Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of 20 Microns Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as âStandalone Ind AS Financial Statementsâ).
Managementâs Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the 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) specified 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.
Auditorâs 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 thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 auditorâs 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 Companyâs 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 Companyâs 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 Ind AS, of the state of affairs (financial position) of the Company as at 31st March 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other matters
The Comparative financial information of the Company for the year ended 31st March 2017 and the transition date opening balance sheet as at 1st April 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31st March 2017 and 31st March 2016 dated 25th May 2017 and 23rd May 2016 respectively expressed an 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 these matters. 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 section 143 (11) of the Act, we give in the âAnnexure - Aâ, a statement on the matters specified in the paragraph 3 and 4 of the order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required
by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
e) On the basis of written representation received from the directors as on 31st March, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of the subsection (2) of section 164 of the Companies Act, 2013.
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. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
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 has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements. Refer Note 41 to the standalone Ind 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.
(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ section of our Independent Auditorâs Report, of even date, to the members of 20 Microns Limited on Standalone Ind AS Financial Statements for the year ended 31st March 2018)
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company as at 31st March 2018.
(ii) The inventory, has been physically verified by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liabilities Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3 (iii) [(a) to (c)] of the said Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.
(v) In respect of deposits accepted by the Company, the Company has complied with the directives of Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under sub-section (1) of Section 148 of the Act, 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 records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, income tax, sales tax, goods and service tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities though there has been slight delay in few cases. According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable were in arrears as at 31st March 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales tax, GST, service tax, duty of excise and customs duty which have not been deposited on account of any dispute.The particulars of dues of income tax as at 31st March 2018 which have not been deposited on account of a dispute, are as follows:
Name of statute |
Nature of dues |
Amount (in Lakhs) |
Period to which the amount relates |
Forum where the dispute is pending |
Income Tax Act. 1961 |
Income Tax |
5.96 |
Assessment Year 2009-10 |
Commissioner of Income Tax, Appeals |
Income Tax Act. 1961 |
Income Tax |
44.53 |
Assessment Year 2016-17 |
Central Processing Centre Bengaluru |
50.49 |
(viii) The Company has not defaulted in repayment of loans or borrowing dues to financial institution or bank or dues to debenture holders.
(ix) The Company did not raise any money by way of initial public offer, further public offer (including debt instruments) or term loans during the year.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been, noticed or reported during the year, nor we have been informed of any such case by the Management.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid or provided managerial remuneration during the year in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
(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 Companies Act, 2013. Details of such transactions have been disclosed in the financial statements as required by the applicable Indian 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.
(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) According to the information and explanations given to us and based on our examination of the records of the Company, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
(Referred to in paragraph 2 (f) under âReport on Other Legal and Regulatory Requirementsâ section of our Independent Auditorâs Report, of even date, to the members of 20 Microns Limited on Standalone Ind AS Financial Statements for the year ended 31st March 2018) 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 20 MICRONS LIMITED (âthe Companyâ), as of 31st March, 2018 in conjunction with our audit of the standalone Ind As financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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 (âICAIâ). 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 companyâs 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs 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 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 auditorâs 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 Companyâs internal financial controls over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 companyâs 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 companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For, J. H. Mehta & Co.
Chartered Accountants
ICAI Firm Regn. No. 106227W
(Naitik J Mehta)
Place : Ahmedabad Partner
Date : 24/05/2018 Membership No. 130010
Mar 31, 2016
To
The Members of 20 Microns Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of 20 Microns Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended on that date and a summary of the 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 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these 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 profit and its cash flows for the year ended on that date.
Emphasis of Matter
We refer to note no. 4(e) to the standalone financial statements, regarding classification of Company''s Term Loan and Cash Credit Facilities with State Bank of India as Nonperforming Assets by the said bank with effect from 01/04/ 2014 for the reasons stated in the said note to which company has objected.
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 Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as 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 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms 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 financial statements - Refer Note 27 to the 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.
(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ section of our report on Standalone Financial Statements of 20 Microns Limited of even date)
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) Physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liabilities Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3 (iii) [(a) to (c)] of the said Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.
(v) In respect of deposits accepted by the Company the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder, where applicable, have been complied with;
During the year Company Law Board, Mumbai Bench, has passed an order granting extension of time limit for repayment of deposits accepted by the company prior to commencement of the Act, upto the time as agreed with the fixed deposits holders. As per the order, no compliance is required to be made by the Company.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under sub-section (1) of Section 148 of the Act, 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 records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations
given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the 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 other material statutory dues, as applicable, with appropriate authorities except Income Tax Deducted at source, Sales Tax, Excise, Service Tax, Provident Fund and ESIC where there was some delay on few occasions at some of the offices of the company.
According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable were in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.
(viii)The Company has not defaulted in repayment of loans or borrowing dues to financial institution or bank or dues to debenture holders.
(b) According to the information and explanations given to us and the records of the Company examined by us, the details of disputed statutory dues that have not been deposited on account of dispute are as under.
Sr. No. |
Name of Statute |
Nature of dues |
Amount (In Lacs '') |
Period to which the amount relates |
Forum where dispute is pending |
1. |
Central Sales Tax, 1956 |
Central Sales Tax |
10.76 |
Financial Year 2011-12 |
Commissioner of Commercial Taxes, Appeals |
2. |
Income Tax Act, 1961 |
Income tax |
5.96 |
Assessment year 2009-10 |
Commissioner of Income Tax |
3. |
Income Tax Act, 1961 |
Income tax |
1.04 |
Assessment year 2011-12 |
Income Tax Appellate Tribunal |
(ix) The Company did not raise any money by way of initial public offer, further public offer (including debt instruments) or term loan during the year.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been, noticed or reported during the year, nor have we been informed of any such case by the Management.
(xi) According to information and explanation provided to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provision of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us 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 financial statements as required by the applicable accounting standards.
(xiv) The Company has made private placement of shares during the year. The requirement of section 42 of the Companies Act, 2013 have been complied with. The amount raised have been used for the purpose for which it was raised.
(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 him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(Referred to in paragraph 2 (f) under âReport on Other Legal and Regulatory Requirementsâ section of our report on Standalone Financial Statements of 20 Microns Limited of even date)
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 20 Microns Limited (âthe Companyâ), as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Manubhai & Shah LLP
Chartered Accountants
ICAI Firm Regn. No. 106041W/W100136
(G. R. Parmar)
Place: Waghodia, Vadodara Partner
Date: 23rd May, 2016 Membership No.121462
Mar 31, 2015
We have audited the accompanying standalone financial statements of 20
MICRONS LIMITED ("the Company"), which comprise the Balance Sheet as at
31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended on that date 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 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
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the 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, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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, 2015, and its profit and its cash flows for the year
ended on that date.
Emphasis of Matter
We draw attention to:
a) Note 4(e) to the financial statements regarding
restructuring/re-schedulement of loans by lenders.
b) Note 42 to the financial statements, regarding action taken by the
company for repayment of deposits accepted prior to commencement of the
Act and its classification in to Current and Non- Current Category for
the reasons stated in the said note.
Our Opinion is not modified in respect of above matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as 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, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms 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 tous :
(i) The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 28 to the
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 were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company.
ANNEXURE TO INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under "Report on Other
Legal and Regulatory Requirements" section of our report on Standalone
Financial Statement of 20 Microns Limited of even date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) As explained to us, the fixed assets have been physically verified
by the management as per phased programme of verification designed to
cover all the fixed assets on rotation basis, which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. As informed to us, no material discrepancies were noticed on
such physical verification as compared to the records maintained by the
Company.
(ii) (a) As explained to us, inventories have been physically verified
by the management at regular intervals during the year. In our opinion,
the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on verification between physical stocks and book
records were not material.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act. Therefore, the provisions of Clause 3
(iii) [(a) and (b)] of the said Order are not applicable to the
Company.
(iv) In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.
(v) In respect of deposits accepted prior to commencement of the act
i.e. 01.04.2014, as per Section 74(1) of the Act, the Company is
required to make repayment of deposit accepted prior to 31.03.2014
within a period of one year from 01.04.2014 or the date on which deposit
becomes due for payment, whichever is earlier. The Company has repaid
the deposits which have matured during the year 2014-15. However, in
respect of deposits maturing after 31.03.2015, the Company has made an
application dated March 29, 2015 under Section 74 (2) of the Companies
Act, 2013, before the Company Law Board, Western Region Bench, Mumbai to
allow the Company to re-pay the deposits up to and inclusive of the time
as agreed with the fixed deposit holders.
In respect of deposits accepted after commencement of the Act i.e.
01.04.2014 from members, the Company has complied with provisions of
Section 73 of Companies Act, 2013.
According to the information and explanations given to us, no order has
been passed by the Company Law Board or the National Company Law
Tribunal or the Reserve Bank of India or any Court or any other
Tribunal.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of mineral products where, pursuant to the rules
made by the Central Government of India, the maintenance of cost
records has been prescribed under sub- section (1) of Section 148 of
the Act, 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 records with a view to
determine whether they are accurate or complete.
(vii) (a) According to the information and explanations
given to us and the records of the Company examined by us, in our
opinion, the Company is regular in depositing the 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 other material statutory dues, as applicable,
with appropriate authorities except Income Tax Deducted at source,
Sales Tax, Service Tax, Provident Fund and ESIC where there was some
delay on few occasions at some of the offices of the company.
According to the information and explanations given to us and the
records of the Company examined by us, in our opinion, no undisputed
amounts payable as applicable were in arrears as at March 31, 2015 for
a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the details of disputed
statutory dues that have not been deposited on account of dispute are
as under.
Sr. Name of Statute Nature of Amount
No. dues (In Lacs Rs.)
1. Central Excise Act, Excise Duty 749.67
1944
2. Central Excise Act, Excise Duty 2.00
1944
3. Central Excise Act, Custom Duty 1.50
1944
4. Income Tax Act, Income tax 5.96
1961
5. Income Tax Act, Income tax 32.76
1961
6. Central Sales Tax, Central Sales 9.43
1956 Tax
Sr. Name of Statute Period to which the Forum where
No. amount relates dispute is
pending
1. Central Excise Act, Financial Year Supreme Court
1944 07.02.2000 to
31.07.2003
2. Central Excise Act, Financial Year Customs, Excise
1944 1999-2000 and Service Tax
Appellate Tribunal
Financial Year Customs, Excise
3. Central Excise Act, 2006-2007 and Service Tax
1944 Appellate Tribunal
Assessment Commissioner of
Year 2009-2010 Income Tax
4. Income Tax Act,
1961 Assessment Commissioner of
Year 2011-2012 Income Tax
5. Income Tax Act,
1961 Financial Year Commissioner of
2008-2009 Commercial
6. Central Sales Tax, Taxes, Appeals
1956
(c) The Company is not required to transfer any amount to Investor
Education and Protection Fund in accordance with the provisions of the
Companies Act, 1 956 and rules made thereunder.
(viii) The Company has no accumulated losses as at the end of the year
ended March 31, 2015 and it has not incurred any cash losses in the year
ended on that date or in the immediately preceding year ended on March
31, 2014.
(ix) In our opinion and according to the information and explanations
given to us, during the year there have been defaults in repayment of
instalments and Interest on Term Loans from the Banks. However in this
regards Company had made an application for re-schedulement which was
approved by the banks by way of Restructuring Package as mentioned in
Note no. 4(e) to the Financial Statements. As per the terms of
restructuring package the repayment of dues will commence from April
2016. Hence at the year- end there was no default in terms of
restructuring package.
(x) According to the information and explanations given to us, the
Company has given guarantee of Rs. 1,225 Lacs for loans taken by
Subsidiary Company. The terms of such guarantee are not prejudicial to
the interest of the Company.
(xi) The Term Loans were applied for the purpose for which the loans
were obtained.
(xii) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
period, nor have we been informed of any such case by the Management.
For Manubhai & Shah
Chartered Accountants
Firm Registration No. 106041W
(G R Parmar)
Place : Ahmedabad
Partner
Date : May 27, 2015 Membership No.121462
Mar 31, 2014
We have audited the accompanying financial statements of 20 Microns
Limited ("the Company"), which comprise the Balance Sheet as at March
31,2014, the Statement of Profit and Loss and Cash Flow Statement for
the year then ended and a summary of significant accounting policies
and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and fair presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
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 March 31, 2014;
b) in the case of Statement of Profit and Loss, of the Profit for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to Note 42 to the financial statements which
describes managements view on repayment of deposits accepted prior to
31.03.2014. Consequently its classification in to Current and Non
Current Category is made considering the period within which deposit
will be repaid for the reason stated in the said note. 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") issued by the Central Government of India in terms of
sub-section (4A)of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection(3C) of section 211 of the Companies Act, 1956 read with the
General Circular 15/2013 dated 13 September 2013 of the Ministry of
Company Affairs in respect of section 133 of the Companies Act, 2013.
e) on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO
INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under "Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets except tagging details of fixed assets is in the process of
updation in the fixed assets register.
b. As explained to us, the fixed assets have been physically verified
by the management as per phased programme of verification designed to
cover all the fixed assets on rotation basis, which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. As informed to us, no material discrepancies were noticed on
such physical verification as compared to the records maintained by the
Company.
c. The fixed assets disposed of during the year, do not constitute a
substantial part of the fixed assets of the Company and such disposal
has, in our opinion, not affected the going concern status of the
Company.
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 explanations
given to us, the procedures of physical verification of inventories
followed by the management are generally 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, the discrepancies noticed on verification between
physical stocks and book records were material and the same have been
properly dealt with in the books of account.
3 a. The Company has granted unsecured loan to one party covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount outstanding at any time during the year was Rs. 10.28
Lacs and the year- end balance was Rs. Nil.
b. In our opinion and according to information and explanation given
to us, the loans are interest free and other terms and conditions are
not prima facie prejudicial to the interest of the Company.
c. The loans given by the Company are interest free and repayable at
the end of one year in single installment and on demand therefore the
question of regular receipt of principal amount and interest does not
arise.
d. The Company has taken unsecured loans from two parties covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount outstanding at any time during the year was Rs.
185.38 Lacs and the year- end balance was Rs. Nil.
e. In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of
these loans are not prima facie prejudicial to the interest of the
Company.
f. In respect of loans taken by the company, the interest and the
principal amount are repayable on demand.
g. The loans taken/granted by the Company are repayable on demand and
therefore question of overdue amount does not arise.
4. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5 a. According to the information and explanations given to us, we are
of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered.
b. Having regard to the nature of transaction and non availability of
comparable quotations, the reasonability of price in respect of the
transactions made in pursuance of contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceeding the value of rupees five lacs in respect of any party
during the year cannot be ascertained.
6. In our opinion and according to the information and explanation
given to us, the Company has complied with the provisions of sections
58A and 58AA of the Companies Act, 1956 and Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from public.
Further, we are informed that no Order has been passed by the Company
Law Board (''the CLB'') or National Company Law Tribunal (''the NCLT'') or
Reserve Bank of India (''the RBI'') or any Court or any other Tribunal.
7. The Company has appointed firms of chartered accountants as
internal auditors. On the basis of reports submitted by internal
auditors, in our opinion the internal audit system is commensurate with
the size and nature of company''s business.
8. The Central Government has prescribed maintenance of cost records
under section 209 (1) (d) of the Companies Act, 1956. We have broadly
reviewed the accounts and records of the Company in this connection 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 records with a view to determine whether
they are accurate or complete.
9. a. In our opinion and according to the information and explanation
given to us, the company has been regular in depositing undisputed
statutory dues including Provident Fund, Income Tax, Wealth Tax,
Investor Education and Protection Fund, Custom duty, Professional tax
and other statutory dues as may be applicable to the company except in
case of Income Tax deducted at Source, Excise duty, Sales Tax, Service
Tax and Employees'' State Insurance dues where there was some delay on
few occasions at some of the offices of the company.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax, wealth
tax, service tax, custom duty and excise duty were in arrears, as at
31st March, 2014 for a period of more than six months from the date
they become payable.
c. The details of disputed statutory dues that have not been deposited
on account of dispute are as under:
Sr. Name of Statute Nature of Amount Period to which
No dues (In Lacs Rs.) the amount
relates
1. Income Tax Act, 1961 Income 20.14 (Adjusted 2005-2006
Tax Against refund
due by Income
Tax Department)
2. Income Tax Act,
1961 Income Tax 48.78 2011-2012
3. Central Sales Central Sales 9.43 2008-2009
Tax Act, 1956 Tax
4. Central Excise Custom Duty 2.77 2006-2007
Act, 1944
5. Central Excise Custom Duty 3.00 1999-2000
Act, 1944
6. Central Excise Custom Duty 749.67 07.02.2000 to
Act, 1944 31.07.2003
Sr. Name of Statute Forum where dispute
No is pending
1. Income Tax Act, ITAT, Ahemedabad
2. Income Tax Act,
1961 Commissioner of Income Tax
3. Central Sales Commissioner of
Tax Act, 1956 Commercial Taxes, Appeals
4. Central Excise Customs, Excise and
Act, 1944 Service Tax Appellate Tribunal
5. Central Excise Customs, Excise and
Act, 1944 Service Tax Appellate Tribunal
6. Central Excise Supreme Court
Act, 1944
10. The Company has no accumulated losses as at the period ended March
31,2014 and it has not incurred any cash losses in the period ended on
that date or in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions and banks.
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 a nidhi / mutual
benefit fund / society. Therefore, the provision of clause 4(xiii) of
the Order is not applicable to the Company.
14. The Company is not dealing or trading in Shares, Securities,
Debentures and Other Investments. However the Company has maintained
proper records of transactions and contracts in respect of investment
in shares and other securities and timely entries have been made
therein. The investment in the shares and other securities are held by
the Company in its own name.
15. According to the information and explanation given to us, the
Company has given guarantee of Rs. 1,225 Lacs for loans taken by
subsidiary from bank. The terms of such guarantee are not prejudicial
to the interest of the Company.
16. In our opinion, the Company has applied the term loan for the
purpose for which it was raised.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that funds raised on short-term basis to the extent of Rs. 922.15 Lacs
have been used for long-term investment.
18. According to the information and explanation given to us, the
company has not made any preferential allotment of shares to parties
covered in the register maintained under section 301 of the Act during
the year.
19. The Company has, during the year issued 7,00,000 fully convertible
unsecured debentures of Rs. 700.00 Lacs on which no security or charge
was required to be created and the same have been fully converted in to
equity shares during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
period, nor have we been informed of any such case by the Management.
For Manubhai & Shah
Chartered Accountants
Firm Registration No.:106041W
G. R. Parmar
Place: Waghodia, Vadodara Partner
Date: May 24, 2014 Membership No.: 121462
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of 20 Microns
Limited ["the Company"], which comprise the Balance Sheet as at March
31, 2013, Statement of Profit and Loss and Cash Flow Statement for the
year then ended and a summary of significant accounting policies and
other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section [3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
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 March 31,2013;
(b) in the case of Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows
For the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies [Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A)of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act,we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary forthe 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 274of the Companies Act, 1956.
The Annexure referred to in our report to the members of 20 Microns
Limited [''the Company'') for the year ended on March 31,2013. We report
that:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets except
tagging details of fixed assets is in the process of updating in the
fixed assets register.
b) As explained to us, the fixed assets have been physically verified
by the management as per phased programme of verification designed to
cover all the fixed assets on rotation basis, which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. As informed to us, no material discrepancies were noticed on
such physical verification as compared to the records maintained by the
Company. c) The fixed assets disposed of during the year, do not
constitute a substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
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 explanations
given to us, the procedures of physical verification of inventories
followed by the management are generally 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, the discrepancies noticed on verification between
physical stocks and book records were material and the same have been
properly dealt with in the books of account.
a) The Company has granted unsecured loan to 3 parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount outstanding at any time during the year wasRs.31.37 Lacs
and the year-end balance wasRs.31.37 Lacs.
b] In our opinion and according to information and explanation given to
us, the loans are interest free and other terms and conditions are not
prima facie prejudicial to the interest of the Company.
c) The loans given by the Company are interest free and repayable at
the end of one year in single installment and on demand therefore the
question of regular receipt of principal amount and interest does
notaries.
d) The Company has taken unsecured loans from two subsidiary companies
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount outstanding at any time during the year
was Rs. 145.97 Lacs and the year-end balance wasRs. 47.99 Lacs.
e) In our opinion and according to information and explanation given to
us, the loans are interest free and other terms and conditions are not
prima facie prejudicial to the interest of the Company.
f) The loans taken by the Company are interest free and repayable at
the end of one year in single installment. The outstanding loan of Rs.
47.99 Lacs is not paid at the end of one year in single installment as
per the terms of repayment. As the loans are interest free the question
of regularity of its payment does not arise.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources do not
exist for obtaining comparable quotations, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to purchases of inventory, fixed
assets and for sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weaknesses in
internal control system.
5. In respect of transactions need to be entered into a register
maintained u/s301 of the Companies Act, 1956.
a) According to the information and explanations given to us, we are of
the opinion that the particulars of all contracts or arrangements that
need to be entered into the register maintained under section 301 of
the Companies Act, 1956 have been so maintained.
b] Having regard to the nature of transaction and non availability of
comparable quotations, the reasonability of price in respect of the
transactions made in pursuance of contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceeding the value of rupees five lacs in respect of any party
during the year cannot be ascertained.
6. In our opinion and according to the information and explanation
given to us, the Company has complied with the provisions of sections
58A and 58AA of the Companies Act, 1956 and Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from public.
We are informed that no order has been passed by the Company Law Board
or National Company Law Tribunal or Reserve Bank of India or any Court
or any other Tribunal.
7. The Company has appointed firms of chartered accountants as
internal auditors. On the basis of reports submitted by internal
auditors, in our opinion the internal audit system is commensurate with
the size and nature of company''s business.
8. The Central Government has prescribed maintenance of cost records
under section 209 (1) (d) of the Companies Act, 1956. We have broadly
reviewed the accounts and records of the Company in this connection and
are of the opinion, that prima facie, the prescribed accounts and
records have been made and maintained. We have not, however, carried
out a detailed examination of the same.
a] In our opinion and according to the information and explanation
given to us, the company has been regular in depositing undisputed
statutory dues including Provident Fund, Income Tax, Wealth Tax,
Investor Education and Protection Fund, Custom duty, Excise duty,
Professional tax and other statutory dues as may be applicable to the
company except in case of Income Tax deducted at Source, Sales Tax,
Service Tax and Employees'' State Insurance dues where there was some
delay on few occasions at some of the offices of the company.
b] According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax, wealth
tax, service tax, custom duty and excise duty were in arrears, as at
31st March, 2013 for a period of more than six months from the date
they become payable.
c] The details of disputed statutory dues that have not been deposited
on account of dispute are as under:
Sr. Name of Statute Nature of
Dues Amount Period to Forum where
No. (in LacsRs.) which the
amount dispute is
pending
relates
1 Central Excise
Act, 1944 Excise
Duty 749.67 07.02.2000
to Supreme
Court
31.07.2003
2 Central Excise
Act, 1944 Excise
Duty 2.00 1999-2000 Customs,
Excise and
Service Tax
Appellate
Tribunal
3 Central Excise
Act, 1944 Custom
Duty 2.77 2006-2007 Customs,
Excise and
Service Tax
Appellate
Tribunal
4 Income Tax
Act, 1961 Income
tax 20.14 2003-2004 Commissio-
ner of
Income Tax
5 Income Tax
Act, 1961 Income
tax 1.31 2009-2010 Commissi-
oner of
Income Tax
6 Tamil Nadu
General Sales
Local
Sales Tax 0.60 2004-2005 Appellate
Dy.Commis-
sioner,
Tax Act, 1959 Commercial
Taxs,
Tamil Nadu
7 Central Sales
Tax Act, 1956 Central
Sales Tax 11.93 2008-2009 Commiss-
ioner of
Commercial
Taxes,
Appeals
10. The Company does not have accumulated losses and has not incurred
cash losses during the financial year covered by our audit and the
immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions and banks.
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 ora nidhi / mutual
benefit fund / society as per the Chit Fund Act, 1982 and other state
legislations. Therefore, clause 4[xiii] of the Order is not applicable
to the Company.
14. The Company is not dealing or trading in Shares, Securities,
Debentures and Other Investments. However the Company has maintained
proper records of transactions and contracts in respect of investment
in shares and other securities and timely entries have been made
therein. The investment in the shares and other securities are held by
the Company in its own name.
15. According to the information and explanation given to us, the
Company has given guarantee ofRs. 1,225 Lacs for loans taken by
subsidiary from bank. The terms of such guarantee are not prejudicial
to the interest of the Company.
16. In our opinion, the term loans have been applied for the purpose
for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that funds raised on short term basis have, prima facie, not been used
for long-term investment.
18. During the year, the Company has made preferential allotment of
warrants to the promoters and promoters group on July 12,2012. The
promoters are covered in the Register maintained under Section 301 of
the Companies Act, 1956. The terms and conditions of the issue are in
accordance with Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2009 and hence the
price at which shares have been issued is not prejudicial to the
interest of the Company.
19. The Company has not issued any debentures during the year
therefore paragraph 4(xix) of the Order is not applicable.
20. The Company has not raised any money by way of public issue during
the year.
21. To the best of our knowledge and belief, and according to the
information and explanations given to us, no fraud on or by the
company was noticed or reported during the year.
For Manubhai & Co.
Chartered Accountants
Firm Registration No. 106041W
G R Parmar
Place: Waghodia Partner
Date : 28.05.2013 Membership No. 121462
Mar 31, 2012
1. We have audited the attached Balance Sheet of 20 MICRONS LIMITED
('the Company') as at March 31, 2012, and also the Statement of Profit
and Loss and the Cash Flow Statement for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material 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 (order)
and related amendments issued by the Central Government of India in
terms of sub Section (4A) of Section 227 of the Companies Act, 1956, we
enclose in the Annexure hereto a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Attention is invited to Note No 30 regarding non accounting of loss
of Rs 145.52 Lacs on cancellation of forward contracts and loss of Rs.
359.73 Lacs on open forward contracts on valuing the same to the market
value as at the balance sheet date for sale of US Dollars for the
reasons stated in the said note. As mentioned in the said note since
investigations of the transactions and legal proceeding are in process
and pending the ultimate outcome or decision in the matter, we are
unable to comment of its impact on profit, reserves and liabilities.
5. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of accounts 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 Account and Cash
Flow Statement dealt with by this report are in agreement with books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit & Loss
Account and Cash Flow Statement dealt with by this report comply with
the Accounting Standards referred to in Subsection (3C) of Section 211
of the Companies Act, 1956 except non recognition of loss on certain
forward contracts for sale of US Dollars as required by Accounting
Standard (AS -11) "The Effects of Changes in Foreign Exchange Rates" as
mentioned in Note No. 30;
e) On the basis of written representations received from the directors
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that none of directors is disqualified as on 31st March, 2012
from being appointed as a director in terms of Clause (g) of sub
section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, subject to comments in paragraph 4 above,
the said accounts read together with the Significant Accounting
Policies and other notes thereon give the information required by the
Companies Act, 1956, in the manner so required, and present a true and
fair view in conformity with the accounting principles generally
accepted in India:
i. in so far as it relates to Balance Sheet, of the state of affairs
of the Company as at 31st March, 2012;
ii. in so far as it relates to Statement of Profit and Loss, of the
Profit of the Company for the year ended on that date; and
iii. in so far as it relates to the Cash Flow Statement, of the Cash
Flows of the Company for the year ended on that date.
LIMITED
20 MICRONS LIMITED
ANNEXURE TO AUDITORS' REPORT [Referred to paragraph 3 of our report of
even date]
1.
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) As explained to us, the fixed assets have been physically verified
by the management as per phased programme of verification designed to
cover all the fixed assets on rotation basis, which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. As informed to us, no material discrepancies were noticed on
such physical verification as compared to the records maintained by the
Company.
c) The fixed assets disposed of during the year, in our opinion, do not
constitute a substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
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 explanations
given to us, the procedures of physical verification of inventories
followed by the management are generally 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, the discrepancies noticed on verification between
physical stocks and book records were not material in relation to
operations of the Company and such differences have been properly dealt
with in the books of account.
a) The Company has not granted any loans, secured or unsecured to
Companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Consequently, reporting
requirements as per clause (iii) (a) to (iii) (d) of paragraph 4 of the
Order are not applicable in case of the Company.
b) The Company has taken unsecured loans from two subsidiary companies
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount outstanding at any time during the year
was Rs 152.90 Lacs and the year-end balance was Rs. 152.90 Lacs.
c) In our opinion and according to information and explanation given to
us, the loans are interest free and other terms and conditions are not
prima facie prejudicial to the interest of the Company.
d) The loans taken by the Company are interest free and repayable at
the end of one year in single installment therefore the question of
regular payment of principal amount interest does not arise.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchase are of special nature and suitable alternative sources do not
exist for obtaining comparable quotations, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to purchases of inventory, fixed
assets and for sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weaknesses in
internal control system.
5. In respect of transactions need to be entered into a register
maintained u/s 301 of the Companies Act, 1956.
a) According to the information and explanations given to us, we are of
the opinion that the particulars of all contracts or arrangements that
need to be entered into the register maintained under section 301 of
the Companies Act, 1956 have been so maintained.
b) Having regard to the nature of transaction and non availability of
comparable quotations, the reasonability of price in respect of the
transactions made in pursuance of contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceeding the value of rupees five lakhs in respect of any party
during the year cannot be ascertained.
6. In our opinion and according to the information and explanation
given to us, the Company has complied with the provisions of sections
58A and 58AA of the Companies Act, 1956 and Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from public.
We are informed that no order has been passed by the Company Law Board
or National Company Law Tribunal or Reserve Bank of India or any Court
or any other Tribunal.
7. The Company has appointed firms of chartered accountants as
internal auditors. On the basis of reports submitted by internal
auditors, in our opinion the internal audit system is commensurate with
the size and nature of company's business except that scope needs to be
enhanced to cover Treasury Operations.
8. According to information and explanation given to us, the Company
is under the process of maintaining cost records prescribed by Central
Government under section 209(1) (d) of the Companies Act, 1956 in
respect of manufacturing activities carried out by the Company.
a) In our opinion and according to the information and explanation
given to us, the company has been regular in undisputed statutory dues
including Provident Fund, Income Tax, Wealth Tax, Investor Education
and Protection Fund, Custom duty, Excise duty, Professional tax and
other statutory dues as may be applicable to the company except in case
of Income Tax deducted at Source, Sales Tax, Service Tax and Employees'
State Insurance dues where there was some delay on few occasions at
some of the offices of the company.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax, wealth
tax, service tax, custom duty and excise duty were in arrears, as at
31st March, 2012 for a period of more than six months from the date
they become payable.
c) The details of disputed statutory dues that have not been deposited
on account of dispute are as under:
Sr. Amount Period to which
Nature of Forum where
dispute
Name of Statute (In Lacs the amount
No. dues is pending
Rs.) relates
1 Central Sales
Tax Act, Local 1.35 2002-03 Appellate
Tribunal
1956
Sales Tax
2 Sales Tax
Act, 1959 Local 4.51 2003-04 Appellate
Tribunal
Sales Tax
3 Central
Excise Act, Central 147.68 September
2003 to Customs,
Excise and
1944 Excise June 2008 Service Tax
Appellate
Tribunal
7 Income Tax
Act, 1961 Income 4.68 1995-96 Income Tax
Appellate
tax Tribunal
8 Income
Tax Act,
1961 Income 20.15 2004-05 Commis
sioner of
tax
Income Tax
9 Income Tax
Act, 1961 Income 184.48 2004-05 Income Tax
Appellate
tax Tribunal
10. The Company does not have accumulated losses and has not incurred
cash losses during the financial year covered by our audit and the
immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions and banks.
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 a nidhi / mutual
benefit fund / society as per the Chit Fund Act, 1982 and other state
legislations. Therefore, clause 4(xiii) of the Order is not applicable
to the Company.
14. The Company has maintained proper records of transactions and
contracts in respect of investment in shares and other securities and
those timely entries have been made therein. The investment in the
shares and other securities are held by the Company in its own name are
note traded.
15. According to the information and explanation given to us, the
Company has given guarantee of Rs. 1,250 Lacs for loans taken by
subsidiary from bank. The terms of such guarantee are not prejudicial
to the interest of the Company.
16. In our opinion, the term loans have been applied for the purpose
for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that there are no funds raised on short-term basis that
have been used for long-term investments.
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. The Company has not issued any debentures during the year
therefore paragraph 4(xix) of the Order is not applicable.
20. The Company has not raised any money by way of public issues
during the year.
21. As mentioned in Note No. 30, the Senior Executive of the Company,
acting beyond the delegated powers, had booked forward contracts for
sale of US Dollars. Total loss on account of all such contract is
estimated at Rs. 505.25 Lacs, considering the exchange rate as on the
balance sheet date. The Company, based on legal advice has disputed
such debits with bank as well as future liability. Company is
investigating the transactions and shall also resort to suitable legal
remedy, as advised, against the Senior Executive and / or Bank.
For Manubhai & Co.
Chartered Accountants
Firm Registration No. 106041W
G. R. Parmar
Waghodia, Vadodara Partner
May 23, 2012 Membership No.: 121462
Mar 31, 2011
1. We have audited the attached Balance Sheet of 20 MICRONS LIMITED
('the Company') as at 31st March, 2011, and also the Profit and Loss
Account for the year ended on that date annexed thereto and the Cash
Flow Statement for the year ended on that date. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material 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 (order)
and related amendments issued by the Central Government of India in
terms of sub Section (4A) of Section 227 of the Companies Act, 1956, we
enclose in the Annexure hereto 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, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of accounts as required by law, have
been kept by the Company so far as appears from our examination of
those books;
c) The Balance Sheet, the Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with books of
account;
d) In our opinion, the Balance Sheet, the Profit & Loss Account and
Cash Flow Statement dealt with by this report 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, 2011 and taken on record by the Board of Directors,
we report that none of directors is disqualified as on 31st March, 2011
from being appointed as a director in terms of Clause (g) of sub
section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and other notes thereon give the
information required by the Companies Act, 1956, in the manner so
required, and present a true and fair view in conformity with the
accounting principles generally accepted in India:
i. in so far as it relates to Balance Sheet, of the state of affairs
of the Company as at 31st March, 2011;
ii. in so far as it relates to the Profit and Loss Account, of the
Profit of the Company for the year ended on that date;
and iii. in so far as it relates to the Cash Flow Statement, of the
Cash Flows of the Company for the year ended on that
date.
20 MICRONS LIMITED ANNEXURE TO AUDITORS' REPORT
[Referred to paragraph 3 of our report of even date]
1. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b. As explained to us, the fixed assets have been physically verified
by the management as per phased programme of verification during the
year, which in our opinion is reasonable, having regard to the size of
the Company and nature of its assets. As informed to us, no material
discrepancies were noticed on such physical verification as compared to
the records maintained by the Company.
c. In our opinion, the Company has not disposed of any substantial
part of fixed assets during the year so as to affect going concern
status.
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 explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The company has maintained proper records of inventories. As
explained to us, there was no material discrepancies noticed on
physical verification of inventories as compared to the book records.
3. (i) In respect of loans granted to parties covered in the register
maintained u/s 301 of the Companies Act, 1956.
The Company has not granted any loans, secured or unsecured to
Companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Consequently, reporting
requirements as per clause (iii) (a) to (iii) (d) of paragraph 4 of the
Order are not applicable in case of the Company.
(ii) In respect of loans taken from parties covered in the register
maintained u/s 301 of the Companies Act, 1956.
The Company has not taken any loans or advances in the nature of loans,
secured or unsecured from parties covered in the register maintained
under section 301 of the Companies Act, 1956 Consequently, reporting
requirements as per clauses (iii) (e) to (iii) (g) of paragraph 4 of
the Order are not applicable in case of the Company.
4. In respect of internal control
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 with regard to
purchases of inventory, fixed assets and for sale of goods. During the
course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
5. In respect of transactions need to be entered into a register
maintained u/s 301 of the Companies Act, 1956.
a. According to the information and explanations given to us, we are
of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so maintained.
b. Having regard to the nature of transaction and non availability of
comparable quotations, the reasonability of price in respect of the
transactions made in pursuance of contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceeding the value of rupees five lakhs in respect of any party
during the year can not be ascertained.
6. In respect of deposits from public
In our opinion and according to the information and explanation given
to us, the Company has complied with the provisions of sections 58A and
58AA of the Companies Act, 1956 and Companies (Acceptance of Deposits)
Rules, 1975 with regard to the deposits accepted from public. We are
informed that no order has been passed by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal.
7. In respect of internal audit system
The Company has appointed firms of chartered accountants as internal
auditors. On the basis of reports submitted by internal auditors, in
our opinion the internal audit system is commensurate with the size and
nature of company's business.
8. In respect of maintenance of cost records
According to information and explanation given to us, neither order has
been passed by Central Government nor have cost records been prescribed
under section 209(1) (d) of the Companies Act, 1956 in respect of
products manufactured by the Company.
9. In respect of statutory dues:
a. In our opinion and according to the information and explanation
given to us, the company has been regular in undisputed statutory dues
including Provident Fund, Income Tax, Wealth Tax, Investor Education
and Protection Fund, Custom duty, Excise duty, Professional tax and
other statutory dues as may be applicable to the company except in case
of Income Tax deducted at Source, Sales Tax, Service Tax and Employees'
State Insurance dues where there was some delay on few occasions at
some of the offices of the company.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441A of the Companies Act, 1956,
we are not in position to comment upon the regularity or otherwise of
the Company in depositing the same.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax, wealth
tax, service tax, custom duty and excise duty were in arrears, as at
31st March, 2011 for a period of more than six months from the date
they become payable.
c. The details of disputed statutory dues that have not been deposited
on account of dispute are as under:
Sr. Name of Statute Nature of Amount
dues (In Lacs
No.
Rs.)
1 Central Sales Tax Act, 1956 Central 2.90
sales tax
2 Central Sales Tax Act, 1956 Central 1.63
sales tax
3 Tamil Nadu Government
Sales Tax Sales Tax 1.81
Act, 1959
4 Sales Tax Act, 1959 Local Sales 1.36
Tax
5 Sales Tax Act, 1959 Local Sales 0.89
Tax
6 Central Excise Act, 1944 Central 148.68
Excise
7 Income Tax Act, 1961 Income tax 4.68
8 Income Tax Act, 1961 Income tax 50.51
9 Income Tax Act, 1961 Income tax 113.05
Name of the Statute Period to which the Forum where dispute is
amount relates pending
Central Sales Tax Act, 1956 2002-03 Appellate Tribunal
Central Sales Tax Act, 1956 2007-08 Assistant Commissioner
of Sales Tax
Tamil Nadu Government Sales 2002-03 Appellate Tribunal
Tax Act,1959
Sales Tax Act, 1959 2003-04 Appellate Tribunal
Sales Tax Act, 1959 2004-05 Appellate Tribunal
Central Excise Act, 1944 September 2003 to Customs, Excise and
June 2008 Service Tax Appellate
Tribunal
Income Tax Act, 1961 1995-96 Income Tax Appellate
Tribunal
Income Tax Act, 1961 2004-05 Commissioner of
Income Tax
Income Tax Act, 1961 2004-05 Income Tax Appellate
Tribunal
10. In respect of accumulated losses and cash losses
The Company does not have accumulated losses and has not incurred cash
losses during the financial year covered by our audit and the
immediately preceding financial year.
11. In respect of dues to financial institution / banks / debentures
In our opinion and according to the information and explanations given
to us, the Company has not defaulted in the repayment of dues to
financial institutions and banks.
12. In respect of loans and advances granted on the basis of security.
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 respect of provisions applicable to Chit fund
In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society as per the Chit Fund Act, 1982 and other state
legislations. Therefore, clause 4(xiii) of the Order is not applicable
to the Company.
14. In respect of dealing or trading in shares, securities, debentures
and other investment
As the company is not dealing or trading in shares, securities,
debentures and other investments, provision of clause 4(xiv) of the
Order is not applicable to the Company.
15. In respect of guarantee given for loans taken by others
According to the information and explanation given to us, the Company
has given guarantee of Rs. 1250 Lacs for loans taken by subsidiary
from bank. The terms of such guarantee are not prejudicial to the
interest of the Company.
16. In respect of application of term loans
In our opinion, the term loans have been applied for the purpose for
which they were raised.
17. In respect of fund used
According to the information and explanations given to us and on an
overall examination of the balance sheet of the company, funds of Rs.
9.42 Crores raised on short-term basis, have been used for long-term
investment.
18. In respect of preferential allotment of shares
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 respect of securities created for debentures
The Company has not issued any debentures during the year therefore
paragraph 4(xix) of the Order is not applicable.
20. In respect of end use of money raised by public issues
We have verified the end use of money raised by public issue as
disclosed in the notes to the financial statements.
21. In respect of fraud
To the best of our knowledge and belief, and according to the
information and explanation given to us, no fraud on or by the Company
was noticed or reported during the year that causes the financial
statements to be materially misstated.
For Manubhai & Co.
Chartered Accountants
Firm Registration No. 106041W
Place: Waghodia, Vadodara (G. R. Parmar)
Partner
Date: May 19, 2011 Membership No.: 121462
Mar 31, 2010
1. We have audited the attached Balance Sheet of 20 MICRONS LIMITED
(the Company) as at 31st March, 2010, and also the Profit and Loss
Account for the year ended on that date annexed thereto and the Cash
Flow Statement for the year ended on that date. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material 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 and
related amendments issued by the Central Government of India in terms
of sub Section (4A) of Section 227 of the Companies Act, 1956, we
enclose in the Annexure hereto 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, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of accounts as required by law, have
been kept by the Company so far as appears from our examination of
those books;
c) The Balance Sheet, the Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with books of
account;
d) In our opinion, the Balance Sheet, the Profit & Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub section (3C) of Section 211 of
the Companies Act, 1956;
e) On the basis of written representations received from the directors
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that none of directors is disqualified as on 31st March, 2010
from being appointed as a director in terms of Clause (g) of sub
section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and other notes thereon give the
information required by the Companies Act, 1956, in the manner so
required, and present a true and fair view in conformity with the
accounting principles generally accepted in India:
i. in so far as it relates to Balance Sheet, of the state of affairs
of the Company as at 31st March, 2010;
ii. in so far as it relates to the Profit and Loss Account, of the
Profit of the Company for the year ended on that date; and
iii. in so far as it relates to the Cash Flow Statement, of the Cash
Flow of the Company for the year ended on
ANNEXURE TO AUDITORS REPORT
[Referred to paragraph 3 of our report of even date]
1. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b. As explained to us, the fixed assets have been physically verified
by the management as per phased programme of verification during the
year, which in our opinion is reasonable, having regard to the size of
the Company and nature of its assets. As informed to us, no material
discrepancies were noticed on such physical verification as compared to
the records maintained by the Company.
c. In our opinion, the Company has not disposed of any substantial
part of fixed assets during the year so as to affect going concern
status.
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 explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The company has maintained proper records of inventories. As
explained to us, there was no material discrepancies noticed on
physical verification of inventories as compared to the book records.
3. (i) In respect of loans granted to parties covered in the register
maintained u/s 301 of the Companies Act, 1956.
a. The Company had granted loan in earlier year to one party covered
in the register maintained under section 301 of the Companies Act,
1956. The maximum amount involved during the year was Rs. 170 lacs and
the year-end balance of loan granted to such party was Rs. Nil.
b. In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions on
which loan have been granted to party listed in the register maintained
under section 301 of the Companies Act, 1956 are not, prima facie,
prejudicial to the interest of the Company.
c. The loan granted by the Company is repaid during the year and hence
the question of overdue amount does not arise.
(ii) In respect of loans taken from parties covered in the register
maintained u/s 301 of the Companies Act, 1956.
The Company has not taken any loans or advances in the nature of loans,
secured or unsecured from parties covered in the register maintained
under section 301 of the Companies Act, 1956 Consequently, reporting
requirements as per clauses (iii) (e) to (iii) (g) of paragraph 4 of
the Order are not applicable in case of the Company.
4. In respect of internal control
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 with regard to
purchases of inventory, fixed assets and for sale of goods. During the
course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
5. In respect of transactions need to be entered into a register
maintained u/s 301 of the Companies Act, 1956.
a. According to the information and explanations given to us, we are of
the opinion that the particulars of all contracts or arrangements that
need to be entered into the register maintained under section 301 of
the Companies Act, 1956 have been so maintained.
b. Having regard to the nature of transaction and non availability of
comparable quotations, the reasonability of price in respect of the
transactions made in pursuance of contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceeding the value of rupees five lakhs in respect of any party
during the year can not be ascertained.
6. In respect of deposits from public
In our opinion and according to the information and explanation given
to us, the Company has complied with the provisions of sections 58A and
58AA of the Companies Act, 1956 and Companies (Acceptance of Deposits)
Rules, 1975 with regard to the deposits accepted from public. We are
informed that no order has been passed by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal.
7. In respect of internal audit system
The Company has appointed firms of chartered accountants as internal
auditors. On the basis of reports submitted by internal auditor, in our
opinion the internal audit system is commensurate with the size and
nature of companys business.
8. In respect of maintenance of cost records
According to information and explanation given to us, neither order has
been passed by Central Government nor have cost records been prescribed
under section 209(1) (d) of the Companies Act, 1956 in respect of
products manufactured by the Company.
9. In respect of statutory dues:
a. In our opinion and according to the information and explanation
given to us, the company has been regular in undisputed statutory dues
including Provident Fund, Income Tax, Wealth Tax, Investor Education
and Protection Fund, Custom duty, Excise duty, Professional tax and
other statutory dues as may be applicable to the company except in case
of Income Tax deducted at Source, Sales Tax, Service Tax and Employees
State Insurance dues where there was some delay on few occasions at
some of the offices of the company.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441A of the Companies Act, 1956,
we are not in position to comment upon the regularity or otherwise of
the Company in depositing the same.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax, wealth
tax, service tax, custom duty and excise duty were in arrears, as at
31st March, 2010 for a period of more than six months from the date
they become payable.
c. The details of disputed statutory dues that have not been deposited
on account of dispute are as under:
Sr. Name of Statute Nature of dues Amount Period to which
NO
(In Lacs
Rs.) the amount
relates
1 Central Sales Tax Central sales tax 2.90 2002-03
Act, 1956
2 Central Sales Tax Central sales tax 1.63 2007-08
Act, 1956
3 Tamil Nadu Government Sales Tax 1.81 2002-03
Sales Tax Act, 1959
4 Central Excise Act,
1944 Central Excise 147.68 September
2003 to
June 2008
5 Income Tax Act, 1961 Income tax 4.68 1995-96
6 Income Tax Act, 1961 Income tax 46.80 2004-05
Name of the statue Forum where dispute
is pending
Central Sales Tax
Act, 1956 Appellate Tribunal
Central Sales Tax
Act, 1956 Assistant Commissioner
of Sales Tax
Tamil Nadu Government
Sales Tax, 1959 Appellate Tribunal
Customs,
Excise and Service Tax
Appellate Tribunal
Income Tax
Act, 1961 Income Tax Appellate
Tribunal
Income Tax
Act, 1961 Commissioner of Income Tax
10. In respect of accumulated losses and cash losses
The Company does not have accumulated losses and has not incurred cash
losses during the financial year covered by our audit and the
immediately preceding financial year.
11. In respect of dues to financial institution / banks / debentures
In our opinion and according to the information and explanations given
to us, the Company has not defaulted in the repayment of dues to
financial institutions and banks.
12. In respect of loans and advances granted on the basis of security.
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 respect of provisions applicable to Chit fund
In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society as per the Chit Fund Act, 1982 and other state
legislations. Therefore, clause 4(xiii) of the Order is not applicable
to the Company.
14. In respect of dealing or trading in shares, securities, debentures
and other investment
As the company is not dealing or trading in shares, securities,
debentures and other investments, provision of clause 4(xiv) of the
Order is not applicable to the Company.
15. In respect of guarantee given for loans taken by others
According to the information and explanation given to us, the Company
has given guarantee of Rs. 1250 Lacs for loans taken by subsidiary from
bank. The terms of such guarantee are not prejudicial to the interest
of the Company.
16. In respect of application of term loans
In our opinion, the term loans have been applied for the purpose for
which they were raised.
17. In respect of fund used
According to the information and explanations given to us and on an
overall examination of the balance sheet of the company, funds raised
on short-term basis have, prima facie, not been used for long-term
purpose.
18. In respect of preferential allotment of shares
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 respect of securities created for debentures
The Company has not issued any debentures during the year therefore
paragraph 4(xix) of the Order is not applicable.
20. In respect of end use of money raised by public issues
We have verified the end use of money raised by public issue as
disclosed in the notes to the financial statements.
21. In respect of fraud
To the best of our knowledge and belief and according to the
information and explanation given to us, fraud in the nature of
defalcation of cash amounting to Rs. 10.38 Lacs by one of the employees
of the company has been reported, for which the Company has lodged an
FIR with relevant authorities and also claim has been filed with
insurance company.
For Manubhai & Co.
Chartered Accountants
Firm Registration No. 106041W
Place: Vadodara (G. R. Parmar)
Date: May 31, 2010 Partner
Membership No.: 121462
Mar 31, 2007
1. We have audited the attached Balance Sheet of 20 MICRONS LIMITED
(the Company) as at 31st March, 2007, and also the Profit and Loss
Account for the year ended on that date annexed thereto and the Cash
Flow Statement for the year ended on that date. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material 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 and
related amendments issued by the Central Government of India in terms
of sub Section (4A) of Section 227 of the Companies Act, 1956, we
enclose in the Annexure hereto 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, we report that :
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of accounts as required by law, have
been kept by the Company so far as appears from our examination of
those books;
c) The Balance Sheet, the Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with books of
account;
d) In our opinion, the Balance Sheet, the Profit & Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub - section (3C) of Section 211
of the Companies Act, 1956;
e) On the basis of written representations received from the directors
as on 31st March, 2007 and taken on record by the Board of Directors,
we report that none of directors is disqualified as on 31st March, 2007
from being appointed as a director in terms of Clause (g) of sub
section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and other notes thereon give the
information required by the Companies Act, 1956, in the manner so
required, and present a true and fair view in conformity with the
accounting principles generally accepted in India:
i. in so far as it relates to Balance Sheet, of the state of affairs
of the Company as at 31st March, 2007;
ii. in so far as it relates to the Profit and Loss Account, of the
Profit of the Company for the year ended on that date; and
iii. in so far as it relates to the Cash Flow Statement, of the Cash
Flow of the Company for the year ended on that date.
Annexure to Auditors Report [Referred to paragraph 3 of our report of
even date]
1. In respect of its fixed assets :
a. As per information and explanation given to us the Company is under
process of compilation of proper records showing full 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 as per phased programme of verification during the
year, which in our opinion is reasonable, having regard to the size of
the Company and nature of its assets. As informed to us, no material
discrepancies were noticed on such physical verification as compared to
the records maintained by the Company.
c. In our opinion, the Company has not disposed of any substantial
part of fixed assets during the year so as to affect going concern
status.
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 explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
3. i) In respect of loans granted to parties covered in the register
maintained u/s 301 of the Companies Act, 1956.
The Company has not granted any loans or advances to companies, firms
or other parties covered in the Register maintained under section 301
of the Companies Act, 1956. Consequently, reporting requirements as per
clauses (iii) (a) to (iii) (d) of paragraph 4 of the Order are not
applicable in case of the Company.
ii) In respect of loans taken from parties covered in the register
maintained u/s 301 of the Companies Act, 1956.
The Company has not taken any loans or advances in the nature of loans,
secured or unsecured from parties covered in the register maintained
under section 301 of the Companies Act, 1956 Consequently, reporting
requirements as per clauses (iii) (e) to (iii) (g) of paragraph 4 of
the Order are not applicable in case of the Company.
4. In respect of internal control
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 with regard to
purchases of inventory, fixed assets and for sale of goods. During the
course of our audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
5. In respect of transactions need to be entered into a register
maintained u/s 301 of the Companies Act, 1956.
In our opinion and as explained to us, there were no contracts and
arrangements referred in section 301 of the Companies Act, 1956 that
need to be entered in the register required to be maintained under that
section.
6. In respect of deposits from public
In our opinion and according to the information and explanation given
to us, the Company has complied with the provisions of sections 58A and
58AA of the Companies Act, 1956 and Companies (Acceptance of Deposits)
Rules, 1975 with regard to the deposits accepted from public. We are
informed that no Order has been passed by the Company Law Board (the
CLB) or National Company Law Tribunal (the NCLT) or Reserve Bank of
India (the RBI) or any Court or any other Tribunal.
7. In respect of internal audit system
In our opinion, the internal audit system, in form of internal audit
carried out during the year by firms of Chartered Accountants appointed
by the management, is commensurate with the size of the Company and
nature of its business.
8. In respect of maintenance of cost records
According to information and explanation given to us, neither order has
been passed by Central Government nor cost records have been prescribed
under section 209(1) (d) of the Companies Act, 1956 in respect of
products manufactured by the Company.
9. In respect of statutory dues :
a. In our opinion and according to the information and explanation
given to us, the company has been regular in undisputed statutory dues
including Provident Fund, Income Tax, Wealth Tax, Investor Education
and Protection Fund, Employees State Insurance dues, Custom duty,
Excise duty, Professional tax and other statutory dues as may be
applicable to the company except in case of Income Tax deducted at
Source, Sales Tax and Service Tax where there was some delay on few
occasions at some of the locations.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441A of the Companies Act, 1956,
we are not in position to comment upon the regularity or otherwise of
the Company in depositing the same.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, sales tax, wealth
tax, service tax, custom duty and excise duty were in arrears, as at
31st March, 2007 for a period of more than six months from the date
they become payable.
c. The details of disputed statutory dues of Rs. 96.84 Lacs that have
not been deposited on account of dispute are as under:
Sr. Nature of dues Amount Forum where dispute is
pending
No. (in Lacs Rs.)
1 Central Sales Tax
and Gujarat Sales Tax 88.66 Deputy Commissioner of
Sales Tax, Vadodara
2 West Bengal Sales Tax 5.88 Assistant Commissioner of Sales Tax
3 Central Excise 2.30 Central Excise & Gold (Control)
Appellate Tribunal
TOTAL 96.84
10.In respect of accumulated losses and cash losses
The Company has accumulated losses at the end of the financial year,
which is not more than fifty percent of its net worth. However, it has
not incurred cash losses in the financial year under report and in the
immediately preceding financial year.
11.In respect of dues to financial institution / banks / debentures
In our opinion and according to the information and explanations given
to us, the Company has not defaulted in the repayment of dues to
financial institutions and banks.
12.In respect of loans and advances granted on the basis of security.
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 respect of provisions applicable to Chit fund
In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society as per the Chit Fund Act, 1982 and other state
legislations. Therefore, clause 4(xiii) of the Order is not applicable
to the Company.
14.In respect of dealing or trading in shares, securities, debentures
and other investment
As the company is not dealing or trading in shares, securities,
debentures and other investments, provision of clause 4(xiv) of the
Order is not applicable to the Company.
15.In respect of guarantee given for loans taken by others
According to the information and explanation given to us, the Company
has not given any guarantees for loans taken by others from banks or
financial institutions and therefore paragraph 4(xv) of the Order is
not applicable.
16.In respect of application of term loans
According to the information and explanations given to us the Company
has not obtained any term loan during the year. The Company has
utilized term loan for the purpose for which they were raised.
17.In respect of fund used
According to the information and explanations given to us and on an
overall examination of the balance sheet and cash flow statement of the
company, funds of Rs 38.11 lacs raised on short-term basis, have been
used for long-term purpose.
18.In respect of preferential allotment of shares
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 respect of securities created for debentures
The Company has not issued any debentures during the year therefore
paragraph 4(xix) of the Order is not applicable.
20.In respect of end use of money raised by public issues
The Company has not raised any money by way of public issue during the
year therefore paragraph 4(xx) of the Order is not applicable.
21.In respect of fraud
According to the information and explanations given to us, no fraud on
or by the Company has been noticed or reported during the year that
causes the financial statements to be materially misstated.
For MANUBHAI & CO.
CHARTERED ACCOUNTANTS
(K. C. Patel)
Place : Ahmedabad
Partner
Date : 30th May, 2007 Membership No.: 30083.
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