| We have audited the accompanying financial statements of Minal
Industries Limited. ("the Company") which comprise the Balance Sheet as
at March 31, 2014, 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 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.
Auditors' 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. 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 qualified audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the aforesaid
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 the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
b) in the case of the Statement of Profit and Loss, of the 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 Emphasis of Matter
We invite the attention of the members to the following material
matters:
a) With regard to Note No. 22, relating to Provision for diminution in
value of investment no provision is made for diminution in value of non
trade investments amounting to Rs. 3,53,000/- which is not as per
AS-13- Accounting for Investments. The amount of such deviation is not
ascetainable.
b) With regard to Note No. 23, Gratuity and leave encashment is
accounted on cash basis, which is not as per AS-15 Employee Benefits.
The amount is not ascertained in absence of actuarial valuation.
c) With regard to Note no.25 relating to Trade Receivables, it has been
observed that an amount of Rs.395,61,66,909/- is outstanding for more
than three years. The management of the Company is confident of
recovery of the full amount and therefore no provision has been made.
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 referred to in
subsection (3C) of section 211 of the Companies Act, 1956 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;
and
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.
Annexure to Independent Auditor's Report
Referred to in Paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements" of our report of even date.
1. (a) The Company has maintained memorandum of records showing
details of fixed assets (except furniture and fittings and electrical
installation). However, comprehensive fixed assets register is being
complied.
(b) The fixed assets of the Company have been physically verified by
the management during the year; no material discrepancies between the
book records and the physical inventory have been noticed. In our
opinion, the frequency of verification is reasonable.
(c) In our opinion and according to the information and explanations
given to us, no Fixed Assets has been disposed of by Company during the
year.
2. (a) According to the information and explanations given to us,
inventories have been physically verified by the management at
reasonable intervals during the year.
(b) According to the information and explanations given to us, the
procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) According to the information and explanations given to us, the
Company is maintaining proper records of its inventory. The
discrepancies noticed on verification between the physical stocks and
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 unsecured loan to two Companies covered in the
register maintained under Section 301 of the Companies Act, 1956. The
details of loan are as under:
Name of the Company Relationship Maximum Year end
Balance
Amount
involved
Minal International
FZE Subsidiary Company 2,07,18,932/- 2,07,18,932/-
C Mahendra
Infojewels Associate Company 18,42,61,568/- 18,14,36,122/-
Limited
(b) The Company has granted interest bearing loan of Rs.2,07,18,932/-
(net of exchange difference) to its subsidiary company which the
company has made provision of interest income and the loan given to
associate company is interest free. In our opinion and according to the
information and explanations given to us, the rate of interest and
other terms and conditions on which loans have been granted to the
above Companies listed in the register maintained under section 301 of
the Companies Act, 1956 are not, prima facie prejudicial to the
interest of the Company.
(c) We are informed that the loans granted to the Companies, do not
have any stipulation for the payment of principal and interest.
(d) In view of sub clause (c) above, there are no overdue amount and
hence the provision of sub-clause (d) of clause 4(iii) of the Order are
not applicable to the Company.
(e) The Company has taken loan from Director covered in the register
maintained under Section 301 of the Act. The details of loan are as
under:
No of
Directors Maximum Amount
outstanding Amount outstanding
during the year at the year end
1 Rs.35,00,000/- Rs.35,00,000/-
(f) No interest is paid and other terms and conditions on which loan
has been taken from Directors listed in register maintained under
section 301 are prima facie not prejudicial for the interest of the
Company.
(g) The loan taken does not have any stipulation for the payment of
principal.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, carried out accordance with the auditing
standards generally accepted in India and according to the information
and explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control systems.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
that need to be entered in the register maintained under section 301
have been properly entered.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs. 5
lakhs with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
6. The Company has not accepted any deposit from public within the
meaning of section 58A and 58AA or any other relevant provisions of the
Companies Act, 1956 and the rules framed there under.
7. As per the information and explanation given to us by the
management, the Company's internal control procedures together with the
internal checks conducted by the management staff during the year can
be considered as an internal audit system commensurate with the size
and nature of its business.
8. According to the information and explanations given to us, The
Central Government has not prescribed maintenance of cost records under
Section 209(1)(d) of the Act, in respect of activities carried on by
the company. Hence the provisions of clause 4(viii) of the Order is not
applicable to the Company.
9. (a) According to the information and explanations given to us, the
Company is generally regular in depositing undisputed statutory dues
including provident fund, investor education and protection fund,
employee's state insurance, income tax, sales tax, service tax, wealth
tax, custom duty, excise duty, cess, and other statutory dues
applicable with the appropriate authorities except for Profession Tax
amounting to Rs. 18,775/-, which remain in arrears as at March 31,
2014 for a period exceeding six months from the date they became
payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of income tax,
sales tax, service tax, wealth tax, custom duty, excise duty, cess,
which have not been deposited on account of dispute.
10. The Company has no accumulated losses as at March 31, 2014 after
considering the balance in Reserve and Surplus account as at that date.
Further the company has incurred cash losses of Rs. 16,69,655/- in the
financial year ended on that date and has not incurred any cash losses
in the immediately preceding financial year.
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 not defaulted in repayment of dues to a financial
institution, banks. There are no debenture holders.
12. According to the information and explanations give to us, the
Company has not granted any loans and advances on the basis of
securities by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to chit fund and nidhi/mutual benefit
fund/societies.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. It has invested in shares of wholly
owned foreign subsidiary and few other companies for which proper
records have been maintained and timely entries have been made therein.
Said investment are held in Company's own name.
15. According to the records of the company and the information and
explanations provided by the management, the company has given
guarantee for loans taken by its associated company from banks, the
terms and conditions whereof in our opinion are not prima facie
prejudicial to the interest to the Company.
16. According to the records of the company, the company has not
obtained any term loans during the year.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
investment by the company.
18. According to the records of the company and the information and
explanations provided by the management, 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.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money through a public issue during
the year.
21. During the course of our explanations of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
FOR R. H. MODI & CO.,
CHARTERED ACCOUNTANTS
(Registration No : 106486W)
R. H. MODI
PLACE : MUMBAI PROPRIETOR
DATE : 30/05/2014 Membership No. 37643 |