| We have audited the accompanying financial statements of M/s Kovalam
Investment and Trading Company Limited, Ludhiana ("the Company"), which
comprise the Balance Sheet as at March 31, 2014, and 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 Financial Statements
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 Standards notified under the Companies Act, 1956 ("the
Act") read with the General Circular 15/2013 dated 13.09.2013 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 control relevant to the
preparation and fair presentation of the financial statements that are
free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements 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
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgement, including the assessment of
the risks, material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, we 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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in confirmity with the accounting principles generally accepted in
India;
(a) in the case of the Balance Sheet, of the state of affiars of the
Company as at March 31, 2014;
(b) in the case of the Profit and Loss Account, of the profit/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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. 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 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 appears from our examination of those
books.
c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d. In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash flow Statement comply with the Accounting Standards notified
under the Companies Act, 1956 read with the General Circular 15/2013
dated 13.09.2013 of the Ministry of Corporate Affairs in respect of
section 233 of the Companies Act, 2013.
e. On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
(Referred to in paragraph (1) UNDER THE HEADING OF "Reporting on Other
Legal and Regulatory Requirements" of our report of even date]
(i) a) The Company has maintained proper records showing full
particular including quantitative details and situation of the fixed
assets.
b) According to the information and explanation given to us, the
Company had only Land & Building as its fixed assets the same were
physically verified by the management during the year.
c) During the year, the company has disposed off all its fixed assets
and the going concern status of the company is not affected as the
company is primarily in investment business.
(ii) The Company does not have any inventories. Hence Clauses 4(11)
(a), (b) and (c) are not applicable to the Company.
(iii) a) The Company has granted loan to one party covered in the
register maintained u/s 301 of the Companies Act, 1956. The maximum
amount outstanding during the year was Rs.8, 16, 02,460 and yearend
balance is Rs.8, 16, 02,460/-.
b) in our opinion, the rate of interest and other terms & conditions on
which the loans have been granted are not prima-facie prejudicial to
the interest of the Company.
c) The Loans granted are receivable on demand.
d) There is no overdue amount.
e) The Company has not taken any loans from the parties covered in the
registered maintained u/s 301 of the Companies Act, 1956. Accordingly,
the clauses 4(iii) (f) & (g) are not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and nature of its business.
During the course of our audit, we have not observed any major
weaknesses in internal control.
(v) a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Act have been entered in the register
required to be maintained under that section; and
b) In our opinion and according to the information and explanations
given to us, no transactions have been made in pursuance of such
contracts or arrangements during the year.
(vi) The company has not accepted any deposits from public. Hence, the
clause 4(vi) of the Order is not applicable to the company.
(vii) In our opinion, the company has internal audit system
commensurate with its size and nature of its business.
(viii) The maintenance of cost records has not been prescribed by the
Central Government for the maintenance of cost records under section
209(1) (d) of the Companies Act, 1956. Hence clause 4(viii) of the
Order is not applicable.
(ix) a) According to the records of the company, undisputed statutory
dues including provident fund, investor education and protection fund,
employees' state insurance, income tax, sales tax, wealth tax,
service-tax, custom duty, excise duty, cess and other material
statutory dues applicable to the company, if any, have been regularly
deposited with appropriate authorities.
According to the information and explanations given to us, undisputed
amounts payable in respect of above dues were not in arrears, as at
31st March, 2014 for a period of more than six months from the date
they become payable.
b) According to the information and explanation given to us, there are
no dues of sales tax, income tax, custom duty, wealth tax, service-tax,
excise duty and cess which have not been deposited on account of any
disputes.
(x) 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 financial year immediately preceding such financial year.
(xi) The Company has not borrowed any money from banks or financial
institutions. Hence Clause 4(xi) is not applicable.
(xii) In our opinion and according to the information and explanations
given to us, the company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities. Therefore, the provisions of clause 4(xii) of the Companies
(Auditors' Report) Order, 2003 are not applicable to the company.
(xiii) The company is not a chit fund or a nidhi mutual benefit
fund/society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditors' Report) Order, 2003 are not applicable to the
company.
(xiv) In respect of dealing/investments in shares, in our opinion and
according to the information and explanations given to us, proper
records have been maintained of the investments and timely entries have
been made therein.The shares and other investments have been held by
the company in its own name.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for the loans taken by others from
banks or financial institutions.
(xvi) The Company has not taken any term loans and hence not
applicable.
(xvii) The Company has not raised any funds on short term basis.
Accordingly, Clause 4(xvii) is not applicable to the Company.
(xviii) The company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Companies Act, 1956. Hence clause 4(xviii) of the
Order is not applicable.
(xix) The company has not issued debentures during the year. Therefore,
the provisions of clause 4(xix) of the Companies (Auditors' Report)
Order, 2003 are not applicable to the company.
(xx) The company has not raised money by way of public issue during the
year. Therefore, the provisions of clause 4(xx) of the Companies
(Auditors' Report) Order, 2003 are not applicable to the company.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
year.
For GUPTA VIGG & CO.
Chartered Accountants
Firm Regn.No.001393N
Sd/-
(CA.VINOD KUMAR MAMA)
PARTNER
M.N0.81585
Dated: 30.05.2014
Place: LUDHIANA.
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