Mar 31, 2016
INDEPENDENT AUDITORâS REPORT
To,
The Members,
ARCHIT ORGANOSYS LIMITED,
Ahmedabad.
Report on the Financial Statements
We have audited the accompanying financial statements of ARCHIT ORGANOSYS LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, 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.
Managementâs Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation 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 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 provision 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 material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these 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 specified 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 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 true and fair view 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 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 qualified audit opinion on financial statements.
Basis for Qualified Opinion
The company had entered into derivative contract for sale of foreign currency with HDFC Bank Ltd. in financial year 2008-2009 which has resulted into loss to the tune of Rs.1,97,52,367/- against which the sum of Rs. 55,06,598/has already been paid to HDFC Bank Ltd. and charged to Statement of Profit and Loss in the aforesaid financial year. Consequent upon adjustment of fixed deposits amounting to Rs. 23,64,200/- against the balance loss of Rs. 1,42,45,769/- the liability on account of aforesaid loss, as per bank statement provided up to 31st January, 2013 stands to Rs. 1,47,07,069/- including interest, which has not been provided for by the company. Such non provision of liability has resulted into non compliance of Accounting Standard 29 issued by Institute of Chartered Accountants of India and also resulted into understatement of current liabilities. Since the interest/charges, if any, for the period from 1st February, 2013 to 31st March, 2016 has not been intimated to company, the impact thereof on profit for the year under review could not be ascertained.
Had the observations made by us in Para (i) above been considered, there would have been loss for the year amounting to Rs.48,492/- as against reported profit of Rs. 1,46,58,577/-, current liabilities would have been Rs. 16,85,89,488/- as against reported current liabilities of Rs. 15,38,82,419/-.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for 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, of the state of affairs of the company as at 31st March, 2016 and its profit and its 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 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub section (11) of section 143 of the Act, we give in the âAnnexure - Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
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 appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) Except for the matter described in the basis for Qualified Opinion paragraph, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and
(g) 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 and to our 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 notes 29 and 30 to the financial statements.
(ii) The Company did not have any long-term contracts including derivatives 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 - A to the Independent Auditorsâ Report of even date on financial statements
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.
(b) The fixed assets have been physically verified by the management at reasonable intervals having regard to size of company and nature of its assets. According to information and explanation given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) According to information and explanation given to us, the Management of the Company has conducted physical verification of inventory at reasonable intervals and no material discrepancies were noticed on such physical verification during the year.
(iii) The Company has not granted any secured / unsecured loan to any parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of Clause 3(iii) of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans, investments, guarantees and securities.
(v) According to information and explanations given to us, the Company has not accepted any deposits as defined in The Companies (Acceptance of Deposits) Rules 2014. Accordingly, the provisions of Clause 3(v) of the Order are not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant to rules made by the Central Government. We are of the opinion that prima facie the prescribed accounts and records have been maintained and being made. We have not, however, made a detailed examination of these records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information given to us, the Company is generally regular in depositing with appropriate
authorities undisputed statutory dues and Company had no arrears of such outstanding statutory dues as at 31st March, 2016 for a period more than six months from the date they became payable.
(b) According to the information and explanations given to us, the company has no disputed outstanding statutory dues as at 31st March, 2016 other than stated below:
Name of the Statute |
Nature of Dues |
Amount in Rs. |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act, 1961 |
Income Tax |
4,84,830 |
F.Y. 2012-2013 |
CIT(A), Ahmedabad |
(viii) According to the information and explanations given to us, the Company has not defaulted in the repayment of loans and borrowings to financial institutions, banks, government or dues to debenture holders during the year.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and term loans during the year.
(x) According to the information and explanations given to us, no fraud by company or any fraud on the company by its officers and employees have been noticed or reported during the year.
(xi) According to the information and explanations give to us, the Company has paid/provided for managerial remuneration in accordance with the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us, transactions with the related parties are in compliance with sections 177 and 188 of the Act and details of transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations give to us, the Company has made preferential allotment shares which is in compliance with the requirement of section 42 of companies act, 2013. During the year, the amount raised through preferential allotment have been used for the purpose for which the funds were raised.
(xv) According to the information and explanations given to us, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure - B to the Independent Auditorsâ Report of even date on the Financial Statements
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting ARCHIT ORGANOSYS LIMITED (âthe Companyâ) as of 31 March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For G. K. Choksi & Co.
Chartered Accountants
[Firm Registration No. 101895W]
(SANDIP PARIKH)
Place: Ahmedabad Partner
Date: 30th May, 2016 Membership No. 40727
Mar 31, 2015
We have audited the accompanying financial statements of ARCHIT
ORGANOSYS LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31,2015, 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 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 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 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
provision 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 control, 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
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 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
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified 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 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 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 operating effectiveness of
such control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by 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 qualified audit opinion on
financial statements.
Basis for Qualified Opinion
(i) The company had entered into derivative contract for sale of
foreign currency with HDFC Bank Ltd. in financial year2008-2009 which
has resulted into loss to the tune of Rs. 1,97,52,367/- against which
the sum of Rs. 55,06,598/ - has already been paid to HDFC Bank Ltd. and
charged to Statement of Profit and Loss in the aforesaid financial
year. Consequent upon adjustment of fixed deposits amounting to Rs.
23,64,200/- against the balance loss of Rs.1,42,45,769/- the liability
on account of aforesaid loss, as per bank statement provided up to 31st
January, 2013 stands to Rs. 1,47,07,069/- including interest, which has
not been provided for by the company. Such non provision of liability
has resulted into non compliance of Accounting Standard 29 issued by
Institute of Chartered Accountants of India and also resulted into
understatement of current liabilities. Since the interest/charges, if
any, for the period from 1St February, 2013 to 31st March, 2015 has not
been intimated to company, the impact thereof on profit for the year
under review could not be ascertained.
(ii) The company has not yet compiled the requisite information,
related to suppliers who have registered themselves under the Micro,
Small And Medium Enterprises Development Act, 2006. In the absence of
relevant information the requisite disclosures are not made in the
financial statements.
Had the observations made by us in Para (i) above been considered,
there would have been loss for the year amounting to Rs. 67,51,340/- as
against reported profit of Rs. 79,55,729 /-, current liabilities would
have been Rs. 18,34,50,103/- as against reported current liabilities of
Rs. 16,87,43,034/-.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for 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, of the state of affairs of the company as
at 31st March, 2015 and its profit and its 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 2015 ("the
Order") 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 of the matters specified in paragraphs 3 and 4 of the Order
to the extent applicable.
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 appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
(d) Except for the matter described in the basis for Qualified Opinion
paragraph, in our opinion, the aforesaid financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of written representations received from the directors
as on 31 March, 2015 taken on record by the Board of Directors, none of
the directors is disqualified as on 31 March, 2015 from being appointed
as a director in terms of Section 164(2) of the Act.
(f) 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 and to our 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 notes 30 to the
financial statements.
(ii) The Company did not have any long-term contracts including
derivatives 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 AUDITORS'' REPORT
(Referred to in our Report of even date to the members of ARCHIT
ORGANOSYS LIMITED)
(i) (a) The Company has not compiled fixed assets records to show full
particulars, including quantitative details
and situation of fixed assets.
(b) We were informed that the fixed assets were not physically verified
by the Management at reasonable intervals. Therefore we are unable to
comment on material discrepancies if any.
(ii) (a) In our opinion, physical verification of inventory (excluding
inventory lying with third parties) has been
conducted by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the management needs to be strengthened in relation to the
size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company is maintaining proper records of inventory. No
material discrepancy was noticed on physical verification of the
inventory.
(iii) The Company has not granted any loans, secured or unsecured to
any companies, firms or other parties covered in the register
maintained u/s. 189 of the Companies Act, 2013. Accordingly clause
3(iii)(a) and 3(iii)(b) of the order are not applicable.
(iv) In our opinion and according to information and explanation given
to us; the internal control system needs to be strengthened so as to
commensurate with the size of the Company and the nature of its
business , with regard to purchase of inventory and fixed assets.
However there is adequate internal control system with regard to the
sale of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weakness in the
internal controls.
(v) The Company has not accepted any deposits as defined in The
Companies (Acceptance of Deposits) Rules 2014. Accordingly, the
provisions of Clause 3(v) of the Order are not applicable to the
Company.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to rules made by the Central Government. We are of the
opinion that prima facie the prescribed accounts and records have been
maintained and being made. We have not, however, made a detailed
examination of these records with a view to determine whether they are
accurate or complete.
(vii) (a) According to the information given to us, the Company is
generally regular in depositing with appropriate
authorities undisputed statutory dues and Company had no arrears of
such outstanding statutory dues as at 31st March, 2015 for a period
more than six months from the date they became payable.
(b) According to the information and explanations given to us, the
Company has no disputed outstanding statutory dues as at to 31st March,
2015.
(c) According to the information and explanations given to us, there
are no amounts which are required to be transferred to the Investor
Education and Protection Fund by the Company.
(viii) The company does not have accumulated losses at year end. The
company has not incurred any cash loss during the current financial
year even after considering the effect of qualifications reported in
Auditor''s Report. However, there would have been cash loss to the tune
of Rs. 28,42,763/- in the immediately preceding year.
(ix) According to the information and explanations given to us, the
Company has not defaulted in the repayment of dues to financial
institutions, banks or debenture holders during the year.
(x) According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions during the year.
(xi) According to the information and explanation given to us the term
loan has been applied for the purpose for which it was obtained.
(xii) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the year
under review.
For G. K. Choksi & Co.
Chartered Accountants
[Firm Registration No. 101895W]
(SANDIP PARIKH)
Place: Ahmedabad Partner
Date: 25th May, 2015 Membership No. 40727
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of ARCHIT
ORGANOSYS LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31, 2013, 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 referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). 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. 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.
Basis for Qualified Opinion
(i) The company had entered into derivative contract for sale of
foreign currency with HDFC Bank Ltd. in financial year 2008-2009 which
has resulted into loss to the tune ofRs. 1,97,52,367/- against which the
sum of Rs. 55,06,598/- has already been paid to HDFC Bank Ltd. and
charged to Statement of Profit and Loss in the aforesaid financial
year. Consequent to adjustment of fixed deposits amounting to Rs.
23,64,200/- against the balance loss oft 1,42,45,769/- the liability on
account of aforesaid loss stands reduced toRs. 1,47,07,069/- including
interest which has not been provided for by the company. Such non
provision of liability has resulted into non compliance of Accounting
Standard 29 issued by Institute of Chartered Accountants of India and
also resulted into understatement of current liabilities.
(ii) The company has not yet compiled the requisite information,
related to suppliers who have registered themselves under the Micro,
Small And Medium Enterprises Development Act, 2006. In the absence of
relevant information the requisite disclosures are not made in the
financial statements.
Had the observations made by us in Para (i) above been considered, the
loss for the year would have been Rs. 96,05,866/- as against reported
profit off. 51,01,203/-, current liabilities would have been Rs.
11,29,29,697/- as against reported current liabilities off
9,82,22,628/-.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the matter described in the basis
for Qualified Opinion paragraph, 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 the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) In the case of the Statement of Profit and Loss, 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 ("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) Except for the matter described in the basis for Qualified Opinion
paragraph, in our opinion, the Balance Sheet, Statement of Profit and
Loss and Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956
(e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March, 31, 2013, from being
appointed as a director in terms 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.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in our Report of even date to the members of ARCHIT
ORGANOSYS LIMITED)
1 (a) The Company has not compiled fixed assets records to show full
particulars, including quantitative details and situation of fixed
assets.
(b) We were informed that the fixed assets were not physically verified
by the Management at the end of the year however the company has a
regular programme of verification which in our opinion is reasonable
having regard to the size of the company and nature of its business.
Since the fixed assets records are still under compilation no
comparison with the book records have yet been made. In the absence of
such comparison opinion as to discrepancies if any can not be given.
(c) The Company has not disposed of any substantial part of its fixed
assets during the year as would affect its going concern status.
2 (a) In our opinion, physical verification of inventory (excluding
inventory lying with third parties) has been conducted by the
management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the management needs to be strengthened in relation to the
size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company is maintaining proper records of inventory. No
material discrepancy was noticed on physical verification of the
inventory.
3 (a) The Company has not granted any loans, secured or unsecured to
any companies, firms or other parties covered in the register
maintained u/s.301 of the Companies Act, 1956. Accordingly clause
4(iii)(b), 4(iii)(c) and 4(iii)(d) of the order are not applicable.
(b) i)The Company has taken interest free unsecured loans from five
parties and interest bearing unsecured loan from one party covered in
the register maintained u/s.301 of the Companies Act, 1956. The balance
outstanding on account of these loans as at the end of the year was Rs.
2,42,70,000/- and the maximum balance outstanding during the year were
Rs. 2,67,20,000/-
(ii) The terms and conditions of the above loans are prima facie not
prejudicial to the interest of the Company.
(iii)As per the information and explanations given to us, principal
amount and interest thereon has been repaid whenever they fall due for
payment.
4 In our opinion and according to information and explanation given to
us; the internal control system needs to be strengthened so as to
commensurate with the size of the Company and the nature of its
business, with regard to purchase of inventory and fixed assets..
However there is adequate internal control system and with regard to
the sale of goods and services. During the course of our audit, we
have not observed any continuing failure to correct major weakness in
the internal controls.
5 (a) According to information and explanations provided by the
management, 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.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6 In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA or other relevant provisions of
the Act.
7 In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business;
8 "We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies(Cost Accounting Records)Rules,2011 prescribed
by the Central Government under section 209(1 )(d) of the Companies
Act, 1956 and are of the opinion that prima facia the prescribed cost
records have been maintained. We have however not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
9 (a) In our opinion, the Company is regular in depositing with
appropriate authorities undisputed statutory dues and the company had
no arrears of such outstanding dues as at 31st March, 2013 for a period
more than six months from the date they became payable.
(b) According to the information and explanations given to us, the
Company does not have any disputed outstanding statutory dues as at
31st March, 2013 except stated hereunder.
10 The company does not have accumulated losses at year end. However,
had the effect of qualification reported in the basis for Qualified
Opinion paragraph of Independent Auditor''s report been taken in to
consideration, there would have been cash loss to the tune of Rs.
47,35,007/- for the year under review. Similarly, there would have been
cash loss to the tune of Rs. 53,53,143/- in the immediately preceding
year.
11 According to the records of the company examined by us and on the
basis of information and explanations given to us, the company has not
defaulted in repayment of dues to financial institution or bank.
12 As per the information and explanations given to us, the Company has
not granted any loan or advance on the basis of security by way of
pledge of shares, debentures and other securities.
13 The provisions of any special statute applicable to Chit fund, Nidhi
or Mutual Benefit Funds/Societies are not applicable to the company.
14 According to the information and explanation given to us, the
company does not deal or trade in shares, securities, debentures and
other investments.
15 In our opinion and according to the information and explanation
given to us, the company has not given any guarantee for loans taken by
others from banks and financial institutions during the year.
16 In our opinion and according to the information and explanations
given to us, the term loan has been applied for the purpose for which
it was obtained.
17 In our opinion and according to the information and explanations
given to us, the Company has not used any funds, raised on short term
basis, for long term investment.
18 The company has not made any preferential allotment 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 under
review.
20. The company has not raised any money by public issues during the
year under review.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the year
under review.
For G. K. Choksi & Co.
Chartered Accountants
Firm Registration No. 101895W
Place : Ahmadabad
Date: 18th May, 2013 (SANDIP PARIKH)
Partner
Membership No.40727
Mar 31, 2012
1. We have audited the attached Balance Sheet of ARCHIT ORGANOSYS
LIMITED [Formerly known as Shri Chlochem Limited] as at 31st March,
2012 and the related Statement of Profit and Loss and Cash Flow
Statement of the company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis evidence supporting, the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, and on the basis of such
checks as we considered appropriate and according to information and
explanations given to us, we enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the said order.
4. Particular attention is drawn to the following.
(i) Note no. 2.26 of Notes forming part of accounts regarding non
provision of option loss,though considered as contingent liability by
management, amounting to Rs. 142.45 lacs and interest amounting to Rs.
62.31 lacs in respect of concluded derivative contracts resulting into
understatement of loss by Rs. 204.76 lacs and understatement of current
liabilities by like amount.
(ii) The company has not yet compiled the requisite information,
related to suppliers who have registered themselves under the Micro,
Small And Medium Enterprises Development Act, 2006. In the absence of
relevant information the requisite disclosures are not made in the
financial statements.
Had the observations made by us in Para 4(i) above been considered, the
loss for the year would have been Rs.137.58 lacs as against reported
profit of Rs. 67.18 lacs, current liabilities would have been Rs.
1749.19 lacs as against reported current liabilities of Rs. 1544.43
lacs.
5. Further to our comments in the Annexure referred at para 3 above,
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 purposes
of our audit.
b. In our opinion, subject to matters stated 1 (a) and 1 (b) of
annexure to the auditors' report below, proper books of account have
been kept by the Company as required by law 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
sub-section (3C) of Section 211 of the Companies Act, 1956.
e. On the basis of written representation received from the directors
of the company as at 31st March, 2012 and taken on record by the board
of directors, we report that none of the directors is disqualified from
being appointed as director of company under clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956.
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, subject to para 4 and
5(b) above, give the information required by the Companies Act, 1956 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, 2012
b. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date and
c. in the case of Cash Flow Statement, of the Cash Flow for the year
ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
Re: ARCHIT ORGANOSYS LIMITED [Formerly known as Shri Chlochem Limited]
Referred to in paragraph 3 of our report of even date,
1 (a) The Company has not compiled fixed assets records to show full
particulars, including quantitative details and situation of fixed
assets.
(b) We were informed that the fixed assets were not physically verified
by the Management at the end of the year however the company has a
regular programme of verification which in our opinion is reasonable
having regard to the size of the company and nature of its business.
Since the fixed assets records are still under compilation no
comparison with the book records have yet been made. In the absence of
such comparison opinion as to discrepancies if any can not be given.
(c) The Company has not disposed of any substantial part of its fixed
assets during the year as would affect its going concern status.
2 (a) In our opinion, physical verification of inventory (excluding
inventory lying with third parties) has been conducted by the
management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the management needs to be strengthened in relation to the
size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company is maintaining proper records of inventory. No
material discrepancy was noticed on physical verification of the
inventory.
3 (a) The Company has not granted any loans, secured or unsecured to
any companies, firms or other parties covered in the register
maintained u/s.301 of the Companies Act, 1956.
Accordingly clause 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the order are
not applicable.
(b) (i) The Company has taken interest free unsecured loans from three
parties and interest bearing unsecured loan from one party covered in
the register maintained u/s.301 of the Companies Act, 1956. The balance
outstanding on account of these loans as at the end of the year was Rs.
241.41 lacs and the maximum balance outstanding during the year were
Rs. 410.06 lacs.
(ii) The terms and conditions of the above loans are prima facie not
prejudicial to the interest of the Company.
(iii)As per the information and explanations given to us, principal
amount and interest thereon has been repaid whenever they fall due for
payment.
4 In our opinion and according to information and explanation given to
us; the internal control system needs to be strengthened so as to
commensurate with the size of the Company and the nature of its
business, with regard to purchase of inventory and fixed assets, and
with regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weakness in the internal controls.
5 (a) According to information and explanations provided by the
management, 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.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6 In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA or other relevant provisions of
the act.
7 In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business;
8 According to information and explanation given to us, the central
government has not prescribed maintenance of cost records under section
209(1 )(d) of the Companies Act, 1956 in respect of activities carried
out by the company
9 (a) In our opinion, the Company is regular in depositing with
appropriate authorities undisputed statutory dues and the company had
no arrears of such outstanding dues as at 31st March, 2012 for a period
more than six months from the date they became payable. (b) According
to the information and explanations given to us, the Company does not
have any disputed outstanding statutory dues as at 31st March, 2012
except stated hereunder.
Particular Amount (Rs.) Period to which Forum where dispute
the amount relates is pending
Central Sales
Tax 10,10,032 2006-2007 Joint Commissioner
of
Act, 1956 Commercial Tax
(Appeal)
Gujarat Value
Added 7,46,271 2006-2007 Joint Commissioner
of
Tax Commercial Tax
(Appeal)
10 The company does not have accumulated losses at year end. However,
if had the effect of qualification reported at para 4 of Auditor's
report been taken in to consideration, there would have been cash loss
to the tune of Rs. 87.57 lacs for the year under review. Similarly,
there would have been cash loss to the tune of Rs. 101.79 lacs in the
immediately preceding year.
11 According to the records of the company examined by us and on the
basis of information and explanations given to us, the company has not
defaulted in repayment of dues to financial institution or bank.
12 As per the information and explanations given to us, the Company has
not granted any loan or advance on the basis of security by way of
pledge of shares, debentures and other securities.
13 The provisions of any special statute applicable to Chit fund, Nidhi
or Mutual Benefit Funds/Societies are not applicable to the company.
14 According to the information and explanation given to us, the
company does not deal or trade in shares, securities, debentures and
other investments.
15 In our opinion and according to the information and explanation
given to us, the company has not given any guarantee for loans taken by
others from banks and financial institutions during the year.
16 In our opinion and according to the information and explanations
given to us, the term loan has been applied for the purpose for which
it was obtained.
17 On the basis of an overall examination of the balance sheet of the
company in our opinion and according to the information and
explanations given to us, we report that company has utilised funds
raised on short term basis for long term investments to the tune of Rs.
92.39 lacs (previous year Rs. NIL Lacs).
18 The company has not made any preferential allotment 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 under
review.
20. The company has not raised any money by public issues during the
year under review.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the year
under review.
For G. K. Choksi & Co.
Chartered Accountants
Firm Registration No. 101895W
Place : Ahmedabad
Date: 29th May, 2012.
(SANDIP PARIKH)
Partner
Membership No.40727
Mar 31, 2011
1. We have audited the attached Balance Sheet of Shri Chlochem Limited
as at 31st March, 2011 and the related Profit and Loss Account and Cash
Flow Statement of the company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
company s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generality accepted in India. These standards require that we pair and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, On a test basis evidence supporting, the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion
3. As required by the Companies Auditors Report) Order, 2003 issued by
the Central Government of India in terms of sub-section 4A) of section
227 of the Companies Act. 4956, and on to basis of such checks as we
considered appropriate and according to information and explanations
given to us, we enclose in the Annexure a statement on to matters
specified in paragraph 4 and S of the said order.
4. Particular attention is drawn to the following.
(i) Note no. 2 of Schedule 14 regarding non provision of option loss,
though considered as contingent liability by management amounting to
Rs, 142.45 lacs and interest amounting to Rs. 45.21 lacs in respect of
concluded derivative contracts resulting into understatement of loss by
Rs. 187.66 lacs and understatement of current liabilities by like
amount
(il) The company has not yet complied the requisite information,
related to suppliers who have registered themselves under the Micro,
Small And Medium Enterprises Development Act 2006. In the absence of
relevant information the requisite disclosures are not made In the
financial statements.
Had the observations made by us in Para 4(i) above been considered, the
loss for would have been Rs. 156.23 lacs as against reported profit of
Rs. 31.43 lacs current liabilities would have been Rs. 897.17 lacs as
against reported current liabilities Rs. 709.51 lacs.
5. Further to our comments in the Annexure referred aJ para 3 above,
we report that
a. We have obtained at 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, subject to matters stated 1(a) and 1(b) of annexure
to the auditor's report below, proper books of account have been kept
by the Company as required by law so far as appears from our
examination of those books.
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d. In our opinion the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the accounting standards referred to in
sub-section (30) of Section 211 of the Companies Act, 1956.
e. On the basis of Mitten representation received from the directors
of the company as at 31st March, 2011 and taken on record by the board
of directors, we report that none of the directors is disqualified from
being appointed as director of company under clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1950.
f. in our opinion and to the best of our information and according to
the explanations given to us, the said accounts, subject to para 4 and
5(b) above, give the information required by the Companies Act, 1950 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, 2011
b. in the case of the Profit and Loss Account, of the profit for the
year ended on that date and
c. in the case of Cash Flow Statement, of the Cash Flow for the year
ended on that date
ANNEXURE TO THE AUDITORS' REPORT
As: Shri Chiochem Limited Referred to in paragraph 3 of our report of
even date,
1. (a) The Company has not compiled Fixed assets records to show fuH
particulars including quantitative details and situation of fixed
assets.
(b) We were Informed that the fixed assets were not physically verified
by the Management at the end of the year however the company has a
regular programme of verification which in our opinion Is reasonable
having regard to the site of the company and nature of its business.
Since he fixed assets records are still under compilation no comparison
with the bock records have yet been made. In the absence of such
comparison opinion as to discrepancies tf any can not be given.
(c) The Company has not disposed of any substantial part of its fixed
assets during the year as would affect its going concern status.
2 (a) In our opinion, physical verification of inventory (excluding
inventory lying with third parties) has boon conducted by the
management at reasonable Intervals.
(b) In our opinion and according to the information and explanations
given to us the procedure of physical verification of inventory
followed by the management needs to be strengthened in relation to the
size of the Company and the nature of Its business.
(c) On the basis of our, examination of records of inventory, in our
opinion, the Company is maintaining proper records of inventory. No
material discrepancy was noticed on physical verification of the
inventory.
3 (a) The Company has not granted any loans, secured or unsecured to
any companies, firms or other parties covered In the register
maintained u/s.301 of the Companies Act. 1956. Accordingly clause
4(iii)(b), 4{iii)(c) and 4(iii)(d) of the order are not applicable.
(b) (i) The Company has taken interest free unsecured loans tram three
patty covered in the register maintained u/s301 of the Companies Act,
lose. The balance outstanding on account of these loans as at the end
of the year was Rs. 147.70 lacs and the maximum balance outstanding
during the year were As. 25950 lacs. (ii) The terms and conditions of
the above loans are prima facie not prejudicial to the Interest of the
Company. (iii) As per the information and explanations given to us,
principal amount and interest thereon has been repaid whenever they
fall due for payment,
4 In cur opinion and according to information and explanation given to
us; the internal control system needs to be strengthened so as to
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory and fixed assets, and
with regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct weakness
in the Internal controls.
5 a) According to information and explanations provided by the
management, the particulars of contracts or arrangements referred to in
section 301 of the act have entered in the register required to be
maintained under that section.
(b) in our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(c) In our opinion and according to the information and explanations
given to us The Company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA or other relevant provisions of
the act.
7 In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business: 8.
According to information and explanation given to us, the central
government has not prescribed maintenance of cost records under section
209{1)(d) of the Companies Act, 1958 in respect of activities carried
cut by the company
9 (a) In our opinion, the Company is regular in depositing with
appropriate authorities undisputed statutory dues and the company had
no arrears of such outstanding dues as at 31 st March, 2011 or a period
more than six months from the date they became payable. {b) According
to the information and explanations given to us, the Company does not
have any disputed outstanding statutory dues as at 31st March, 2011
10 The company does net have accumulated losses exceeding fifty percent
of it's net worth. The company has incurred cash losses to the tune of
Rs. 101.79 lacs during the year under review after considering the
effect of qualifications referred to at para 4 of the Auditors Report,
ft has incurred cash tosses to the tune of Rs. 96.06 in the immediate
preceding period.
11 According to the records of the company examined by us and on the
basis of information and explanations given to us, the company has not
defaulted in repayment of dues to financial in institutions or bank.
12 As per Hire Information and explanations given to us, the Company has
not granted any loon or advance on the basis of security by way of
pledge of shares, debentures and other securities,
13 The provisions of any special statute applicable to Chit fund, Nidhi
or Mutual Benefit Funds/ Societies are not applicable to the company.
14 According to the Information explanation given to us, the company
does not deal or trade in shares, securities, debentures and other
Investments.
15 In our opinion and according to the information and explanation
given to us. the company has not given any guarantee for loans taken by
others from banks and financial institutions during the year.
16 In our opinion and according to the information and explanations
given to us, the term HRA has been applied for the purpose for which it
was obtained
17 On the basis of an overall examination of the balance sheet of the
company in our opinion and according to the information and
explanations given to us, there are no funds raised on short term basis
which have been used for long term investment.
18 The company has not made any preferential allotment 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 under
review,
20. The company has not raised any money by public Issues during the
year under review.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the year
under review.
For G. K. Choksl & Co.
Chartered Accountants
Firm Registration No. 101895W
(SANDIP PAR1KH)
Place : Ahmedabad Partner
Date : 20th May, 2011 Membership No. 40727
Mar 31, 2010
1. We have audited the attached Balance Sheet of Shri Chlochem Limited
as at 31st March, 2010 and the related Profit and Loss Account and Cash
Flow Statement of the company for the period ended on that date annexed
thereto. These financial statements are the responsibility of the
companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatments. An audit
includes examining, on a test basis evidence supporting, the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, and on the basis of such checks
as we considered appropriate and according to information and
explanations given to us, we enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the said order.
4. Particular attention is drawn to the following.
(i) Note no. 2 of Schedule 14 regarding non provision of option loss,
though considered as contingent liability by management, amounting to
Rs. 142.45 lacs and interest amounting to Rs. 28.12 lacs in respect of
concluded derivative contracts resulting into understatement of loss by
Rs. 170.57 lacs and understatement of current liabilities by like
amount.
(ii) The company has not yet compiled the requisite information,
related to suppliers who have registered themselves under the Micro,
Small and Medium Enterprises Development Act, 2006. In the absence of
relevant information the requisite disclosures are not made in the
financial statements.
Had the observations made by us in Para 4 (i) above been considered,
the loss for the year would have been Rs. 146.38 lacs as against
reported profit of Rs. 24.19 lacs, current liabilities would have been
Rs. 597.10 lacs as against reported current liabilities of Rs. 426.53
lacs.
5. Further to our comments in the Annexure referred at para 3 above,
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 purposes
of our audit.
b. In our opinion, subject to matters stated 1(a) and 1(b) of annexure
to the auditors report below, proper books of account have been kept
by the Company as required by law so far as appears from our
examination of those books.
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d. In our opinion the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956.
e. On the basis of written representation received from the directors
of the company as at 31st March, 2010 and taken on record by the board
of directors, we report that none of the directors is disqualified from
being appointed as director of company under clause (g) of sub-section
(1) of Section 274 of the Companies Act. 1956.
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, subject to para 4 and
5(b) above, give the information required by the Companies Act, 1956 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, 2010
b. in the case of the Profit and Loss Account, of the loss for the
period ended on that date and
c. in the case of Cash Flow Statement, of the Cash Flow for the period
ended on that date.
ANNEXURE TO THE AUDITORS REPORT Re: Shri Chlochem Limited
Referred to in paragraph 3 of our report of even date,
1 (a) The Company has not compiled fixed assets records to show full
particulars, including quantitative details and situation of fixed
assets.
(b) We were informed that the fixed assets were not physically verified
by the Management at the end of the period however the company has a
regular programme of verification which in our opinion is reasonable
having regard to the size of the company ana nature or its business.
Since the fixed assets records are still under compilation no
comparison with the book records have yet been made. In the absence of
such comparison opinion as to discrepancies if any can not be given.
(c) The Company has not disposed of any substantial part of its fixed
assets during the period as would affect its going concern status.
2 (a) In our opinion, physical verification of inventory (excluding
inventory lying with third parties) has been conducted by the
management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the management needs to be strengthened in relation to the
size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company is maintaining proper records of inventory. No
material discrepancy was noticed on physical verification of the
inventory.
3 (a) (i) As per the information and explanations given to us. the
Company has granted interest free unsecured loan to two parties covered
in the register maintained under section 301 of the Companies Act,
1956. The balance outstanding on account of this loan as at the end of
the period was Rs. NIL lacs and the maximum balance outstanding during
the period was Rs. 59.49 lacs.
(ii) In our opinion, the other terms and conditions of the above loan
are prima facie, not prejudicial to the interest of the company.
(iii) As per the information and explanations given to us, there is no
overdue amount as on the Balance Sheet date.
(b) (i) The Company has taken interest free unsecured loans from one
party covered in the register maintained u/s.301 of the Companies Act,
1956. The balance outstanding on account of these loans as at the end
of the period was Rs. 50 lacs and the maximum balance outstanding
during the period were Rs. 50 lacs.
(ii) The terms and conditions of the above loans are prima facie not
prejudicial to the interest of the Company.
(iii) As per the information and explanations given to us, principal
amount and interest thereon has been repaid whenever they fall due for
payment.
4 In our opinion and according to information and explanation given to
us; the internal control system needs to be strengthened so as to
commensurate with the size of the Company and the nature of its
business, with regard to purchase of inventory and fixed assets, and
with regard to the sale of goods and services. During the course of our
audit, we have not observed any major weakness in the internal
controls.
5 (a) According to information and explanations provided by the
management, 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.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at me relevant time.
6 In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA or other relevant provisions of
the act.
7 In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business;
8 According to information and explanation given to us, the central
government has not prescribed maintenance of cost records under section
209(1 )(d) of the Companies Act, 1956 in respect of activities carried
out by the company
9 (a) In our opinion, the Company is regular in depositing with
appropriate authorities undisputed statutory dues and the company had
no arrears of such outstanding dues as at 31st March, 2010 for a period
more than six months from the date they became payable.
(b) According to the information and explanations given to us, the
Company does not have any disputed outstanding statutory dues as at
31st March. 2010.
10. The company does not have accumulated losses exceeding fifty
percent of its net worth. The company has incurred cash losses to the
tune of Rs. 129.28 lacs during the period under review after
considering the effect of qualifications referred to at para 4 of the
Auditors Report. It has incurred cash losses to the tune of Rs.
192.81 in the immediate preceding period.
11. According to the records of the company examined by us and on the
basis of information and explanations given to us, the company has not
defaulted in repayment of dues to financial institution or bank.
12. As per the information and explanations given to us, the Company
has not granted any loan or advance on the basis of security by way of
pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to Chit fund,
Nidhi or Mutual Benefit Funds/Societies are not applicable to the
company.
14. According to the information and explanation given to us, the
company does not deal or trade in shares, securities, debentures and
other investments.
15. In our opinion and according to the information and explanation
given to us, the company has not given any guarantee for loans taken by
others from banks and financial institutions during the period.
16. In our opinion and according to the information and explanations
given to us, the term loan has been applied for the purpose for which
it was obtained.
17. On the basis of an overall examination of the balance sheet of the
company in our opinion and according to the information and
explanations given to us, there are no funds raised on short term basis
which have been used for long term investment.
18. The company has not made any preferential allotment 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 period under
review.
20. The company has not raised any money by public issues during the
period under review.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
period under review.
FOR G. K. CHOKSI & CO.
Chartered Accountants
SANDIP A. PARIKH
Place : Ahmedabad. Partner
Date : 31st May, 2010 Membership No. 40727
Sep 30, 2009
1. We have audited the attached Balance Sheet of Shri Chlochem Limited
as at 30st September, 2009 and the related Profit and Loss Account and
Cash Flow Statement of the company for the period ended on that date
annexed thereto. These financial statements are the responsibility of
the companys management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis evidence supporting, the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, and on the basis of such checks
as we considered appropriate and according to information and
explanations given to us, we enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the said order.
4. Particular attention is drawn to the following.
(i) Note no. 2 of Schedule 16 regarding non provision of option loss,
though considered as contingent liability by management, amounting to
Rs. 142.45 lacs and interest amounting to Rs. 15.42 lacs in respect of
concluded derivative contracts resulting into understatement of loss by
Rs. 157.87 lacs and understatement of current liabilities by like
amount.
(ii) Note no. 3 of Schedule 16 regarding non confirmation of Fixed
Deposits amounting to Rs. 8,00,000/- lacs and Rs. 9,00,000/- lacs
aggregating Rs. 17,00,000/- already matured on 19/01/2009 and
03/06/2009 respectively, and non provision of interest thereon till the
date of maturity amounting to Rs. 1.94 lacs.
Had the observations made by us in Para 4 above been considered, the
loss for the year would have been Rs. 231.44 lacs as against reported
loss of Rs. 75.51 lacs, current liabilities would have been Rs. 493.14
lacs as against reported current liabilities of Rs. 335.27 lacs and
current assets would have been Rs. 1484.94 lacs against reported
current assets of Rs. 1483.00 lacs.
5. Further to our comments in the Annexure referred at para 3 above,
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 purposes
of our audit.
b. In our opinion, subject to matters stated 1(a) and 1(b) of annexure
to the auditors report below, proper books of account have been kept
by the Company as required by law so far as appears from our
examination of those books.
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d. In our opinion the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956.
e. On the basis of written representation received from the directors
of the company as at 30th September, 2009 and taken on record by the
board of directors, we report that none of the directors is
disqualified from being appointed as director of company under clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, subject to para 4 and
5(b) above, give the information required by the Companies Act, 1956 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 30th September, 2009
b. in the case of the Profit and Loss Account, of the loss for the
period ended on that date and
c. in the case of Cash Flow Statement, of the Cash Flow for the period
ended on that date.
ANNEXURE TO THE AUDITORS REPORT Re: Shri Chlochem Limited Referred to
in paragraph 3 of our report of even date,
1 (a) The Company has not compiled fixed assets records to show full
particulars, including quantitative details and situation of fixed
assets.
(b) We were informed that the fixed assets were not physically verified
by the Management at the end of the period however the company has a
regular programme of verification which in our opinion is reasonable
having regard to the size of the company ana nature of its business.
Since the fixed assets records are still under compilation no
comparison with the book records have yet been made. In the absence of
such comparison opinion as to discrepancies if any can not be given.
(c) The Company has not disposed of any substantial part of its fixed
assets during the period as would affect its going concern status.
2 (a) In our opinion, physical verification of inventory (excluding
inventory lying with third parties) has been conducted by the
management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the management needs to be strengthened in relation to the
size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company is maintaining proper records of inventory. No
material discrepancy was noticed on physical verification of the
inventory.
3 (a) (i) As per the information and explanations given to us, the
Company has granted interest free unsecured loan to two parties covered
in the register maintained under section 301 of the Companies Act,
1956. The balance outstanding on account of this loan as at the end of
the period was Rs. NIL lacs and the maximum balance outstanding during
the period was Rs. 86.45 lacs.
(ii) In our opinion, the other terms and conditions of the above loan
are prima facie, not prejudicial to the interest of the company.
(iii) As per the information and explanations given to us, there is no
overdue amount as on the Balance Sheet date.
(b) (i) The Company has taken interest free unsecured. loans from one
party covered in the register maintained u/s.301 or the Companies Act,
1956. The balance outstanding on account of these loans as at the end
of the period was Rs. NIL and the maximum balance outstanding during
the period were Rs. 135.39 lacs.
(ii) The terms and conditions of the above loans (which is interest
free) are prima facie not prejudicial to the
interest of the Company.
(iii) As per the information and explanations given to us, principal
amount and interest thereon has been repaid whenever they fall due for
payment.
4 In our opinion and according to information and explanation given to
us; the internal control system needs to be strengthened so as to
commensurate with the size of the Company and the nature of its
business, with regard to purchase of inventory and fixed assets, and
with regard to the sale of goods and services. During the course of our
audit, we have not observed any major weakness in the internal controls
system.
5 (a) According to information and explanations provided by the
management, 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. (b) In our opinion and according to the
information and explanations given to us, the transactions made in
pursuance of such contracts or arrangements have been made at prices
which are reasonable having regard to the prevailing market prices at
the relevant time.
6 In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA or other relevant provisions of
the act.
7 In our opinion, the company has an adequate internal audit system
commensurate with the size and the nature of its business;
8 According to information and explanation given to us the central
government has not prescribed maintenance of cost records-under section
209(1)(d) of the Companies Act, 1956 in respect of activities carried
out by the company
9 (a) In our opinion, the Company is regular in depositing with
appropriate authorities undisputed statutory dues and the company had
no arrears of such outstanding dues as at 30th September, 2009 for a
period more than six months from the date they became payable. (b)
According to the information and explanations given to us, the Company
does not have any disputed outstanding statutory dues as at 30th
September, 2009.
10 The company have accumulated losses exceeding fifty percent of its
net worth. The company has incurred cash losses to the tune of Rs.
192.81 lacs during the period under review after considering the effect
of qualifications referred to at para 4 of the Auditors Report.
However, it has not incurred cash losses in the immediate preceding
year.
11 According to the records of the company examined by us and on the
basis of information and explanations given to us, the company has not
defaulted in repayment of dues to financial institution or bank.
12 As per the information and explanations given to us, the Company has
not granted any loan or advance on the basis of security by way of
pledge of shares, debentures and other securities.
13 The provisions of any special statute applicable to Chit fund, Nidhi
or Mutual Benefit Funds/Societies are not applicable to the company.
14 According to the information and explanation given to us, the
company does not deal or trade in shares, securities, debentures and
other investments.
15 In our opinion and according to the information and explanation
given to us, the company has not given any guarantee for loans taken by
others from banks and financial institutions during the period.
16 In our opinion and according to the information and explanations
given to us, the term loan has been applied for the purpose for which
it was obtained.
17 On the basis of an overall examination of the balance sheet of the
company in our opinion and according to the information and
explanations given to us, there are no funds raised on short term basis
which have been used for long term investment.
18 The company has not made any preferential allotment 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 period under
review.
20. The company has not raised any money by public issues during the
period under review.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
period under review.
FOR G. K. CHOKSI & CO.
Chartered Accountants
SANDIP A. PARIKH
Place : Ahmedabad. Partner
Date : 21st November, 2009 Membership No. 40727