| We have audited the accompanying financial statements of TIMBOR HOME
LIMITED, AHMEDABAD. which comprise the Balance Sheet as at March 31,
2014 and the statements of Profit and Loss and cash flow 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
accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"),read with the General Circular
15/2013 dated 13th September, 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
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 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 Company's
internal control. 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 subject to audit evidences, which we have
not been able to obtain due to company's disability and have relied on
Management's representation in that cases to form an audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us,read with the points stated in theEmphasis of
Matter and Qualification and Notes to accounts of the financial
statements, the 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 :
a) In case of the Balance Sheet , of the state of affairs of the
Company as at March 31, 2014; And
b) In case of the Statement of Profit and Loss, of the Loss for the
year ended on that date; and
c) In case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
Emphasis of Matter and Qualifications
1. We draw attention to Note No. 32 of the accompanying financial
statements in respect of recovery cases and arbitration matters filed
by Creditors and Banks/ NBFCs against the company and the Note No. 33
of the accompanying financial statements in respect of internal
restructuring of the debts of the company and which may affect the
going concern's concept of the company upon final outcome of the said
pending petitions/arbitration/cases.
2. We draw attention to Note No. 21 of the accompanying financial
statements in respect of third party balance confirmations,grouping &
classification, Disclosure of Gross Amounts, and other related issues,
resulting into effect on the results/affairs, as given in the said
Notes.
3. The company is in continuing default in respect of non compilance of
provison sec. 383A of the companys act, 1956 in respect of appointment
of whole time company secretary
Report on Other Legal and Regulatory Requirements
1. 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 referred
to in subsection (3C) of section 211 of the Companies Act, 1956read
with the General Circular 15/2013 dated 13th September, 2013 of the
Ministry of Corporate Affairs in respect of Section 133 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 term 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
the rate at which the cess is to be paid under section 441A 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.
2. 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.
Annexure referred to in paragraph 2 of our Auditor's Report of even
date on the financial statements of Timbor Home Limited for the year
ended 31st March, 2014
On the basis of such checks as we considered appropriate and in terms
of the information and explanation given to us, we state that:-
1. a) The company is in process of updating the records showing
particulars of quantity and situation of fixed assets.
b) As informed to us, the fixed assets of the company have been
physically verified by the Management at reasonable intervals and no
materials discrepancies have been noticed on such verification.
c) None of the substantial part of fixed assets has been disposed off
during the year, however as informed to us substantial part of Fixed
Assets has been lost due to fire at factory premises. It is informed to
us that On 17th August 2013, on account of short circuit, fire wedged
at Unit I of the Company situated at 7, Shubhlaxmi Industrial Estate,
Sarkhej-Bavala Highway. Changodhar - 382213, Ahmedabad, Gujarat due to
which a substantial part of Fixed Assets got burnt and have no
realisable value. As per management, estimated Loss of Fixed Assets as
reported by the Surveyor in his Survey / Valuation Report is Rs. 65.22
Lakhs (Net Construction Loss Value) & Rs. 286.84 Lakhs (Net Plant &
Machinary Loss Value). We have relied on the Management representations
on the basis of which we are of the opinion that the company shall be
able to continue as a going concern for the foreseeable future despite
the loss of substantial part of fixed assets.
2. a) As informed to us, during the year the management has conducted
physical verification of the inventories, except of
the inventories as stated in Note No. 43 and further in our opinion the
frequency of verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are broadly 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 and on the basis of our examination of the records of
inventory & subject to limited audit evidences available, the Company
seems to be maintaining proper records of inventory. As informed by
management,the discrepancies noticed on physical verification of
inventory as compared to book records were not material and have been
properly dealt with in the books of account.
3. a) According to the information and explanations given to us, the
company has granted secured or unsecured loans to
1 (ONE) parties covered in the register maintained under Section 301 of
the Act. The maximum amount outstanding during the year was Rs. 3.50
Lakhs and the year end balance of loans was Rs. 3.50 Lakhs. The rate of
interest and the terms of repayment are not stipulated and other terms
and conditions are not prima facie prejudicial to the interest of the
Company.
b) According to the information and explanation given to us, the
Company had taken unsecured loan from the 8 (Eight) Parties listed in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount outstanding during the year was Rs.795.07 Lacs and
the year end balance of loans was Rs.534.09 Lacs. The rate of interest
and the terms of repayment are not stipulated and other terms and
conditions are not prima facie prejudicial to the interest of the
Company.
4. In our opinion and according to the information and explanation
given to us, there are generally adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to the purchase of inventories and fixed assets,
and with regard to the sale of goods. In our opinion and according to
information and explanation given to us, there is no continuing failure
to correct major weakness of such internal control system.
5. 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 Companies Act, 1956,
that need to be entered into the register maintained under Section 301
of the Companies Act, 1956, have been so entered. b) In respect of
transactions with parties with whom transactions exceeding value of ' 5
Lacs have been entered into during the financial year, are at the
prices which are reasonable having regard to the prevailing market
prices at the relevant time, except in case of transactions where we
are unable to comment owing to the unique and specialized nature of the
items and absence of any comparable prices, whether the transactions
are made at the prevailing market prices at the relevant time or not.
6. In our opinion and according to the information and explanation
given to us, the company has not accepted deposits from the public.
7. The Company does not have proper Internal Audit System. Looking to
the size and nature of its business, we recommend to Audit Committee to
strengthen the Internal Audit system.
8. We have been informed that the Central Government has prescribed
maintenance of cost records under Clause (d) of Sub- section (1) of
Section 209 of the Companies Act, 1956, and according to the
information and explanation given to us, maintenance of Cost Records of
FY 2013-14 are still in process and Compliance Report will be submitted
with in prescribed time limit. However the Compliance Report for FY
2012-13 has not been submitted yet due to unavoidable circumstances as
informed by the management.
9. a) According to the records of the company and information and
explanations given to us the company is regular in
depositing undisputed statutory dues including Provident Fund, Income
Tax, Custom Duty and any other statutory dues
wherever applicable with the appropriate authorities during the year.
However at times, the company gets irregular in
depositing the aforesaid undisputed statutory dues. Details of
Outstanding Undisputed dues for over six months as at year
b) According to the records of the company and information and
explanations given to us there is no disputed statutory dues payable by
the company.However, the company has filed theIncome Tax Returns for
Financial Year 2011-12 on 28-03- 2014 and the income tax payable for
the same is Rs. 21813470. It is to be noted that the company has not
filed the Income tax return for the financial year 2012-13.
10. The company has incurred losses during the current year.
Accumulated Cash losses stand to be Rs. 1773.84 Lakhs and Net worth of
the company as on the end of financial year stands to be Rs. 3530.49
Lakhs. So the accumulated losses at the end of the financial year are
more than 50% of the company's net worth.
In the current year, the company has incurred a cash loss of Rs.
1773.84 Lakhs. While in the immediately preceeding previous year,
company had earned an average profits.
11. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has defaulted in repayment of dues (including interest) to
financial institution and banks and as informed to us, details relating
to extent of defaults is not readily available with the company.
12. According to the information and explanation 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.
13. The Company is not a chit fund or a nidhi / mutual benefit fund or
society. Therefore clause 4 (xiii) is not applicable to the company.
14. The Company is not dealing or trading in shares or securities,
debentures and other investments. Therefore clause 4(xiv) is not
applicable to the Company.
15. According to the information & explanations given to us the Company
has not given guarantee for loans taken by others from banks or
financial institutions.
16. According to the Cash Flow Statement and other records examined by
us as well as information and explanations given to us, during the year
under consideration no new term loan has been taken by the company.
17. According to the Cash Flow Statement and other records examined by
us as well as information and explanations given to us on an overall
basis, we report that funds raised on short term basis have not
prima-facie been used for long term investment.
18. The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under Section
301 of the Companies Act, 1956.
19. The company has not issued any debentures and accordingly, the
provisions of clause 4(xix) of the Companies (Auditor's Report) Order,
2003 are not applicable to the company.
20. During the year, the company has not raised any money through a
public issue.
21. During the course of our examination of the books of account and
records of the company carried out in accordance with the generally
accepted auditing practices in India, and according to the information
and explanation given to us, we have neither come across any instance
of material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of such case by the management.
For, MOTWANI & AGARWAL
CHARTERED ACCOUNTANTS
KAPIL R. TALREJA
PARTNER
AHMEDABAD FIRM REG. NO. : 127781W
DATE : 30/5/2014 MEMBERSHIP NO.: 146488 | 