company.
f) 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
Act.
g) There are no qualifications preservations or adverse remarks
relating to maintenance of accounts or other matters connected
therewith.
h) 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 26 B - 17
to the financial statement.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company.
Annexure to the Independent Auditor's Report
With reference to paragraph 1 of report on other legal and other
regulatory requirements of our report to the shareholders of Dhanada
Corporation Ltd. of even date.
i. Fixed Assets
a) The Company has generally maintained proper records showing full
particulars including quantitative details and situation of the fixed
assets.
b) Most of the fixed assets have been physically verified by the
management during the year and as examined by us, no material
discrepancies have been noticed on such verification.
ii. Inventories
a) As explained to us, the inventories were physically verified during
the year by the management at reasonable intervals.
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 were reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company has maintained adequate records of its
inventories and no material discrepancies were noticed on physical
verification.
iii. Loans granted by the Company
The Company has granted loans to parties covered in the register
maintained under Section 189 of the Companies Act, 2013. The details
are as below:
The interest has been provided on prorate basis and all the principal
together with the interest has been converted into fully paid equity
shares of respective companies.
iv. Internal Control Systems
In our opinion and according to the information and explanation given
to us there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business for purchases of
stores, raw materials including components, plant and machinery,
equipment and other assets and for sale of goods and services. During
the course of our audit we have not observed any weaknesses or continue
in the failure to correct major weaknesses in internal control system.
v. Deposits from the public
According to the information and explanations given to us the Company
has not accepted deposits from the public during the year and hence the
directives issued by the Reserve Bank India and the provisions of
section 73 to 76 or any other relevant provisions of the Companies Act,
2013 and the rules framed there under are not applicable to it.
vi. Cost Records
According to the information and explanations given to us the Central
Government has not prescribed maintenance of cost record under
sub-section 1 of section 148 under Companies Act, 2013 read with the
rule 3 of the Companies (Cost Record and Audit Rules 2014).
vii. Statutory Dues
a. The Company has been regular in depositing undisputed statutory dues
in respect of Provident Fund, Employee's State Insurance (ESI), Income
Tax, Value Added Tax, Service Tax, Luxury Tax and other material
statutory dues with appropriate authorities.
According to the information and explanation given to us no undisputed
amounts payable in respect of statutory due were in arrears as at 31st
March 2015, for a period of more than six month from the date they
became payable except in case of Sales Tax Deferral liability of Rs,
21,04,188/-, which is not paid. Appropriate interest is also due till
the actual date of payment.
b Sales Tax Cases
1. The Company has disputed Sales tax liability against Assessment
orders passed by Sales Tax Officer, Aurangabad and matter is pending as
detailed below:
Nature of
Name of the Statute Dues Amount Period Forum Where dispute
is pending
Dy. Commissioner of
Sales
Bombay Sales Tax
Act, 1959 Sales Tax 5,000 1998-1999 Tax,(Appeal)
Aurangabad
Dy. Commissioner of
Sales
Bombay Sales
Tax Act, 1959 Sales Tax 57,536 1999-2000 Tax,(Appeal)
Aurangabad
Dy. Commissioner of
Sales
Bombay Sales
Tax Act, 1959 Sales Tax 88,239 2000-2001 Tax,(Appeal)
Aurangabad
2. The Company has disputed Sales tax liability against Rectification
Orders passed by Sales Tax officer, Aurangabad and matter is pending as
detailed below:
Nature of Part Payment
Name of the Dues Amount MADE
Statute
Bombay Sales
Tax Act, 1959 Sales Tax 2,542,314 150,000
Bombay Sales
Tax Act, 1959 Sales Tax 1,779,156 125,000
Bombay Sales
Tax Act,1959 Sales Tax 919,859 100,000
Bombay Sales
Tax Act,1959 Sales Tax 14,049 2,000
Name of the Statute Period Forum Where dispute is pending
Bombay Sales Tax Act, 1959 1998-1999 Dy. Commis sioner of Sales Tax,
(Appeal) Aurangabad
Bombay Sales Tax Act, 1959 Dy. Commissioner of Sales Tax,
1999-2000 (Appeal) Aurangabad
Bombay Sales Tax Act, 1959 Dy. Commissioner of Sales Tax,
2000-2001 (Appeal) Aurangabad
Bombay Sales Tax Act, 1959 Dy. Commissioner of Sales
2001-2002 (Appeal) Aurangabad
3. Sales Tax Refund Cases:
Name of the Nature of Amount Payment Period Forum Where
Statute Dues Against dispute is
Demand pending
Maharashtra VAT Refund 1,60,494 2,02,023 2007-08
Value Dy. Commis-
sioner of Sales
Added
Tax, 2002 Tax,(Appeal)
Aurangabad
Maharashtra VAT Refund 19,22,195 nil 2008-09 Dy. Commis-
value sioner of Sales
Added Tax, Tax,(Appeal)
2002 Aurangabad
4. Income Tax Cases:
Name of the Nature of Amount Part
Payment F.Y. Forum
Statute made where dispute
is pending
Income Tax
Act, 1961 Commissioner
of Income Tax
Assessment
dues 1,96,01,345 Nil 2012-13 (Appeals) -
Aurangabad
c. According to the information and explanation given to us, there are
no amounts required to transfer 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.
viii. Accumulated Losses
The Company has accumulated losses at the end of the financial year
less than 50% of its net worth and has not incurred cash losses in the
current financial year and in the immediately preceding financial year.
ix. Dues to financial Institutions
In our opinion and according to the information and explanations given
to us, the Company has defaulted in repayment of dues to banks to the
extent of Rs, 1,01,26,914/- (Including interest) of Bank of Maharashtra
and Rs, 6,92,11,882/- of Phoenix ARC Pvt. Ltd.
x. Guarantees given by the Company
According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from bank or
financial institutes. The question of terms and conditions does not
arise.
xi. Term Loan
In our opinion and according to the information and explanations given
to us, and on an overall examination, the term loans taken have been
applied for the purpose for which it was raised.
xii. Frauds
In our opinion and according to the information and explanation given
to us, having regards to the nature of the Company's business no fraud
on or by the Company was noticed or reported during the year.
For G. K. Chandavarkar & Co.
Chartered Accountants
(Firm Registration No.115924W)
Place : Pune G. K. Chandavarkar
Date : 30th May 2015 (Proprietor)
M. No. 044537 |