Auditor Report of Eco Recycling Ltd.
Mar 31, 2018
We have audited the accompanying standalone Ind AS financial statements of M/s Eco Recycling Limited (âthe Companyâ), which comprises of the Balance Sheet as at March 31st, 2018, Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity, the Statement of Cash Flows for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of the standalone Ind AS financial statements that give a true and fair view of the financial position, 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 Accounting Standards prescribed under section 133 of the Act, read with relevant rules issued there under.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on the standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the financial position of the Company as at March 31st2018, its financial performance including other comprehensive income, its cash flows and changes in equity, for the year ended on that date.
Emphasis of Matter
We draw attention to the following notes in the standalone Ind AS financial statements annexed to the auditorâs report
a) Note 4.4, 4.5 and 4.7: The company has not done any fair valuation of its financial assets and financial liabilities as it believes that the carrying amounts of these financial assets and financial liabilities approximate their fair values and that the impact of change, if any, on account of fair valuation these financial assets and financial liabilities, will be insignificant.
b) Note no 37: The company has a pending legal dispute with M/s KUD Realtors Pvt. Ltd relating to the transfer of assets purchased in favour of the company. The company has paid amount of Rs 2, 10, 95,615 as advance for purchase of the assets. The company is however of the opinion that the dispute will be resolved in its favor soon.
Our opinion is not modified in any of the above matters
Other Matters
The comparative financial information of the company for the year ended 31st March 2017 and the transition date opening balance sheet as at 1st April 2016 included in these standalone Ind AS financial statements, are based on previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules 2006 and which have not been audited by us. This comparative financial information has been furnished to us by the Management and the Auditorâs report for the years ended 31st March 2017 and 31st March 2016 contain a qualified opinion on those standalone financial statements.
The financial information for the periods 31st March 2017 and 1st April 2016, have been adjusted for differences in accounting policies adopted by the Company on transition to Ind AS.
Report on other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, we report that
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including other Comprehensive income, the statement of cash flow dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards prescribed under section 133 of the Act read with relevant rules there under;
e) On the basis of the written representations received from the directors as on March 31st, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
2. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements. Refer Note Nos. 36 and 37 to the financial statements.
b) The Company did not have any long-term contracts including derivative contract having material foreseeable losses for which provision was required to be made under the applicable law or the accounting standards.
c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
3. As required by the Companies (Auditorâs Report) Order, 2016 issued by the Central Government in terms of Section 143 (11) of the Companies Act 2013, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) As explained to us the fixed assets are being physically verified by the management at regular intervals and no material discrepancies were noticed on such verification.
(c) As explained to us, the title deeds of immovable properties were held in the name of the company except assets mentioned in note no 37 to the standalone Ind AS financial statements
(ii) According to information and explanations given to us, the physical verification of inventories has been conducted by the management at reasonable intervals and no material discrepancies were noticed during the physical verification of the inventories, during the year.
(iii) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, the paragraphs 3(iii) (a) to (c) of the Order are not applicable to the Company.
(iv) The company has provided financial guarantee on behalf of its subsidiary and in respect of loans, investments, guarantees and security, it has complied with sections 185 and 186 of the Companies Act 2013.
(v) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under with regard to acceptance of deposits, are not applicable to the company. Accordingly, paragraph 3(v) of the Order is not applicable to the company.
(vi) The cost records are not required to be maintained under section 148(1) of the Companies Act 2013, as prescribed by the Central Government. Accordingly paragraph 3(vi) of the Order is not applicable to the company.
(vii) In respect to payment of statutory dues:
(a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Income-Tax, Service Tax, Cess, Professional Tax and any other statutory dues with the appropriate authorities.
(b) There are no statutory dues that have not been deposited by the company with appropriate statutory authorities, on account of any dispute as at 31st March 2018.
(viii)Based on our audit procedures and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions
(ix) The company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). The term loans have been applied by the company for the purposes for which they were raised.
(x) Based on our audit procedures and according to the information and explanations given to us, neither there has been any fraud on the company by its officers or employees, noticed during the year nor have we been informed of such cases by the Management.
(xi) The company has paid / provide for managerial remuneration during the year in accordance with requisite approvals mandated by provisions of section 197 read with Schedule V of the Companies Act 2013
(xii) The Company is not a Nidhi Company and hence paragraph 3(xii) of the Order is not applicable to the company.
(xiii)According to the information and explanation given to us and based on our examination of the records of the company, the transaction with the related party are in compliance with section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.
(xiv)Based upon the audit procedures performed and the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or other persons connected with the directors. Accordingly, the paragraph 3(xv) of the Order is not applicable to the Company.
(xvi)The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
We have audited the internal financial controls over financial reporting of M/s Eco Recycling Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on, the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over Financial reporting based on our audit conducted in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing issued by ICAI, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those standards and Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the standalone Ind AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of the standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the stand alone Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over financial reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be deducted. Also projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India
For Talati and Talati
Chartered Accountants
Firm Registration No.: 110758W
Rovin Kothari
Mumbai Partner
30th May, 2018 M. No.: 133326
Mar 31, 2017
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of "Eco Recycling Limited" ("the Company"), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We have conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Basis of Qualified Opinion :
(i) We draw attention to Note No. 33 of the "Notes forming part of Standalone Financials Statements " regarding method of accounting of ''Miscellaneous expenditure (to the extent not written off)'', which in our opinion is not in accordance with the Accounting Standard 26 "Intangible Assets" aggregating to Rs.8,60,076/-
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us except for the effects of the matter described in the ''Basis for qualified opinion'' paragraph above, 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 2017, its Loss and its cash flows for the year ended on that date.
Emphasis of Matter:
We draw attention of the management to the following observations without qualifying our opinion:
1) Note 31 of the Notes forming part of Financial Statements regarding holding of equity shares which are currently not being reflected in the Company''s De-mat account due to a dispute with "Keynote Capital Limited" and hence Company has not accounted the loss of Rs. 235.16 Lakhs which is considered as fully recoverable by the Management. The Company has assessed the recoverability of these claims based on legal advice. Considering the Contractual tenability and legal advice from Company''s counsel in the matter, the management is confident of recovery of the same. In view of Significant uncertainty, the amount of loss for eventual non-recovery of claim made by the company, if any is presently not ascertainable. In the interim company has booked the loss on sale of these shares in the current Financial Year.
2) We draw attention to Note 34 of the Notes forming part of Standalone Financial Statements regarding uncertainties in relation to assets purchased from KUD Realtors Pvt. Ltd. due to certain legal disputes.
3) Note 15 of the Notes forming part of the standalone Financial Statements regarding valuation of closing stock, The Company has certain inventory items which are non-moving and obsolete. This indicates material uncertainty, that may cast doubts on the recoverability of these Inventories. However, in view of the management, no provision is required to be made as they are confident of its recoveries.
4) Note 11 (B) of the Notes forming part of the standalone Financial Statements regarding Branding Expenses, The Company has capitalized Branding expenses incurred amount to Rs. 652.77 Lakhs as Intangible Assets under Development. However, the same as not in consonance into the principles laid down under As-26 "Intangible Assets". The management is of the view that branding will have a long term benefit.
5) Note 11 (C) of the Notes forming part of the standalone Financial Statements regarding Capital work in Progress, Due to prolonged suspension of construction activities of ''E- Waste recycling and Precious metal recovery'''' project, expenses incurred and capitalized so far on those assets, the physical condition of these assets under construction require technical evaluation to determine impairments or write off, if any. However, in the view of the management, the suspension of construction activities of these assets is temporary in nature and assets under construction are not obsolete, and the company will be able to resume construction activities in the near future and hence no provision is required to be made.
6) Note 12 of the Notes forming part of the standalone Financial Statements regarding Non-Current Investment, The market value of the quoted investment as at 31st march, 2017 is Rs. 186.28 lakhs as against the carrying value of Rs. 304.81 lakhs. However, no provision for the same is made as in view of the management, diminution is temporary in nature. Further in respect of investments in unquoted equity shares amounting to Rs. 141.01 lakhs as at 31st march, 2017, out of which for the investment of Rs. 55 lakhs, audited financial statements are not available of the investee companies. No impairment has been provided for the same in the books of accounts as in view of the management the Quoted & Unquoted investments are long term and strategic in nature and there is no diminution other than temporary in nature. We are unable to ascertain or quantify whether any provision is required to be made for the impairment of these investments.
7) Note 13 of the Notes forming part of the standalone Financial Statements regarding Advances recoverable in cash or kind, includes dues outstanding from Shree Ganesh Forgins Ltd. of Rs. 22.50 Lakhs and Chandramouli Silk Mills of Rs. 25 Lakhs. These are outstanding for a long period of time. Absence of recoveries from those parties since several years indicates the existence of material uncertainty that may cast doubt on the recoverability of the advances. However, in view of the management no provision is required as they are proceeding with legal action.
8) Note 35 of the Notes forming part of Standalone Financial Statements regarding Balances of some of the trade receivables, trade payables and creditor of expenses, loans and advances (given and taken) and loans are subject to confirmation and reconciliation. The consequential adjustments if any, arising out of these are not quantifiable.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) Except for the effects of the matter described in the Basis for qualified opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) Except for the effects of the matter described in the Basis for qualified opinion paragraph above, in our opinion, theafore said standalone financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014;
(e) On the basis of the written representations received from the directors as on 31st March, 2017, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017, from being appointed as a director in terms of Section 164(2) of the Act.
(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
(g) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,2014:
i. The Company does not have any pending litigations which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the financial statements [note no. 39] as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management.
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section 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
(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of the immovable property are in the name of the Company except 173.37 Gunthas.
ii According to the information and explanations given to us, physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed on such physical verification during the year.
iii The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore, the provisions of clause 3 (iii), (iii)(a), (iii)(b) and (iii)(c) of the said order are not applicable to the company.
iv The Company has complied with the provisions of Section 185 & 186 of the Companies Act, 2013 in respect of corporate guarantee to National Skills Development Corporation on behalf of its 100% subsidiary Ecoreco Enviro Education Pvt. Ltd. The Company has not given any loans or made any investments.
v The company has not accepted any deposits from the public within the meaning of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the Rules framed there under to the extent notified.
vi The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Companies Act, 2013 for any of the services rendered by the Company.
vii (a) The company has been generally regular in depositing 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 any other statutory dues to the appropriate authorities. There are no outstanding dues as on the last day of the financial year for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there have been no disputed dues which have not been deposited in respect of income tax, sales tax, service tax, duty of customs, duty of excise and value added taxes at 31st March, 2017.
viii The Company has not defaulted in repayment of loans or borrowings to any financial institution, banks or Government during the year and the Company has not issued any debentures.
ix The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans availed during the year were applied for the purposes for which the loans were obtained.
x According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi The Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
xii In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, Clause 3(xii) of the Order is not applicable.
xiii According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18.
xiv The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3(xiv) of the order are not applicable to the Company.
xv The Company has not entered in to non-cash transactions with directors or persons connected with him. Accordingly, the provision of Clause 3(xv) of the Order is not applicable to the Company.
xvi The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
For GMJ & Co
Chartered Accountants
Firm''s Reg. No. 103429W
CA. Sanjeev Maheshwari
Mumbai Partner
30th May, 2017 M. No. 38755
Mar 31, 2016
To
The Members of,
Eco Recycling Limited
Report on the Standalone Financial
Statements
We have audited the accompanying standalone financial statements of "Eco Recycling Limited" ("the Company"), which comprises the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We have conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Basis of Qualified Opinion :
i. The Company has not carried out Actuarial Valuation as required under AS-15 "Employee Benefits" for Gratuity Liability and has instead made anadhoc provision of Rs.2,00,000 /- only. The impact of the difference, if any, on the Balance sheet and Statement of Profit and Loss Account is unascertainable.
ii. We draw attention to Note No. 33 of the "Notes forming part of Financials Statements" regarding method of accounting of ''Miscellaneous expenditure (to the extent not written off)'', which in our opinion is not in accordance with the Accounting Standard 26 "Intangible Assets" aggregating to Rs.14,51,548/Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us except for the effects of the matter described in the ''Basis for qualified opinion'' paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2016, its Profits and its cash flows for the year ended on that date.
Emphasis of Matter:
We draw attention of the management to the following observations without qualifying our opinion:
- We draw attention to Note 31 of the Notes forming part of Financial Statements regarding holding of equity shares which are currently not being reflected in the Company''s De-mat account due to a dispute with "Keynote Capital Limited" and hence Company has not accounted the loss of Rs.213.39/- Lacs which is considered as fully recoverable by the Management. The Company has assessed the recoverability of these claims based on legal advice. Considering the Contractual tenability and legal advice from Company''s counsel in the matter, the management is confident of recovery of the same. In view of Significant uncertainty, the amount of loss for eventual non-recovery of claim made by the company, if any is presently not ascertainable.
- We draw attention to Note 34 of the Notes forming part of Financial Statements regarding uncertainties in relation to assets purchased from KUD Realtors Pvt. Ltd. due to certain legal disputes.
- We draw attention to Note 37 of the Notes forming part of Financial Statements regarding Balances of some of the trade receivables, trade payables and creditor of expenses, loans and advances (given and taken) and loans are subject to confirmation and reconciliation. The consequential adjustments if any, arising out of these are not quantifiable.
Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. Except for the effects of the matter described in the Basis for qualified opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. Except for the effects of the matter described in the Basis for qualified opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014;
e. On the basis of the written representations received from the directors as on 31st March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164(2) of the Act.
f. with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
g. In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:
(i) The Company does not have any pending litigations which would impact its financial position.
(ii) The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.
(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
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 programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of the immovable property are in the name of the Company except 173.37 Gunthas.
ii According to the information and explanations given to us, physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed on such physical verification during the year.
iii The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore, the provisions of clause 3 (iii), (iii)(a), (iii)(b) and (iii) (c) of the said order are not applicable to the company.
iv The Company has complied with the provisions of Section 185 & 186 of the Companies Act, 2013 in respect of corporate guarantee to National Skills development Corporation on behalf of its 100% subsidiary Ecoreco Enviro Education Pvt. Ltd. The Company has not given any loans or made any investments.
v The company has not accepted any deposits from the public within the meaning of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the Rules framed there under to the extent notified.
vi The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Companies Act, 2013 for any of the services rendered by the Company.
vii (a) The company has been generally regular in depositing 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 any other statutory dues to the appropriate authorities. There are no outstanding dues as on the last day of the financial year for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there have been no disputed dues which have not been deposited in respect of income tax, sales tax, service tax, duty of customs, duty of excise and value added taxes at 31st March, 2016.
viii The Company has not defaulted in repayment of loans or borrowings to any financial institution, banks or Government during the year and the Company has not issued any debentures.
ix The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans availed during the year were applied for the purposes for which the loans were obtained.
x According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi The Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
xii In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, Clause 3(xii) of the Order is not applicable.
xiii According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18.
xiv The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3(xiv) of the order are not applicable to the Company.
xv The Company has not entered in to non-cash transactions with directors or persons connected with him. Accordingly, the provision of Clause 3(xv) of the Order is not applicable to the Company.
xvi The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
(Referred to in paragraph 2(f) under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date on the standalone financial statements of Eco Recycling Limited)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Eco Recycling Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For GMJ & Co
Chartered Accountants
Firm''s Reg. No. 103429W
CA P. Somani
Place: Mumbai Partner
Date: 30th May, 2016 M. No. 40637
Mar 31, 2015
We have audited the accompanying financial statements of ECO RECYCLING
LIMITED ("the Company"), which comprise the Balance Sheet as at March
31st, 2015, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance withthe accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgements
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under.
We have conducted our audit in accordance with the Standards on
Auditing specified under section 143(10) of the Act. Those Standards
require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness
of the entity's Internal Control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Basis of Qualified Opinion:
1) During the year 2014-15, the Company has not revised the useful life
of the Fixed Assets as required by Schedule - II of the Companies Act,
2013, as a result its impact on the Balance Sheet and Statement of
Profit and Loss account is unascertainable.
2) Company has not complied with the requirement of Gratuity as
required under AS-15 and has not made any provision for the same, as a
result its impact on the Balance Sheet and Statement of Profit and Loss
account is unascertainable.
3) We draw attention to Note 33 of the Notes forming part of financial
Statements regarding method of accounting of miscellaneous expenditure
which are in our opinion is not in accordance with the Accounting
Standard 26 " Intangible Assets" aggregating to Rs. 3,919,517.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us except for the effects of the matter described
in the 'Basis for Qualified Opinion' paragraph above, 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, of the state of
affairs of the Company as at 31 March 2015 and its profit and its cash
flows for the year ended on that date.
Emphasis of Matter:
We draw attention of the management to the following observations
without qualifying our opinion:
1) We draw attention to Note 31 of the Notes forming part of the
Financial Statements regarding holding of equity shares which are
currently not being reflected in the Company's De-mat account due to a
dispute with "Keynote Capital Limited" and hence Company has not
accounted the loss of Rs.213.39/- Lacs which is considered as fully
recoverable by the Management. The Company has assessed the recover
ability of these claims based on legal advice. Considering the
Contractual tenability and legal advice from Company's counsel in the
matter, the management is confident of recovery of the same. In view of
significant uncertainty, the amount of loss for eventual non-recovery of
claim made by the company, if any is presently not ascertainable.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required by section143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
(b) Except for the effects of the matter described in the basis for
qualified opinion paragraph above, In our opinion, proper books of
account as required by law have been kept by the Company so far as
appears from our examination of those books
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
(d) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above, in our opinion, the aforesaid
financial statements comply with the accounting standards specified
under section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
(e) The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, may have an adverse effect on the functioning of
the Company.
(f) On the basis of written representations received from the directors
as on March 31, 2015 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164 (2) of the Act.
3. In our opinion and to the best of our information and according to
the explanations given to us, we report as under with respect to other
matters to be included in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014:
(i) The Company does not have any pending litigations which would
impact its financial position
(ii) The Company does not anticipate any material foreseeable losses,
on long- term contracts.
(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 INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 9 under 'Report on Other Legal and Regulatory
Requirements' section 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.
(b) All the assets have been physically verified by the management
during the year and no material discrepancies were noticed on such
verification.
ii. (a) In our opinion, physical verification of inventory lying with
the company has been conducted at reasonable intervals by the
management.
(b) Inour opinion, the procedures of physical verification of inventory
followed by the management are adequate in relation to the size of the
Company and the nature of its business.
(c) The Company has maintained proper records of inventory. No material
discrepancies have been noticed on physical verification between
physical stock and book records.
iii. The Company has not granted loans, secured or unsecured to a
firms, companies or other parties covered in the register maintained
under Section 189 of the Companies Act,2013 and hence the provisions of
clause (iii) (a) and (b) of paragraph 3 of the Companies (Auditor's
Report) Order,201 5 are not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate with
the size of the Company and the nature of its business, for the purchase
of fixed assets, purchase of inventory, sale of inventory and sale of
services. Further, on the basis of our examination of the books and
records of the Company and according to the information and explanations
given to us, no major weakness has been noticed in the internal
controls.
v. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public
within the meaning of Sections 73 to 76 of the Companies Act, 2013 and
the rules framed there under.
vi. The Central Government has not prescribed the maintenance of cost
records under section 148(1) of the Act, for any of the services
rendered by the Company.
vii. (a) According to the information and explanation given to us and on
the basis of our examination of our records of the Company amounts
deducted/ accrued in the books of account in respect of undisputed
statutory dues including provident fund, employees' state insurance,
income tax, sales tax, wealth tax, service tax, duty of customs, duty of
excise, value added tax, cess and any other statutory dues have
generally been regularly deposited with the appropriate authorities
except forprofession tax amounting to Rs.22,100.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, income tax,
sales tax, wealth tax, service tax, duty of customs, value added tax,
cess and other material statutory dues were in arrears as at 31 March
2015 for a period of more than six months from the date they became
payable except forprofession tax amounting to Rs. 22,100.
(b) According to the information and explanations given to us, there
have been no disputed dues which have not been deposited in respect of
income tax, sales tax, wealth tax, service tax, duty of custom, duty of
excise, value added tax, cess as at 31st March, 2015.
(c) Provisions of this clause are not applicable to the company.
viii. The Company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses in the financial
year and in the immediately preceding financial year.
ix. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of any
outstanding dues to banks during the year.
x. In our opinion and according to the information and explanations
given to us, the company has not given any guarantee for loan taken by
others from bank or financial institutions during the period covered by
audit.
xi. In our opinion and according to the information and explanations
given to us, the company has applied the term loans taken during the
year for the purpose for which they have been taken.
xii. According to the information and explanations given to us, no
material fraud on or by the company has been noticed or reported during
the course of our audit.
Mumbai For GMJ & Co
May 30, 2015 Chartered Accountants
Firm Reg. 103429w
CA. P. Somani
Partner
Membership No. 40637
Mar 31, 2014
We have audited the accompanying financial statements of "Eco Recycling
Limited" (the Company"), which comprise the Balance Sheet as at March
31, 2014, the Statement of Profit and Loss and Cash Flow Statement for
the year then ended, and a summary of significant accounting policies
and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in under section (3c) of section
211 of the Companies Act, 1956 ("the Act") read with the General
Circular 152013/ dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of the Companies Act, 2013. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
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 judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our Qualified audit opinion.
Basis of Qualified Opinion:
We draw attention to Note 37 of the Notes forming part of financial
statements regarding method of accounting of miscellaneous expenditure
which are in our opinion is not in accordance with the Accounting
Standard 26 "Intangible Assets" aggregating to Rs. 64,98,617/-.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except in the basis for Qualified - opinion
paragraph, the aforesaid financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
(b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter:
We draw attention to Note 33 of the Notes forming part of financial
statements regarding holding of equity shares which are currently not
being reflected in the company''s de-mat account due to a dispute with
"Keynote Capital Limited", and hence company has not accounted the loss
of Rs. 213.39/- lacs which is considered as fully recoverable by the
management. The Company has assessed the recoverability of these claims
based on legal advice. Considering the contractual tenability and legal
advice from Company''s counsel in the matter, the management is
confident of recovery of the same. In view of significant uncertainty,
the amount of loss for eventual non-recovery of claim made by the
company, if any is presently not ascertainable.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of Section
227(4A) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) Except for the matter described in the "Basis of Qualified Opinion"
paragraph, in our opinion, the Balance Sheet, the Statement of Profit
and Loss, and the Cash Flow Statement comply with the Accounting
Standards referred to in under section (3c) of section 211 of the
Companies Act, 1956 read with the General Circular 15/2013 dated
September 13, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013.
(d) On the basis of the written representations received from the
directors as on March 31, 2014, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2014,
from being appointed as a director in terms of clause (g) of
sub-section(1) of section 274 of the Act.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph 9 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
i. In respect of its fixed assets :
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) All the fixed assets have been physically verified by the company
during the year, 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.
(c) The company has not disposed off any Fixed Assets during the
financial year and hence the provisions of clause i (c) of paragraph 4
of the Companies (Auditor''s Report) Order, 2003 are not applicable to
the company.
ii. In respect of its inventory :
(a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanation
given to us, the company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
iii. (a) The company has granted Interest free unsecured loans to one
party amounting to Rs. 5,24,000/- (Maximum balance outstanding Rs.
78,84,000/-) during the year covered in the register maintained under
Section 301 of the Companies Act 1956. The year end balance outstanding
is NIL.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of
unsecured loans granted by the company to the parties (referred to in
(a) above) are prima facie not prejudicial to the interest of the
company.
(c) In respect of the loans granted by the company (referred to in (a)
above) there are no stipulations as regards receipt of loan amount.
(d) In respect of the above said loans and interest thereon granted by
the company (referred to in (a) above), there are no overdue amounts.
(e) The company has not taken loans, secured or unsecured to/from
firms, companies or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956 and hence the provisions
of clause (iii) (e) to (g) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the company.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, no major weakness has been noticed or
reported.
v. (a) According to the information and explanation given to us, the
transaction that needs to be entered into the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
(b) According to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements have
been made at prices which are reasonable having regard to the
prevailing market price at the relevant time has referred to in Section
301 of the Act.
vi. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public
within the meaning of Section 58A, 58AA or any other relevant
provisions of the Acts and Rules framed there under.
vii. The company does not have a formal internal audit system
commensurate with its size and nature of the business but its financial
and other checks ensure proper recording of financial transactions.
viii. According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
Section 209 (1) (d) of the Companies Act, 1956 for the products of the
company. Accordingly the provisions of clause 4(viii) of paragraphs 4
of the Companies (Auditor''s Report) Order, 2003 (as amended) are not
applicable to the company.
ix. (a) The company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education protection fund, employees state insurance,
income tax, wealth tax, sales tax, service tax, customs duty, excise
duty, and other material statutory dues. According to the information
and explanations given to us, no undisputed amount payable in respect
of aforesaid dues were outstanding as at March 31, 2014 for a period of
more than six months from the date they became payable.
(b) According to the information and explanations given to us, no
disputed amounts payable in respect of income tax, wealth tax, sales
tax, service tax, excise duty, customs duty and cess were in arrears,
wherever applicable as at March 31,2014.
x. The company has no accumulated losses at the end of the financial
year and it has not incurred any cash losses in the current financial
year or in the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
xii. In our opinion and according to information and explanations given
to us, the company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other securities
and hence the provisions of clause (xii) of paragraph 4 of the
Companies (Auditor''s Report) Order, 2003 are not applicable to the
company.
xiii. In our opinion, the company is not a chit fund or a nidhi mutual
benefit fund/society and hence the provisions of clause (xiii) of
paragraph 4 the Companies (Auditor''s Report) Order, 2003 are not
applicable to the company.
xiv. In our opinion, the company has maintained proper records of the
transactions and contracts of the investments dealt in by the company
and timely entries have been made therein. All shares have been held by
the company in its own name, except the matters described in the Note
35 of the Notes forming part of financial statements.
xv. In our opinion and according to information and explanations given
to us, the company has not given any guarantees for the loan taken by
others from bank or financial institutions. Hence the provision of
clause (xv) of paragraph 4 of the companies (Auditor''s Report) Order,
2003 are not applicable to the company.
xvi. In our opinion, the terms loans raised during the year from banks
and financial institution 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 Balance Sheet of the company, we report
that 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 or companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
xix. The company has not issued any debentures.
xx. The company has not raised any money by public issue during the
year.
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
Mumbai For GMJ & Co
May 30, 2014 Chartered
Accountants
Firm Reg. 103429w
CA. P. Somani
Partner
Membership No.40637
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying financial statements of "Eco
Recycling Limited" (the Company"), which comprise the Balance Sheet as
at March 31, 2013, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. The Company''s 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 principles generally accepted in
India including Accounting Standards referred to in Section 211(3C) of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditors'' Responsibility
3. 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 misstatements.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Basis of Qualified Opinion
6. We draw attention to Note 37 of the Notes forming part of financial
statements regarding method of accounting of miscellaneous expenditure
which are in our opinion is not in accordance with the Accounting
Standard 26
"Intangible Assets" aggregating to Rs. 62,69,089/-.
Qualified Opinion
7. In our opinion and to the best of our information and according to
the explanations given to us, we further report that, the observation
made in paragraph 6 above been considered, the profit/(loss) after tax
for the year ended 31st March, 2013 would have been Rs. 1,36,927/- as
against the reported profit of Rs. 64,06,017/-, earning per share would
have been Rs. 0.01 as against the reported figure of Rs. 0.38, balance in
the surplus/ (deficit) in the statement of profit and loss as at 31st
March, 2013 vide Note 3 of the notes would have been Rs. (40,33,161)/- as
against the reported figure of Rs. 1,48,88,677/- and balance in the other
non-current assets as at 31st March, 2013 vide Note 15 of the notes
would have been Rs. 26,15,339/- as against the reported figure of Rs.
88,84,428/-, the aforesaid financial statements give the information
required by the act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
(b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
8. We draw attention to Note 35 of the Notes forming part of financial
statements regarding holding of equity shares which are currently not
being reflected in the company''s de-mat account due to a dispute with
"Keynote Capital Limited", and hence company has not accounted the loss
of Rs. 4,45,27,907/- which is considered as fully recoverable by the
management. The Company has assessed the recoverability of these claims
based on legal advice. Considering the contractual tenability and legal
advice from Company''s counsel in the matter, the management is
confident of recovery of the same. In view of significant uncertainty,
the amount of loss for eventual non-recovery of claim made by the
company, if any is presently not ascertainable. Our opinion is not
qualified in respect of this matter
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of Section
227(4A) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
10. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) Except for the matter described in the "Basis of Qualified Opinion"
paragraph, in our opinion, the Balance Sheet, the Statement of Profit
and Loss, and the Cash Flow Statement comply with the Accounting
Standards referred to in section 211(3C) of the Act;
(e) On the basis of the written representations received from the
directors as on March 31, 2013, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2013,
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
i. In respect of its fixed assets :
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) All the fixed assets have been physically verified by the company
during the year, 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.
(c) The company has not disposed off any Fixed Assets during the
financial year and hence the provisions of clause i (c) of paragraph 4
of the Companies (Auditor''s Report) Order, 2003 are not applicable to
the company.
ii. In respect of its inventory :
(a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanation
given to us, the company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
iii. (a) The company has granted unsecured loans to two party''s
amounting to Rs. 55,90,000/- (Maximum balance outstanding Rs. 86,00,000/-)
during the year covered in the register maintained under Section 301 of
the Companies Act 1956. The year end balance outstanding are Rs.
75,00,000/-.
(b) I n o u r op i n i o n a n d according to the information and
explanations given to us, the rate of interest and other terms and
conditions of unsecured loans granted by the company to the parties
(referred to in (a) above) are prima facie not prejudicial to the
interest of the company.
(c) In respect of the loan granted by the company (referred to in (a)
above) there are no stipulations as regards receipt of loan amount.
(d) In respect of the above said loans and interest thereon granted by
the company (referred to in (a) above), there are no overdue amounts.
(e) The company has taken an interest free unsecured loan from a
party''s amounting to Rs. 9,549/-(Maximum balance outstanding Rs.
1,50,000/-) during the year covered in the register maintained under
Section 301 of the Companies Act 1956. The year end balance outstanding
is Nil.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of
unsecured loan taken by the company from the party (referred to in (e)
above) are not prima facie prejudicial to the interest of the company.
g) In respect of the loan taken by the company (referred to in (e)
above) the principal and the interest were not due for repayment in the
current year.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, no major weakness has been noticed or
reported.
v. (a) According to the information and explanation given to us, the
transaction that needs to be entered into the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
(b) According to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements have
been made at prices which are reasonable having regard to the
prevailing market price at the relevant time has referred to in Section
301 of the Act.
vi. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public
within the meaning of Section 58A, 58AA or any other relevant
provisions of the Acts and Rules framed there under.
vii. The company does not have a formal internal audit system
commensurate with its size and nature of the business but its financial
and other checks ensure proper recording of financial transactions.
viii. According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
Section 209 (1) (d) of the Companies Act, 1956 for the products of the
company. Accordingly the provisions of clause 4(viii) of paragraphs 4
of the Companies (Auditor''s Report) Order, 2003 (as amended) are not
applicable to the company.
ix. a) The company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance, income
tax, wealth tax, sales tax, service tax, customs duty, excise duty, and
other material statutory dues. According to the information and
explanations given to us, no undisputed amount payable in respect of
aforesaid dues were outstanding as at 31st March 2013 for a period of
more than six months from the date they became payable.
b) According to the information and explanations given to us, no
disputed amounts payable in respect of income tax, wealth tax, sales
tax, service tax, excise duty, customs duty and cess were in arrears,
as at 31st March 2013.
x. The Company has no accumulated losses at the end of the financial
year and it has not incurred any cash losses in the current financial
year or in the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
xii. In our opinion and according to information and explanations given
to us, the company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other securities
and hence the provisions of clause (xii) of paragraph 4 of the
Companies (Auditor''s Report) Order, 2003 are not applicable to the
company.xiii. In our opinion, the company is not a chit fund or a nidhi
mutual benefit fund/society and hence the provisions of clause (xiii)
of paragraph 4 the Companies (Auditor''s Report) Order, 2003 are not
applicable to the company.
xiv. In our opinion, the company has maintained proper records of the
transactions & contracts of the investments dealt in by the company &
timely entries have been made therein. All shares, debentures & other
investments have been held by the company in its own name, except the
matters described in the Note 35 of the Notes forming part of financial
statements.
xv. In our opinion and according to information and explanations given
to us, the company has not given any guarantees for the loan taken by
others from bank or financial institutions. Hence the provision of
clause (xv) of paragraph 4 of the companies
(Auditor''s Report) Order, 2003 are not applicable to the company.
xvi. In our opinion, the terms loans raised during the year from banks
and financial institution 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 Balance Sheet of the company, we report
that 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 or companies covered in the register maintained under Section
301 of the Companies Act, 1956.
xix. The company has not issued any debenture during the year.
xx. The company has not raised any money by public issue during the
year.
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
Mumbai For GMJ & Co
May 30, 2013 Chartered Accountants
Firm Reg. 103429w
CA P. Somani
Partner
Membership No. 40637
Mar 31, 2012
1. We have audited the attached Balance Sheet of ECO RECYCLING LIMITED
as at 31st March, 2012, the Statement of Profit and Loss and also the
cash flow statement of the company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
(the 'Order'), issued by the Central Government of India in terms
sub-section (4A) of Section 227 of the Companies Act, 1956, we annex
hereto a statement on the matters specified in paragraphs 4 and 5 of
the said order.
4. Without qualifying our opinion we draw attention to Note no. 31 of
the financial statements. The company has paid remuneration to the
Executive Director of the company Mrs. Aruna Soni for which no
permission has been taken by the company from members.
5. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the company so far, as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the mandatory 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
and taken on record by the Board of Directors, we report that none of
the said directors is disqualified as on 31st March, 2012 from being
appointed as directors of the company under clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said Accounts read together with the
Notes thereon give the information required by the Companies Act, 1956
in the manner so required give a true and fair view in conformity with
the accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2012.
ii) in the case of the Statement of Profit and Loss, of the Profit of
the company for the year ended on that date.
iii) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
i. a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) All the fixed assets have been physically verified by the company
during the year, 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.
c) The company has not disposed off any Fixed Assets during the
financial year and hence the provisions of clause i (c) of paragraph 4
of the Companies (Auditor's Report) Order, 2003 are not applicable to
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.
b) In our opinion and according to the information & explanation given
to us, the procedures of physical verification of inventories followed
by the management are reasonable and adequate in relation to the size
of the company & the nature of its business.
c) In our opinion and according to the information and explanation
given to us, the company is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material.
iii a) According to the information and explanations given to us, the
company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act 1956. Accordingly, the provisions of clause
4(iii) (a), (b), (c), (d) of the Companies (Auditor's Report) Order
2003, (as amended) are not applicable to the Company and hence not
commented upon.
b) The company has taken an unsecured loan from one company & three
parties amounting to Rs.12,28,893/-(Maximum balance outstanding
Rs.12,28,893/-) during the year covered in the register maintained
under Section 301 of the Companies Act 1956. The year end balance
outstanding Nil.
c) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of
secured loans taken by the company from the party (referred to in (b)
above) are not prima facie prejudicial to the interest of the company.
d) In respect of the loan taken by the company (referred to in (b)
above) the principal and the interest were not due for repayment 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 with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weaknesses in
internal control system.
v. a) According to the information and explanation given to us, the
transaction that needs to be entered into the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) According to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements have
been made at prices which are reasonable having regard to the
prevailing market price at the relevant time has referred to in Section
301 of the Act.
vi. In our opinion & according to the information & explanations given
to us, the company has not accepted any deposits from public within the
meaning of Section 58A, 58AA or any other relevant provisions of the
Acts & Rules framed there under.
vii. The company does not have a formal internal audit system
commensurate with its size & nature of the business but its financial &
other check ensure proper recording of financial transactions.
viii. According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
Section 209 (1) (d) of the Companies Act, 1956 for the products of the
company. Accordingly the provisions of clause 4(viii) of paragraphs 4
of the Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the company.
ix. a) The company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance, income
tax, wealth tax, sales tax, service tax, customs duty, excise duty, and
other material statutory dues. According to the information and
explanations given to us, no undisputed amount payable in respect of
aforesaid dues were outstanding as at 31st March 2012 for a period of
more than six months from the date they became payable.
b) According to the information and explanations given to us, no
disputed amounts payable in respect of income tax, wealth tax, sales
tax, service tax, excise duty, customs duty and cess were in arrears,
as at 31st March 2012.
x. The Company has no accumulated losses at the end of the financial
year and it has not incurred any cash losses in the current financial
year or in the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
xii. In our opinion and according to information and explanations given
to us, the company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other securities
and hence the provisions of clause (xii) of paragraph 4 of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
company.
xiii. In our opinion, the company is not a chit fund or a nidhi mutual
benefit fund/society and hence the provisions of clause (xiii) of
paragraph 4 the Companies (Auditor's Report) Order, 2003 are not
applicable to the company.
xiv. In our opinion, the company has maintained proper records of the
transactions & contracts of the investments dealt in by the company &
timely entries have been made therein. All shares, debentures & other
investments have been held by the company in its own name.
xv. In our opinion and according to information and explanations given
to us, the company has not given any guarantees for the loan taken by
others from bank or financial institutions. Hence the provision of
clause (xv) of paragraph 4 of the companies (Auditor's Report) Order,
2003 are not applicable to the company.
xvi. In our opinion, the terms 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 Balance Sheet of the company, we report
that 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 or companies covered in the register maintained under Section
301 of the Companies Act, 1956.
xix. The company has not issued any debenture during the year.
xx. The company has not raised any money by public issue during the
year.
xxi. According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
period.
Mumbai For GMJ & Co
May 30, 2012 Chartered Accountants
Firm Reg. 103429w
CA P. Somani
Partner
Membership No. 40637
Mar 31, 2011
1. We have audited the attached Balance Sheet of M/s. Eco Recycling
Limited, as at 31stMarch, 2011 andProft & Loss Account and the Cash
Flow Statements of the Company for the year ended on that dateannexed
thereto. These financial statements are the responsibility of the
Company's management.Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whetherthe
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 areasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) (Amendment) Order,
2004 issued by the Central Government of India in terms of sub Ã
section (4A) of Section 227 of Companies Act, 1956, weenclose in the
annexure, a statement on the matters specifiedin paragraphs 4 & 5 of
the said Order
4. Further to our comments in the annexure referred to above we report
that:
i) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit.
ii) In our opinion, proper books of accounts as required by 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 accounts.
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 March 31, 2011 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 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 in conformity with the accounting principles
generally accepted in India:
a) In case of the Balance Sheet, of the state of affairs of the
Company, as on 31st March, 2011 and
b) In case of the Profit & Loss Account, of the Profit of the Company for
the year ended on that date.
c) In case of the Cash Flow Statement, of the cash flow of the company
for the year ended on that date.
Annexure Referred to in paragraph 3 to the Auditors' Report
i. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of the Fixed
Assets.
b) The fixed assets have been physically verified by the management
during the year as per phased program of verification. In our opinion
the frequency of verification is reasonable having regard to the size of
the company and the nature of the assets no material discrepancies were
noticed on such verification.
c) During the year the company has not disposed off a major part of
fixed assets which has affected the going concern status of the company.
ii. a) The inventory has been physically verified by the management at
reasonable intervals during the year. In our opinion, frequency of the
verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, procedures ofphysical verification inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) In our opinion and according to the information and explanation
given to us the company ismaintainingproper records of inventory. No
material discrepancies were noticed on physical verification between
physical stock and book records.
iii a) The Company has not granted any advances in the nature of loan
to companies in which director's are interested as listed in register
maintained under section 301 of the Companies Act, 1956. Hence the
clauses (b), (c) and (d) are not applicable.
b) The Company has taken advances in the nature of loan from a director
and a company in which director's are interested as listed in register
maintained under section 301 of the Companies Act, 1956. The closing
balance is nil and maximum outstanding during the year is Rs.
14,00,000/-.
c) The loans were taken for short period and repaid. There was no
stipulation of interest payment and the taking of loans, prima facie
was not prejudicial to the interest of the company.
iv. In our opinion and according to the information and explanations
given to us, there is adequate internal control system 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 weaknesses
in internal control system.
v. a) According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
vi. The Company has not accepted any deposits from the public during
the year & consequently the provisions of Section58A, 58AA or any other
relevant provisions of the Companies Act, 1956 & the rules framed there
under are not applicable.
vii. The Company does not have a formal internal audit system
commensurate with its size & nature of the business but its financial &
other check ensure proper recording of financial transactions.
viii. According to the information and explanation given to us the
maintenance of Cost records has not been prescribed by the Central
Government under section 209 (1) (d) of the Companies Act, 1956 for any
of the activities of the Company.
ix. According to the information and explanations given to us, the
Company is generally regular in depositing with appropriate authorities
undisputed statutory dues including income tax, sales tax, wealth tax,
service tax, custom duty, excise duty, cessand other material statutory
dues applicable to it and there is no undisputed amounts payable in
respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty
and cess as on 31st March, 2011 which have remained outstanding for a
period of more than six months from the date they became payable.
x. The Company has no accumulated losses at the end of the fnancial
year and it has not incurred any cash losses in the current fnancial
year or in the immediately preceding financial year.
xi. According to the information and explanations provided to us the
company has not defaulted in the repayment of any dues to any fnancial
institution or bank
xii. In our opinion and according to the information and explanations
provided to us the company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
xiii. In our opinion and according to the information and explanations
provided to us the nature of activities of the company does not attract
special statute applicable to Chit Fund and Niddhi /Mutual Benefit Fund
/ Society.
xiv. In our opinion, the Company has maintained proper records of the
transaction and contracts of the investments dealt in by the company
and timely entries have been made therein. All shares, debentures and
other investments have been held by the company in its own name.
xv. In our opinion and according to the information and explanations
provided to us the company has not given any guarantee for loans taken
by others from banks or financial institutions.
xvi. On the basis of records examined by us the company has prima-facie
applied the term loans for which they were obtained
xvii. In our opinion and according to the information and explanations
provided to us and on an overall examination of the Balance Sheet of
the company, we report that 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
during the year to parties and companies covered in the register
maintained under section 301 of the act.
xix. The company has not issued any debenture during the year.
xx. The company has not raised any money through public issue during
the year.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
has been noticed or reported during the year.
Mumbai
30th May, 2011 FOR VEDULA VIJAY &RAMANATHAN
Chartered Accountants
S. Vedula
Partner
Membership No. 38150
Firm Reg. 106742w
Mar 31, 2010
1. We have audited the attached Post-Merger Balance Sheet of M/s.
Infotrek Syscom Limited, as at 31st March, 2010 and Profit & Loss
Account and the Cash Flow Statements of the Company for the year ended
on that date annexed thereto. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3 As required by the Companies (Auditors Report) (Amendment) Order,
2004 issued by the Central Government of India in terms of sub -
section (4A) of Section 227 of Companies Act, 1956, we enclose in the
annexure, a statement on the matters specified in paragraphs 4 & 5 of
the said Order.
4 Further to our comments in the annexure referred to above we report
that:
i) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit.
ii) In our opinion, proper books of accounts as required by 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 accounts.
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 March 31, 2010 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 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 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 in conformity with the accounting principles
generally accepted in India:
a) In case of the Balance Sheet, of the state of affairs of the
Company, as on 31st March, 2010 and
b) In case of the Profit & Loss Account, of the profit of the Company
for the year ended on that date.
c) In case of the Cash Flow Statement, of the cash flow of the company
for the year ended on that date.
Annexure Referred to in paragraph 3 to the Auditors Report
1. A) The Company has maintained proper records showing full
particulars including quantitative details and situation of the Fixed
Assets.
B) The fixed assets have been physically verified by the Management
during the year as per phased programme of verification. In our
opinion the frequency of verification is reasonable having regard to
the size of the company and the nature of the assets no material
discrepancies were noticed on such verification.
C) During the year the company has not disposed off a major part of
fixed assets which has affected the going concern status of the
company.
2. A) The inventory has been physically verified by the management at
reasonable intervals during the year. In our opinion, frequency of the
verification is reasonable.
B) In our opinion and according to the information and explanations
given to us, procedures of physical verification inventories followed
by the management are reasonable and adequate in relation to the size
of the company and the nature of its business.
C) In our opinion and according to the information and explanation
given to us the company is maintaining proper records of inventory. No
material discrepancies were noticed on physical verification between
physical stock and book records.
3. A) The Company has not granted or taken any advances in the nature
of loan to companies in which directors are interested as listed in
register maintained under section 301 of the Companies Act, 1956. Hence
the clauses (B), (C) and (D) are not applicable.
4. In our opinion and according to the information and explanations
given to us, there is adequate internal control system 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 weaknesses
in internal control system.
5. A) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into
the register maintained under section 301 of the Companies Act, 1956
have been so entered.
B) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public during
the year & consequently the provisions of Section 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 & the rules framed
there under are not applicable.
7. The Company does not have a formal internal audit system
commensurate with its size & nature of the business but its financial &
other check ensure proper recording of financial transaction.
8. According to the information and explanation given to us the
maintenance of Cost records has not been prescribed by the Central
Government under section 209 (1) (d) of the Companies Act, 1956 for any
of the activities of the Company.
9. A) According to the information and explanations given to us, the
Company is generally regular in depositing with appropriate authorities
undisputed statutory dues including income tax, sales tax, wealth tax,
service tax, custom duty, excise duty, cess and other material
statutory dues applicable to it and there is no undisputed amounts
payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty,
Excise Duty and cess as on 31st March, 2010 which have remained
outstanding for a period of more than six months from the date they
became payable.
B) According to the information and explanation given to us, there are
no dues of sales tax, income tax, customs duty, wealtt tax, service
tax, excise duty and cess which have not been deposited on account of
any dispute except Rs.1, 281,837 foi the A Y 1998-99 for which the
Tribunal has referred back the matter to CIT Appeals.
10. The Company has no accumulated losses at the end of the financial
year and it has not incurred any cash losses in the current financial
year or in the immediately preceding financial year.
11. According to the information and explanations provided to us the
company has not defaulted in the repayment of any dues to any financial
institution or bank
12. In our opinion and according to the information and explanations
provided to us the company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
13. In our opinion and according to the information and explanations
provided to us the nature of activities of the company does not attract
special statute applicable to Chit Fund and Niddhi /Mutual Benefit Fund
/ Society.
14. In our opinion, the Company has maintained proper records of the
transaction and contracts of the investments dealt in by the company
and timely entries have been made therein. All shares, debentures and
other investments have been held by the company in its own name.
15. In our opinion and according to the information and explanations
provided to us the company has not given any guarantee for loans taken
by others from banks or financial institutions.
16. On the basis of records examined by us the company has prima-facie
applied the term loans for which they were obtained
17. In our opinion and according to the information and explanations
provided to us and on an overall examination of the Balance Sheet of
the company, we report that no funds raised on short term basis have
been used for long term investment.
18. The company has not made any preferential allotment of shares
during the year to parties and companies covered in the register
maintained under section 301 of the act.
19. The company has not issued any debenture during the year.
20. The company has not raised any money through public issue during
the year.
21. To the best of our Knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
has been noticed or reported during the year.
Mumbai FOR VEDULA VIJAY AND RAMANATHAN
02.12.2010 Chartered Accountants
CA S. Vedula
Partner
Membership No. 38150
Firm Regd: 106742w
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