| We have audited the accompanying financial statements of Kar Mobiles
Limited ("the Company") which comprise the Balance Sheet as at 31st
March 2014, the Profit and Loss Statement 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 Financial Statements
The management of the company 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 Companies Act, 1956 ("the Act") and the
Accounting Standards referred to in sub section (3C) of Section 211 of
"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 presentation of the financial statements that give a
true and fair view and 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 of
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 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 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 controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, 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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the said
financial statements read together with the significant accounting
policies and notes to accounts attached thereto, 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 Profit and Loss Statement, of the profit 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 issued
by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure, a statement on the
matters specified in Paragraphs 4 and 5 of the said Order;
2. As required by section 227(3) of the Act, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) 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;
(iii) The Balance Sheet and Profit and Loss Statement, and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Statement and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub- section (3C) of Section 211 of
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
133 of the Companies Act, 2013;
(v) On the basis of written representations received from the directors
and taken on record by the Board of Directors, we report that none of
the directors of the company is disqualified as on March 31st, 2014
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
ANNEXURE TO INDEPENDENT AUDITORS' REPORT
ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDIT REPORT OF
EVEN DATE ON THE FINANCIAL STATEMENTS OF KAR MOBILES LIMITED FOR THE
YEAR ENDED 31ST MARCH 2014
1. (a) The company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) We are informed that most of the fixed assets of the company have
been physically verified by the management during the previous year
based on the fixed assets verification programme laid down by the
management of the company which, in our opinion is reasonable having
regard to the size of the company and the nature of assets.
(c) The company has not disposed off substantial part of fixed assets
during the year.
2. (a) We are informed that the inventory of raw materials, stores and
spares in the custody of the company are physically verified by the
management on a continuing basis as per a programme of perpetual
inventory and inventories of other items have been physically verified
at the year-end, the frequency of which, in our opinion is reasonable,
having regard to the size of the company and the nature of its
business;
(b) In our opinion and according to the explanations given to us, the
procedures of physical verification of inventory followed by the
management are fairly 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 as
informed to us, discrepancies of material nature noticed on physical
verification, by the management, have been appropriately adjusted in
the books of account.
3. (a) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956 except an interest free
loan of Rs..0.75Crores given in an earlier year to Rane Foundation, a
public charitable trust. The maximum amount involved during the year
and the year-end balance of such loan is Rs.0.75 crores;
(b) In our opinion, the terms and conditions of such loan is not prima
facie prejudicial to the interests of the company;
(c) The aforesaid mentioned loan is due for repayment during financial
year ending 31st March 2016. Accordingly there are no over dues as at
the Balance Sheet date;
(d) The company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are fairly adequate internal control procedures
commensurate with the size of the company and nature of its business
for the purchase of inventory and fixed assets and for the sale of
goods. We have not noted any continuing failure to correct major
weaknesses in the internal control system, subject to Auditor's
Responsibility paragraph mentioned in the Independent Auditor's Report
above.
5. According to the information and explanations given to us, all
transactions which require to be entered in a register maintained
pursuant to Section 301 of the Companies Act, 1956 have been so
entered. Where each of such transactions is in excess of Rs.5 lakhs in
respect of any party, they have been made at cost/ negotiated prices
and they either compare favourably with market prices or there are no
comparable prices.
6. The company has not accepted any deposits from the public during
the year and there are no deposits outstanding as at the beginning and
end of the year. Hence, the compliance of provisions of sections 58A
and 58AA of the Companies Act, 1956 is not applicable.
7. In our opinion, the company has an adequate internal audit system
commensurate with the size of the Company and the nature of its
business.
8. We have broadly reviewed the records maintained by the company
pursuant to the order issued by the Central Government under Section
209(1) (d) of the Companies Act, 1956, for the maintenance of cost
records in respect of the products of the company and are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained. We have, however, not made a detailed examination
of these records with a view to determine whether they are accurate or
complete.
9. (a) According to the information and explanations given to us and
as per our verification of the records of the company, the company has
been fairly regular in depositing undisputed statutory dues including
Provident fund, Employee's State Insurance, Income Tax, Sales Tax,
Wealth Tax, Customs Duty, Excise Duty, Cess, Investor Education and
Protection Fund and other statutory dues with the appropriate
authorities during the year to the extent applicable. There are no
arrears of undisputed statutory dues of a material nature outstanding
for a period of more than six months from the date on which they became
payable;
(b) According to the information and explanations given to us and as
per our verification of the records of the company, there are no
disputed amounts of tax/ duty that have not been deposited with
appropriate authorities as at 31st March 2014 except for the following:
Period to
Sl. Name of the Amount which the
No. Statutes ( Rs.. In Cr.) dispute relates
1 Finance Act, 1994 0.07 Apr-2005 to July-2007
2 Finance Act, 1994 0.03 Sept-2004 to Mar-2005
3 Finance Act, 1994 0.003 Apr-2011 to Aug-2011
4 Finance Act, 1994 0.02 Nov-2006 to Mar-2009
5 Finance Act, 1994 0.01 Oct-2007 to Mar-2012
6 Customs Act, 1962 0.06 May-2005
7 Income Tax Act, 1961 0.08 AY 2011-12
Name of the Statue Forum where dispute is pending
Finance Act, 1994 Customs Excise and Service Tax
Appellate Tribunal
Finance Act, 1994 Customs Excise and Service Tax
Appellate Tribunal
Finance Act, 1994 Commissioner of Central Excise
(Appeals)
Finance Act, 1994 Commissioner of Central Excise
(Appeals)
Finance Act, 1994 Commissioner of Central Excise
(Appeals)
Customs Act, 1962 Joint Commissioner of Customs
Income Tax Act, 196 Assistant Commissioner of Income
Tax
10. There are no accumulated losses at the end of the financial year.
The company has also not incurred any cash losses during the year and
in the immediately preceding financial year.
11. According to the information and explanations given to us and as
per our verification of the records of the company, the company has not
defaulted in repayment of dues to the financial institutions and banks.
12. The company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. Since the company is not a chit fund/nidhi/mutual benefit
fund/society, the related reporting requirements are not applicable.
14. Since the company is not dealing or trading in shares, securities,
debentures or other investments, the related reporting requirements are
not applicable.
15. According to the information and explanations given to us and as
per the verification of the records of the company, there are no
guarantees given by the company for loans taken by others from banks or
financial institutions.
16. According to the information and explanation given to us and as
per the verification of the records of the company, the term loans
obtained and to the extent utilized during the year were applied for
the purpose for which such loans were obtained.
17. According to the information and explanations given to us and as
per our verification of the records of the company, the company has not
utilized funds raised on short-term basis for long term purposes,
except for an instance of repayment of a term loan using cash credit
facility, which was regularized within a week.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act.
19. The company has not issued any debentures during the year.
20. The company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us and as
per our verification of the records of the company, no fraud either on
or by the company has been noticed or reported during the year.
For VARMA & VARMA
Chartered Accountants
FRN.004532S
CHERIAN K BABY
Place : Chennai Partner
Date : May 20, 2014 M.No.16043 | 