Mar 31, 2018
Independent Auditor''s Report
To the Members of Accel Frontline Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Accel Frontline Limited (''the Company''), which comprise the Balance Sheet as at 31 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, in which are incorporated the returns for the year ended on that date audited by the branch auditors of the Company''s branch at Singapore.
Management''s Responsibility for the Standalone Financial Statements
2. 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 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. 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. 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.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether these standalone financial statements are free from material misstatement.
6. 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 controls 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.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on these standalone financial statements.
Basis for Qualified Opinion
8. As disclosed in Note 33 to the standalone financial statements, the Company has made investments in its subsidiary company, Accel IT Resources Limited, amounting to INR 790 lakhs and has given loans to such subsidiary company amounting to INR 622 lakhs, which are outstanding as at 31 March 2018. The subsidiary company has incurred losses and its net worth as at 31 March 2018 is fully eroded. The management has drawn up business plans for the subsidiary company and is of the view that its investment and loans advanced to the subsidiary company will be recovered over the years. However, in the absence of binding arrangements and other sufficient appropriate supporting audit evidence in respect of the business projections prepared by the management, we are unable to comment on the carrying value of the aforementioned investments and financial assets - loans as at 31 March 2018, and the impact of adjustments, if any, that may be required to such carrying values in the accompanying standalone financial statements.
Qualified Opinion
9. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, 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 including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2018, and its profit (financial performance including other comprehensive income), its cash flows andthe changes in equity for the year ended on that date.
Emphasis of Matter
10. We draw attention to Note 32 to the standalone financial statements relating to the Company''s inventory valuation as at 31 March 2018 and related disclosures. The Company, in the current year, has followed and complied with the requirements of Ind AS 2 - Valuation of Inventory and has accounted for the impact relating to non-compliance with accounting policy in the earlier years. As a result of impracticability of determining the impact on the comparatives financial information including the impact on beginning of such period, due to reasons disclosed in the aforesaid note, the change in the valuation of Inventory has been made only prospectively as at 31
March 2018, in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors. Accordingly, to this extent, the current period figures and corresponding figures are not comparable. Our opinion is not modified in respect of this matter.
Other Matters
11. The Company had prepared separate sets of statutory financial statements for the year ended 31 March 2017 and 31 March 2016 in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) on which we issued auditor''s reports to the shareholders of the Company dated 01 August 2016 and 26 May 2017 respectively. These financial statements have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have also been audited by us. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
12. As required by the Companies (Auditor''s Report) Order, 2016 (''the Order'') issued by the Central Government of India interms of Section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
13. Further to our comments in Annexure A, as required by Section 143(3) of the Act, we report that:
a) we have sought and except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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 and proper returns adequate for the purposes of our audit have been received from the branch not visited by us;
c) the reports on the accounts of the branch office of the Company audited under Section 143(8) of the Act by the branch auditor has been sent to us and have been properly dealt with by us in preparing this report;
d) the standalone financial statements dealt with by this report are in agreement with the books of account and with the returns received from the branch not visited by us;
e) except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under Section 133 of the Act;
f) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act;
g) the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;
h) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 09 May 2018 as per Annexure B expressed a qualified opinion;
i) 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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. the Company, as detailed in Note 43 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. the disclosure requirement relating to holding as well as dealings in specified bank notes were applicable for the period 8 November 2016 to 30 December 2016 which are not relevant to these standalone financial statements. Hence, reporting under this is not applicable.
Annexure A to the Independent Auditor''s Report of even date to the members of Accel Frontline Limited, on the standalone financial statements for the year ended 31 March 2018
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner 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. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.
(c) The Company does not hold any immovable property (in the nature of ''fixed assets''). Accordingly, the provisions of clause 3(i) (c) of the Order are not applicable.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. No material discrepancies were noticed on the aforesaid verification.
(iii) The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Act; and with respect to the same:
(a) in our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the company''s interest.
(b) the schedules of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayments/receipts of the principal amount and the interest are regular;
(c) in the absence of stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than 90 days and whether reasonable steps have been taken by the Company for recovery of principal amount and interest.
(iv) In our opinion, the Company has complied with the provisions of Sections 185 of the Act in respect of loans, investments, guarantees and security. In our opinion, the Company has complied with the provisions of Section 186 except Section 186 (5) of the Act relating to prior approval of public financial institutions for loans given to Accel IT Resources Limited amounting to INR 538 lakhs which is also the balance as at 31 March 2018.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company''s products/services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund,
employees'' state insurance, income-tax, sales-tax, goods and service tax, duty of customs, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (?) Lakhs |
Amount paid under Protest (?) Lakhs |
Period to which the amount relates |
Forum where dispute is pending |
Kerala Value Added Tax Act, 2003 |
Tax |
44 |
35 |
2007-08 |
Commissioner of Commercial Taxes |
Uttar Pradesh Trade Tax Act, 1948 |
Tax |
1 |
- |
2002-03 |
Trade Tax Tribunal |
West Bengal Sales Tax Act,1994 |
Tax |
1 |
- |
2001-02 |
Commercial Tax Officer |
West Bengal Sales Tax Act,1994 |
Tax and Interest |
2 |
- |
2003-04 and 2004-05 |
Assistant Commissioner |
Jharkhand Value Added Tax, 2005 |
Penalty |
1 |
- |
2007-08 |
Joint Commissioner |
Kerala Value Added Tax Act, 2003 |
Tax |
69 |
21 |
2013-14 and 2014-15 |
Commercial Tax Officer |
Kerala Value Added Tax Act, 2003 |
Tax |
1 |
- |
2015-16 |
Assistant Commissioner (intelligence) |
Kerala Value Added Tax Act, 2003 |
Tax |
47 |
10 |
2011-12 and 2012-13 |
Deputy Commissioner, Appeals II |
Uttar Pradesh Trade Tax Act, 1948 |
Tax |
146 |
42 |
2010-11, 2011-12 and 2012-13 |
Deputy Commissioner |
Rajasthan Value Added Tax, 2003 |
Tax |
4 |
- |
2011-12 |
Assistant Commissioner |
Kerala Value Added Tax Act, 2003 |
Tax and Penalty |
128 |
- |
2013-14 and 2014-15 |
Deputy Commissioner (Appeals) |
Customs and Excise Act, 1964 |
Tax, Interest and Penalty |
411 |
175 |
2014-15 |
CESTAT |
Income Tax Act, 1961 |
Tax |
844 |
- |
2005-06 to 2007-08 |
High Court |
Income Tax Act, 1961 |
Tax |
327 |
- |
2008-09 |
High Court and CIT Appeals |
Income Tax Act, 1961 |
Tax |
110 |
- |
2010-11 |
High Court |
Income Tax Act, 1961 |
Tax |
121 |
- |
2010-11 |
Assessing Officer |
Income Tax Act, 1961 |
Tax |
248 |
- |
2012-13 |
Commissioner of Income Tax (Appeals) |
(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution or a bank during the year. The Company has no borrowings obtained from government and the Company did not have any outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) and did not have any term loans outstanding during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.
(x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) The Company has not paid or provided for any managerial remuneration. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable.
(xii) In our opinion, the Company is not a Nidhi Company.
Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are
in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable IndAS.
(xiv) During the year, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
(xv) In our opinion, the company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on the Company''s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (''ICAI'') and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (''the Guidance Note'') issued by the ICAI. 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 IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company''s IFCoFR 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 IFCoFR include 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.
Annexure B to the Independent Auditor''s Report of even date to the members of Accel Frontline Limited on the standalone financial statements for the year ended 31 March 2018
Independent Auditor''s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (''the Act'')
1. In conjunction with our audit of the standalone financial statements of Accel Frontline Limited (''the Company'') as at and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (''IFCoFR'') of the Company as at that date.
Management''s Responsibility for Internal Financial Controls
2. The Company''s Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Company''s business, including adherence to the 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 Act.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Basis of Qualified Opinion
8. According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at 31 March 2018:
The Company did not have an appropriate internal control system towards estimating the value in use of its investment in subsidiary to assess the requirement of recognizing an impairment loss as laid down under Indian Accounting Standard (''Ind AS'') 36 ''Impairment of Assets'', which resulted or could have potentially resulted in a material misstatement in the value of Company''s investments, provision for impairment and its consequential impact on corresponding earnings and reserves and surplus including applicable disclosures in the Company''s standalone financial statements.
''A ''material weakness'' is a deficiency, or a combination of deficiencies, in IFCoFR, such that there is a reasonable possibility that a material misstatement of the Company''s annual or interim financial statements will not be prevented or detected on a timely basis.
Qualified Opinion
9. In our opinion, except for the possible effects of the material weakness described above on the achievement of the objectives of control criteria, the Company has in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 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.
10. We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the financial statements of the Company as at and for the year ended 31 March 2018, and these material weaknesses have affected our opinion on the financial statements of the Company and we have issued a qualified opinion on the financial statements.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm''s Registration No.: 001076N/N500013
Sumesh E S
Partner
Membership No.: 206931
Place: Chennai
Date: 09 May 2018
Mar 31, 2016
Independent Auditor''s Report
To the Members of Accel Frontline Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Accel Frontline Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the returns for the year ended on that date audited by the branch auditors of the Company''s branch at Singapore.
Management''s Responsibility for the Standalone Financial Statements
2. 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. 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.
5. 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 financial statements are free from material misstatement.
6. 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 controls 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.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.
Basis for Qualified Opinion
8. As detailed in note 30 to the financial statements, the Company has made a provision for bad and doubtful debts and written off as bad debts Rs. 132 lakhs and Rs.5,117 lakhs, respectively for the year ended 31 March 2016. According to the information and explanations given to us, in respect of the trade receivables amounting to Rs.9,166 lakhs as at 31 March 2016, the management is taking steps including obtaining balance confirmations to assess the existence of the said trade receivables and/or any additional adjustments required to the trade receivables. Pending completion of the aforesaid process and in absence of sufficient appropriate evidence, we are unable to comment upon the existence of the aforesaid trade receivables or any adjustments required to the remaining trade receivables and the consequent impact, if any, on the accompanying financial statements. Our limited review report for the quarter and period ended 31 December 2015 was also qualified in this regard.
9. As disclosed in note 33 to the financial statements, the Company''s inventory at maintenance divisions is carried at Rs.3,823 lakhs as at 31 March 2016 (31 March 2015: Rs.3,044 lakhs). According to the information and explanations given to us, the management is unable to comply with the requirement of valuing the inventory in accordance with the requirements of Accounting standard (AS) 2 - Valuation of Inventories. Owing to the nature of the Company''s records relating to valuation of inventory pertaining to its maintenance divisions, and in the absence of sufficient appropriate evidence, we are unable to comment upon the impact of the aforesaid matter on carrying value of aforesaid inventory as at 31 March 2016, changes in inventories of stock-in-trade and spares, prior period expenses, and the consequent impact, on the accompanying financial statements. Our audit opinion on the financial statements for the previous year ended 31 March 2015 and the review reports for the quarters and periods ended 30 June 2015, 30 September 2015 and 31 December 2015 were also qualified in this regard.
10. As disclosed in note 32 to the financial statements, the Company has provided for an amount of Rs.750 lakhs during the year in respect of discrepancies noted on the physical verification of inventory of maintenance division as at 31 March 2016. The management is presently in the process of evaluating the reasons for such material discrepancies noted on the aforesaid physical verification. Pending completion of such process and in the absence of sufficient appropriate audit evidence, we are unable to comment upon the appropriateness of the provision so recognized and the corresponding impact, if any, on the existence of inventory, purchases of stock-in-trade for the year ended 31 March 2016, trade payables as at 31 March 2016 and consequential impact on the accompanying financial statements.
11. As disclosed in note 31 to the financial statements, the Company''s fixed assets as at 31 March 2016 comprise fixed assets having a gross book value of Rs.3,104 lakhs and accumulated depreciation of Rs.2,309 lakhs, in respect of which company is in the process conducting a physical verification and reconciliation with books of account. Pending completion of such process and in the absence of other sufficient appropriate audit evidence, we are unable to comment upon the existence and carrying value of the aforesaid assets, depreciation expense for the current year and accumulated depreciation in respect thereof and the consequential impact on the accompanying financial statements.
12. As disclosed in note 20(a) to the financial statements, revenues aggregating to Rs.397 lakhs pertaining to the year ended 31 March 2016 were recognized in the previous year ended 31 March 2015. Had the Company followed the accounting principles as laid down under Accounting Standard 9 - ''Revenue Recognition'', the net sales/income from operations (net of excise duty), changes in inventories of finished goods and stock-in-trade and prior period items for the year ended 31 March 2016 would have been higher by Rs.397 lakhs, Rs.368 lakhs, Rs.29 lakhs respectively. Similarly, the net sales/income from operations (net of excise duty), the changes in inventories of finished goods and stock-in-trade for the year ended 31 March 2015 would have been lower by Rs.397 lakhs, Rs.368 lakhs respectively and net loss for the period after tax would have been higher by Rs.29 lakhs. Our audit report for the previous year ended 31 March 2015and the review reports for the quarters and periods ended 30 June 2015, 30 September 2015 and 31 December 2015 were also qualified in this regard.
Qualified Opinion
13. In our opinion and to the best of our information and according to the explanations given to us, except for the effects/ possible effects of the matters described in the Basis for Qualified Opinion paragraphs, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016, and its loss and its cash flows for the year ended on that date.
Emphasis of Matters
14. We draw attention to note 34 to the financial statements which indicates that the Company has incurred loss after tax of Rs.13,759 lakhs during the year ended 31 March 2016 and, as of that date, the Company''s negative reserves amounted to Rs.5,332 lakhs resulting in complete erosion of the net worth of the Company. Further, as of that date, the Company''s current liabilities exceeded its current assets by Rs.6,458 lakhs. These conditions, along with matters as set forth in note 29 indicate the existence of material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
15. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure Aa statement on the matters specified in paragraphs 3 and 4 of the Order.
16. Further to our comments in annexure A, as required by Section 143(3) of the Act, we report that:
a. we have sought and except for the matters/effects/ possible effects of the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. except for the effects/possible effects of the matters described in the Basis for Qualified Opinion paragraph, 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 and proper returns adequate for the purposes of our audit have been received from the branch not visited by us;
c. the report on the accounts of the branch office of the Company audited under Section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report;
d. the standalone financial statements dealt with by this report are in agreement with the books of account and with the returns received from the branch not visited by us;
e. except for the effects/possible effects of the matters described in the Basis for Qualified Opinion paragraph, 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 (as amended);
f. the matters described in paragraph 14 under the Emphasis of matter paragraph and paragraph 9 in Annexure B, in our opinion, may have an adverse effect on the functioning of the Company;
g. Mr. N R Panicker, the director of the Company, has not produced a written representation as to whether any Company in which he is a director as on 31 March 2016, had not defaulted in terms of sub-section (2) of the section 164 of the Act. In the absence of this representation, we are unable to comment whether he is disqualified from being appointed as a director under sub-section (2) of section 164 of the Act. As far as other directors are concerned, on the basis of the written representations received from such directors as on 31 March 2016 and taken on record by the Board of Directors, we report that none of the remaining directors are disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164(2) of the Act;
h. the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph;
i. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company 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 and our report dated1 August 2016 as per Annexure B expressed an adverse opinion.
j. 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 Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets
(b) The Management has physically verified certain assets during the year and material discrepancies were noticed on such verification which have been properly dealt with in the books of account. As stated in paragraph 11 of the Independent Auditor''s report, fixed assets having a gross block and accumulated depreciation of Rs.3,104 lakhs and Rs.2,309 lakhs, respectively, have not been physically verified by the management including reconciliation with the books of account during the year and we are therefore unable to comment on the discrepancies, if any, which could have arisen on such verification. In our opinion, the frequency of verification of fixed assets is reasonable having regard to the size of the Company and the nature of its assets.
(c) The Company does not hold any immovable property (in the nature of ''fixed assets'').
Accordingly the provisions of clause 3(i)(c) of the Order are not applicable.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. As described in paragraph 10 of the Independent Auditor''s Report, material discrepancies noticed on such physical verification have been provided for in the books of according to the explanations given to us:
i. as detailed in Note 45 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure A to the Independent Auditor''s Report of even date to the members of Accel Frontline Limited, on the financial statements for the year ended 31 March 2016
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Management has physically verified certain assets during the year and material discrepancies were noticed on such verification which have been properly dealt with in the books of account. As stated in paragraph 11 of the Independent Auditor''s report, fixed assets having a gross block and accumulated depreciation of Rs.3,104 lakhs and Rs.2,309 lakhs, respectively, have not been physically verified by the management including reconciliation with the books of account during the year and we are therefore unable to comment on the discrepancies, if any, which could have arisen on such verification. In our opinion, the frequency of verification of fixed assets is reasonable having regard to the size of the Company and the nature of its assets.
(c) The Company does not hold any immovable property (in the nature of ''fixed assets''). Accordingly the provisions of clause 3(i)(c) of the Order are not applicable.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. As described in paragraph 10 of the Independent Auditor''s Report, material discrepancies noticed on such physical verification have been provided for in the books of account, however, due to the reasons mentioned in the said paragraph we are not able to comment upon the appropriateness of the provision so recognized and the consequential impact on the financial statements.
(iii) (a) The Company has not granted during the year any loan, secured or unsecured to companies or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a) of the Order is not applicable.
(b) The schedule of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayments/receipts of the principal amount and the interest are regular;
(c) In the absence of stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than 90 days and whether reasonable steps have been taken by the Company for recovery of the principal amount and interest.
(iv) In our opinion, company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees, and security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company''s products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-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 to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
(Rs.in lakhs)
Name of the statute |
Nature of dues |
Amount (Rs.) |
Amount paid under Protest (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act, 1961 |
Income tax and interest |
827 |
_ |
2005-06 to 2009-10 |
Madras High Court |
Income Tax Act,1961 |
Income tax and interest |
315 |
â |
2011-12 to 2012-13 |
Commissioner of Income Tax (Appeals), Chennai. |
Income Tax Act,1961 |
Income tax and interest |
78 |
- |
2010-11 |
Income Tax Appellate Tribunal, Chennai. |
Customs and Excise Act, 1964 |
Excise duty, interest and penalty |
411 |
175 |
2014-15 |
Customs, Excise and Service Tax Appellate Tribunal, Mumbai |
Kerala Value Added Tax, 2003 |
Value added tax, interest and penalty |
197 |
21 |
2013-14 and 2014-15 |
Kerala High Court |
Kerala Value Added Tax, 2003 |
Value added tax and interest |
44 |
35 |
2007-08 |
Commissioner of Commercial Taxes, Ernakulam |
Kerala Value Added Tax, 2003 |
Value added tax and interest |
3 |
1 |
2013-14 |
Deputy Commissioner (Appeals), Ernakulam |
Kerala Value Added Tax, 2003 |
Value added tax and interest |
3 |
1 |
2013-14 |
Deputy Commissioner (Appeals), Ernakulam |
Kerala Value Added Tax, 2003 |
Value added taxand interest |
2 |
1 |
2009-10 and 2010-11 |
Assistant Commissioner (Appeals), Ernakulam |
Kerala Value Added Tax, 2003 |
Value added tax |
1 |
- |
2015-16 |
Investigation Officer, Kochi. |
Orissha Value Added Tax Act, 2004 |
Value added tax, interest and penalty |
10 |
2 |
2011-12 and 2012-13 |
Joint Commissioner of Commercial Taxes, Bhubaneswar |
West Bengal Sales Tax Act , 1994 |
Sales tax, interest and penalty |
3 |
- |
2001-02, 2003-04 and 2004-05 |
Commercial Tax Officer, Kolkata |
West Bengal Value Added Tax Act, 2003 |
Value added tax and interest |
1 |
- |
2010-11 |
Commercial Tax Appellate and Revisional Board, Kolkata |
Jharkhand Value Added Tax Act, 2005 |
Penalty |
1 |
- |
2007-08 |
Commissioner of Commercial Taxes, Ranchi. |
Uttar Pradesh Trade Tax Act, 948 |
Sales tax and interest |
1 |
- |
2002-03 |
Trade Tax Tribunal, Lucknow. |
The Employees'' Provident Fund And Miscellaneous Provisions Act, 1952 |
Damages and interest |
46 |
- |
1999-2010 and 20122013 |
Employees'' Provident Fund Appellate Tribunal, Pune |
(viii) The Company has not defaulted in repayment of loans or borrowings to any bank or financial institution or government during the year. The Company did not have any outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.
(x) We draw attention to note 29 to the financial statements. We have been explained that these amounts were recognized in the books of account of the Company through override of internal financial controls by the erstwhile management in the earlier years. The management is in the process of deciding the future course of action.
(xi) Managerial remuneration has been paid and provided by the company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
(xiv) During the year, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
(xv) In our opinion, the company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm''s Registration No.: 001076N/N500013
per Sumesh E S
Partner
Membership No.: 206931
Place : Chennai
Date : 1 August 2016
Mar 31, 2015
Report On The Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of
Accel Frontline Limited ("the Company"), which comprise the Balance
Sheet as at 31st March, 2015, the Statement of Profit and Loss, the
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information, in
which are incorporated the returns for the year ended on that date
audited by the branch auditors of the Company's branch at Singapore.
Management's Responsibility For The Standalone Financial Statements
2. The Company's Board of Directors is responsible for the maters
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 (as amended). This
responsibility also includes maintenance of adequate accounting records
in accordance with the provisions of the Act; safeguarding the assets
of the Company; preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
4. We have taken into account the provisions of the Act, the
accounting and auditing standards and maters which are required to be
included in the audit report under the provisions of the Act and the
Rules made thereunder.
5. 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 financial
statements are free from material misstatement.
6. 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 controls 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.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our qualified audit opinion on
the standalone financial statements.
Basis for Qualified Opinion
8. As disclosed in note 20 (a) of the financial statements, during the
year the Company has recognised revenue from operations amounting to
Rs.397 lakhs however, in our opinion, such recognition does not meet
the conditions enunciated under AS 9 Â 'Revenue Recognition'. Had the
Company followed the principles of AS 9, the revenue from operations
and the changes in inventories of stores and spares and stock in trade
for the year ended 31st March, 2015 would have been lower by Rs.397
lakhs and Rs.368 lakhs respectively. The loss from ordinary activates
after tax would have been higher by Rs.29 lakhs and tax expense would
be lower by Rs.9 lakhs for the year ended 31st March, 2015. Further,
the trade receivables as at 31st March, 2015 would be lower by Rs.397
lakhs and the inventories would be higher by Rs.368 lakhs as at that
date.
9. Further, as disclosed in note 16(a) of the financial statements,
the Company's inventory comprise of certain items carried at Rs.3,044
lakhs as at 31st March, 2015, wherein due to reasons mentioned in the
aforesaid note the management is unable to compute the value of
inventory in accordance with the Company's accounting policy and
requirements of Accounting standard (AS) 2 Â Valuation of Inventories.
Owing to the nature of the Company's records and in the absence of
sufficient appropriate evidence we are unable to comment on the impact,
of the aforesaid mater on the changes in inventories of stock-in-trade
and store and spares for the year ended 31st March, 2015 and the
carrying value of inventories as at 31st March, 2015 and the
consequential impact, if any, on the financial statements.
Qualified Opinion
10. In our opinion and to the best of our information and according to
the explanations given to us, except for the effect / possible effects
of the maters described in the Basis for Qualified Opinion paragraph,
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 loss and its cash flows for the year ended on that date.
Report On Other Legal And Regulatory Requirements
11. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure a statement on the maters
specified in paragraphs 3 and 4 of the Order.
12. As required by Section 143(3) of the Act, we report that:
a. we have sought and except for the possible effects of the matters
described in the Basis for Qualified Opinion paragraph 9, obtained all
the information and explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit;
b. except for the possible effects of the maters described in the
Basis for Qualified Opinion paragraph 9 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 and proper returns adequate
for the purposes of our audit have been received from the branches not
visited by us;
c. the report on the accounts of the branch office of the Company
audited under Section 143(8) of the Act by the branch auditors have
been sent to us and have been properly dealt with by us in preparing
this report;
d. the standalone financial statements dealt with by this report are
in agreement with the books of account and with the returns received
from the branches not visited by us;
e. except for the effects / possible effects of the maters described
in the Basis for Qualified Opinion paragraph 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 (as amended);
f. on the basis of the written representations received from the
directors as on 31st March, 2015 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164(2) of the
Act;
g. the qualification relating to the maintenance of accounts and other
maters connected therewith are as stated in the Basis for Qualified
Opinion paragraph;
h. with respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us.
i. as detailed in note 39 to the standalone financial statements, the
company has disclosed the impact of pending litigations on its
standalone position of the Company
ii. the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. there has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the independent auditor's report of even date to the
members of accel frontline limited, on the financial statements for the
year ended 31st march, 2015
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular program of physical verification of its
fixed assets under which fixed assets are verified in a phased manner
every year, which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year, except for
goods-in-transit and stocks lying with third parties. For stocks lying
with third parties at the year-end, written confirmations have been
obtained by the management.
(b) 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) The Company is maintaining proper records of inventory except that
due to the reasons mentioned the note 16(a) to the financial
statements, the new software is not able to generate the details with
respect to the issue of inventory in a chronological manner. No
material discrepancies between physical inventory and book records were
noticed on physical verification
(iii) The Company has granted interest free unsecured loans to
companies covered in the register maintained under Section 189 of the
Act; and with respect to the same:
(a) as the terms and conditions of the said loan are not stipulated, we
are unable to comment as to whether the receipt of the principal amount
is regular; and
(b) in the absence of stipulated terms and conditions, we are unable to
comment as to whether there is any overdue amount in excess of Rs.. one
lakh and whether reasonable steps have been taken by the Company for
recovery of the principal amount and interest.
(iv) In our opinion, 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. During the course of our audit, no major
weakness has been noticed in the internal control system in respect of
these areas.
(v) The Company has not accepted any deposits within the meaning of
Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits)
Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of
the Order are not applicable.
(vi) To the best of our knowledge and belief, the Central Government
has not specified maintenance of cost records under sub-Section (1) of
Section 148 of the Act, in respect of Company's products/ services.
Accordingly, the provisions of clause 3(vi) of the Order are not
applicable.
(vii) (a) 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, have generally been regularly
deposited with the appropriate authorities, though there has been a
slight delay in many cases. Further, no undisputed amounts payable in
respect thereof were outstanding at the year-end for a period of more
than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax, sales-tax, wealth
tax, service tax, duty of customs, duty of excise, value added tax and
cess on account of any dispute, are as follows:
Rs. in lakhs
Amount
Name of the Amount
Nature of Dues paid under
Statute protest
Income Tax Act Tax and Interest 570 -
1961
Income Tax Act Tax and Interest 332 -
1961
Finance Act Tax and Penalty 6 -
1994
Customs and Tax and Penalty 411 -
Excise Act 1964
Kerala VAT Act Tax and Interest 44 35
2003
Uttar Pradesh Tax and Interest 1 -
VAT Act 2008
West Bengal VAT Tax and Interest 3 -
Act 2003
West Bengal VAT Tax and Interest 6 -
Act 2003
West Bengal VAT Tax and Interest 9 -
Act 2003
Jharkhand VAT Tax and Interest 1 -
Act 2005
Odisha VAT Act Tax and Interest 0 -
2004
Odisha VAT Act Tax and Interest 10 -
2004
Name of the Statute Period to which Forum where dispute is
pending
the amount
relates
Income Tax Act, 1961 2005-06, 2006-07 Income Tax Appellate
Tribunal,
and 2007-08 hennai Branch, Chennai
Income Tax Act, 1961 2010-11 and Commissioner of Income
Tax (Appeals), Chennai
2011-12
Finance Act, 1994 2007-08 and Customs Excise and
Service Tax Appellate
2008-09 Tribunal, Chennai
Customs and Excise Act 1964 Director of Revenue
Intelligence
2014-15 (DRI)
Kerala VAT Act 2003 2007-08 Deputy Commissioner
(Appeals)
Uttar Pradesh VAT Act 2008 2002-03 Trade Tax Tribunal,
Lucknow, UP
West Bengal VAT Act 2003 2001-02, Asst. Commissioner, Park
Street
2003-04 and Charge, Kolkata
2004-05
West Bengal VAT Act 2003 Appellate & Revisional
Board,
2006-07 Kolkata
West Bengal VAT Act 2003 2007-08 and Joint Commissioner,
2010-11 Park Street Charge,
Kolkata
Jharkhand VAT Act 2005 Joint. Commissioner,
2007-08 Jharkand
Odisha VAT Act 2004 2011-12 and Deputy Commercial Tax
2012-13 CST Officer,Odisha
Odisha VAT Act 2004 2011-12 and Deputy Commercial Tax
Officer,
2012-13 VAT Odisha
(c) The Company has transferred the amount required to be transferred
to the investor education and protection fund in accordance with the
relevant provisions of the Companies Act, 1956 (1 of 1956) and rules
made thereunder within the specified time.
(viii) In our opinion, the Company has no accumulated losses at the end
of the financial year and it has not incurred cash losses in the
current and the immediately preceding financial year.
(ix) The Company has not defaulted in repayment of dues to any bank or
financial institution during the year. The Company did not have any
outstanding debentures during the year.
(x) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xi) In our opinion, the Company has applied the term loans for the
purpose for which these loans were obtained.
(xii) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
per Sumesh E S
Place: Chennai Partner
Date: 05th May, 2015 Membership No.: 206931
Mar 31, 2014
We have audited the accompanying financial statements of M/s. Accel
Frontline Limited, which comprise the Balance Sheet as at March 31,
2014, the Statement of Profit and Loss and Cash Flow Statement, summary
of significant accounting policies and other notes for the year then
ended incorporating the financial transactions of Singapore branch of
Accel Frontline Limited which was audited by another auditor.
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 general circular
of 13th September 2013 of Ministry of Corporate Affairs in respect of
Section 133 of the Companies 2013. This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
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 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 31st March, 2014;
(b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) In the case of the cash flow statement, of the cash outflows for
the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2003 (CARO)
as amended by Companies (Auditor''s Report)(Amendment) order, 2004
issued by the Government of India vide GSR No.766
(E) in terms of sub-section (4A) of section 227 of the Companies Act,
1956, we enclose in the annexure a statement on the matters specified
in paragraph 4 and 5 of the said 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 purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books
bb. The report on the accounts of the branch office audited under
section 228 by a another auditor has been forwarded to us as required
by clause (c) of the sub section (3) of section 228 and have been dealt
with in preparing our report in the manner considered necessary by us;
c. The balance sheet, statement of profit and loss account and cash
flow statement dealt with by this report are in agreement with the
books of account and with the audited returns received from branch.
d. In our opinion, the balance sheet, statement of profit and 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 read with General circular dated 13th
September 2013 of Ministry of Corporate Affairs in respect of section
133 of the companies act 2013.
e. On the basis of written representations received from the
directors, as on 31st March 2014 and taken on record by the Board of
Directors, we report that none of the directors of the Company are
disqualified as on 31st March, 2014 from being appointed as a director,
in terms of clause (g) of sub-section (1) of section 274 of the
Companies Act, 1956;
f. Since the Central government has not issued any notification as to
the rate at which the cess is to paid under section 441A of the
companies act, 1956 nor has it issued under any rules under the said
section, prescribing the manner in which such cess is to be paid, no
cess is due and payable by the company.
Annexure to the Auditors'' Report Of M/s. Accel Frontline Limited,
Chennai Referred to in paragraph 2 of our report of even date,
(i)(a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(i)(b) The company has a phased programme of physical verification of
fixed assets which in our opinion is reasonable having regard to the
size of the company and the nature of its business. No material
discrepancies were noticed on such verification.
(i)(c) The fixed assets disposed off during the year were not
substantial, According to the information and explanation given to us;
we are of the opinion that the disposal of the fixed assets has not
affected the going concern status of the company.
(ii)(a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(ii)(b) The procedures of physical verification of inventories followed
by the management are reasonable and adequate in relation to the size
of the company and the nature of its business.
(ii)(c) In our opinion and according to the explanations given to us,
the company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book stock has been properly dealt with in the books of account.
(iii)(a) The company has not granted any loans secured/unsecured to
companies, firms or other parties covered under the register maintained
under sec.301 of the Companies Act, 1956. Hence comments on clause
(b),(c) & (d) are not applicable.
(e) The company has taken unsecured loan for Rs.13.66/- crores from a
company which is covered under section 301 of companies act, 1956.
(f) As per the books of accounts produced to us, the rate of interest
and other terms and conditions of unsecured loan taken by the company
is prima facie not prejudicial to the interest of the company.
(g) Payment of the interest is regular however principal repayment is
not due in the current year.
(iv) 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 sale of goods and services. During the course of our audit,
no major weakness has been noticed in the internal controls.
(v)(a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in sec.301 of the Companies Act, 1956 that
need to be entered into the register maintained under sec.301 have been
so entered.
(v)(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rs.5/- lakhs have been entered into
during the financial year at prices which are reasonable having regard
to prevailing market prices at the relevant time.
(vi) The company has not accepted any deposits from public and hence
the provisions of sec 58A and 58AA or any other relevant provisions of
the companies Act 1956 and the Companies (Acceptance of deposits)
Rules, 1975 with regard to the deposits accepted from the public is not
applicable.
(vii) In our opinion, the company has an internal audit system, which
is commensurate with the size and nature of its business.
(viii) The Maintenance of cost records under section 209 (1) (d) of the
Companies Act, 1956 is applicable to the Company and provisions
relating to the said provision has been complied with.
(ix)(a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance, sales tax,
wealth tax, customs duty, excise duty has NOT been regularly deposited
with appropriate authorities.
(ix)(b) According to the records of the company, no undisputed amounts
payable in respect of provident fund, investor education and protection
fund, employees state insurance, wealth- tax, sales-tax, customs duty,
excise duty, cess and other undisputed statutory dues were outstanding,
at the year end, for a period of more than six months from the date
they became payable except in the following cases, which was
subsequently paid Â
Nature of Tax Amount (Rs.) Due Since
Tax Deducted at Source 3,48,940 July 2013
Tax Deducted at Source 26,78,136 August 2013
Tax Deducted at Source 48,09,093 September 2013
(ix)(c) According to the records of the company the dues outstanding of
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty and cess on account of any dispute are as follows:
Name of the Nature of Dispute
statute
Income tax Assessment year 2007-08, in connection with
Capitalization of application software, IPO expenses,
depreciation of leasehold improvement, allowance of STPI
profits and allowance of goodwill
Income tax Assessment year 2006-07, in connection with
depreciation claimed on temporary wooden structures.
Income Tax Assessment Year 2008-09 in connection with
depreciation on application software and allocation of
corporate expenses for STPI, Depreciation on goodwill,
Income Tax temporary structure. Dividend income and IPO expenses
Disallowance of Capitalisation of application software,
IPO expenses, depreciation of leasehold improvement,
claim of STPI profits and claim of Goodwill
Disallowance of Capitalisation of application software,
IPO expenses, depreciation of leasehold improvement,
claim of STPI profits and claim of Goodwill Disallowance of
Capitalisation of application software,
IPO expenses, depreciation of temporary partition,
Exemption u/s 10B, Interest on advance to Subsidiaries,
Provision for Gratuity
Levy of Tax for non-production of Form F for Rs.406821/=
and Increase in taxable AMC Turnover from 10% to 20%.
Under WBST ACT.
Wrong imposition of Interest on late payment of
Turnover Tax Increase in Taxable AMC Turnover etc.
under WBST ACT.
The dispute relates to non-submission of Form F for
interstate branch movement of stock, which the company has
filed at the time of hearing with the
appellate authorities. The Tribunal has remanded back the
case to the assessing officer for fresh assessment
In the Assessment order 8% CST charged for non- submission
of Form C and 4% CST charged on CVT &UPS
sales instead of 1%.
Dispute with regard to tax rate on ATVM-KIOSK
Additional VAT liability due to increase in turnover,
purchase tax liability, disallowance of Input Tax Credit,
Sales Tax imposition of interest and penalty under VAT Act.
CST liability on account of non-production of Form
F and consideration of High SEA Sale under CST Sale
&imposition tax on it.
Imposition of penalty for late submission of VAT
Audit Report.
Tax Liability increased due to enhancement of Gross
Turnover
Assessment order passed by the Sales Tax officer without
proper hearing
Assessment order passed by the Sales Tax officer without
proper hearing
Tax Liability increased due to Non production of
declaration forms, Considering labour portion into taxable
CTP, Disallownace of ITC partially, Occurance of clerical
mistake at the end of CTO while computing
tax liability under CTP
Service Tax Penalty for belated payment of service tax
Name of the Period to which Forum where the dispute is
Statute Amount Rs the amount relates Pending
Income Tax 42,418,700 FY 2006-07 Commissioner of Income
tax (Appeals), Chennai
Income tax Appellate
7,348,370 FY 2005-06 Tribunal, Chennai Bench,
Chennai
Commissioner of Income
3,88,10,980 FY 2007-08 tax (Appeals) Chennai
Commissioner of Income
Nil FY 2009-10 tax (Appeals), Chennai
34,19,240 FY 2010-11 Commissioner of Income
tax (Appeals), Chennai
1,17,10,110 FY 2011-12 Commissioner of Income
tax (Appeals), Chennai
Assistant Commissioner
34,306 2003-04 Park Street Charge,Kolkata
Assistant Commissioner
139,135 2004-05 Park Street Charge,Kolkata
149,787 2002-03 Trade Tax Tribunal, Lucknow
Trade Tax, Lucknow, UP
119,115 2001-02 Asst. Commissioner
Park Street Charge,Kolkata
Deputy Commissioner
8,68,281 2007-08 (appeals)
Joint Commissioner
Sales Tax 268,424 2007-08 Park Street Charge,Kolkata
Joint Commissioner
555,061 2007-08 Park Street Charge,Kolkata
Joint Commissioner
100,123 2007-08 Jamshedpur Urban Circle,
Jamshedpur
Joint Commissioner
39,283 FY 2009-10 Park Street, Kolkata
FY 2006-07 Appellate & Revisional
1,97,222 (VAT) Board, Kolkatta
FY 2006-07 Appellate & Revisional
19,574 (CST) Board, Kolkatta
FY 2010-11 Joint Commissioner
62,50,277 (VAT) Park Street, Kolkata
Service Tax 584,433 FY 2007-08 CESTAT, Chennai
(x) The company does not have any accumulated losses at the end of the
financial year and has not incurred any cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management the company has not defaulted in
repayment of dues to banks. However there has been delay in honoring
Letter of credits to the tune of Rs. 28.65 crores which was converted
as term loans.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us the company has not
granted loans and advances on the basis of security by way of pledge of
shares and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly the
provisions of clause 4 (xiv) Companies (Auditor''s Report) Order, 2003
are not applicable to the company.
(xv) The company has not given any guarantee for loans taken by others
from bank or financial institutions.
(xvi) According to the records of the company, the company has availed
the term loans and used the same for the intended purpose.
(xvii) According to the information and explanations given to us and on
an overall examination of the utilization of funds, we report that the
no funds raised on short-term basis have been used for long-term
investment.
(xviii) 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. However the company has made a
preferential allotment of 55 lakhs equity shares on preferential basis
to M/s CAC Corporation, Japan and the price at which it is issued is
not prejudicial to the interest of the company.
(xix) The company did not have any outstanding debentures during the
year.
(xx) During the year the company has not raised any money from public
by way of issue of shares.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
K.S.AIYAR & CO.
Chartered Accountants
(Firm Regn No: 100186W)
(S.Kalyanaraman)
Partner
(M No: 200565)
Place : Chennai - 16
Date : May 7, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying fnancial statements of M/s. Accel
Frontline Limited, which comprise the Balance Sheet as at March 31,
2013, the Statement of Proft and Loss and Cash Flow Statement for the
year then ended incorporating the fnancial transactions of Singapore
branch of Accel Frontline Limited which were audited by other auditor
and a summary of signifcant accounting policies and other notes.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
fnancial performance and cash fows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the fnancial 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 fnancial
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 fnancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements.
We believe that the audit evidence we have obtained is sufcient 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 fnancial 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 afairs of the
company as at 31st March, 2013;
(b) In the case of the Statement of Proft and Loss, of the proft for
the year ended on that date; and
(c) In the case of the cash fow statement, of the cash fows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2003 (CARO)
as amended by Companies (Auditor''s Report)(Amendment) order, 2004
issued by the Government of India vide GSR No.766 (E) in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the annexure a statement on the matters specifed in paragraph 4 and
5 of the said 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 purposes of our
audit;
b. In our opinion, proper books of account as required by law have been
kept by the company so far as appears from our examination of those
books
c. The balance sheet, proft and loss account and cash fow statement
dealt with by this report are in agreement with the books of account.
d. In our opinion, the balance sheet, proft and loss account and cash
fow 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 2013 and taken on record by the Board of
Directors, we report that none of the directors of the Company are
disqualifed as on 31st March, 2013 from being appointed as a director,
in terms of clause (g) of sub-section (1) of section 274 of the
Companies Act, 1956;
Annexure to the Auditors'' Report
Of M/s. Accel Frontline Limited, Chennai
Referred to in paragraph 2 of our report of even date,
(i)(a) The company has maintained proper records showing full
particulars including quantitative details and situation of fxed
assets.
(i)(b) The company has a phased programme of physical verifcation of
fxed assets which in our opinion is reasonable having regard to the
size of the company and the nature of its business. No material
discrepancies were noticed on such verifcation.
(i)(c) The fxed assets disposed of during the year were not
substantial, According to the information and explanation given to us;
we are of the opinion that the disposal of the fxed assets has not
afected the going concern status of the company.
(ii)(a) The inventory has been physically verifed during the year by
the management. In our opinion, the frequency of verifcation is
reasonable.
(ii)(b) The procedures of physical verifcation of inventories followed
by the management are reasonable and adequate in relation to the size
of the company and the nature of its business.
(ii)(c) In our opinion and according to the explanations given to us,
the company is maintaining proper records of inventory. The
discrepancies noticed on verifcation between the physical stocks and
the book stock has been properly dealt with in the books of account.
(iii)(a) The company has not granted or taken any loans secured/
unsecured to/from companies, frms or other parties covered under the
register maintained under sec.301 of the Companies Act, 1956. Hence,
comments on sub-clauses (b), (c), (d), (e), (f) & (g) are not
applicable.
(iv) 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, fxed assets and with
regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal controls.
(v)(a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in sec.301 of the Companies Act, 1956 that
need to be entered into the register maintained under sec.301 have been
so entered.
(v)(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rs.5/- lakhs have been entered into
during the fnancial year at prices which are reasonable having regard
to prevailing market prices at the relevant time.
(vi) The company has not accepted any deposits from public and hence
the provisions of sec 58A and 58AA or any other relevant provisions of
the companies Act 1956 and the Companies (Acceptance of deposits)
Rules, 1975 with regard to the deposits accepted from the public is not
applicable.
(i) In our opinion, the company has an internal audit system, which is
commensurate with the size and nature of its business.
(ii) The Maintenance of cost records under section 209 (1) (d) of the
Companies Act, 1956 is applicable to the Company and provisions
relating to the said provision has been complied with.
(ix)(a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance, sales tax,
wealth tax, customs duty, excise duty has not been regularly deposited
with appropriate authorities.
(ix)(b) According to the records of the company, no undisputed amounts
payable in respect of provident fund, investor education and protection
fund, employees state insurance, wealth- tax, sales- tax, customs duty,
excise duty, cess and other undisputed statutory dues were outstanding,
at the year end, for a period of more than six months from the date
they became payable except in the case of the following:
(ix)(c) According to the records of the company the dues outstanding of
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty and cess on account of any dispute are as follows:
(x) The company does not have any accumulated losses at the end
the fnancial year covered by our audit and in the immediately preceding
fnancial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management the company has not defaulted in
repayment of dues to banks.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us the company has not
granted loans and advances on the basis of security by way of pledge of
shares and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual beneft fund/society. Therefore, the provisions of clause 4(xiii)
of the Companies (Auditor''s Report) Order, 2003 are not applicable to
the company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly the
provisions of clause 4 (xiv) Companies (Auditor''s Report) Order, 2003
are not applicable to the company.
(xv) The company has not given any guarantee for loans taken by others
from bank or fnancial institutions.
(xvi) According to the records of the company, the company has availed
the term loans and used the same for the intended purpose.
(xvii) According to the information and explanations given to us of the
fnancial year and has not incurred any cash losses during and on an
overall examination of the utilization of funds, we report that the no
funds raised on short-term basis have been used for long-term
investment.
(xviii) 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.
(xix) The company did not have any outstanding debentures during the
year.
(xx) During the year the company has not raised any money from public
by way of issue of shares.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
K.S.AIYAR & CO.
Chartered Accountants
(Firm Regn No: 100186W)
(S.Kalyanaraman)
Place : Chennai - 16 Partner
Date : May 29, 2013 (M No: 200565)
Mar 31, 2011
We have audited the attached Balance Sheet of M/s. Accel Frontline
Limited, Chennai as at 31st March, 2011, the Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto incorporating the financial operations of Singapore branch
which was audited by the other auditor whose report has been considered
and our opinion is based on the other auditor. 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.
1. We conducted our audit in accordance with the auditing standards
generally accepted in India. These 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.
2. As required by the Companies (Auditors Report) Order, 2003 (CARO) as
amended by Companies (Auditor's Report) (Amendment) order, 2004 issued
by the Government of India vide GSR No.766 (E) in terms of sub-section
(4A) of section 227 of the Companies Act, 1956, we enclose in the
annexure a statement on the matters specified in paragraph 4 and 5 of
the said order.
3. Further to our comments in the Annexure referred to 2 above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) 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
(iii) The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account.
(iv) In our opinion, the balance sheet, profit and 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.
(v) 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 the directors of the Company are
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;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view inconformity with the accounting principles
generally accepted in India:
(a) In the case of the balance sheet, of the state of affairs of the
company as at 31st March, 2011;
(b) In the case of the profit and loss account, of the profit for the
year ended on that date; and
(c) In the case of the cash flow statement, of the cash flows for the
year ended on that date.
Annexure to the auditors' report
of M/s. Accel Frontline Limited, Chennai
Referred to in paragraph 2 of our report of even date,
(i)(a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(i)(b) The company has a phased programme of physical verification of
fixed assets which in our opinion is reasonable having regard to the
size of the company and the nature of its business. No material
discrepancies were noticed on such verification.
(i)(c) The fixed assets disposed off during the year were not
substantial, According to the information and explanation given to us;
we are of the opinion that the disposal of the fixed assets has not
affected the going concern status of the company.
(ii)(a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(ii)(b) The procedures of physical verification of inventories followed
by the management are reasonable and adequate in relation to the size
of the company and the nature of its business. However the procedures
need to be further strengthened.
(ii)(c) In our opinion and according to the explanations given to us,
the company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book stock has been properly dealt with in the books of account.
(iii)(a)The company has not granted or taken any loans secured/
unsecured to/from companies, firms or other parties covered under the
register maintained under sec.301 of the Companies Act, 1956. Hence,
comments on sub-clauses (b), (c), (d), (e), (f) & (g) are not
applicable.
(iv) 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 with
regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal controls.
(v)(a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in sec.301 of the Companies Act, 1956 that
need to be entered into the register maintained under sec.301 have been
so entered.
(v)(b)In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rs.5 lakhs have been entered into
during the financial year at prices which are reasonable having regard
to prevailing market prices at the relevant time.
(vi) The company has not accepted any deposits from public and hence
the provisions of sec 58A and 58AA or any other relevant provisions of
the companies Act 1956 and the Companies (Acceptance of deposits)
Rules, 1975 with regard to the deposits accepted from the public is not
applicable.
(vii) In our opinion, the company has an internal audit system, which
is commensurate with the size and nature of its business.
(viii) Maintenance of cost records under section 209 (1) (d) of the
Companies Act, 1956 is not applicable to the company.
(ix)(a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance, income tax,
sales tax, wealth tax, service tax, customs duty, excise duty, have
been regularly deposited with respective authorities.
(ix)(b)According to the records of the company, no undisputed amounts
payable in respect of provident fund, investor education and protection
fund, employees state insurance, income-tax, wealth- tax, service tax,
sales-tax, customs duty, excise duty, cess and other undisputed
statutory dues were outstanding, at the year end, for a period of more
than six months from the date they became payable.
(ix)(c)According to the records of the company the dues outstanding of
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty and cess on account of any dispute are as follows:
Name of Nature of Dispute Amount
the statute (Rs.)
Income tax Assessment year 2000-01, in connection with 65,82,000
non-compete fee disallowance
Income tax Assessment year 2007-08, in conn 42,418,700
-ection with Capitalization of application
software, IPO expenses, depreciation of
leasehold improvement, allowance of STPI
profits and allowance of goodwill
Income tax Assessment year 2006-07, in conne 7,348,370
-ction with depreciation claimed on tempor
-ary wooden structures.
Sales Tax Appeal filed on 14.10.04 for disputed turno 115,842
ver of Rs. 10, 71,720 and interest of Rs.
19,786
In the Assessment Order, 8% CST charged for 119,115
non-submission of Form C and 4% CST charged
on CVT and UPS Sales instead of 1%.
Increase in Gross Turnover and taxable AMC 79,424
under WBST ACT. Disallowance of Form D
submitted before S.T.O. and non-submission
of Form C of other customers under CST ACT.
Levy of Tax for non-production of Form F 34,306
for Rs. 406,821 and Increase in taxable
AMC Turnover from 10% to 20%. Under WBST
ACT.
(f) Wrong imposition of Interest on late 139,135
payment of Turnover Tax, Increase in Taxa
-ble AMC Turnover etc. under WBST ACT.
(g) The dispute relates to non-submission 149,787
of Form F for interstate branch movement
of stock, which the company has filed at
the time of hearing with the appellate
authorities. The Tribunal has remanded
back the case to the assessing officer
for fresh assessment
The dispute relates to delay in filing 418,413
the tax return and Penalty was levied
@50% until March 31, 2005 and @10%
w.e.f. 01.04.2006
Assessment order passed without proper 3,293,672
hearing. Appeal filed before Sr. Joint
Commissioner for reopening of Sales Tax
Assessment
Dispute with regard to tax rate on 607,938
ATVM-KIOSK
Additional VAT liability due to increase 293,929
in turnover, purchase tax liability,
disallowance of Input Tax Credit, impos
-ition of interest and penalty under
VAT Act.
CST liability on account of non-produ 560,072
-ction of Form F and consideration
of High SEA Sale under CST Sale and
imposition tax on it.
Imposition of penalty for late submi 100,123
-ssion of VAT Audit Report.
Service Tax Penalty for belated payment of service 584,433
tax
Name of Period to Form where the dispute
the statute which the pending
Amount
relates
Income Tax 1999-00 DCIT, Co Cir.I (1) - Appeals
2006-07 Commissioner of Income tax
(Appeals), Chennai
2005-06 Income tax Appellate
Tribunal, Chennai Bench,
Chennai
Sales Tax 2001-02 Asst. Commissioner (Appeals)
2001-02 Sales Tax Officer
2002-03 Assistant Commissioner of CT
2003-04 Assistant Commissioner
2004-05 Assistant Commissioner
2002-03 Trade Tax Tribunal, Lucknow
2005-06 High Court, Bangalore
2006-07 Joint Commissioner
2007-08 Deputy Commissioner
(appeals)
2007-08 Joint Commissioner
2007-08 Joint Commissioner
2007-08 Joint Commissioner
Service Tax 2007-08 CESTAT, Chennai
(x) The company does not have any accumulated losses at the end of the
financial year and has not incurred any cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management the company has not defaulted in
repayment of dues to banks.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us the company has not
granted loans and advances on the basis of security by way of pledge of
shares and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly the
provisions of clause 4 (xiv) Companies (Auditor's Report) Order, 2003
are not applicable to the company.
(xv) The company has not given any guarantee for loans taken by others
from bank or financial institutions.
(xvi) According to the records of the company, the company has not
availed any term loans. Therefore, our comment in respect of the clause
is not applicable.
(xvii) According to the information and explanations given to us and on
an overall examination of the utilization of funds, we report that the
no funds raised on short-term basis have been used for long-term
investment.
(xviii) 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.
(xix) The company did not have any outstanding debentures during the
year.
(xx) During the year the company has not raised any money from pubic by
way of issue of shares.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For K.S.Aiyar & Co.
(Firm Regn No: 100186W)
Chartered Accountants
(S. Kalyanaraman)
Partner
(M No.200565)
Place: Chennai - 16
Date: 27 July 2011
Mar 31, 2010
We have audited the attached Balance Sheet of M/s. Accel Frontline
Limited, Chennai as at 31st March, 2010, the Proft and Loss Account and
the Cash Flow Statement for the year ended on that date annexed thereto
incorporating the fnan- cial operations of Singapore branch which was
audited by the other auditor whose report has been considered and our
opinion is based on the other auditor. These fnancial state- ments are
the responsibility of the companyÃs management. Our responsibility is
to express an opinion on these fnancial statements based on our audit.
1. We conducted our audit in accordance with the auditing standards
generally accepted in India. These Standards re- quire that we plan and
perform the audit to obtain reason- able assurance about whether the
fnancial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and dis- closures in the fnancial statements. An audit also includes
assessing the accounting principles used and signifcant esti- mates
made by management, as well as evaluating the over- all fnancial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 (CARO)
as amended by Companies (AuditorÃs Report) (Amendment) order, 2004
issued by the Government of India vide GSR No.766 (E) in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the annexure a statement on the matters specifed in paragraph 4 and
5 of the said Order..
3. Further to our comments in the Annexure referred to 2 above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were neces- sary for the purposes of
our audit;
(ii) 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
(iii) The balance sheet, proft and loss account and cash fow statement
dealt with by this report are in agreement with the books of account.
(iv) In our opinion, the balance sheet, proft and loss account and cash
fow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of sec- tion 211 of the
Companies Act, 1956.
(v) On the basis of written representations received from the di-
rectors, as on 31st March 2010 and taken on record by the Board of
Directors, we report that none of the directors of the Company are
disqualifed 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;
(vi) In our opinion and to the best of our information and accord- ing
to the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformi- ty with the accounting principles
generally accepted in India:
(a) In the case of the balance sheet, of the state of affairs of the
company as at 31st March, 2010;
(b) In the case of the proft and loss account, of the proft for the
year ended on that date; and
(c) In the case of the cash fow statement, of the cash fows for the
year ended on that date.
Annexure to the auditors report Of M/s. Accel Frontline Limited,
Chennai Referred to in paragraph 2 of our report of even date,
(i)(a) The company has maintained proper records showing full
particulars including quantitative details and situation of fxed
assets.
(i)(b) The company has a phased programme of physical verifca- tion of
fxed assets which in our opinion is reasonable having regard to the
size of the company and the nature of its busi- ness. No material
discrepancies were noticed on such verif- cation.
(i)(c) The fxed assets disposed off during the year were not sub-
stantial, According to the information and explanation given to us; we
are of the opinion that the disposal of the fxed as- sets has not
affected the going concern status of the com- pany.
(ii)(a) The inventory has been physically verifed during the year by
the management. In our opinion, the frequency of verifca- tion is
reasonable.
(ii)(b) The procedures of physical verifcation of inventories fol-
lowed by the management are reasonable and adequate in relation to the
size of the company and the nature of its busi- ness. However the
procedures need to be further strength- ened.
(ii)(c) In our opinion and according to the explanations given to us,
the company is maintaining proper records of inventory. The
discrepancies noticed on verifcation between the physi- cal stocks and
the book stock has been properly dealt with in the books of account.
(iii) The company has not granted or taken any loans secured/ unsecured
to/from companies, frms or other parties covered under the register
maintained under sec.301 of the Compa- nies Act, 1956.
(iv) In our opinion and according to the information and explana- tions
given to us, there are adequate internal control proce- dures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fxed assets and with
regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal controls.
(v)(a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in sec.301 of the Companies Act, 1956 that
need to be entered into the regis- ter maintained under sec.301 have
been so entered.
(v)(b) In our opinion and according to the information and expla-
nations given to us, the transactions made in pursuance of such
contracts or arrangements exceeding value of Rs.5/- lakhs have been
entered into during the fnancial year at prices which are reasonable
having regard to prevailing mar- ket prices at the relevant time.
(vi) The company has not accepted any deposits from public and hence
the provisions of sec 58A and 58AA or any other rel- evant provisions
of the Companies Act, 1956 and the Compa- nies (Acceptance of deposits)
Rules, 1975 with regard to the deposits accepted from the public is not
applicable.
(vii) In our opinion, the company has an internal audit system, which
is commensurate with the size and nature of its busi- ness.
(viii) Maintenance of cost records under section 209 (1) (d) of the
Companies Act, 1956 is not applicable to the company.
(ix)(a) Undisputed statutory dues including provident fund, inves- tor
education and protection fund, employees state insur- ance, income tax,
sales tax, wealth tax, service tax, customs duty, excise duty, have
been regularly deposited with respec- tive authorities except for some
delay in remittance of in- come tax deducted at source.
(ix)(b) According to the records of the company, no undisputed amounts
payable in respect of provident fund, investor education and protection
fund, employees state insurance, income-tax, wealth- tax, service tax,
sales-tax, customs duty, excise duty, cess and other undisputed
statutory dues were outstanding, at the year end, for a period of more
than six months from the date they became payable.
(ix)(c) According to the records of the company the dues outstand- ing
of income tax, sales tax, wealth tax, service tax, customs duty, excise
duty and cess on account of any dispute are as follows:
Period to
Name of the Amount which the Forum where
the
Nature of
Dispute
statute (Rs.) amount dispute
is pending
relates
Income Tax Income tax assessment
year 2000-01, in conn
ection with non- 65,82,000 F.Y 1999-00 DCIT, Co Ci
r.I (1) -
compete fee disallow
ance Appeals
Income tax assessment
year 2007-08, in conn
ection with 42,418,700 F.Y 2006-07 Commissione
of
capitalization of ap
plication software,
IPO expenses, Income tax
(Appeals),
depreciation of lease
hold improvement, all
owance of STPI Chennai
profts and allowance
of goodwill
Sales Tax (a) Appeal fled on 14.
10.04 for disputed tu
rnover of Rs.10, 115,842 2001-2002 Asst.Com
missioner
71,720.00 and interest
of Rs.19786/-. (Appeals)
(c) In the Assessment O
rder, 8% CST charged f
or non- 119,115 2001-2002
Sales Tax Offcer submi
ssion of Form C and 4%
CST charged on CVT and
UPS Sales instead of 1%.
(d) Increase in Gross T
urnover and taxable AMC
under WBST 79,424 2002-2003 Assistant
missioner
Act. Disallowance of Fo
rm D submitted before
S.T.O. and non of CT
submission of Form C of
other customers under
CST Act.
(e) Levy of Tax for non
-production of Form F
forRs.406821/= 34,306 2003-2004 Assistant
Commissio
and Increase in taxab
le AMC Turnover from 1
0% to 20%. Under WBST
Act.
(f) Wrong imposition of
Interest on late payment
of turnover 139,135 2004-2005 Assistant
Commissio
tax, increase in taxable
AMC turnover etc. under
WBST Act.
(g) The dispute relates
to non-submission of Fo
rm F for 149,787 2002-2003 Trade Tax
interstate branch movem
ent of stock, which the
company has Tribunal,
cknow fled at the time
of hearing with the
appellate authorities.
The tribunal has remand
ed back the case to the
assessing offcer for fr
esh assessment
The dispute relates to
delay in fling the tax
return and 418,413 2005-2006 High Cour
Bangalore
penalty was levied @50%
until March 31, 2005 a
nd @10% w.e.f.01.04.2006
Assessment order passed
without proper hearing.
Appeal 3,293,672 2006-07 Joint Com
missioner
fled before Sr. Joint
Commissioner for reopen
ing of sales tax
assessment
Dispute with regard to
tax rate on ATVM-KIOSK 4,144,502 2007-08 HighCourt
Cochin
(x) The company does not have any accumulated losses at the end of the
fnancial year and has not incurred any cash losses during the fnancial
year covered by our audit and in the immediately preceding fnancial
year.
(xi) Based on our audit procedures and as per the informa- tion and
explanations given by the management the company has not defaulted in
repayment of dues to banks.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us the company has not
granted loans and advances on the basis of security by way of pledge of
shares and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual beneft fund/society. Therefore, the provisions of clause 4(xiii)
of the Companies (AuditorÃs Report) Order, 2003 are not applicable to
the company.
(xiv) In our opinion and according to the information and ex-
planations given to us, the Company is not dealing in or trading in
shares, securities, debentures and other invest- ments. Accordingly the
provisions of clause 4 (xiv) Com- panies (AuditorÃs Report) Order, 2003
are not applicable to the company.
(xv) The company has not given any guarantee for loans taken by others
from bank or fnancial institutions.
(xvi) According to the information and explanations given to us the
term loans have been applied for the purpose for which they were
raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the utilization of funds, we report that the
no funds raised on short-term basis have been used for long-term
investment.
(xviii) 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.
(xix) The company did not have any outstanding debentures during the
year.
(xx) During the year the company has not raised any money from pubic by
way of issue of shares.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For K.S. AIYAR & Co.
Firm Regn No: 100186W
Chartered Accountants
(S. Narayanan)
Place: Chennai Partner
Date: July 22, 2010. (M No.29724)
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