Mar 31, 2023
ASHAPURA MINECHEM LIMITED
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Ashapura Minechem Limited ("the Company") which comprise the balance sheet as at 31st March 2023, the statement of profit and loss including other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (''Ind AS") and the other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2023, of its loss including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("the ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in our forming of opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:
Key Audit Matter |
How our audit addressed the Key Audit Matter |
Revenue Recognition |
|
Revenue is one of the key profit drivers and is, therefore, susceptible to misstatement. Cut-off is the key assertion in so far as revenue recognition is concerned, since inappropriate cut-off can result in material misstatement of results for the year. |
We carried out testing controls around dispatches and deliveries, inventory reconciliation and substantive testing for cut-offs and analytical review procedures. |
Assessment of litigations and related disclosure of contingent liabilities |
|
The Company is subject to large number of various ongoing legal and tax related claims as stated under note no. 34 - Contingent Liabilities. Significant judgment is required to assess such matters to determine the probability of occurrence of material outflow of economic resources and whether a provision should be recognized or a disclosure should be made. The management judgment is also supported with legal advice in certain cases as considered appropriate. |
We understood, assessed and tested the operating effectiveness of key controls surrounding assessment of litigations and discussed with the management the recent developments and the status of the material litigations; We evaluated management''s assessment by understanding precedents set in similar cases and assessed the reliability of the management''s past estimates and judgments; |
As the ultimate outcomes of the matters are uncertain and material in nature, it is considered to be a Key Audit Matter. |
We reviewed the disclosures made by the Company in the financial statements in this regard and obtained representation letter from the management on the assessment of these matters. |
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Board''s Report including Annexures to Board''s Report, Management Discussion and Analysis, Business Responsibility Report, Corporate Governance Report, Shareholder''s Information, but does not include the standalone financial statements and auditor''s report thereon. The Board''s Report and other information are expected to be made available to us after the date of this auditor''s report.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
When we read the aforesaid reports and information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is high level of assurance, but is not a guarantee that audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatements of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of the internal control.
⢠Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosure, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India terms of sub-section
(11) of section 143 of the Act, we give in the Annexure - A, a statement on the matters specified in clause 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 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 it appears from our examination of those books;
c) The balance sheet, the statement of profit and loss including other comprehensive income, statement of changes in equity and the cash flow statement dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2015;
e) On the basis of written representations received from the directors as on 31st March 2023, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2023, from being appointed as a director in terms section 164(2) of the Act;
f) With respect to the adequacy of internal financial controls over financial reporting of the Company and operating effectiveness of such controls, our separate report in annexure - B may be referred;
g) In our opinion and to the best of our information and according to the explanations given to us, remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 read schedule V of the Act
h) 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, in our opinion and to the best of our information and according to the explanation given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone 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 required to be transferred to the Investor Education and Protection Fund by the Company.
iv. a. The Management has represented that, to the best of its knowledge and belief, as disclosed in the note no, 38(i) to the
accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b. The Management has represented, that, to the best of its knowledge and belief, as disclosed in the note no. 38 ( j ) to the accounts, no funds have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (''Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
c. Based on such audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) above, contain any material misstatement.
v . The Company has not declared any dividend during the year.
vi . Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software
which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.
For P A R K & COMPANY Chartered Accountants FRN:116825W
Mumbai PRASHANT VORA
May 25, 2023 Partner
Membership No. 034514 UDIN: 23034514BGZEMJ7641
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Ashapura Minechem Limited ("the Company") which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Ind AS 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 standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in the equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules 2015 under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone Ind AS 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 standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act and the rules made thereunder including 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 and the Order issued under section 143(11) of the Act.
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 these standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal financial control relevant to the Company''s preparation of the standalone Ind AS 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 the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Basis for Qualified Opinion
Attention is invited to -
Note No. 39 regarding non provision of the additional liability aggregating to '' 17,358.77 Lakhs towards interest on the award amounts as specified in the arbitration awards. The loss for the year is understated and reserves as at the balance sheet date are overstated to that extent.
Qualified 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 matters described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone Ind AS 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 2018 and of the loss (including other comprehensive income), its cash flows and changes in equity for the year ended on that date.
Other Matters
(a) The financial information of the Company for the year ended 31st March, 2017 and the transition date opening balance sheet as at 1st April, 2016 included in these standalone Ind AS financial statements are based on the previously issued financial statements for the years ended 31st March, 2017 and 31st March, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, as applicable, which were audited by the predecessor auditors, on which they had expressed their modified opinion dated 30th May, 2017 and unmodified opinion dated 26th May, 2016 respectively. The adjustments to those financial statements for the differences in the accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
(b) We did not audit the financial statements of two branches included in the standalone Ind AS financial statements of the Company whose financial statements reflect total assets of Rs. 737.28 Lakhs as at 31st March 2018 and total revenues of Rs.923.56 Lakhs for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial statements of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India terms of subsection (11) of section 143 of the Act, we give in the Annexure - A, a statement on the matters specified in clause 3 and 4 of the Order, to the extent possible.
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 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 it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Act;
f) On the basis of written representations received from the directors as on 31st March 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018, from being appointed as a director in terms section 164(2) of the Act;
g) With respect to the adequacy of internal financial controls over financial reporting of the Company and operating effectiveness of such controls, our separate report in annexure - B may be referred;
h) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanation given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements under note no. 33;
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 required to be transferred to the Investor Education and Protection Fund by the Company.
ANNEXURE - A TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we state that:
1 In respect of fixed assets:
a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
b. The fixed assets were physically verified by the management at reasonable intervals in a phased manner in accordance with a programme of physical verification. No discrepancies were noticed on such verification.
c. The title deeds of immovable properties are held in the name of the Company.
2 The inventories were physically verified by the management at reasonable intervals during the year. No material discrepancies were noticed on such physical verification carried out by the Company.
3 The Company has granted unsecured loans to companies covered in the register maintained under section 189 of the Act. Since no terms and conditions of these loans are stipulated, we cannot offer any comments as to the repayment of principal amount or overdue amounts, if any. The receipts of interest on these loans are regular.
4 The Company has complied with provisions of Section 185 and 186 of the Act in respect of loans, investments, guarantees and security, to the extent applicable.
5 The Company has not accepted any deposits within the meaning of the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.
6 We have broadly reviewed the cost records maintained by the Company pursuant to Section 148(1) of the Companies Act, 2013 and are of the opinion that, prima facie, 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.
7 In respect of statutory and other dues:
a. The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess, GST and other statutory dues, to the extent applicable, with the appropriate authorities during the year. There are no undisputed statutory dues outstanding for a period of more than six months from the date they became payable.
b. There are no statutory dues, which have not been deposited on account of dispute except for the followings:
Nature of Dues |
Statute |
Rs.in Lakhs |
Relevant Year |
Forum where dispute is pending |
Value Added Tax |
Andhra Pradesh Value Added Tax Act |
16.12 |
2006-07 to 2009-10 |
The Commercial Tax Officer |
Value Added Tax |
Gujarat Value Added Tax Act |
30.57 |
2009-10 to 2013-14 |
The Assistant Commissioner of VAT |
Service Tax |
Service Tax Rules |
81.38 |
2008-09, 2009-10 |
CESTAT- Ahmedabad |
Service Tax |
Service Tax Rules |
6.05 |
2008-09, 2009-10 |
CESTAT- Ahmedabad |
Income Tax |
Income Tax Act |
141.79 |
2007-08, 2008-09 |
Gujarat High Court |
1,291.53 |
2010-11 |
Income Tax Appellate Tribunal |
8 The Company has not defaulted in repayment of loans or borrowing to banks except for the dues of certain banks in respect of losses and liabilities for foreign currency derivative transactions which are disputed by the Company as stated in note no. 39 and to the extent the amounts stated under note no. 15. The Company has not obtained any borrowings from any financial institutions or government or by way of debentures.
Lender wise details of the defaults are as under:
Bank |
Balance as on |
31st March 2018 Rs. Lakhs |
|
HDFC Bank |
2540.00 |
* excluding interest
9 Term loans obtained by the Company have been applied for the purpose for which they were obtained. The Company has not raised any money, during the year, by way of public offer (including debt instruments).
10 To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company or on the Company by its officers or employees was noticed or reported during the year.
11 Managerial remuneration paid or provided by the Company during the year is in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
12 Since the Company is not a Nidhi Company, the provisions of clause 3 (xii) of the Order are not applicable to the Company.
13 All transactions with the related parties are in compliance with Section 177 and 188 of the Act and the details have been disclosed in the financial statements as required by the applicable accounting standards.
14 The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.
15 The Company has not entered into any non-cash transactions during the year with directors or persons concerned with him.
16 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 AUDITORS'' REPORT
(Referred to in paragraph 2 (f) under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
We have audited the internal financial controls over financial reporting of Ashapura Minechem Limited ("the Company") as of 31st March, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for the Internal Financial Statements
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. 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.
Auditors'' 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 "Guidance Note") 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 auditors'' judgement, 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, 2018, 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 P A R K & COMPANY
Chartered Accountants
FRN:116825W
PRASHANT VORA
Partner
Membership No. 034514
Mumbai
May 28, 2018
Mar 31, 2016
The Members of
ASHAPURA MINECHEM LIMITED Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Ashapura Minechem Limited ("the Company") which comprise the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financial position and financial performance 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 provisions of the Act for safeguarding of 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone 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 the disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider 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 the 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 audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 of the profit and its cash flows for the year ended on that date.
Other Matters
We did not audit the financial statements of two branches included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs, 118,244,827 as at 31st March 2016 and total revenues of \v 13,754,141 for the year ended on that date, as considered in the standalone financial statements. The financial statements of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government
of India terms of sub-section (11) of section 143 of the Act, we give in the Annexure - A, a statement on the matters specified in clause 3 and 4 of the Order, to the extent possible.
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 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 it appears from our examination of those books;
c) The reports on the accounts of two branch offices of the Company audited under section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
d) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
f) On the basis of written representations received from the directors as on 31st March 2016, and 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 section 164(2) of the Act;
g) With respect to the adequacy of internal financial controls over financial reporting of the Company and operating effectiveness of such controls, our separate report in annexure - B may be referred;
h) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanation given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. Refer note no. 25, 26 and 35;
ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring the amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we state that:
1 In respect of fixed assets:
a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
b. The fixed assets were physically verified by the management at reasonable intervals in a phased manner in accordance with a programme of physical verification. No discrepancies were noticed on such verification.
c. The title deeds of immovable properties are held in the name of the Company.
2 The inventories were physically verified by the management at reasonable intervals during the year. No material discrepancies were noticed on such physical verification carried out by the Company.
3 The Company has granted unsecured loans to companies covered in the register maintained under section 189 of the Act. Since no terms and conditions of these loans are stipulated, we cannot offer any comments as to the repayment of principal amount or overdue amounts, if any. The receipts of interest on these loans are regular.
Nature of Dues |
Statute |
in lacs |
Relevant Year |
Forum where dispute is pending |
Value Added Tax |
Kerala VAT Act |
8.23 |
2007-08 |
Appellate Tribunal |
Value Added Tax |
Andhra Pradesh Value Added Tax Act |
16.12 |
2006-07 to 2009-10 |
The Commercial Tax Officer |
Value Added Tax |
Gujarat Value Added Tax Act |
30.57 |
2009-10 to 2013-14 |
The Assistant Commissioner of VAT |
Service Tax |
Service Tax Rules |
6.05 |
2008-09, 2009-10 |
CESTAT - Ahmadabad |
141.79 |
2007-08, 2008-09 |
Gujarat High Court |
||
Income Tax |
Income Tax Act |
1,403.32 |
2010-11 |
The Commissioner of Income Tax (Appeals) |
4 The Company has complied with provisions of Section 185 and 186 of the Act in respect of loans, investments, guarantees and security, to the extent applicable.
5 The Company has not accepted any deposits within the meaning of the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.
6 We have broadly reviewed the cost records maintained by the Company pursuant to Section 148(1) of the Companies Act, 2013 and are of the opinion that, prima facie, 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.
7 In respect of statutory and other dues:
a. The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues, to the extent applicable, with the appropriate authorities during the year. There are no undisputed statutory dues outstanding for a period of more than six months from the date they became payable.
b. There are no statutory dues, which have not been deposited on account of dispute except for the followings:
8 The Company has not defaulted in repayment of loans or borrowing to banks except for the dues of certain banks in respect of losses and liabilities for foreign currency derivative transactions which are disputed by the Company as stated in note no. 25 and to the extent the amounts stated under note no. 6. The Company has not obtained any borrowings from any financial institutions or government or by way of debentures.
Lender wise details of the defaults are as under:
16 The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Bank |
Balance as on 31st March 2016 |
Rs, |
|
HDFC Bank |
254,000,000 |
* excluding interest
9 Term loans obtained by the Company have been applied for the purpose for which they were obtained. The Company has not raised any money during the year, by way of public offer (including debt instruments).
10 To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company or on the Company by its officers or employees was noticed or reported during the year.
11 Managerial remuneration paid or provided by the Company during the year is in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
12 Since the Company is not a Nidhi Company, the provisions of clause 3 (xii) of the Order are not applicable to the Company.
13 All transactions with the related parties are in compliance with Section 177 and 188 of the Act and the details have been disclosed in the financial statements as required by the applicable accounting standards.
14 The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.
15 The Company has not entered into any non-cash transactions during the year with directors or persons concerned with him.
(Referred to in paragraph 2 (f) under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
We have audited the internal financial controls over financial reporting of Ashapura Minechem Limited ("the Company") as of 31st March, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management''s Responsibility for the Internal Financial Statements
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. 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.
Auditors'' 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 "Guidance Note") 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 auditors'' 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 March 31, 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 SANGHAVI & COMPANY
Chartered Accountants
FRN : 109099W
sd/-
MANOJ GANATRA
Partner
Membership No. 043485
Mumbai 26th May, 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Ashapura Minechem Limited ("the Company") which comprise the Balance
Sheet as at 31st March 2015, the Statement of Profit and Loss, the Cash
Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone 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 standalone financial statements that give a
true and fair view of the financial position and financial performance
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 provisions of the Act for
safeguarding of 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.
Auditors' Responsibility
Our responsibility is to express an opinion on these standalone
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 the disclosures in the financial statements. The
procedures selected depend on the auditors' 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 auditors consider 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
control system over financial reporting and the operating effectiveness
of such controls. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by the 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 audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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 of the loss and its cash flows for the year
ended on that date.
Other Matters
We did not audit the financial statements of three branches included in
the standalone financial statements of the Company whose financial
statements reflect total assets of Rs.412,240,612 as at 31st March 2015
and total revenues of Rs. 72,986,563 for the year ended on that date, as
considered in the standalone financial statements. The financial
statements of these branches have been audited by the branch auditors
whose reports have been furnished to us, and our opinion in so far as
it relates to the amounts and disclosures included in respect of these
branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
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
terms of sub-section (11) of section 143 of the Act, we give in the
Annexure a statement on the matters specified in clause 3 and 4 of the
Order, to the extent possible.
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
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 it appears from our examination of those
books;
c) The reports on the accounts of three branch offices of the Company
audited under section 143 (8) of the Act by branch auditors have been
sent to us and have been properly dealt with by us in preparing this
report.
d) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
e) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014;
f) On the basis of written representations received from the directors
as on 31st March 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March 2015, from being
appointed as a director in terms section 164(2) of the Act;
g) With respect to the other matters to be included in the Auditors'
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanation given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements. Refer note no. 25, 26
and 36;
ii. The Company did not have any long-term contracts including
derivatives contracts for which there were any material foreseeable
losses;
iii. There has been no delay in transferring the amounts, required to
be transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO AUDITORS' REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory
Requirements' section of our report of even date)
On the basis of such checks as we considered appropriate and in terms
of information and explanations given to us, we state that:
1 In respect of fixed assets:
a. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b. The fixed assets were physically verified by the management at
reasonable intervals in a phased manner in accordance with a programme
of physical verification. No discrepancies were noticed on such
verification.
2 In respect of inventories:
a. The inventories were physically verified by the management at
reasonable intervals during the year.
b. 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. The Company has maintained proper records of its inventories and no
material discrepancies were noticed on physical verification carried
out by the management of the Company.
3 The Company has granted unsecured loans to the companies, firms or
other parties covered in the register maintained under section 189 of
the Companies Act, 2013.
Since no terms and conditions of these loans are stipulated, we cannot
offer any comments as to the repayment of principal amount or overdue
amounts, if any. The receipts of interest on these loans are regular.
4 There are adequate internal control procedures commensurate with the
size of the Company and the nature of its business with regard to
purchase of inventory and fixed assets and for the sale of goods and
services. However, the same needs to be strengthened in certain
functional areas. During the course of our audit, no major weakness has
been noticed in the internal controls.
5 The Company has not accepted any deposits within the meaning of
section 73 to 76 of the Companies Act, 2013 and the rules framed
thereunder.
6 We have broadly reviewed the cost records maintained by the Company
pursuant to Section 148(1) of the Companies Act, 2013 and are of the
opinion that, prima facie, 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.
7 In respect of statutory and other dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Value Added Tax, Cess and other statutory dues, to the extent
applicable, with the appropriate authorities during the year. There are
no undisputed statutory dues outstanding for a period of more than six
months from the date they became payable.
b. There are no statutory dues, which have not been deposited on
account of dispute except for the followings:
Nature of Statute in lacs
Dues
Value Added Tax Kerala VAT Act 8.23
Value Added Tax Andhra Pradesh 16.12
Value Added Tax
Act
Value Added Tax Gujarat Value
Added Tax Act 30.57
Service Tax Service Tax Rules 6.05
141.79
Income Tax Income Tax Act 1,403.32
Nature of Relevant Forum where dispute
Dues Year is pending
Value Added Tax 2007-08 Appellate Tribunal
Value added Tax 2006-07 to The Commercial Tax Officer
2009-10
Value Added Tax 2009-10 to The Assistant Commissioner
2013-14 of VAT
Service Tax 2008-09,
2009-10 CESTAT - Ahmedabad
Income Tax 2007-08 Gujarat High Court 2008-09
2010-11 The Commissioner of
Income Tax (Appeals)
c. The amounts required to be transferred to Investor tEducation and
Protection Fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder has been
transferred to such fund within time.
8 The Company has accumulated losses as at the end of the financial
year exceeding its entire net worth. The Company has incurred cash
losses during the current year, but not in the immediately preceding
financial year.
9 The Company has not defaulted in repayment of dues to banks and
financial institutions except for the dues of certain banks in respect
of losses and liabilities for foreign currency derivatives transactions
which are disputed by the Company as stated in note no. 25 and to the
extent the amounts stated under note no. 6 and 7. The Company has not
obtained any borrowings from any financial institutions or by way of
debentures.
10 The terms and conditions on which the Company has given guarantees
for loans taken by its subsidiaries, associates and a joint venture
company from banks are, prima facie, not prejudicial to the interest of
the Company.
11 Terms loans obtained by the Company have been applied for the
purpose for which they were obtained.
12 To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
For SANGHAVI & COMPANY
Chartered Accountants
FRN : 109099W
sd/-
MANOJ GANATRA
Partner
Membership No. 043485
Mumbai
26th May, 2015
Mar 31, 2014
We have audited the accompanying financial statements of Ashapura
Minechem Limited ("the Company"), which comprise the Balance Sheet as
at 31st March 2014 and the statement of Profit & 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 recognition and measurement principles laid down in the Companies
(Accounting Standards) Rules, 2006 [which continue to be applicable in
respect of section 133 of the Companies Act, 2013 in terms of general
circular 15/2013 dated 13th September 2013 of the Ministry of Corporate
Affairs] as per Section 211(3C) 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.
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 auditors'' 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 auditors consider internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
Reference is invited to -
* note no. 25(ii) in respect of write-back and non-provision for losses
on foreign currency derivatives transactions and certain loans in
connection thereto in the earlier years aggregating to Rs. 22,686.91
(27,779.75) lacs;
* note no. 25(iii) in respect of non-provision of foreign currency
derivatives losses of Rs. Nil (611.49) lacs; and thereby overstatement
of the net profit in the financial statements by Rs. Nil (611.49) lacs
and overstatement of reserves and surplus by Rs. 22,686.91 (28,391.24)
lacs.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements, except for the
effects of the matter described in the Basis for Qualified Opinion
paragraph, give the information required by the Act in the manner so
required give a true and fair view in conformity with the accounting
principles generally accepted in India:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2014;
b) In the case of the Profit and Loss Statement, of the profit for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India 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 reports of Branch Auditors on the accounts of the branches not
audited by us have been forwarded to us as required by clause (c) of
sub-section (3) of section 228 and the same have been adequately dealt
with while preparing this reports;
d) 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;
e) 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 [which
continue to be applicable in respect of section 133 of the Companies
Act, 2013 in terms of general circular 15/ 2013 dated 13th September
2013 of the Ministry of Corporate Affairs];
f) On the basis of written representations received from the directors
as on 31st March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March 2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
section 274 of the Companies Act, 1956;
g) 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 to be paid, no cess is due
and payable by the Company.
ANNEXURE TO AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date) On the basis of such
checks as we considered appropriate and in terms of information and
explanations given to us, we state that:
1 In respect of fixed assets:
a. The company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. Fixed assets were physically verified during the year by the
management at reasonable intervals in a phased manner in accordance
with a programme of physical verification. According to information and
explanations given to us, no material discrepancies were noticed on
such verification.
c. There was no substantial disposal of fixed assets during the year.
2 In respect of inventories:
a. The inventories were physically verified by the management at
reasonable intervals during the year.
b. 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. The company has maintained proper records of its inventories and as
informed to us, no material discrepancies were noticed on physical
verification carried out by the company.
3 In respect of loans granted or taken to/from companies, firms or
other parties in the register maintained under section 301 of the
Companies Act, 1956:
a. The company has granted unsecured loans (excluding trade advances)
to the companies covered in the register maintained under section 301
of the Companies Act, 1956. The number of companies to which loans are
granted, are three and the amount involved in the transactions is Rs.
Nil and the year-end balances were Rs. 6,117.39 lacs.
b. The rate of interest and other terms and conditions of loans given
by the company, wherever stipulated, are prima facie not prejudicial to
the interest of the company.
c. Since no stipulations as to the recovery of principal amount as
well as payment of interest are made for the loans granted as stated in
(a) above, we cannot offer any comments for regularity of payments or
overdue amounts, if any.
d. The company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
4 There are adequate internal control procedures 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.
During the course of our audit, no major weakness has been noticed in
the internal controls. There are, however, certain operational areas,
which needs improvement in respect of internal controls.
5 In respect of transactions entered in the register maintained in
pursuance of section 301 of the Companies Act 1956:
a. Based on the audit procedures applied by us and according to the
information and explanations given to us, the particulars of contracts
or arrangements referred to in section 301 of the Act have been entered
in the register maintained under that section.
b. 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 prima facie, reasonable having regard to
the prevailing market prices at the relevant time, wherever such
comparison is possible.
6 The company has not accepted any deposits within the meaning of
section 58A and 58AA of the Companies Act 1956 and the rules framed
there under.
7 In our opinion, the company has an internal audit system commensurate
with its 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 facie, 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 In respect of statutory and other dues:
a. The company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education &
Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues, to
the extent applicable, with the appropriate authorities during the
year.
b. There are no undisputed statutory dues outstanding for a period of
more than six months from the date they became payable except for tax
deducted at source Rs. 0.16 lacs.
c. There are no statutory dues as prescribed under the clause, which
have not been deposited on account of any dispute except for the
followings:
Nature of Name of the Statute Rs. in lacs Relevant
Dues Year
Value Added Tax Kerala Commercial Tax Act 5.67 2007-08
Value Added Tax Andhra Pradesh 16.12 2006-07 to
Value Added Tax Act 2009-10
Service Tax Service Tax Rules 6.05 2008-09,
2009-10
Income Tax Income Tax Act 1,403.32 2010-11
Nature of Forum where dispute
Dues is pending
Value Added Tax The Dy Commissioner
of Sales
Tax (Appeals)
Value Added Tax The Commercial Tax
Officer
Service Tax CESTAT - Ahmedabad
Income Tax The Commissioner of
Income Tax (Appeals)
10 The company has accumulated losses as at the end of the financial
year exceeding its entire net worth. The company has not incurred cash
losses during the current year or in the immediately preceding
financial year.
11 Based on our audit procedures and the information and explanations
given to us, the company has not defaulted in repayment of dues to
banks and financial institutions except for the dues of certain banks
in respect of losses on foreign currency derivatives transactions and
certain loans in connection thereto are unpaid and being disputed by
the company as stated in note no. 25 and to the extent the amounts
stated under notes no. 6 and 7. The company has not obtained any
borrowings by way of debentures.
12 The company has not granted loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13 In our opinion, the company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) are
not applicable to the company.
14 The company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly the provisions of clause
4(xiv) of the Order are not applicable to the company.
15 The terms and conditions on which the company has given guarantees
for loans taken by the subsidiary, associates and joint venture
companies from banks and financial institutions are, prima-facie not
prejudicial to the interest of the company.
16 In our opinion, the term loans raised have been applied for the
purpose for which they were raised.
17 According to the information and explanations given to us and on an
overall examination of the balance sheet of the company, funds raised
on short-term basis including increase in current liabilities have been
used for long-term investment.
18 The company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Companies Act 1956 except for allotment of 4,000,000 equity
shares on preferential basis upon conversion of equity warrants to a
company in which some of the directors are interested in accordance
with the guidelines issued by the Securities and Exchange Board of
India in this regard.
19 The company did not have any outstanding debentures during the year.
20 The company has not raised any money through a public issue during
the year.
21 To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
was noticed or reported during the year except for a fraud on the
company by an employee against whom the company has initiated necessary
legal actions, the amount of the said fraud is unascertainable.
For SANGHAVI & COMPANY
Chartered Accountants
FRN : 109099W
sd/-
MANOJ GANATRA
Partner
Membership No. 043485
Mumbai
29th May, 2014
Mar 31, 2012
We have audited the attached Balance Sheet of Ashapura Minechem Limited
as at 31st March, 2012 and also the Profit & Loss Account and the 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.
We conducted our audit in accordance with the 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 misstatement. 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
1. 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, we enclose in the annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
order.
2. Further to our comments in the annexure referred to in paragraph
(I) above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) In our opinion, proper books of accounts as required by the law
have been kept by the company so far as appears from our examination of
those books;
(iii) The reports of Branch Auditors on the accounts of the branches
not audited by us have been forwarded to us as required by clause (c)
of sub-section (3) of section 228 and the same have been adequately
dealt with while preparing this report;
(iv) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
(v) In our opinion, the Balance Sheet, Profit & Loss account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act 1956, to the extent applicable;
(vi) Based on the written representations received from the directors
of the Company and taken on the record by the Board of Directors, we
report that no director is disqualified as on 31st March, 2012 from
being appointed as director under clause (g) of sub-section (I) of
section 274 of the Companies Act 1956;
(vii) In our opinion and to the best of our information and according
to the explanations given to us, the said accounts subject to -
- note no. 25 (i) in respect of write-back and non- provision for
losses on foreign currency derivatives transactions and certain loans
in connection thereto in the earlier years aggregating to Rs. 39,436.76
lacs;
- note no. 25(H) in respect of non-provision of foreign currency
derivatives losses of Rs. 3,925.27 lacs; and
- note no. 25(iii) in respect of non-provision for losses on foreign
currency derivatives transactions by marking them to market (MTM)
aggregating to Rs. 3,131.20 lacs (previous year Rs. 3,084.28), and
thereby overstatement of the net profit in the financial statements by
Rs. 13,972.19 lacs and overstatement of reserves and surplus by Rs.
43,408.95 lacs.
and read with all the notes thereon 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 Profit & Loss Account, of the PROFIT of the
Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of cash flows of the
Company for the year ended on that date.
Annexure referred to in paragraph I of the report of even date of the
Auditors to the members of ASHAPURA MINECHEM LIMITED on the accounts
for the year ended 31n March, 2012.
On the basis of such checks as we considered appropriate and in terms
of information and explanations given to us, we state that:
1 In respect of fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. Fixed assets were physically verified during the year by the
management at reasonable intervals in a phased manner in accordance
with a programme of physical verification. According to information and
explanations given to us, no material discrepancies were noticed on
such verification.
c. There was no substantial disposal of fixed assets during the year.
2 In respect of inventories:
a. The inventories were physically verified by the management at
reasonable intervals during the year.
b. In our opinion and 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. The Company has maintained proper records of its inventories and as
informed to us, no material discrepancies were noticed on physical
verification carried out by the Company.
3 In respect of loans granted or taken to/from companies, firms or
other parties in the register maintained under section 301 of the
Companies Act, 1956:
a. The Company has granted unsecured loans (excluding trade advances)
to the companies covered in the register maintained under section 301
of the companies Act, 1956. The number of companies to which loans are
granted, are four and the amount involved in the transactions is t
1,215.80 lacs and the year-end balances were Rs. 7,141.50 lacs.
b. The rate of interest and other terms and conditions of loans given
by the company, wherever stipulated, are prima facie not prejudicial to
the interest of the company except that no interest is charged on the
loans to a wholly owned subsidiary company, aggregating to Rs. 1,979.06
lacs.
c. Since no stipulations as to the recovery of principal amount as
well as payment of interest are made for the loans granted as stated in
(a) above, we can not offer any comments for regularity of payments or
overdue amounts, if any.
d. The Company has taken unsecured loans from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act. The number of parties from whom such loans are taken
were one and the amount involved in the transactions and the year-end
balance are Rs. 2,000.00 lacs and t Nil respectively.
e. The rate of interest and other terms and conditions of loans taken
by the company, are prima facie not prejudicial to the interest of the
company.
f. The repayments of the loans taken by the Company were regular.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal controls. There are certain
operational areas, which needs improvement for which the company is
taking necessary steps.
5 In respect of transactions entered in the register maintained in
pursuance of section 301 of the Companies Act 1956:
a. Based on the audit procedures applied by us and according to the
information and explanations given to us, the particulars of contracts
or arrangements referred to in section 301 of the Act have been entered
in the register maintained under that section.
b. 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 prima facie, reasonable having regard to
the prevailing market prices at the relevant time, wherever such
comparison is possible.
6 The company has not accepted any deposits within the meaning of
section 58A and 58AA of the Companies Act 1956 and the rules framed
there under.
7 In our opinion, the company has an internal audit system commensurate
with its size and the nature of its business.
8 The Companies (Cost Accounting Records) Rules 2011 have been
applicable to the Company w.e.f. the financial year 2011-2012. 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 facie, 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 In respect of statutory and other dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education &
Protection Fund, Employees' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues, to
the extent applicable, with the appropriate authorities during the
year.
b. There are no undisputed statutory dues outstanding for a period of
more than six months from the date they became payable.
c. There are no statutory dues as prescribed under the clause, which
have not been deposited on account of any dispute except for the
followings:
Nature of Name of the
Statute Rs. in
lacs Relevant Forum where
dispute
Dues Year is pending
Value Added Tax Kerala
Commercial
Tax Act 5.67 2007-08 The Dy
Commissioner
of Sales
Tax (Appeals)
Value Added Tax Andhra Pradesh
Value Added
Tax Act 16.12 2006-07 to
2009-10 The Commercial
Tax Officer
Custom Duty Central Excise
& Custom 28.75 2009-2010 The Custom
Officer
Service Tax Service Tax
Rules 6.05 2008-09,
2009-10 CESTAT -
Ahmedabad
Baraya Gram
Panchayat Tax Gram Panchayat 15.00 2010-11 District
Development
Officer -Kutch
10 The Company has accumulated losses as at the end of the financial
year exceeding its entire net worth. The Company has not incurred cash
losses during the current year. However, the Company has incurred cash
losses in the immediately preceding financial year.
11. Based on our audit procedures and the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks and financial institutions except for the dues of certain banks
in respect of losses on foreign currency derivatives transactions and
certain loans in connection thereto are unpaid and being disputed by
the Company as stated in note no. 25 and to the extent the amounts
stated under notes no.4 and 6. The Company has not obtained any
borrowings by way of debentures.
12 The Company has not granted loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13 In our opinion, the company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) are
not applicable to the company.
14 The Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly the provisions of clause
4(xiv) of the Order are not applicable to the Company.
15 In our opinion, the terms and conditions on which the Company has
given guarantees for loans taken by the subsidiary, associates and
joint venture companies from banks and financial institutions are,
prima-facie not prejudicial to the interest of the company.
16 In our opinion, the term loans raised have been applied for the
purpose for which they were raised.
17 According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, funds raised
on short-term basis including increase in current liabilities have been
used for long-term investment.
18 The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Companies Act, 1956.
19 The Company did not have any outstanding debentures during the year.
20 The Company has not raised any money through a public issue during
the year.
21 To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
For SANGHAVI & COMPANY
Chartered Accountants
FRN: I09099W
sd/-
MANOJ GANATRA
Partner
Membership No. 043485
Place: Mumbai
Date : 30th May, 2012
Mar 31, 2011
We have audited the attached Balance Sheet of Ashapura Minechem Limited
as at 31st March, 2011 and also the Profit & Loss Account and the 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.
We conducted our audit in accordance with the 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 misstatement. 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
1. 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, we enclose in the annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
order.
2. Further to our comments in the annexure referred to in paragraph
(I) above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) In our opinion, proper books of accounts as required by the law
have been kept by the company so far as appears from our examination of
those books;
(iii) The reports of Branch Auditors on the accounts of the branches
not audited by us have been forwarded to us as required by clause (c)
of sub-section (3) of section 228 and the same have been adequately
dealt with while preparing this report;
(iv) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
(v) In our opinion, the Balance Sheet, Profit & Loss account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act 1956, to the extent applicable;
(vi) Based on the written representations received from the directors
of the Company and taken on the record by the Board of Directors, we
report that no director is disqualified as on 31st March, 2011 from
being appointed as director under clause (g) of sub-section (I) of
section 274 of the Companies Act 1956;
(vii) Attention is invited to:
- Note no. 3 regarding the status of the pending litigation in respect
of Contracts of Affreightment (COA) with few shipping companies and
consequent provision of t 56,202.88 lacs against these claims.
(viii) In our opinion and to the best of our information and according
to the explanations given to us, the said accounts subject to -
- note no. 2(i), 2 (ii) and 2 (iii) in respect of write- back and
non-provision for losses on foreign currency derivatives transactions
and certain loans in connection thereto in the earlier years
aggregating to t 9,766.98 lacs as well as in the current year X.
10,697.53 lacs; and
- note no. 2 (iv) in respect of non-provision for losses on foreign
currency derivatives transactions by marking them to market (MTM)
aggregating to t 3,084.28 lacs.
and thereby understatement of the net loss in the financial statements
by K. 13,781.81 lacs and overstatement of reserves and surplus by *
23,548.79 lacs.
and read with all the notes thereon 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 31 * March, 2011;
(b) In the case of the Profit & Loss Account, of the LOSS of the
Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of cash flows of the
Company for the year ended on that date.
ANNEXURE TO AUDITORS' REPORT
Annexure referred to in paragraph I of the report of even date of the
Auditors to the members of ASHAPURA MINECHEM LIMITED on the accounts
for the year ended 31n March, 2011.
On the basis of such checks as we considered appropriate and in terms
of information and explanations given to us, we state that:
1 In respect of fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. Fixed assets were physically verified during the year by the
management at reasonable intervals in a phased manner in accordance
with a programme of physical verification. According to information and
explanations given to us, no material discrepancies were noticed on
such verification.
c. There was no substantial disposal of fixed assets during the year.
2 In respect of inventories:
a. The inventories were physically verified by the management at
reasonable intervals during the year.
b. In our opinion and 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. The Company has maintained proper records of its inventories and as
informed to us, no material discrepancies were noticed on physical
verification carried out by the Company.
3 In respect of loans granted or taken to/from companies, firms or
other parties in the register maintained under section 301 of the
Companies Act, 1956:
a. The Company has granted unsecured loans (excluding trade advances)
to the companies covered in the register maintained under section 301
of the companies Act, 1956. The number of companies to which loans are
granted, are four and the amount involved in the transactions is Rs.
804.72 lacs and the year-end balances were t 5,246.42 lacs.
b. The rate of interest and other terms and conditions of loans given
by the company, wherever stipulated, are prima facie not prejudicial to
the interest of the company except that no interest is charged on the
loans to a wholly owned subsidiary company, aggregating to t 1,939,.88
lacs.
c. Since no stipulations as to the recovery of principal amount as
well as payment of interest are made for the loans granted as stated in
(a) above, we cannot offer any comments for regularity of payments or
overdue amounts, if any.
d. The Company has taken unsecured loans from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act. The number of parties from whom such loans are taken
are two (subsidiary companies) and the amount involved in the
transactions and the year-end balance are t 550.00 lacs and t 590.00
lacs respectively.
e. The rate of interest and other terms and conditions of loans taken
by the company, are prima facie not prejudicial to the interest of the
company.
f. Since there are no stipulations as to the repayment of principal
amount for the loans taken, we cannot offer any comments for regularity
of payments.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal controls. There are certain
operational areas, which needs improvement for which the company is
taking necessary steps.
5 In respect of transactions entered in the register maintained in
pursuance of section 301 of the Companies Act 1956:
a. Based on the audit procedures applied by us and according to the
information and explanations given to us, the particulars of contracts
or arrangements referred to in section 301 of the Act have been entered
in the register maintained under that section.
b. 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 prima facie, reasonable having regard to
the prevailing market prices at the relevant time, wherever such
comparison is possible.
6 The company has not accepted any deposits within the meaning of
section 58A and 58AA of the Companies Act 1956 and the rules framed
there under.
7 In our opinion, the company has an internal audit system commensurate
with its size and the nature of its business.
8 As informed to us, the Central Government has not prescribed
maintenance of cost records under section 209 (I) (d) of the Companies
Act, 1956.
9 In respect of statutory and other dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education &
Protection Fund, Employees' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues, to
the extent applicable, with the appropriate authorities during the
year.
b. There are no undisputed statutory dues outstanding for a period of
more than six months from the date they became payable except for
service tax payments of t. II 5.46 lacs, which are outstanding for a
period of more than six months from the date they became payable as the
company is in the process of seeking legal opinion as to the
applicability of the service tax to its transactions.
c) There are no statutory dues as prescribed under the clause, which
have not been deposited on account of any dispute except for the
followings :
Nature of Name of the Statute Rs in lacs Relevant
Dues Year
Income Tax (TDS) Income Tax Act 141.78 2008-09
2009-10
Value Added Tax Kerala Commercial
Tax Act 8.74 2006-07
Value Added Tax Tamilnadu Value
Added Tax Act 215.61 2009-10
Value Added Tax Andhra Pradesh Value
Added Tax Act 16.12 2006-07
to 2009-10
Custom Duty Central Excise &
Custom 28.75 2009-2010
Service Tax Serive Tax Rules 6.05 2008-09,
2009-10
Baraya Gram
Panchayat Tax Gram Panchayat 15.00 2010-11
Nature of Dues Forum where dispute is pending
Income Tax (TDS) The Commissioner of
Income Tax (TDS)
Value Added Tax The Sales Tax Appellate Tribunal
Value Added Tax The Commercial Tax Officer
Value Added Tax The Commercial Tax Officer
Custom Duty The Custom Officer
Service Tax CESTAT - Ahmedabad
Baraya Gram Panchayat Tax District Development Officer -Kutch
10 The Company has accumulated losses as at the end of the financial
year exceeding its entire net worth. The Company has incurred cash
losses during the current year as well as in the immediately preceding
financial year (excluding exceptional items).
11 Based on our audit procedures and the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks and financial institutions except for the dues of certain banks
in respect of losses on foreign currency derivatives transactions and
certain loans in connection thereto are unpaid and being disputed by
the Company as stated in note no. 2 of Schedule - P. The Company has
not obtained any borrowings by way of debentures.
12 The Company has not granted loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13 In our opinion, the company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) are
not applicable to the company.
14 The Company is not dealing in or trading in shares, securities
debentures and other investments. Accordingly the provisions of clause
4(xiv) of the Order are not applicable to the Company.
15 In our opinion, the terms and conditions on which the Company has
given guarantees for loans taken by the subsidiary, Associates and
joint venture companies from banks and financial institutions are,
prima-facie not prejudicial to the interest of the company.
16 In our opinion, the term loans raised during the year have been
applied for the purpose for which they were raised.
17 According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, funds raised
on short-term basis, prima facie, have not been used during the year
for long-term investment.
18 The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Companies Act 1956.
19 The Company did not have any outstanding debentures during the year.
20 The Company has not raised any money through a public issue during
the year.
21 To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
For SANGHAVI & COMPANY
Chartered Accountants
FRN: I09099W
sd/-
MANOJ GANATRA
Partner
Membership No. 043485
Place : Mumbai
Date : 30th May, 2011
Mar 31, 2010
We have audited the attached Balance Sheet of Ashapura Minechem Limited
as at 31st March, 2010 and also the Profit & Loss Account and the Cash
Flow Statement of the Company for the year 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.
We conducted our audit in accordance with the 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 misstatement. 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
1. 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, we enclose in the annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
order.
2. Further to our comments in the annexure referred to in paragraph
(1) above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) In our opinion, proper books of accounts as required by the law
have been kept by the company so far as appears from our examination of
those books;
(iii) The reports of Branch Auditors on the accounts of the branches
not audited by us have been forwarded to us as required by clause (c)
of sub-section (3) of section 228 and the same have been adequately
dealt with while preparing this report;
(iv) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
(v) In our opinion, the Balance Sheet, Profit & Loss account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act 1956, to the extent applicable;
(vi) Based on the written representations received from the directors
of the Company and taken on the record by the Board of Directors,
we report that no director is disqualified as on 31st March, 2010
from being appointed as director under clause (g) of
sub-section (1) of section 274 of the Companies Act 1956;
(vii) In our opinion and to the best of our information and according
to the explanations given to us, the said accounts subject to -
à note no. 2(i) and 2 (ii) in respect of write-back and non-provision
for losses on foreign currency derivatives transactions aggregating to
Rs 9,766.98 lacs (net of deferred tax); and
note no. 2 (iii) in respect of non-provision for losses on foreign
currency derivatives transactions by marking them to market (MTM)
aggregating to Rs. 15,460.00 lacs, and thereby overstatement of
the net profit in the financial statements by Rs. 25,226.98 lacs
and read with all the notes thereon 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 & Loss Account, of the PROFIT of the
Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of cash flows of the
Company for the year ended on that date.
ANNEXURE TO AUDITORS REPORT
Annexure referred to in paragraph 1 of the report of even date of the
Auditors to the members of ASHAPURA MINECHEM LIMITED on the accounts
for the year ended 31st March, 2010.
On the basis of such checks as we considered appropriate and in
terms of information and explanations given to us, we state that:
1 In respect of fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. Fixed assets were physically verified during the year by the
management at reasonable intervals in a phased manner in accordance
with a programme of physical verification. According to information and
explanations given to us, no material discrepancies were noticed on
such verification.
c. There was no substantial disposal of fixed assets during the year.
2 In respect of inventories:
a. The inventories were physically verified by the management at
reasonable intervals during the year.
b. In our opinion and 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. The Company has maintained proper records of its inventories and as
informed to us, no material discrepancies were noticed on physical
verification carried out by the Company.
3 In respect of loans granted or taken to/from companies, firms or
other parties in the register maintained under Section 301 of the
Companies Act, 1956:
a. The Company has granted unsecured loans (excluding trade advances)
to the companies covered in the register maintained under section 301
of the companies Act, 1956. The number of companies to which loans are
granted, are five and the amount involved in the transactions is Rs.
11,155.62 lacs and the year-end balances were Rs. 4,440.08 lacs.
b. The rate of interest and other terms and conditions of loans given
by the Company, wherever stipulated, are
prima facie not prejudicial to the interest of the Company except that
no interest is charged on the loans to a wholly owned subsidiary
company, aggregating to Rs. 1,810.15 lacs.
c. Since no stipulations as to the recovery of principal amount as
well as payment of interest are made for the loans granted as stated in
(a) above, we cannot offer any comments for regularity of payments or
overdue amounts, if any.
d. The Company has taken unsecured loans from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act. The number of parties from whom such loans are taken
are two (subsidiary companies) and the amount involved in the
transactions and the year-end balance are Rs. 409.00 lacs and Rs.
310.00 lacs respectively.
e. The rate of interest and other terms and conditions of loans taken
by the company, are prima facie not prejudicial to the interest of the
Company.
f. Since there are no stipulations as to the repayment of principal
amount for the loans taken, we cannot offer any comments for regularity
of payments.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. However, the same needs to be strengthened
in certain functional areas. During the course of our audit, no major
weakness has been noticed in the internal controls.
5 In respect of transactions entered in the register maintained in
pursuance of section 301 of the Companies Act, 1956:
a. Based on the audit procedures applied by us and according to the
information and explanations given to us, the particulars of contracts
or arrangements referred to in section 301 of the Act have been entered
in the register maintained under that section.
b. 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 prima facie, reasonable having regard to
the prevailing market prices at the relevant time, wherever such
comparison is possible.
6 The Company has not accepted any deposits within the meaning of
section 58A and 58AA of the Companies Act, 1956 and the rules framed
there under.
7 In our opinion, the Company has an internal audit system commensurate
with its size and the nature of its business.
8 As informed to us, the Central Government has not prescribed
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956.
9 In respect of statutory and other dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education &
Protection Fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues, to
the extent applicable, with the appropriate authorities during the
year.
b. There are no undisputed statutory dues outstanding for a period of
more than six months from the date they became payable except for
service tax payments of Rs. 115.46 lacs, which are outstanding for a
period of more than six months from the date they became payable as the
Company is in the process of seeking legal opinion as to the
applicability of the service tax to its transactions.
c. There are no statutory dues as prescribed under the clause, which
have not been deposited on account of any dispute.
10 Considering amount of Rs. 25,226.98 lacs as stated in clause (vii)
of the Auditors Report, the Company has accumulated losses as at the
end of the financial year exceeding fifty percent of its net worth. The
Company has incurred cash losses during the current year (excluding
exceptional items as stated in note no. 2) as well as in the
immediately preceding financial year.
11 Based on our audit procedures and the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks and financial institution. However, dues of certain banks in
respect of losses on foreign currency derivatives transactions, are
unpaid and being disputed by the Company as stated in note no. 2 of
Schedule - P. The Company has not obtained any borrowings by way of
debentures.
12 The Company has not granted loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
13 In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) are
not applicable to the Company.
14 The Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly the provisions of clause
4(xiv) of the Order are not applicable to the Company.
15 In our opinion, the terms and conditions on which the Company has
given guarantees for loans taken by the subsidiary and joint venture
companies from banks and financial institutions are, prima-facie not
prejudicial to the interest of the company.
16 In our opinion, the term loans raised during the year have been
applied for the purpose for which they were raised.
17 According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, funds raised
on short-term basis, prima facie, have not been used during the year
for long-term investment.
18 The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under Section
301 of the Companies Act, 1956.
19 The Company did not have any outstanding debentures during the year.
20 The Company has not raised any money through a public issue during
the year.
21 To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
For SANGHAVI & COMPANY
Chartered Accountants
FRN : 109099W
sd/-
MANOJ GANATRA
Partner
Membership No. 043485
Place : Mumbai
Date : 30th June, 2010