Mar 31, 2023
INDEPENDENT AUDITORS'' REPORT
To the Members of Sadhana nitro chem Limited
Opinion
We have audited the stand-alone financial statements or Mis. Sad hone Nflro Cbcm I. Company"), which
comprise !ho balance shee! as at 31ManJi 2023. and die stejepnerM of Pnom and Loss (Including Olhcr Comprehensive
(ncomed, Statement of changes in Eouiiy and Statement of Cash flows for (he year teen ended, and notes to the financial
statements. including a sum m 3 ry of sig nifica ni accou n I .rg pc in ies and doer explanatory irfonmafinnh=rei lafter referred to
as ''the slandalone fmapf.ial statements.
In purdji-mpn anrt to the be-gt of our information and according 1n Ihu explanations given to uu, Ida aforesaid slanda-pne
financial sia(dineifl& give lha infom-iaton required by t"= Act Ip Uia manner so r&qtiired amt give a Litre and view m
CoriVi n ity will 1IJ re accounting print:- pit;;; gsiiarailly acoa pled; ri I rid ia. of :f ia mate of affairs of ti 10 Company as at 31 March,
2023, it s pro fit, cha i igoe and its east i (tows for the year e titled un tli at date
Basis for Opinion
We conducted our audil in accordance with the Standards on Audit mj (SAs) specified under 3eclion 143(10) of the
Coni pomes Act. 2013 Our res ponsibi'' ities under those Standards are funder descnf>sd in ide Auditor''s Responsihi1 ities for
the Audii of tlie Ftnariciol Statements section cf our repon We s re i ndependent of tee Com pan / in accord a nee wi Hi me C od s
of Ethics ssued ny th e I r Stihtte pt Chartered Accouniants of I n-d n fog e 1hm wilh 1he eini cal regi lireme n1S that ere tsieve nt tp
our e.idd r,l the ftpencial statements under me provisions of Ine Comps n res Ac: 3013 am: lire R-.i''hs thereunder end we
have! 1. lJi iled nur otfier elhignl respon situ lili e s in ,h pcnm nr r.e wH h I neeR regi, Ire merlin a nd: I -e Code nf LI h ins. We bel, eve I h a I
the a udil avid&nca We have oiilei ned is Sul I it: a ri I end appropriate lo provide a ba Six far pur Opinion
Key Audit Matters;
Kay a add ma tie rs a to those matters that. in our professional judgm 6 n I. wore of most s igoifican co in c ur audii of bio fin a ncial
statements of the current period These matters wore addressed in th e context of our audit of tee firartcia1 statements as a
whole, and m forming our opinion thereon, and we do not provide a separate opinion on these matters.
The Company''s management arc E3oard ot Directory are responsible for me other mforn-atior- The omer hbforTTialloii
comprises the information inr''uded in the Company''s annual report. out does nnr incâLid-e me standalone financial
statements ardour auditor'' report thereon
Our opinion np the etenha lone fingnns I sieremenfs rine& nnt nnysT the other intnrn''atipn a n rl ive dp r of epreS anyorm g1
essurahee rtinduninn Iherenn.
In ecifinauiiin with our a udi i of the standalone -irtancfal siafe.''nents. our iBsprjn''slbiJty is to 1 eac Liother informaSi in and. in
doing So, eadKidorwiiultior the other Inforn is materially niCoilSisLunl with [ho stun tin ont Financial stall.-: munis or our
iuti^i^dge obtained in LIil- auditor ijttieriirise appears to ba matarisfly t ilestated. tf bsssd on [ha vrort we iiat*e purfomiud.
cludti that [herd .s a maleria: misstatement of tills i.ilter Information, we are required ti report fact. We have
nothing to report i n tin s regard.
Res ponsib 11 Itios of Management a nd Those Cftrgod wtlb Go vornanco for the Sta nd a lone FI nano ia I Stalema nts
T he Company''s Board of Directors is respon siote for the matters seated i n section 134j5) of ine Compsn ies Act .2013 fâ1 ue
Act") wilh respect tome preparation of ihese standalone fiino^jfel statements that give s true and ig rviewof the financial
position, luancial performance changes innnily and QA-sh flows ot I ti e? Company in Accordance with the acCfliifitiilg
pnficipieS generally Accepted in Ini.a. including Ihe ancn.i.nfng Slur cards Specified under section 133 d the Act Tins
responsibility also includes maintenance of adequate accounting records in accordance wjlh fhe provisions of the Ac! for
safeguarding ol the Assets of the Company and fot preventing and defecting frauds end other irregularities; selection and
application of appropriate accounting poHcfes: making Hidgmenis and estimates that are reasonable and pnjdejfii and
design, implarrvsiitallofl and maintenance of adequate Interna) tlrtandal oonlfds, tfiat were ope-ating effectively fci
ensuring tho accuracy and camp''s Lon css of tho accouir ng iscores, relevant to the pro para tiun arc presentation of the
financial sfcStsmer its that g.vu a 1 rue and fjifYtew and a rufreoifrcini mater .a I misstatement, whether tluelo fraud or error.
In preparing ttieflnaiiclal statements, managen''pnr -s re sponsible for asses singthe Company''s -in IHy tacantir-Le as a going
concern disclosing. cs applicable natters reined to going concern and using tiie going concern basis of accounting unless
mans g=ment eiiher intend s fr iqi li''deiie the Company or io cense operSjBcms. or has no realislic a tiemaiive h lit to do. so
ThSoarrl of Director is also responsible rnrnverseeinq I he Company financial report ug process
Auditor''s Responsibilities for the Audit ol the Standalone Fina-nciul Statements
Our objectives are to obtain rea&otiaEte assurance At?Dul whothtir Ilia financial etaterowits as ,-j jifthole are free from
malei ¦ a I mis sta La me m, whetbe r duo to fraud or arror, and is issue an auditor''s re pa rt that Includes ou r opinion. Reasonabla
assurance is a high lov. iofaiSLirarict. tiut is not a cjuaranLc ¦ that an audit conducted in ¦accordance with SAswtil always
detecta materia:-misstatement when dexists. Misstatements can anse from fraud or error and are considered matierial if
i nd'' v''idually c r ¦ r rhs aggregate. mey could reaso naofy 0e oxpe cters to inflnence the econom ic decisjons of u sers taken on
the basis of these finanrtial slatemenfs
As part of an audit in accorffgnce with SAs we exccise piufessidnsl judgment and maintain professicna: skepticism
throughout the audit, We also1
identify end Fssfu;s the risks of mater h! hllSStatemert of I tie timnrml eteLenieiite, wiietfiei due to I mud Dr error resign
arid perform aud t prooeduree respor-sive to those risks and obtain audii avittenoe trial is sufficiuni and appropriate to
provide a basis forotif opinion.'' bs risk of no) detactiny a matBrlal rriisslatuiriuiiL resulting fmm fraud is higher than tor
oriA resulliiig from error, as fraud may irwnlv coBusiori, frirgu-y, intontmual omlsilpris; rrhisropretLinlalions prflte
override of itrlerrial conlrot.
- OPinion understanding of eternal control relevant to the audit In order to design aud.t procedures that are
appropriate n the circumstances Under section me Companies Act. 2013. we are also responsible for
express-ng our opinion on whether the company has adequate interne! finance'' controls system in p:ace and fee
nperaltng eifef:EivEr.EH.5 of such coJilrnls.
* Ey;h unto the 8pprop«rieteniB&£ or accounting policies used and ftte reasoopblpn-eps of accr-unl re eStiflij^e''S aid
related disc Q6Ure$ made by mantis err''" in.
¦ Conclude on j£ie approprlateness.-of mm my orient''s usej ol the going contufri basis ol acoouiih
audit ov. J q nee ohla ''nod, whether a mate n a i nndartainty exists re- atod to events o ¦'' conditions ilia L may cast sig-lificanl
doubt on the Company''s abihty toconbnua as agoing concern It we conclude''that ?¦maional uncertainty exists we
are required to craw attenlioi nour auditors report 10 the related disclosures m irie financial slatome-i''ts or. if such
disclosures are inadequate to modify our option Our cc-nclusons nre based on ihe audit evidence obtained up lo
the date of our auditor''s resort. However, future ev e n15 or cond ifions may cause the Company lo ce a se to continue as
a going concern
Eva-ill a te tha overall presenlnlipn. structure Bfid cpnlsnl n1 1fie financial etalpmenls. ino-li irting the disclosures and
whnLhe-'' 1.ne ImFincm elgtamenls neprespr.l ihe underlying transaction:-! nnrf eu-enls in a nianm:r ln.il artiieve^. fair
presentation
MaLenahiy Is Ihn magritajda crt standalone finarv: ul Etdterlftn!s ttidl, Individual y ci in aggregate,
1 decisions of a 1 oasonab ;l ki iuwladgeaue user of lbs standalone filane. slalamei its
may bo influenced. Wo consider LruaiiULalive materiality & qualitative factors in (i) planning iho scope of our audit and in
oval u ating the resu Its of ou r work: and (ii) to eual uate the effect of an y idefibfied misstatements i n the standalone financial
statements
We communicate wife those charged with governance regarding, among other martens, the pâarmed scope and liming of
(he audit and significant audit findings, including any significant deficiencies in internal control thal we identify during our
audit.
We alsoprqvicfe Ihcme charged will 1 gnvEmanoR wi111 g slaLemenl him We have oc-n1; 1 ied with relevant alhioel FPEjulrenterilS
1 H-gurcing i ndepander.tte. ai d to Com n 1 u ntoftte with tlteta 3ll retttidnshi p> fi S nd chief 11: a I la rs dial may reasonably be Ihriu g hi
to be nr pnOUt indepEiiUuiiOE, end where applicable, related safeguards.
from ti c mallci.''s cofrimunicjitod wilh 1nosa chaigod with govemancu, wo dc-tcrmino Ihoso matters lhal wore of most
s. p ii if ica ncc- in the audit of itio sta nda: on-e f ntanciai statemen ts of the currant period ana are lhorefcro tho key a ud it matte ra..
Wc describe- these matters Incur auditor eport unless :aw or regulation precludes public d sefosuro about the matter or
when, in extremely rare circumstances, we rtetenmino that a manor should no- be communicated n dur repent because the
adverse consequences of doing so would reasonably tie: expected so outweigh the public interest benefits of such
communication
Report on Other Legal and Regulatory Requirements
As required ny I Me Companies (Auditor''s Re p-rutl Order, ?0?n fl he Order'') issued ny I he Centra; Government of Indie
and 4 o1 tl 1(3 Oftfeâ, to ttm axle lit applitablo
2. As roqu irad Py Section 14 3(3) of the Act, we report, that
a We have sought and obtai ned a H the information a up explanati ems which to the bes! of our knowledge a nd be lief
were necessary fecthe purposes ofou r aud it
b In our opinion. proper nooks of accoum as required by law nave been * ept by the Com bony in so far as ft a ppears
From our exs miration of ihose books;
c The Balance Sheet. Mm Statement ol Profit and Loss ncftitiing Other Comprehensive Income, me Cash Ftow
Sfaiernahtend Ststamenl of Change''S 11 Eguiitydarall with hy (his ijbport are fiiegrEement with thareleventltaclts
of account
d. In nu.'' ophiion, the aforesaid slandatcmis linantiu ftataenents comply wiih the Indian Accqunling Standayds
prescribed unde ¦ sacUon 133 of the Act rood with relevant rules -ssuod thereundor
e On tne basis of the written representations received front ine directors as on 31 '' March. 2023 and taken on record
by tha Board of Directors, none of the cirectorsisd squal find os on 31â March, 2023 from being appointed as a
director .n terms of Section â 64(2}of iho Act;
F With respect to the adequacy of the internal financial contras over financial reporting of the Company a-nd me
oper.svng effertiveresB 0= StJCll conl''ols, refer to oytseparfite Report in "Annnyurs ''
g WLI respect ta the -matter le be included in Lhfl Auditor''s Report under section 1E)7( 16) -of (he Act
opinion and lathe best at our information and according La the explanation gfysipi lo us. the rartiunttreilori
pant by Lire Company to its diractu i s daring the year|s lii accordance witlt pruvis-ofts of Section 197 read with
Sdiadule y rd the Act. The nemunpralrtfi paid Id any director is net m excess of the In iris I a down pndar Siiution
"¦97 toad w:Lh Schedule V of Ure Act.
h With respect to the ether matters to be ncljdod in the Auditor''s Report n accordance witti Role tl of the
Con1 pan es (Audit and Aud-tors) R-.ies. 2014.-as amended. in our opinion-and to rhe best otour information and
seconding to the explanations given ta us
(i) The Company has disci osec ihe impact nt per fling liiirjations on its financial position m itb siandgloina
tâna ncial si a Ir=men1s. Refer note 3 11d the Slaoh alone finanna ¦ staterr e hts
iir) 1 he Company did not nave any Inng-term ciMitiecfs- including derivative coni rads ''or which there wa-e any
malarial (bra aeea trie lossa s
(li i: i here ha s not iwu nary occasiot ¦ in casa of 11 m Comp; 11 ly dor ing the year under repot 1 iu t: ti isfar any Earns
to Ltio Invoslor Education and Protection Fund. Thus, the question of da lay In transferring such sums does
notarise
: Ivj (a) The Managemen t has represen ted that. to the best of
no. 45 to he standalone financial statements. no Funds have been advanced or Foanetf or invested (either
any other person entities}, Iticlutling foreign entities {''Intyrmerftaries''), with th= understanding.
Whether rHoondad in Wiling or oLtievWise that I he Intern ledimy spall directly or indirectly tend nr u vest in
ether persons nr entities identified li nny niannfl'' wlialsnever nynr on behalf nf I fie Compary ¦ "Jltimele
be neiktiarieii'' \ af prav l! e any guar Antea, s-ticn oly nr the liite Ofl bahftll nf I ha Ulti mate Beneficiaries
(b) t he Managament has rspnsMfitud, ifiat. re ina bast of it''s Knowtedg* and belief as diset&sad in the
rale no. 45 to the standalone tin a ncinl statement s. i so f u nd s have boon ractilv ud sy fbu Company trom any
aarson(s>or cntilyfi*s(. inefudhig foreign entities Funding Parties"), with the understanding, whether
licordod ¦ n writing or olkiBrtwse, Liia I the Compary shall, di reefiy or indirod :y. le: id or invest ih uthc-rpersons
o: entities identify d in any manner whatsoever sy or on behalf of the Tun ping Party edit''male
Bo net diaries > or p nov d c any guaran te e, security or Ihg Hke on behalf of i he Ultimate Beneficiaries
(c) Rased on she aud i rvocedures lh^r hsve been considered reasonable and appropriate m the
circumstances, nothing nas come to our nnrice that has CB used us to ce ieve that the representations ur-rer(iyj As stalmd In note ho 50 tedne stand,sluna finahciill statements
(a) i Nt final d vidarid jjtiopxssafl m (he previoue yea/, riuularcd a paid by (ha Gatnpany rturtna tin: year is lr
accorda.hoa wilh Secbcu 123 of theAct, as applicable.
(b J The Board of Directors or the Company have proposed final dividend for the ye a r which is subject to the
approval of the membere al the ensuing Annual General Mooting The in:, urt of dividend proposod ''S in
accord ance wit n Section 123 of th e Ac: as applicable
For Jayesh Updia & Associates LLP
Chartered A ncounlanfs
Firm Reg istrali cm Ho. 12 M 42WIW1091 22
Jayesh Dadia
Partner
Membership No, 033973
Piacc of S i gita tu ro: Mumbai
24 '' May, 2023
LI DIM: 23033973BCVRBT2649
Mar 31, 2018
Report on the Standalone IND AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Sadhana Nitro Chem Limited (the Company), which comprise the Balance Sheet as at 31"March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, (hereinafter referred to as âStandalone IND AS Financial Statementsâ)
Management''s Responsibility forthe Standalone Financial Statements
The Company''s Board of Directors is responsible forthe matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of thesestandalonelndASfinancialstatementsthatgiveatrueandfairviewofthe state of affairs(financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS financial statements 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 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 auditor''s 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 auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the 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.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, 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 including the Ind AS, of the state of affairs(financial position) of the Company as at 31s'' March, 2018, and its profit(financial performance including other comprehensive income), its cash flows and the changes in equity forthe year ended on that date.
Other Matters
The comparative financial information of the Company for the year ended 31 â March 2017 and the transition date opening balance sheet as at 1st April 2016 included in these standalone financial statements , are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31- March 2017 and 31â March 2016 dated 26"1 April 2017 and 27- May 2016 respectively expressed unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
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 (âthe Order-) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3)of the Act, were port that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and 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 prescribed under section 133 of the Act read with relevant rules issued thereunder.
e) On the basis of the written representations received from the directors as on 31st March, 2018 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 of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ; and
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 32 to the standalone I nd AS financial statements;
ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
The Annexure referred to in independent auditors report to the members of the Company on the standalone IND AS financial statements of Sadhana Nitro Chem Limited for the year ended 31st March 2018.We report that:
i) a) The company has generally maintained proper records, showing full particulars including quantitative details and situation of property, plant and equipment.
b) property, plant and equipment have been physically verified by the Management during the year based on a phased programme of verifying all the assets over three years, which in our opinion is reasonable having regard to the size of the company and the nature of its property, plant and equipment. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.
c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held In the name of the Company.
Ii) The Management has conducted physical verification of inventory at reasonable intervals and no material discrepancies were noticed on physical verification.
Iii) The Company has granted loan to a Company covered in the register maintained under section 189 of the Companies Act, 2013("the Act").
a) In our opinion , the rate of interest and other terms and condition on which the loan had been granted to the company listed in the register maintained under Section 189 of the Act was not , prima facie , prejudicial to the interest of the Company.
b) The schedule of repayment of principal and payment of interest is not stipulated and in absence of such a schedule , we are unable to comment on the regularity of the repayments or receipts of principal amounts and interest.
c) There are no overdue amounts in respect of the loan granted to a company covered in the register maintained under Section 189 of the Act.
Iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and Investments made. The Company has not provided any guarantees / security.
v) The Company has not accepted any deposits from the public.
vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prlma facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii) According to the information and explanations given to us, in respect of statutory dues:
a) There were delays by the Company in depositing undisputed statutory dues, including Provident Fund, Employees âState Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues In arrears as at March 31,2018 for a period of more than six months from the date they became payable.
c) According to the information and explanations given to us, there are no dues of income tax, sales-tax, service tax, customs duty and cess which have not been deposited on account of any dispute except as given below:
Name of Statue |
Nature of Dues |
Forum where dispute is pending |
Period to which the amount relates |
Amount involved (Rs) |
Amount Pending (Rs) |
Maharashtra Value Added Tax Ad |
Maharashtra Value Added Tax Act |
Maharashtra Value Added Tax Tribunal |
A.Y :2012-13 |
12,48,439/- |
6,98,439/- |
Income Tax Act |
Income Tax |
Commissioner of Income Tax -Appeals, Mumbai |
A.Y : 2014-15 |
55,180/- |
55,180/- |
viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks or government. The Company did not have any borrowings during the year by way of debentures.
ix) According to the information and explanations given to us , the Company has not raised any money by way of public issue or further public offer (including debt instruments) during the year. The term loans raised by the company have been applied for the purpose for which they were raised.
x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year except of issue of sweat equity shares to a Director in accordance with the Issue of Sweat Equity Regulations, 2002 issued by Securities and Exchange Board of India.
xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv)of the Order is not applicable.
xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
Referred to in paragraph 2(f) of our report of even date
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting of Sadhana Nitro Chem Limitedfthe Company") as of March 31,2018 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 Internal Financial Controls
2. 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 (Guidance Note) issued by the Institute of Chartered Accountants of India (''ICAI''). 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
3. 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.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. 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
6. 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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
7. 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
8. 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 Chandrashekar Iyer & Co
Chartered Accountants
Firm Registration No: 114260W
Chandrashekhar Iyer
Place: Mumbai Partner
Date: April 30, 2018 Membership No.47723
Mar 31, 2017
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Sadhana Nitro Chem Limited (âthe Companyâ), which comprises the Balance Sheet as at 31 â March 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including 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 the assets of the Company, preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these 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 auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 31 $â March, 2017, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in Annexure 1, a statement on the matters specified in paragraph 3 and 4 of the Order, to the extent applicable.
2. Further to our comments in Annexure 1, as required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books
(c) 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.
(d) 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.
(e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in âAnnexure 2â, and
(g) With respect to the other matters to be included in the Auditorâs 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 explanations given to us:
I. The Company does not have any pending litigation which would Impact its financial position.
II. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the financial statements as to holding as well as dealing in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Managementâ(Refer Note No. 16.1 of Financial Statements)
ANNEXURE 1 TO TI-IE INDEPENDENT AUDITORSâ REPORT TO THE MEMBERS OF SADHANA NITRO CHEM LIMITED ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2017
Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and in our opinion, we report that:
I a. The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. The Company has a policy of physically verifying its fixed assets in a phased manner to cover all the assets of the Company in a block of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its business.
c. The title deeds of the immovable properties are held in the name of the company.
II a. The inventory has been physically verified by the Management at reasonable intervals during the year
b. The procedures of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business. No material discrepancies were noticed on such physical verification.
c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.
III The Company has not granted any loans secured or unsecured during the period to the parties covered in the Register maintained under section 189 of the Companies Act, 2013.
IV The Company has not granted any loans, investments, or any guarantees or securities accordingly provision of Section 185 and 186 does not apply.
V The Company has not accepted any deposits from public. Accordingly, this clause is not applicable.
VI The Central Government has not prescribed maintenance of cost records under section 148(1) of the Act.
VII a) The company has been irregular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities during the year. No undisputed amount in respect of the aforesaid statutory dues were in arrears, as at 31st March 2017, for a period of more than six months from the date they become payable except in the following cases :-
Name of the Statute |
Nature of Dues |
Amount (Rs.) |
Period to Which it relates |
Income Tax Act. 1961 |
Tax Deducted at Source |
67,17,849 |
April 2015 to September 2016 |
Provident Fund Act, 1952 |
R F. Contribution |
57,84,537 |
June 2015 to September 2016 |
Service Tax |
Reverse Mechanism |
20,57,631 |
April 2014 to September 2016 |
Total |
1,45,60,017 |
b) There are no dues of Income Tax, Sales tax, Service Tax, Customs duty, Wealth Tax, Excise Duty, Excise Duty and Cess which have not been deposited on account of a dispute.
VIII The Company has not defaulted in repayment of dues to any financial institutions or banks.
IX The Company did not raise any money by way of initial public offer (including debts instruments) or further public offer and terms loans during the year. Accordingly, this clause is not applicable.
X No material fraud by the company or on the company by its officers or employees has been noticed or reported during the course of our audit.
XI The company has paid / provided for managerial remuneration in accordance with the requisite approvals as mandated by the provisions of section 197 read with Schedule V of the Act.
XII The Company is not a Nidhi Company. Accordingly, this clause is not applicable.
XIII All Transaction with related parties are in compliance with Section 177 and section 188 of the Companies Act,2013 where applicable, and details of such transactions have been disclosed in the financial statements as required by the applicable Accounting standards.
XIV The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, this clause is not applicable.
XV The Company has not entered into any non cash transactions with directors or persons connected with them.
XVI The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For V. Sankar Aiyar & Co
Chartered Accountants
Firm Reg No: 109208W
Arvind Mohan
Place: Mumbai Partner
Date: April 26th, 2017 Membership No. 124082
Mar 31, 2016
AUDITORâS REPORT
Independent Auditorâs Report
To the Members of Sadhana Nitro Chem Limited.
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Sadhana Nitro Chem Limited (âthe Companyâ), which comprises 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 significant accounting policies and other explanatory information.
Managementâs 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 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including 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 the assets of the Company, preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the 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 its loss and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to Note No. 30 in financial statements regarding going concern. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in Annexure 1, a statement on the matters specified in paragraph 3 and 4 of the Order, to the extent applicable.
2. Further to our comments in Annexure 1, as required by Section 143(3) of the Act, we report that :
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books
(c) 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.
(d) 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.
(e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in '' Annexure 2'', and
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :
i. The Company does not have any pending litigation which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE1
TO THE INDEPENDENT AUDITORSâ REPORT TO THE MEMBERS OF SADHANA NITRO CHEM LIMITED ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016.
Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and in our opinion, we report that :
I. a. The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. The Company has a policy of physically verifying its fixed assets in a phased manner to cover all the assets of the Company in a block of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its business.
c. The title deeds of the immovable properties are held in the name of the company.
II. a. The inventory has been physically verified by the Management at reasonable intervals during the year.
b. In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business. No material discrepancies were noticed on such physical verification.
c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.
III. The Company has not granted any loans secured or unsecured during the period to the parties covered in the Register maintained under section 189 of the Companies Act, 2013.
IV. The Company has not granted any loans, investments, or any guarantees or securities accordingly provision of Section 185 and 186 does not apply.
V. The Company has not accepted any deposits from public. Accordingly, this clause is not applicable.
VI. The Central Government has not prescribed maintenance of cost records under section 148(1) of the Act.
VII. a. The company is generally irregular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amount in respect of the aforesaid statutory dues were in arrears, as at 31st March 2016, for a period of more than six months from the date they become payable except in the following cases :-
Name of the Statute |
Nature of Dues |
Amount '' |
Period to which it relates |
Income Tax Act, 1961 |
Tax Deducted at Source |
24,07,383 |
April to September 2015 |
Provident Fund Act, 1952 |
P. F. Contribution |
26,61,814 |
April to September 2015 |
Service Tax |
Reverse Mechanism |
12,82,097 |
April to September 2015 |
Total |
63,51,294 |
b. According to the information and explanations given to us based on the records of the company examined by us, there are no dues of Income Tax, Sales tax, Service Tax, Customs duty, Wealth Tax, Excise Duty, Excise Duty and Cess which have not been deposited on account of a dispute.
VIII. The Company has not defaulted in repayment of dues to any financial institutions or banks.
IX. The Company did not raise any money by way of initial public offer (including debts instruments) or further public offer and terms loans during the year. Accordingly, this clause is not applicable.
X No material fraud by the company or on the company by its officers or employees has been noticed or reported during the course of our audit.
XI. The company has paid / provided for managerial remuneration in accordance with the requisite approvals as mandated by the provisions of section 197 read with Schedule V of the Act.
XII. The Company is not a Nidhi Company. Accordingly, this clause is not applicable.
XIII. All Transaction with related parties are in compliance with Section 177 and section 188 of the Companies Act,2013 where applicable, and details of such transactions have been disclosed in the financial statements as required by the applicable Accounting standards.
XIV. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, this clause is not applicable.
XV The Company has not entered into any non - cash transactions with directors or persons connected with them.
XVI. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. ANNEXURE2
TO THE INDEPENDENT AUDITORâS REPORT TO THE MEMBERS OF SADHANA NITRO CHEM LIMITED ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Sadhana Nitro Chem Limited (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s Judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that
(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company ;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 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 V. Sankar Aiyar & Co.
Chartered Accountants
Firm Regn No. 109208W
Arvind Mohan
Place : Mumbai Partner
Dated : 27th May, 2016 Membership No. 124082
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Sadhana Nitro Chem Limited ("the Company"), which comprise the
Balance Sheet as at 31 st 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, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
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.
Auditor's 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 auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud
or error. I n making those risk assessments, the auditor considers
internal financial control relevant to the Company's preparation of the
financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances. An audit
also includes evaluating the appropriateness of the 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 aud it opi n ion 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 Ad in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its profit and its cash flows for the year
ended on that date.
Emphasis of Matters
We draw attention to Note 31 in the financial statements regarding
going concern. Our opinion is not qualified 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"), as amended, issued by the Central Government of India
intermsofsub-sedion 11 of section 143oftheAct, wegiveintheAnnexure a
statement on the matters specified i n parag raphs 3 and 4 of the Order
2) As required by Section 143(3)oftheAct,wereportthat:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In ouropinion, 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, and the Cash
Flow Statement dealt with by this Report are in agreementwith the books
of account.
(d) 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.
(e) On the basis of the written representations received from the
directors as on 31 st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 st March,
2015 from being appointed as a director in terms of Section 164 (2) of
the Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company does not have any pending litigations which would impact
its financial position;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO THE AUDITOR'S REPORT
(Referred to in paragraph (a) under the heading of "Report on Other
Legal and Regulatory Requirements" of our report of even date to the
members of Sadhana NitroChem Ltd forthe period ended 31st March, 2015)
Annexure referred in Independent Auditors Report of even date
1. a. The company has maintained records showing particulars including
quantitative details and situation offixed assets on the basis of
available information, b. As explained to us, the fixed assets have
been physically verified by the management during the year in a phased periodical manner of over two years, which in ouropinion is reasonable,
having regard to the size of the company and nature of its assets. No
material discrepancies were noticed on such physical verification.
2. a. As explained to us, inventories have been physically verified by
the management at regular intervals during the year.
b. In our opinion and according to the information and explanation
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. No material
discrepancies were noticed on such physical verification.
c. The company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. The company has not granted any loans, secured or unsecured during
the period to parties covered in register maintained under section
189oftheAct.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanation that purchase of certain
items of inventory and fixed assets are for the Company's specialized
requirements and similarly, certain goods sold are forthe specialized
requirements of the buyers and suitable alternate source are not
available to obtain comparable quotations there is generally adequate
internal control system commensurate with the size of the company and
the nature of its business for the purchase of inventory & fixed assets
and for the sale of goods & services. In our opinion ands according to
the information and explanations given to us, we have not observed any
major weakness during the course of Audit.
5. The company has not accepted any deposits during the year.
6. The Central Government has prescribed maintenance of cost records
under sub section (1) of section 148 of the Companies Act 2013 in
respect of one of the products, manufactured by the company. We have
broadly reviewed the accounts and records of the company and are of the
opinion that prima- facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the same.
7. In respect of statutory dues:
a. There have generally been delays by the company in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, employees' state insurance, income-tax, Sales Tax,
Wealth tax, Customs duty, Excise duty, cess, Service tax and other
statutory dues with the appropriate authorities. There are undisputed
amounts payable in respect of the aforesaid dues as at 31st March,
2015 for a period of more than six months from the date of becoming
payable, details are as under:
Name of Nature of dues Amount (Rs.) Period to which it relates
statute
Income Tax
Act, 1961 Tax Deducted 20,31,593 April to September 2014
at Source
Provident
Fund Act,1952 P.F. Contribution 8,42,405 April to September 2014
Service Tax Reverse Mechanism 3,97,176 April to September 2014
Total 32,71,174
b. According to the records of the company, there are no disputed
statutory dues on account of Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, and cess remaining unpaid as on 31st March,
2015.
c. Amount required to be transferred to investor education and
protection fund in accordance with the relevant provisions of Companies
Act, 1956 has been transferred to such fund within time.
6. The company has accumulated losses is more than fifty percent of its
net worth. The company has not incurred any cash loss during the year
and in the immediately preceding financial year.
7. Based on our audit procedures and according to the information and
explanation given to us, there have been no delays in repayment of dues
to banks and financial institutions during the year.
8. The company has not given any guarantee for loans taken by others
from Bank or Financial Institutions.
9. The company has not obtained any term loans during the year.
10. In our opinion and according to the information and explanation
given to us, no material fraud on or by the company has been noticed or
reported during the course of our audit.
For V. Sankar Alyar & Co.
Chartered Accountants
(Firm's Registration No. 10S208W)
Arvind Mohan
Place: Mumbai Partner
Date: 16th April 2015 (Membership No. 124082)
Mar 31, 2014
We have audited the accompanying financial statements of Sadhana Nitro
Chem Limited. ("the Company") which comprise the Balance sheet as at
31st March, 2014 and the Statement of Profit and Loss and the Cash Flow
Statement for the period then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the financial statements
Management is responsible for preparation of these financial statements
that give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement. An audit involves performing procedures to
obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor''s
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal
control relevant to the Company''s preparation and fair presentation of
the financial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014 ;
(b) In the case of the Statement of Profit and Loss, of the Loss for
the period ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
Emphasis of Matter
We draw your attention to Note 33 regarding going concern. Our opinion
is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that :
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit ;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books
c. The Balance Sheet, Statement of Profit and Loss, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d. In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956 ;
e. 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 March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITOR''S REPORT
(Referred to in paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements" of our report of even date to the members
of Sadhana Nitro Chem Ltd for the period ended 31st March, 2014)
Annexure referred in Independent Auditors Report of even date
1. In respect of its fixed assets :
a. The company has maintained records showing particulars including
quantitative details and situation of fixed assets on the basis of
available information.
b. As explained to us, the fixed assets have been physically verified
by the management during the period in a phased periodical manner of
over two years, which in our opinion is reasonable, having regard to
the size of the company and nature of its assets. No material
discrepancies were noticed on such physical verification.
c. During the period, the company has disposed of some of its non core
business assets which does not form substantial part of fixed assets.
Accordingly, going concern status of the company is not affected.
2. In respect of its inventories :
a. As explained to us, inventories have been physically verified by
the management at regular intervals during the period.
b. In our opinion and according to the information and explanation
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. No material
discrepancies were noticed on such physical verification.
c. The company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. In respect of loans, secured or unsecured, granted or taken by the
company to/ from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956, we
report that : a. The company has not granted any loans, secured or
unsecured during the period.
b. During the period company had taken interest free loan from one
company amounting to Rs. 22,50,000/- This along with other loans covered
in register maintained under section 301 have been repaid during the
period and maximum balance during the period was Rs. 20,28,242/-.
c. In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are not
prima facie prejudicial to the interest of the Company.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanation that purchase of certain
items of inventory and fixed assets are for the Company''s specialized
requirements and similarly, certain goods sold are for the specialized
requirements of the buyers and suitable alternate source are not
available to obtain comparable quotations there is generally adequate
internal control system commensurate with the size of the company and
the nature of its business for the purchase of inventory & fixed assets
and for the sale of goods & services. In our opinion ands according to
the information and explanations given to us, we have not observed any
major weakness during the course of Audit.
5. In respect of transactions covered under section 301 of the
companies act, 1956 :
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into in the register maintained
under section 301 of the companies act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the companies act, 1956 exceeding value of Rs. 5,00,000/- in respect of
any party during the period have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6. The company has repaid all existing deposits accepted from public
and has not accepted new deposits. Accordingly, clause 4(xiii) of the
Companies (Auditor''s Report) Order 2003 is not applicable to the
company.
7. On the basis of the internal audit reports broadly reviewed by us,
we are of the opinion that, the internal audit functions carried out by
a firm of chartered accountants appointed by the management is
commensurate with the size of the company and the nature of its
business.
8. The Central Government has prescribed maintenance of cost records
under section 209(1) (d) of the Companies act, 1956 in respect of one
of the products, manufactured by the company. We have broadly reviewed
the accounts and records of the company and are of the opinion that
prima-facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
same.
9. In respect of statutory dues :
a. There have generally been delays by the company in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, employees'' state insurance, income-tax, Sales Tax,
Wealth tax, Customs duty, Excise duty, cess, Service tax and other
statutory dues with the appropriate authorities. There are undisputed
amounts payable in respect of the aforesaid dues as at 31st March, 2014
for a period of more than six months from the date of becoming payable,
details are as under :
Name of statute Nature of dues Amount (Rs.) Period to which
it relates
Income Tax Act,
1961 Tax Deducted
at Source 14,08,125 July to September
2013
Provident Fund
Act, 1952 P.F. Contribution 8,15,612 August -
September 2013
Service Tax Reverse Mechanism 5,16,258 April -
September 2013
Total Unpaid Statutory Dues for
more than 27,39,995
six months
b. According to the records of the company, there are no disputed
statutory dues on account of Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, and cess remaining unpaid as on 31st March,
2014.
10. The company has accumulated losses of Rs. 22,71,06,251/- at the end
of the financial period, which is more than fifty percent of its net
worth. The company has not incurred any cash loss during the period and
in the immediately preceding financial period.
11. Based on our audit procedures and according to the information and
explanation given to us, there have been delays in repayment of dues to
banks and financial institutions during the period. There were,
however, no delayed dues to banks existing at the balance sheet date.
12. In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the company 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 nidhi/mutual
benefit fund/ society. Therefore, clause 4(xiii) of the Companies
(Auditor''s Report) Order 2003 is not applicable to the company.
14. The company has not traded in securities, debentures and other
investments. All the investments are held in the name of the company.
Accordingly, clause 4(xiv) of the Companies (Auditor''s Report) Order
2003 is not applicable to the company.
15. The company has not given any guarantee for loans taken by others
from Bank or Financial Institutions. Accordingly, clause 4(xv) of the
Companies (Auditor''s Report) Order 2003 is not applicable to the
company.
16. In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purpose for which
they were raised.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company as on 31st
March, 2014, in our opinion, there are no funds raised on a short term
basis which have been used for long term investment
18. During the period, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
19. In our opinion and according to the information and explanation
given to us, the company has not issued any secured debentures during
the period covered by our report.
20. The Company has not raised any money by public issue during the
period. Accordingly clause 4(xx) of Companies (Auditor''s Report) Order
2003 is not applicable to the company.
21. In our opinion and according to the information and explanation
given to us, no material fraud on or by the company has been noticed or
reported during the course of our audit.
For V. Sankar Aiyar & Co.
Chartered Accountants
Firm Regn. No. 109208W
Arvind Mohan
Place: Mumbai Partner
Dated: 27th May, 2014 Membership No. 124082
Jun 30, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Sadhana Nitro
Chem Limited ("the Company"), which comprise the Balance Sheet as at
June 30, 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the period then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at June 30, 2013;
b) in the case of Statement of Profit and Loss, of the Loss for the
period ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
Emphasis of Matter
We draw your attention to Note 33 regarding going concern and deferred
tax assets. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"),as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956;
ANNEXURE TO THE AUDITOR''S REPORT
Annexure Referred in Independent Auditors Report of even date
1. In respect of its fixed assets:
a. The company has maintained records showing particulars including
quantitative details and situation of fixed assets on the basis of
available information.
b. As explained to us, the fixed assets have been physically verified
by the management during the period in a phased periodical manner,
which in our opinion is reasonable, having regard to the size of the
company and nature of its assets. No material discrepancies were
noticed on such physical verification.
c. During the period, the company has disposed of some of its non core
business assets which does not form substantial part of fixed assets.
Accordingly, going concern status of the company is not affected.
2. In respect of its inventories:
a. As explained to us, inventories have been physically verified by
the management at regular intervals during the period.
b. In our opinion and according to the information and explanation
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. No material
discrepancies were noticed on such physical verification.
c. The company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. In respect of loans, secured or unsecured, granted or taken by the
company to/ from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956, we
report that:-
a. The company has not granted any loans, secured or unsecured during
the period.
b. During the period company had taken interest free and interest
bearing loan from one company amounting to Rs. 6,10,54,474/-. This loan
had maximum balance ofRs. 12,12,27,610/- and has been repaid during the
period.
c. In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are not
prima facie prejudicial to the interest of the Company.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanation that purchase''of certain
items of inventory and fixed assets are for the Company''s specialized
requirements, and similarly, certain goods sold are for the specialized
requirements of the buyers and suitable alternate source are not
available to obtain comparable quotations, there is generally adequate
interna! control system commensurate with the size of the Company and
the nature of its business for purchase of inventory and fixed assets
and for the sale of goods and services. In our opinion, and according
to the information and explanations given to us, we have not observed
any major weakness during the course of audit.
5. In respect of transactions covered under Section 301 of the Company
Act, 1956:
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into in the register maintained
under Section 301 of the Companies Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 exceeding value ofRs. 5,00,000/- in respect of
any party during the period have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6. The company has repaid all existing deposits accepted from public
and has not accepted new deposits. Accordingly, clause 4(xiii) of the
Companies (Auditor''s Report) Order 2003 is not applicable to the
company.
7. On the basis of the internal audit reports broadly reviewed by us.
we are of the opinion that, the internal audit functions carried out by
a firm of chartered accountants appointed by the management is
commensurate with the size of the company and the nature of its
business.
8. The Central Government has prescribed maintenance of cost records
under Section 209(1) (d) of the Companies Act, 1956 in respect of
products, manufactured by the company. We have broadly reviewed the
accounts and records of the company and are of the opinion that
prima-facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
same.
9. In respect of statutory dues:
a. There have generally been delays by the company in depositing
undisputed statutory dues including provident fund, investor education
and protection fund employees'' state insurance income-tax, Sales Tax,
Wealth tax, Customs duty, Excise duty, cess, Service tax and other
statutory dues with the appropriate authorities. There are no
undisputed amounts payable in respect of the aforesaid dues as at 30th
June, 2013 for a period of more than six months from the date of
becoming payable;
b. According to the records of the company, there are no disputed
statutory dues on account of Income Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, and cess remaining unpaid as on 30lh
June, 2013.
10. The company has accumulated losses of Rs. 22,14,88,874/- at the
end of the financial period, which is more than fifty percent of its
net worth. The company has not incurred any cash loss during the period
and in the Immediately preceding financial period.
11. Based on our audit procedures and according to the information and
explanation given to us, there have been delays in repayment of dues to
banks and financial institutions. Details of default in repayment of
dues to banks existing at the balance sheet date are as under;
Name of Bank Amount due Due date Date of payment
State Bank of Patiala Rs. 56,25,000 June 30, 2013 Not yet paid
(USD 1,03,500)
12. In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the company 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 nidhi/mutual
benefit fund/ society. Accordingly, clause 4(xiii) of the Companies
(Auditor''s Report) Order 2003 is not applicable to the company.
14. The Company has not traded in securities, debentures and other
investments. All the investments are held in the name of the company.
Accordingly, clause 4(xiv) of the Companies (Auditor''s Report) Order
2003 is not applicable to the company.
15. The company has not given any guarantee for loans taken by others
from bank or financial institutions. Accordingly, clause 4(xv) of the
Companies (Auditor''s Report) Order 2003 is not applicable to the
company.
16. In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purpose for which
they were raised.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company as on 30th
June, 2013, in our opinion, there are no funds raised on a short term
basis which have been used for long term investment
18. During the period, the company has made preferential allotment of
Preference Shares to its Holding Company. In our opinion and according
to information and explanations given to us, the price at which these
Preference Shares have been issued is not prejudicial to the interest
of the company.
19. In our opinion and according to the information and explanation
given to us, the company has not issued any secured debentures during
the period covered by our report.
20. The Company has not raised any money by public issue during the
period. Accordingly, clause 4(xx) of Companies (Auditor''s Report) Order
2003 is not applicable to the company.
21. In our opinion and according to the information and explanation
given to us, no material fraud on or by the company has been noticed or
reported during the course of our audit.
For V. SankarAiyar&Co.
Chartered Accountants
Firm Regn No. 109208W
Arvind Mohan
Place Mumbai Partner
Dated : 28th August, 2013 Membership No. 124082
Mar 31, 2012
1. We have audited the attached Balance Sheet of Sadhana Nitro Chem
Limited as at 31st March, 2012 and also the annexed Profit & Loss
Account and the Cash Flow Statement of the Company for the year ended
on the date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted the audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003
issued by the Central Government of India in terms of Section 227(4A)
of the Companies Act, 1956, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above.
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 it appears from our examination of such
books.
c. The Balance Sheet, Profit & Loss Account and cash flows statement
referred to in this report are in agreement with the Books of Account.
d. In our opinion Balance Sheet and Profit & Loss Account and the Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to sub-sections 3(C) of Section 211 of the Companies
Act, 1956.
e. Based on the representations made by the Directors and taken on
record by the Board of Directors of the Company and the information and
explanations given to us, none of the Directors is, as at 31E| March,
2012, prima-facie disqualified from being appointed as a director in
terms of clause (g) of sub-section (1) of Section 274 of the Companies
Act, 1956.
f. Without qualifying attention is invited to note 11 of financial
statements regarding non provision in respect of guarantees and
diminution in value of investment provided to one of its subsidiaries.
g. Without qualifying attention is invited to note 32 of financial
statements regarding accumulated losses and consequential effect on
going concern.
h. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read along with notes
on Accounts and the Accounting Policies give the information required
by the Companies Act, 1956, in the manner so required and read in
conjunction with all other notes thereon give a truo and fair view.
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012.
ii) in the case of the Profit & Loss Account, of the profit for the
year ended on that date.
and
iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Referred to in Paragraph 3 of our report of even date.
1. In respect of its fixed assets:
a. The company has maintained records showing particulars including
quantitative details and situation of fixed assets on the basis of
available information.
b. As explained to us, the fixed assets have been physically verified
by the management during the year in a phased periodical manner, which
in our opinion is reasonable, having regard to the size of the company
and nature of its assets. No material discrepancies were noticed on
such physical verification. .
c. In our opinion, the company has not disposed of substantial part of
fixed assets during the year and the going concern status of the
company is not affected.
2. In respect of its inventories :
a. As explained to us, inventories have been physically verified by
the management at regular intervals during the year.
b. In our opinion and according to the information and explanation
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 inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. In respect of loans, secured or unsecured, granted or taken by the
company to/ from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956, we
report that:-
a. The company has not granted any loans, secured or unsecured during
the year.
b. During the year company had taken interest free and interest
bearing loan from two companies amounting to Rs 3,62,95,000/- and
interest free loan from one party amounting to Rs 35,50,000/-
respectively. This along with other loans covered in register
maintained under section 301 have an outstanding year end balance of Rs
6,58,06,987/- and maximum balance during the year was Rs 7,38,04,928/-.
c. In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are not
prima facie prejudicial to the interest of the Company.
d. The company is regular in repaying principal and interest as
stipulated.
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, fixed assets and for the sale
of goods & services. During the course of our audit, we have not
observed any major weaknesses in internal controls.
5. In respect of transactions covered under section 301 of the Company
Act, 1956:
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into in the register maintained
under section 301 of the Companies Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the companies act, 1956 exceeding value of Rs 5,00,000/- in respect of
any party during the year have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
58Aofthe companies act and the rules framed thereunder, and also the
directives of Reserve Bank of India with regard to acceptance of
deposits. The company has not accepted any deposits from small
depositors as defined under section 58AA of the companies act. Since
the company has not defaulted in repayments of deposits, obtaining any
order from the national company law tribunal does not arise.
7. On the basis of the internal audit reports broadly reviewed by us,
we are of the opinion that, the internal audit functions carried out by
a firm of chartered accountants appointed by the management is
commensurate with the size of the company and the nature of its
business.
8. The Central Government has prescribed maintenance of cost records
under section 209(1) (d) of the Companies Act, 1956 in respect of
products manufactured by the company. We have broadly reviewed the
accounts and records of the company and are of the opinion that
prima-facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
same.
9. In respect of statutory dues:
a. There have generally been delays by the company in depositing
undisputed statutory dues including provident fund, employees' state
insurance income-tax, Sales Tax, Wealth tax, Customs duty, Excise duty,
cess, Service tax and other statutory dues with the appropriate
authorities. There are no undisputed amounts payable in respect of the
aforesaid dues as at 31st March, 2012 for a period of more than six
months from the date of becoming payable;
b. According to the records of the company, there are no disputed
statutory dues on account of Sales Tax, Income Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, and cess remaining unpaid as on 31st
March 2012.
10. The company has accumulated losses of Rs 20,35,82,519/- at the end
of the financial year, which is more than fifty percent of its net
worth. The company has not incurred any cash loss during the year and
has incurred cash loss Rs 1,82,87,622/- during the immediately preceding
financial year.
11. Based on our audit procedures and according to the information and
explanation given to us, there have been delays in repayment of dues to
banks and financial institutions. Details of default in repayment of
dues to banks existing at the balance sheet date are as under;
Name of Bank Amount due Due date Date of payment
State Bank of
Patiala Rs 36,00,000 March 31, 2012 June 18, 2012
(USD 70,768)
State Bank of
Patiala Rs 42,00,000 March 31, 2012 Not yet paid
12. In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the company 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 nidhi/mutual
benefit fund/ society. Therefore, clause 4
14. The company has maintained proper records of transactions and
contracts in respect of trading in securities, debentures and other
investments and timely entries have been made therein. All shares,
debentures and other investments have been held by the company in its
own name.
15. The company has given corporate guarantee against borrowings of
one of its subsidiaries. According to information explanations given to
us, and the representations made by the management, the terms and
conditions of guarantee are not prejudicial to the interest of the
company.
16. In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purpose for which
they were raised.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company as on March 31,
2012, in our opinion, there are no funds raised on a shortterm basis
which have been used for long term investment
18. During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
19. In our opinion and according to the information and explanation
given to us, the company has not issued any secured debentures during
the period covered by our report.
20. The Company has not raised any money by public issue during the
year. Accordingly clause 4(xx) of Companies (Auditor's Report) Order
2003 is not applicable to the company.
21. In our opinion and according to the information and explanation
given to us, no material fraud on or by the company has been noticed or
reported during the course of our audit.
For V. Sankar Aiyar & Co.
Chartered Accountants
Firm Regn No. 109208W
Arvind Mohan
Place : Mumbai Partner
Dated : 18th June, 2012 Membership No. 124082
Mar 31, 2011
1. We have audited the attached Balance Sheet of Sadhana Nitro Chem
Limited as at 31st March, 2011 and also the annexed Profit & Loss
Account and the Cash Flow Statement of the Company for the year ended
on the date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted the audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above.
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 it appears from our examination of such
books.
c. The Balance Sheet, Profit & Loss Account and cash flows statement
referred to in this report are in agreement with the Books of Account.
d. In our opinion Balance Sheet and Profit & Loss Account and the Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to sub-sections 3(C) of Section 211 of the Companies
Act, 1956.
e. Based on the representations made by the Directors and taken on
record by the Board of Directors of the Company and the information and
explanations given to us, none of the Directors is, as at 31st March,
2011, prima-facie disqualified from being appointed as a director in
terms of clause (g) of sub-section (1) of Section 274 of the Companies
Act, 1956.
f. Without qualifying attention is invited to note B-(3) of Schedule J
regarding non provision in respect of guarantees and diminution in
value of investment provided to one of its subsidiaries.
g. Without qualifying attention is invited to note B-(2) of schedule
(J) regarding accumulated losses and consequential effect on going
concern.
h. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read along with notes
on Accounts and the Accounting Policies give the information required
by the Companies Act, 1956, in the manner so required and read in
conjunction with ail other notes thereon give a true and fair view.
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011.
ii) in the case of the Profit & Loss Account, of the loss for the year
ended on that date.
and
iii) in the case of the Cash Flow Statement, of the cash flows of
the Company for the year ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
Referred to in Paragraph 3 of our report of even date.
1. In respect of its fixed assets:
a. The company has maintained records showing particulars including
quantitative details and situation of fixed assets on the basis of
available information.
b. As explained to us, the fixed assets have been physically verified
by the management during the year in a phased periodical manner, which
in our opinion is reasonable, having regard to the size of the company
and nature of its assets. No material discrepancies were noticed on
such physical verification.
c. In our opinion, the company has not disposed of substantial part of
fixed assets during the year and the going concern status of the
company is not affected.
2. In respect of its inventories :
a. As explained to us, inventories have been physically verified by
the management at regular intervals during the year.
b. In our opinion and according to the information and explanation
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 inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. In respect of loans, secured or unsecured, granted or taken by the
company to/ from companies, firms or other parties covered in the
register maintained under section 301 of the companies act, 1956, we
report that:-
a. The company has not granted any loans, secured or unsecured during
the year.
b. During the year company had taken interest free loan from two
parties amounting to Rs. 32,00,000/- and interest free and interest
bearing loan from one company amounting to Rs. 4,14,60,000/- and Rs.
30,00,000/- respectively. This along with other loans covered in
register maintained under section 301 have an outstanding year end
balance of Rs. 2,58,07,638/- and maximum balance during the year was
Rs. 6,93,37,393/-.
c. In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are not
prima facie prejudicial to the interest of the Company.
d. The company is regular in repaying principal and interest as
stipulated.
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, fixed assets and for the sale
of goods & services. During the course of our audit, we have not
observed any major weaknesses in internal controls.
5. In respect of transactions covered under section 301 of the company
act, 1956:
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into in the register maintained
under section 301 of the companies act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the companies act, 1956 exceeding value of Rs. 5,00,000/- in respect of
any party during the year have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
58A of the companies act and the rules framed thereunder, and also the
directives of Reserve Bank of India with regard to acceptance of
deposits. The company has not accepted any deposits from small
depositors as defined under section 58AA of the companies act. Since
the company has not defaulted in repayments of deposits, obtaining any
order from the national company law tribunal does not arise.
7. On the basis of the internal audit reports broadly reviewed by us,
we are of the opinion that, the internal audit functions carried out by
a firm of chartered accountants appointed by the management is
commensurate with the size of the company and the nature of its
business.
8. The Central Government has prescribed maintenance of cost records
under section 209(1) (d) of the Companies act, 1956 in respect of one
of the products, manufactured by the company. We have broadly reviewed
the accounts and records of the company and are of the opinion that
prima-facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
same.
9. In respect of statutory dues:
a. There has generally been delays by the company in depositing
undisputed statutory dues including provident fund, employees' state
insurance income-tax, Sales Tax, Wealth tax, Customs duty, Excise duty,
cess, Service tax and other statutory dues with the appropriate
authorities. However except as reported below there are no other
undisputed amounts payable in respect of the aforesaid dues as at 31st
March, 2011 for a period of more than six months from the date of
becoming payable;
Nature of Nature of Total Period it
statutory Dues relates to
Income Tax Tax Deducted 2,36,163 July&
Act 1961 at source August 2010
Nature of Due date Date of
statutory payment
Income Tax 7th August and June 14, 2011.
Act 1961 7th September
respectively
b. According to the records of the company, there are no disputed
statutory dues on account of Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, and cess remaining unpaid as on 31st March
2011. In case of disputed dues of Income tax, details are as under;
Name of Nature of Amount Period to which
statute dues (Rs.) related to
Income tax Act, Income tax 46,81,787 Assessment
1961 year 1998-99
Income tax Act, Income tax 44,83,294 Assessment
1961 year 1999-2000
Income tax Act, Income tax 36,00,028 Assessment
1961 year 2001-02
Income tax Act, Income tax 10,58,012 Assessment
1961 year 2003-04
Income tax Act, Income tax 27,80,897 Assessment
1961 year 2004-05
Income tax Act, Income tax 14,44,494 Assessment
1961 year 2007- 08
1,80,48,512
Name of Forum where it dispute
statute is pending
Income tax Act, Hon'ble High Court of
1961 Bombay
Income tax Act, Hon'ble High Court of
1961 Bombay
Income tax Act, Hon'ble Supreme Court
1961 of India / CIT(A)
Income tax Act, Hon'ble Supreme Court
1961 of India
Income tax Act, Hon'ble Supreme Court
1961 of India
Income tax Act, Commissioner Of Income
1961 Tax (Appeals)
Attention is also drawn to note B(5) in Schedule J.
10. The company has accumulated losses of Rs. 21,44,26,293/- at the
end of the financial year, which is more than fifty percent of its net
worth. The company has incurred cash loss Rs. 1,57,87,622/- for the
financial year and Rs. 5,52,55,265/- during the immediately preceding
financial year.
11. Based on our audit procedures and according to the information and
explanation given to us, the company has defaulted in repayment of dues
to financial institutions and banks during the year as under. During
the year banks have rescheduled its loan to the company in the form of
deferring its installments.
Name of Bank & Amount due Due date Date of
Facility payment
State Bank of Patiala Rs. 1000015 30th Sept. 24th
(USD 22090) 2010 Dec.2010
State Bank of Patiala Rs. 4166675 31st Mar. 12th May
(USD 92490) 2011 2011
12. In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the company 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 nidhi/mutual
benefit fund/ society. Therefore, clause 4(xiii) of the Companies
(Auditor's Report) Order 2003 is not applicable to the company.
14. The company has maintained proper records of transactions and
contracts in respect of trading in securities, debentures and other
investments and timely entries have been made therein. All shares,
debentures and other investments have been held by the company in its
own name.
15. The company has given corporate guarantee against borrowings of
one of its subsidiaries. According to information explanations given to
us, and the representations made by the management, the terms and
conditions of guarantee are not prejudicial to the interest of the
company.
16. In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purpose for which
they were raised.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company as on March 31,
2011, in our opinion, there are no funds raised on a short term basis
which have been used for long term investment
18. During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
19. In our opinion and according to the information and explanation
given to us, the company has not issued any secured debentures during
the period covered by our report.
20. The Company has not raised any money by public issue during the
year. Accordingly clause 4(xx) of Companies (Auditor's Report) Order
2003 is not applicable to the company.
21. In our opinion and according to the information and explanation
given to us, no material fraud on or by the company has been noticed or
reported during the course of our audit.
For V. SankarAiyar & Co.
Chartered Accountants
Firm Regn. No. 109208W
Arvind Mohan
Partner
Membership No. 124082
Place Mumbai
Dated 17thJune, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of SADHANA NITRO CHEM
LIMITED as at 31st March, 2010 and alsc the annexed Profit & Loss
Account and the Cash Flow Statement of the Company for the year ended
on the date annexed thereto. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted the audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above.
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 it appears from our examination of such
books.
c. The Balance Sheet, Profit & Loss Account referred to in this report
are in agreement with the Books of Account.
d. In our opinion Balance Sheet and Profit & Loss Account and the Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to sub-sections 3(C) of Section 211 of the Companies
Act, 1956.
e. Based on the representations; made by the Directors and taken on
record by the Board of Directors of the Company and the information and
explanations given to us, none of the Directors is, as at 31st March,
2010, prima-facie disqualified from being appointed as a director in
terms of clause (g) of sub-section (1) of Section 274 of the Companies
Act, 1956.
f. Without qualifying we draw attention to note B(1) regarding
accumulated losses and Note B(2) of Schedule (J) regarding non
provision in respect of diminution in value of investment, loans and
guarantee provided to one of its subsidiaries.
g. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read along with notes
on Accounts and the Accounting Policies give the information required
by the Companies Act, 1956, in the manner so required and read in
conjunction with all other notes thereon give a true and fair view.
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010.
ii) in the case of the Profit & Loss Account, of the loss for the year
ended on that date. and
iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Referred to in Paragraph 3 of our report of even date.
1. In respect of its fixed assets :
a. The company has maintained records showing particulars including
quantitative details and situation of fixed assets on the basis of
available information.
b. As explained to us, the fixed assets have been physically verified
by the management during the year in a phased periodical manner, which
in our opinion is reasonable, having regard to the size of the company
and nature of its assets. No material discrepancies were noticed on
such physical verification.
c. In our opinion, the company has not disposed of substantial part of
fixed assets during the year and the going concern status of the
company is not affected.
2. In respect of its inventories :
a. As explained to us, inventories have been physically verified by
the management a. regular intervals during the year.
b. In our opinion and according to the information and explanation
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 inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. In respect of loans, secured or unsecured, granted or taken by the
company to/ from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956, we
report that :-
a. During the year company has not granted any loans to parties
concerned in registered maintained u/s 301 of Companies Act, 1956. In
respect of existing loans given, the maximum amount outstanding at any
time during the year is Rs. 5,44,34,699/- and the year end balance is
Rs. 2,26,95,476/-.
b. In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are not
prima facie prejudicial to the interest of the Company.
c. Principal on the said loan is repayable on demand. During the year
Rs. 3,72,99,379/- has been received. With regard to interest the same
is under negotiation with the party.
d. According to information and explanations provided to us, we are of
the opinion that reasonable steps are being taken by the company in
recovering the interest due for the year.
e. The company has taken loans from one Director, three companies and
one party aggregating to Rs. 2,51,70,396/-. These loans have maximum
balance of Rs. 2,54,51,652/- having an outstanding year end balance of
Rs. 1,84,63,476/-.
f. In our opinion and according to the information and explanations
given to us, the rate of interest, wherever applicable and other terms
and conditions on which the loans are given are not prima- facie
prejudicial to the interest of the company.
g. The company is regular in repaying the principal amount as
stipulated and has been regular in the payment of interest.
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, fixed assets and for the sale
of goods & services. During the course of our audit, we have not
observed any major weaknesses in internal controls.
5. In respect of transactions covered under Section 301 of the Company
Act, 1956 :
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into in the register maintained
under Section 301 of the Companies Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 exceeding value of Rs. 5,00,000/- in respect of
any party during the year have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Section
58A of the Companies Act and the rules framed thereunder, and also the
directives of Reserve Bank of India with regard to acceptance of
deposits. The company has not accepted any deposits from small
depositors as defined under Section 58AA of the Companies Act. Since
the company has not defaulted in repayments of deposits, obtaining any
order from the national company law tribunal does not arise.
7. On the basis of the internal audit reports broadly reviewed by us,
we are of the opinion that, the internal audit functions carried out by
a firm of chartered accountant appointed by the management is
commensurate with the size of the company and the nature of its
business.
8. The Central Government has prescribed maintenance of cost records
under section 209(1) (d) of the Companies act, 1956 in respect of one
of the products, manufactured by the company. We have broadly reviewed
the accounts and records of the company and are of the opinion that
prima-facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
same.
9. In respect of statutory dues :
a. According to the records, there has been no dalay in depositing
dues to Investor Education and Protection Fund and Wealth Tax. There
has generally been delays by the company in depositing undisputed
statutory dues including provident fund, employees state insurance
income-tax, Sales Tax, Customs duty, Excise duty, cess, Service tax and
other statutory dues with the appropriate authorities. There are no
other undisputed amounts payable in respect of the aforesaid dues as at
31st March, 2010 for a period of more than six months from the date of
becoming payable.
Nature of Nature of Total(Rs.) Period it Due date Date of
statutory Dues relates to payment
Income
Tax Tax
Deducted 9,63,216 April To 7th day
of the 3rd May,
Act 1961 at source September following
month 2010
2009 from the
month
of deduc-
tion
b. According to the records of the company, there are no disputed
statutory dues on account of Income Tax, Sales Tax, Service Tax, Excise
Duty, and cess remaining unpaid as on 31st March, 2010.
10. The company has accumulated losses at the end of the financial
year, which is more than fifty percent of its net worth. The company
has incurred Rs. 5,52,55,265/- as cash loss for the financial year and
Rs. 6,97,90,311/- during the immediately preceding financial year.
11. Based on our audit procedures and according to the information and
explanation given to us, the company has defaulted in repayment of dues
to financial institutions and banks during the year as under. During
the year banks have rescheduled its loan to the company in the form of
deferring its installments.
Name of Bank &
Facility Amount due Due date Date of payment
Exim Bank
Term Loan Rs. 26,12,567 15th March,
2010 27th April, 2010
(USD 61,294.66)
Axis Bank
Term Loan Rs. 65,62,500 5th January,
2010 18th February,
2010
12. In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the company 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 nidhi/mutual
benefit fund/ society. Therefore, clause 4(xiii) of the Companies
(Auditors Report) Order 2003 is not applicable to the company.
14. The company has maintained proper records of transactions and
contracts in respect of trading in securities, debentures and other
investments and timely entries have been made therein. All shares,
debentures and other investments have been held by the company in its
own name.
15. The company has given corporate guarantee against borrowings of
one of its subsidiaries. According to information explanations given to
us, and the representations made by the management, the terms and
conditions of guarantee are not prejudicial to the interest of the
company.
16. In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purpose for which
they were raised.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company as on 31st
March, 2010, in our opinion, there are no funds raised on a short term
basis which have been used for long term investment
18. During the year, the company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
19. In our opinion and according to the information and explanation
given to us, the company has not issued any secured debentures during
the period covered by our report.
20. The Company has not raised any money by public issue during the
year. Accordingly clause 4(xx) of Companies (Auditors Report) Order
2003 is not applicable to the company.
21. In our opinion and according to the information and explanation
given to us, no material fraud on or by the company has been noticed or
reported during the course of our audit.
For V. Sankar Aiyar & Co.
Chartered Accountants
Firm Regn. No. 109208W
Arvind Mohan
Place : Mumbai Partner
Dated : 29th July, 2010 Membership No. 124082
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