Mar 31, 2022
REPORT ON THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTS
Opinion
We have audited the standalone financial statements of Privi Speciality Chemicals Limited (formerly known as Fairchem Speciality Limited) (âthe Companyâ), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as ''standalone financial statements'').
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) 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 2022, and profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matter |
|
The key audit matter |
How the matter was addressed in our audit |
Revenue recognition |
In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient |
(Refer note:- 20 and note 36 to the standalone financial statements) |
appropriate audit evidence:- |
The Company''s revenue is derived primarily from sale of products. The principal products of the Company comprise of aroma chemicals. |
⢠Assessed the appropriateness of Company''s accounting policies relating to revenue recognition as per the applicable accounting standard. |
⢠Obtained an understanding of the Company''s sales process |
|
Revenue from sale of goods is recognized on transfer of the |
and evaluated the design and implementation of key internal |
products to the customer. The Company uses a variety of shipment |
controls in relation to the timing of revenue recognition. We |
terms across its operating markets and this has an impact on the |
also tested the operating effectiveness of such controls for a |
timing of revenue recognition. The performance obligations in |
sample of transactions with special reference to controls over |
the contracts may be fulfilled at the time of dispatch, delivery or |
revenue recognised on and around the year end. |
upon formal customer acceptance depending on contract terms. There is a risk that revenue could be recognised at a time which is different from transfer of control especially for sales transactions occurring on and around the reporting period. In view of this and since revenue is a key performance indicator of the Company, we have identified timing of the revenue recognition as a key audit matter. |
⢠For a sample of sale transactions selected using statistical sampling, performed detailed testing and in particular examined whether these are recognised in the period in which control is transferred. This included examination of the terms |
and conditions as per customer orders including the shipping terms, transporter documents and customer acceptances. |
The key audit matter |
How the matter was addressed in our audit |
⢠Tested on a sample basis, specific revenue transactions recorded around the year end date to check whether revenue has been recognised in the correct reporting period by examining the underlying documents. |
|
⢠Tested sample journal entries for revenue recognised during the year, selected based on specified risk-based criteria, to identify unusual transactions. |
The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditors'' report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by the Companies (Auditors'' Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the other matters to be included in the
Auditors'' Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our
opinion and to the best of our information and according
to the explanations given to us:
a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 33 to the standalone financial statements;
b) The Company did not have any long-term contracts for which there were any material foreseeable losses. The Company has made provision for foreseeable losses on derivative contracts - Refer Note 18 to the standalone financial statements;
c) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company;
d) (i) The management has represented that,
to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
⢠directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company or
⢠provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall:
⢠directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party or
⢠provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d) (i) and (d) (ii) contain any material mis-statement.
e) The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Act.
(C) With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm''s Registration No.101248W/W-100022
Jayesh T Thakkar
Partner
Place: Mumbai Membership No. 113959
Date: May 05, 2022 ICAI UDIN: 22113959AILWCJ2471
Mar 31, 2018
Independent Auditorsâ Report
To the Members of
FAIRCHEM SPECIALITY LIMITED
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying standalone financial statements of Fairchem Speciality Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Ind AS Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements to 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 the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made there under including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
5. 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 and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
8. 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 state of affairs of the Company as at March 31, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
9. We draw your attention to the Note no. 49 to the standalone financial statements regarding accounting for issue of equity shares and compulsorily convertible preference shares with a corresponding debit to general reserve and surplus in the profit and loss, in accordance with a Scheme of arrangement between the Company, Privi Organics Limited and Privi Organics India Limited (formerly known as Adi Aromatic Limited), approved by National Company Law Tribunal, Mumbai Bench.
Our opinion is not qualified in respect of this matter.
Other Matter
10. The comparative financial information of the Company for the transition date opening balance sheet as at April 1, 2016 included in these standalone Ind AS financial statements, is based on the previously issued statutory financial statements for the year ended March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which was audited by the predecessor auditor who expressed an unmodified opinion vide report dated April 29, 2016. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
11. The comparative financial information of the Company for the year ended March 31, 2017 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the year ended March 31, 2017 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated May 11, 2017. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
12. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
13. 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 Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.
g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its standalone Ind AS financial statements - Refer Note 42.
ii. The Company did not have any long-term contracts including derivative contracts as at March 31, 2018.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.
iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.
Referred to in paragraph 13(f) of the Independent Auditorsâ Report of even date to the members of Fairchem Specialty Limited on the standalone financial statements for the year ended March 31, 2018
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of Fairchem Specialty Limited (âthe Companyâ) as of March 31, 2018 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
2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting 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 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 Act.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (theâGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act 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 ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 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.
Referred to in paragraph 12 of the Independent Auditorsâ Report of even date to the members of Fairchem Specialty Limited on the standalone financial statements as of and for the year ended March 31, 2018.
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of
fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 4(iii) on fixed assets to the standalone financial statements, are held in the erstwhile name of the Company.
ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. 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. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 of the Act.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our
opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax which have not been deposited on account of any dispute. The particulars of dues of sales tax, service tax, duty of customs, duty of excise and value added tax as at March 31, 2018 which have not been deposited on account of a dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. in lakhs) |
Period to which the amount relates |
Forum where the dispute is pending |
The Central Excise Act, 1944 |
Demand in respect of Excise duty and Cenvat |
22.79 |
Year 2012-13 |
The Commissioner (Appeals - II) Central Excise, Ahmedabad |
Service Tax The Finance Act, 1994 |
Demand in respect of Cenvat credit reversal |
3.85 |
February, 2013 to November, 2014 |
The Commissioner (Appeal) Central Excise, Ahmedabad |
2.44 |
December, 2014 to August, 2015 |
|||
Central Sales Tax Act, 1956 and The Gujarat Value Added Tax 2003 |
Demand in respect of Input Tax Credit |
4.71 |
Year 2011-12 |
Dy. Commissioner of Commercial Tax - Appeal, Ahmedabad |
8.22 |
Year 2012-13 |
Dy. Commissioner of Commercial Tax - Appeal, Ahmedabad |
||
Customs Act, 1962 |
Demand in respect of custom duty on imports |
5.20 |
Year 2007-08 |
Office of Commissioner of Customs, Nhava Sheva |
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments). The term loans were applied for the purposes for which those were raised.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.
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 into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are 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. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse & Co.
Chartered Accountants LLP
Chartered Accountants
Firm Registration Number:304026E/ E-300009
Place : Mumbai Priyanshu Gundana
Date : May 9, 2018 Partner
M No : 109553
Mar 31, 2017
Independent Auditorsâ Report
To the Members of
FAIRCHEM SPECIALITY LIMITED (FORMERLY KNOWN AS ADI FINECHEM LIMITED)
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Fairchem Specialty Limited (Formerly known as Adi Finechem Limited) (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made there under including the accounting standards and matters which are required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis fo rour audit opinion on the standalone financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
9. We draw your attention to the Note no. 35 to the standalone financial statements regarding accounting for issue of equity shares and compulsorily convertible preference shares with a corresponding debit to general reserve and surplus in the profit and loss, in accordance with a Scheme of arrangement between the Company, Privi Organics Limited and Privi Organics India Limited (formerly known as Adi Aromatic Limited), approved by National Company Law Tribunal, Mumbai Bench.
Our opinion is not qualified in respect of this matter.
Other Matter
10. The standalone financial statements of the Company for the year ended March 31, 2016, were audited by another firm of chartered accountants under the Companies Act, 2013 who, vide their report dated April 29, 2016, expressed an unmodified opinion on those financial statements.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11. As required by ''the Companies (Auditor''s Report) Order, 2016'', issued by the Central Government of India in terms of subsection (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
12. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the Directors as on March 31, 2017 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 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 A.
(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2017 on its financial position in its standalone financial statements. Refer Note 29 to the standalone financial statement;
ii. The Company did not have any long-term contracts including derivative contracts as at March 31, 2017;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017.
iv. The Company has provided requisite disclosures in the standalone financial statements 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
- Refer Note 33.
Referred to in paragraph 12 (f) of the Independent Auditorsâ Report of even date to the members of Fairchem Specialty
Limited (formerly known as Adi Finechem Limited) on the standalone financial statements for the year ended March 31, 2017
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of Fairchem Specialty Limited (formerly known as Adi Finechem Limited) (âthe Companyâ) as of March 31, 2017 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
2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting 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 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 Act.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act 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 ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017 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.
Referred to in paragraph 11 of the Independent Auditors'' Report of even date to the members of Fairchem Speciality Limited (Formerly known as Adi Finechem Limited) on the Standalone financial statements as of and for the year ended March 31, 2017.
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 12 on fixed assets to the financial statements, are held in the name of the Company, except for as mentioned here under:
Total Number of Cases |
Nature of Assets |
Gross Block (Amount in Rs. in lakhs) |
Net Block (Amount in Rs. in lakhs) |
Remarks |
1 |
Leasehold Land |
441.05 |
433.34 |
The Asset is registered in the name of Adi Finechem Limited. The saidname of the company was changed to Fairchem Specialty Limited vide certificate dated October 6, 2016. The Company has initiated process for change of name of the said asset. |
ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. 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. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Act in respect of the loans and investments made, and guarantees and security provided by it. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 of the Act.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs and duty of excise duty, value added tax as at March 31, 2017 which have not been deposited on account of a dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. in lakhs) |
Period to which the amount relates |
Forum where the dispute is pending |
The Income Tax Act, 1961 |
Income Tax liability on account of various disallowances |
8.59 |
Assessment year 2006 - 2007 |
Income Tax Appellate Tribunal |
The Central Excise Act, 1944 |
Demand in respect of Excise duty and Cenvat |
22.79 |
Year 2012 - 13 |
The Commissioner (Appeals - II) Central Excise, Ahmadabad |
Name of the statute |
Nature of dues |
Amount (Rs. in lakhs) |
Period to which the amount relates |
Forum where the dispute is pending |
Service Tax The Finance Act, 1994 |
Demand in respect of Cenvat credit reversal |
3.85 |
February 2013 to November 2014 |
The Commissioner (Appeal) Central Excise, Ahmadabad |
2.44 |
December 2014 to August 2015 |
The Commissioner (Appeal) Central Excise, Ahmadabad |
||
Central Sales Tax Act, 1956 and The Gujarat Value added tax 2003 |
Demand in respect of Input Tax Credit |
4.71 |
Year 2011 - 12 |
Dy. Commissioner of Commercial Tax - Appeal, Ahmadabad |
8.22 |
Year 2012 - 13 |
Dy. Commissioner of Commercial Tax - Appeal, Ahmadabad |
||
Customs Act, 1962 |
Demand in respect of custom duty on imports |
5.20 |
Year 2007-08 |
Office of Commissioner of Customs, NhavaSheva |
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments). The term loans were applied for the purposes for which those are raised.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the standalone financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
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 into any non cash transactions with its Directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are 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. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse & Co.
Chartered Accountants LLP
Chartered Accountants
Firm Registration Number:304026E/ E-300009
Place : Ahmadabad Priyanshu Gundana
Date : May 11, 2017 Partner
M No : 109553
Mar 31, 2016
To the Members of Adi Finechem Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Adi Finechem Limited (âthe Companyâ), which comprise 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 the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ 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 Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorsâ 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 Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, 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, of the state of affairs of the company as at 31st March, 2016 and its Profit and its Cash Flow for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by â the Companies (Auditorâs Report) Order, 2016â (âthe Orderâ), issued by the Central Government of India in terms of sub section (11) of section 143 of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order,
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) 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) 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; and
(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
(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
I The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 28 to the financial statement;
II The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
III There were no amounts which were required to be transferred to Investor Education and Protection Fund.
âAnnexure Aâ to Independent Auditorsâ Report
Referred to in paragraph 1 under the heading âReport on Other Legal & Regulatory Requirements of our report of even date to the financial statements of the Company for the year ended 31st March, 2016.
1) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the programme, a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the book records and the physical fixed assets have been noticed.
(c) The title deeds of immovable properties are held in the name of the company.
2) (a) The management has conducted the physical verification of inventory at reasonable intervals.
(b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.
3) 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 provisions of clause 3 (iii) (a) to (c) of the Order are not applicable to the Company.
4) The company has not given any loans, made any investments, given any guarantees or provided any security cover under the provisions of section 185 and 186 of the Act.
5) The company has not accepted any deposits from the public within the meaning of section 73,74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
6) We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, maintenance of cost records has been prescribed under sub-section (1) of section 148 of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate and complete.
7) (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, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 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 provident fund, employees state insurance, duty of customs, cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, VAT, CST and duty of excise / service tax have not been deposited by the Company on account of disputes;
Sr. No. |
Name of the Statute |
Nature of Dues |
Period to which amount relates (F.Y.) |
Forum where dispute is pending |
Amount (in Rs.) |
1 |
Income Tax Act, 1961 |
Interest |
2004-05 |
Income Tax Appellate Tribunal |
2,429 |
2 |
Income Tax Act, 1961 |
Income Tax and interest |
2005-06 |
Income Tax Appellate Tribunal |
8,59,646 |
3 |
Income Tax Act, 1961 |
Fringe Benefit tax |
2005-06 |
Income Tax Officer |
8,040 |
4 |
Income Tax Act, 1961 |
TDS & Interest |
2010-11 |
Income Tax Appellate Tribunal |
5,86,100 |
5 |
Central Excise Act |
Excise Duty including Interest & penalty as applicable |
Demand pertaining to F.Y 2012-13 |
The Commissioner (Appeals) Central Excise, Ahmadabad |
22,79,219 |
6 |
Cenvat Credit Rules |
Reversal of Credit of Service Tax on sales commission plus interest & penalty |
From February, 2013 to November, 2014 |
The Commissioner (Appeals) Central Excise, Ahmadabad |
3,84,692 |
7 |
Cenvat Credit Rules |
Reversal of Credit of Service Tax on sales commission plus interest & penalty |
From December, 2014 to August, 2015 |
Order received on 04.04.2016 appeal is yet to be filed before The Commissioner (Appeals), Central Excise, Ahmadabad |
2,43,913 |
8 |
Gujarat Value added Tax Act and Central Sales Tax Act. |
Reversal of input tax credit |
2011-2012 |
Order received on 07/04/2016. Appeal is yet to be filed before the appropriate forum. |
4,71,023 |
Total |
48,35,062 |
8) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.
9) Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and term Loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company.
10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;
12) As the company is not Nidhi company and the Nidhi Rules, 2014 are not applicable to it, the provisions of clause 3 (xii) of the Order are not applicable to company.
13) In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
14) 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 provisions of clause 3 (xiv) of the Order are not applicable to the Company.
15) 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 persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company.
16) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company.
âAnnexure Bâ referred to in paragraph number 2 (f) under the âReport on other legal and regulatory requirementsâ of the Independent Auditorsâ Report of even date to the members of Adi Finechem Ltd. on the financial statements for the year ended 31st March, 2016.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Adi Finechem Limited (âthe Companyâ) as of 31st March, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The 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. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, 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 auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls 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 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 authorisations of management and Directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 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 Jhaveri Shah & Co.
Chartered Accountants
FRN : 127390W
Place : Ahmedabad Ronak Shah
Date : 29th April, 2016 Partner
M No : 102249
Mar 31, 2015
We have audited the accompanying financial statements of Adi Finechem
Limited ("the Company"), which comprise the Balance Sheet as at
31st March, 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended and a summary of the significant
accounting policies and other explanatory information.
Management's Responsibility for the 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 with the Accounting principles
generally accepted in India including Accounting Standards specified
under section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014. This responsibility also includes maintenance
of adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance
of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the
financial statements that give true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors' Responsibility
OOur 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 Rules made there under.
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Those Standards require
that we comply with the ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control relevant to the
Company's preparation of the financial statements that give a true
and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion
on whether the company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the Management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, 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, 2015;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date, and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015
("the Order"), as amended, issued by the Central Government of
India in terms of sub section (11) of section 143 of the Act, we give
in the Annexure a statement on the matters specified in paragraphs 3
and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
(d) 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) On the basis of the written representations received from the
Directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st March,
2015, from being appointed as a Director in terms of section 164 (2) of
the Act; and.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us;
I The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 28 to the
financial statement;
II The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses;
III There has not been an occasion in case of the company during the
year under report to transfer any sum to the Investor Education and
Protection Fund. The question of delay in transferring such does not
arise.
Annexure to Independent Auditors' Report
Annexure referred to in our Independent Auditors' Report to the
members of Adi Finechem Limited (the company) on the financial
statements for the year ended 31st March, 2015. We report that:
1. In respect of its Fixed Assets:
a. The company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets;
b. As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
physical verification;
2. In respect of inventories:
a. Physical verification of inventory has been conducted at reasonable
intervals by the management;
b. The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business;
c. The company is maintaining proper records of inventory. As explained
to us, there was no material discrepancies noticed on physical
verification of inventory as compared to the book records.
3. The company has not granted any loans to companies, firms or other
parties covered in the register maintained under section 189 of the
Companies Act, 2013.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchase of inventory, fixed assets and for the sale of goods. During
the course of audit, we have not observed any major weaknesses in
internal control system.
5. The company has not accepted any deposit from the public.
6. We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, maintenance of cost records has been
prescribed under sub-section (1) of section 148 of the Companies Act
2013 and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate and complete.
7. According to the information and explanations given to us in respect
of statutory and other dues:
a. According to the information and explanations given to us and on the
basis of our examination of the 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 other material statutory dues have
been regularly deposited during the year by the Company with the
appropriate authorities.
According to the information and explanation given to us, no undisputed
amounts payable in respect of provident fund, employees state
insurance, income tax, sales tax, wealth tax, service tax, duty of
customs, duty of excise, value added tax, cess and other material
statutory dues were in arrears as at 31 March 2015 for a period of more
than six months from the date they became payable.
b. According to the information and explanations given to us, there are
no material dues of provident fund, employees state insurance, sales
tax, wealth tax, service tax, duty of customs, value added tax, cess
which have not been deposited with the appropriate authorities on
account of any dispute. However,
according to information and explanations given to us, the following
dues of income tax, and duty of excise have not been deposited by the
Company on account of disputes;
Name of the Statute Nature of Due Period to which
amount realtes FY
Income Tax Act, 1961 Interest 2004-05
Income Tax Act, 1961 Income Tax and interest 2005-06
Income Tax Act, 1961 Fringe Benefit tax 2005-06
Income Tax Act, 1961 TDS & Interest 2010-11
Central Excise Act Excise Duty including Demand
Interest & penalty as Pertaining to
applicable F.Y 2012-13
Name fo the Statute Forum where dispute is Amount
pending (in Rs.)
Income Tax Act 1961 Income Tax Appellate Tribunal 2,429
Income Tax Act 1961 Income Tax Appellate Tribunal 8,59,646
Income Tax Act 1961 Income Tax Officer 8,040
Income Tax Act 1961 Commissioner of Income Tax 5,86,100
Income Tax Act 1961 Joint Commissioner, Central 22,79,219
Excise, Ahmedabad
Total 37,35,434
c. There has not been an occasion in case of the Company during the
year under report to transfer any sum to the Investor Education and
Protection Fund. The question of reporting any delay in transferring
such sum does not arise.
8. 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.
9. The company has not defaulted in the repayment of term loan from
bank. The company did not have any outstanding dues to financial
institution or debenture holders during the year.
10. In our opinion and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
others from bank or financial institutions.
11. According to the information and explanations given to us, term
loans availed by the Company were, prima facie, applied by the company
for the purpose for which they were raised.
12. According to the information and explanations given to us, during
financial year no fraud on or by the company has been noticed or
reported during the course of our audit.
For Jhaveri Shah & Co.
Chartered Accountants
FRN : 127390W
Place : Ahmedabad Ronak Shah
Date : 4th May, 2015 Partner
M No : 102249
Mar 31, 2014
We have audited the accompanying financial statements of Adi Finechem
Limited ("the Company"), which comprise the Balance Sheet as at 31st
March, 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
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") read with the General Circular 15/2013
dated 13th September, 2013 of the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act 2013.This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and 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 the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the 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 the Management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date, and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), as amended, 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 it appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the 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 Companies Act, 1956 read with
the General Circular 15/2013 dated 13th September 2013 of the Ministry
of Corporate Affairs in respect of section 133 of the Companies Act
2013; and
(e) On the basis of the written representations received from the
Directors as on 31st March, 2014 taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st March,
2014, from being appointed as a Director in terms of section 274 (1)
(g) of the Companies Act, 1956.
Annexure to Independent Auditors'' Report
Referred to in our report to the members of Adi Finechem Limited (the
Company) for the year ended 31st March, 2014. We report that:
(1) In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets;
(b) As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
physical verification;
(c) The Company has not disposed off a substantial part of fixed assets
during the year.
(2) In respect of inventories:
(a) Physical verification of inventory has been conducted at reasonable
intervals by the management;
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business;
(c) The Company is maintaining proper records of inventory. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
(3) (a) The Company has not granted any loans to companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956.
(b) The Company has taken loans from seven companies covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year and year end balance of such
loans aggregates to Rs. 455 lacs and Rs. 455 lacs respectively.
(c) In our opinion, the rate of interest and other terms and conditions
on which such loans have been taken are not, prima facie, prejudicial
to the interest of the Company.
(d) The terms of repayment have not been stipulated and hence the
question of any overdue amount does not arise. The Company is regular
in payment of interest.
(4) In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory, fixed assets and for the sale
of goods. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
(5) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in 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 contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceed the value of rupees five lacs in respect of each party
during the year have been made at prices which appear reasonable as per
the information available with the Company.
(6) According to the information and explanations given to us, the
Company has not accepted any deposit from the public as per the
provisions of sections 58A, 58AA or other relevant provisions of the
Companies Act, 1956 and the rules framed there under.
(7) Internal Audit is carried out by a firm of Chartered Accountants.
On the basis of the reports made by them to the management, in our
opinion, the internal audit system is commensurate with its size and
nature of its business.
(8) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of section 209 of the
Companies Act and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate and complete.
(9) According to the information and explanations given to us in
respect of statutory and other dues:
(a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, sales tax, customs duty, excise
duty, income-tax, wealth tax, service tax, cess and other material
statutory dues applicable to it;
(b) According to the information and explanation given to us, no
undisputed amounts payable in respect of income tax, sales tax, wealth
tax, service tax, custom duty and excise duty were in arrears as at
31st March, 2014 for a period of more the six months from the date they
became payable;
(c) According to the information and explanations given to us, details
of disputed sales tax, income tax, customs duty, wealth tax, excise
duty and cess which have not been deposited as on 31st March, 2014 on
account of any dispute are given below :
Period to
which
Sr. Forum where Amount
Name of the
Statute Nature of Dues amount
relates
No. dispute is
pending (in Rs.)
(Financial
Year)
1 Income Tax
Act, 1961 Interest 2004-05 Income Tax
Appellate
Tribunal 2,429
2 Income Tax
Act, 1961 Income Tax
and interest 2005-06 Income Tax
Appellate
Tribunal 8,59,646
3 Income Tax
Act, 1961 Fringe Benefit
tax 2005-06 Income Tax
Officer 8,040
4 Central
Excise Act Excise Duty
including Demand Joint
Commissioner, 22,79,219
Interest &
penalty as pertaining
to Central
Excise,
Ahmedabad
applicable FY 2012-13
Total 31,49,334
(10) The Company has no accumulated losses as at 31st March, 2014 and
it has not incurred any cash losses in such financial year ended on
that date or in the immediately preceding financial year.
(11) In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in the repayment
of term loan from bank.
(12) According to the information and explanations given to us, the
Company has not given any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(13) The provisions of special statute applicable to chit fund, nidhi /
mutual benefit fund / societies are not applicable to the Company.
(14) The Company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of clause
4(xiv) of the Companies (Auditors'' Report) Order, 2003 is not
applicable to the Company.
(15) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(16) According to the information and explanations given to us, term
loans availed by the Company were, prima facie, applied by the Company
for the purpose for which they were raised.
(17) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company and after
placing reliance on the reasonable assumptions made by the Company for
classification of long term and short term usages of funds, we are of
the opinion that prima facie, the funds raised on short-term basis have
not been used for long term investment.
(18) The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under section
301 of the Act.
(19) No debentures have been issued by the Company and hence the
question of creating securities or charges in respect thereof does not
arise.
(20) During the year, the Company has not raised money by public issue.
(21) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
financial year.
For Jhaveri Shah & Co.
Chartered Accountants
FRN : 127390W
Place : Ahmedabad Ronak Shah
Date : 19th May, 2014 Partner
M No : 102249
Mar 31, 2013
We have audited the accompanying fnancial statements of Adi Finechem
Limited ("the Company"), which comprise the Balance Sheet as at 31st
March , 2013, the Statement of Proft and Loss and the Cash Flow
Statement for the year then ended, and a summary of the signifcant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
fnancial statements that give a true and fair view of the fnancial
position, fnancial performance and cash fows of the Company in
accordance with the Accounting 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 fnancial 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 fnancial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the fnancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the fnancial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the fnancial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control relevant to the
Company''s preparation and fair presentation of the fnancial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Management, as well as evaluating the overall
presentation of the fnancial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid fnancial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
(b) in the case of the Statement of Proft and Loss, of the proft of the
Company for the year ended on that date, and
(c) in the case of the Cash Flow Statement, of the cash fows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003("the
Order") issued by the Central Government of India in terms of section
227 (4A) of the Act, we give in the Annexure a statement on the matters
specifed 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 it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Proft and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Proft 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 31st March, 2013 taken on record by the Board of
Directors, none of the Directors is disqualifed as on 31st March, 2013,
from being appointed as a Director in terms of section 274 (1) (g) of
the Act.
Referred to in Paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements" of our report of even date
(1) In respect of its Fixed Assets :
(a) The company has maintained proper records showing full particulars,
including quantitative details and situation of fxed assets.
(b) As explained to us, all the fxed assets have been physically
verifed by the management in a phased periodical manner which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
physical verifcation.
(c) The Company has not disposed off a substantial part of fxed assets
during the year.
(2) In respect of inventories:
(a) Physical verifcation of inventory has been conducted at reasonable
intervals by the management;
(b) The procedures of physical verifcation of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business;
(c) The company is maintaining proper records of inventory. As
explained to us, there were no material discrepancies noticed on
physical verifcation of inventory as compared to the book records.
(3) (a) The company has not granted any loans to companies, frms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956.
(b) The Company has taken loans from seven companies covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year and yearend balance of such
loans aggregates to Rs. 455 lacs and Rs. 455 lacs respectively.
(c) In our opinion, the rate of interest and other terms and conditions
on which such loans have been taken are not, prima facie, prejudicial
to the interest of the company.
(d) The terms of repayment have not been stipulated and hence the
question of any overdue amount does not arise. The Company is regular
in payment of interest.
(4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business, for the purchase of inventory, fxed assets and for the sale
of goods. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system
(5) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in 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 contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceed the value of rupees fve lacs in respect of each party during
the year have been made at prices which appear reasonable as per the
information available with the company.
(6) According to the information and explanations given to us, the
company has not accepted any deposit from the public as perthe
provisions of sections 58A, 58AA or other relevant provisions of the
Companies Act, 1956 and the rules framed there under.
(7) Internal Audit is carried out by a frm of Chartered Accountants. On
the basis of the reports made by them to the management, in our
opinion, the internal audit system is commensurate with its size and
nature of its business.
(8) We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of section 209 of the
Companies Act and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate and complete.
(9) According to the information and explanations given to us in
respect of statutory and other dues :
(a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, sales tax, customs duty, excise
duty, income-tax, wealth tax, service tax, cess and other material
statutory dues applicable to it.
(b) According to the information and explanation given to us, no
undisputed amounts payable in respect of income tax, sales tax, wealth
tax, service tax, custom duty and excise duty were in arrears as at
31st March, 2013 for a period of more the six months from the date they
became payable.
(c) According to the information and explanations given to us, details
of disputed sales tax, income tax, customs duty, wealth tax, excise
duty and cess which have not been deposited as on 31st March, 2013 on
account of any dispute are given below :
Period to
which
Sr. Forum where Amount
Name of the
Statute Nature of
Dues amount
relates
No. dispute is
pending (in Rs.)
(Financial
Year)
1 Income Tax
Act, 1961 Interest 2004-05 Income Tax
Appellate
Tribunal 2,429
2 Income Tax
Act, 1961 Income Tax
and interest 2005-06 Income Tax
Appellate
Tribunal 8,59,646
3 Income Tax
Act, 1961 Fringe
Beneft tax 2005-06 Income Tax
Offcer 8,040
Total 870,115
(10) The Company has no accumulated losses as at 31st March, 2013 and
it has not incurred any cash losses in such fnancial year ended on that
date or in the immediately preceding fnancial year.
(11) In our opinion and according to the information and explanations
given by the management, the company has not defaulted in the repayment
of term loan from bank.
(12) According to the information and explanations given to us, the
company has not given any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(13) The provisions of special statute applicable to chit fund, nidhi/
mutual beneft fund/societies are not applicable to the Company.
(14) The company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of clause
4(xiv) of the Companies (Auditors'' Report) Order, 2003 are not
applicable to the Company.
(15) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from bank
or fnancial institutions.
(16) According to the information and explanations given to us, term
loans availed by the Company were, prima facie, applied by the company
for the purpose for which they were raised
(17) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company and after
placing reliance on the reasonable assumptions made by the Company for
classifcation of long term and short term usages of funds, we are of
the opinion that prima facie,the funds raised on short-term basis have
not been used for long term investment.
(18) The company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under section
301 of the Act
(19) No debentures have been issued by the company and hence the
question of creating securities or charges in respect thereof does not
arise.
(20) During the year, the company has not raised money by public issue.
(21) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
fnancial year.
For Jhaveri Shah & Co.
Chartered Accountants
FRN : 127390W
Place : Ahmedabad Ronak Shah
Date : 18th May, 2013 Partner
M No : 102249
Mar 31, 2012
1. We have audited the attached Balance Sheet of M/s. Adi Finechem
Limited as at 31st March, 2012 the Profit & Loss Account and Cash Flow
Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
Order.
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 purposes of our
audit;
(ii) in our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examinations of
those books;
(iii) the Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the Balance Sheet, Profit & 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 31 st March, 2012 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with notes thereon
give the information required by the Companies Act, 1956, in the manner
so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of the affairs of the
Company as at 31st March, 2012;
b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
Physical verification.
(c) The Company has not disposed off a substantial part of fixed assets
during the year.
2. (a) Physical verification of inventory has been conducted during
the year by the management at reasonable intervals.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and nature of its business.
(c) The Company is maintaining proper records of inventory. As
explained to us there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. (a) The Company has not granted any loans to companies, firms or
other parties listed in the Register maintained under section 301 of
the Companies Act, 1956.
(b) The Company has taken loans from seven companies covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year and the year-end balance of
such loans aggregates to Rs. 455 lacs and Rs. 455 lacs respectively.
(c) In our opinion, the rate of interest and other terms and conditions
on which such loans have been taken are not, prima facie, prejudicial
to the interest of the Company.
(d) The terms of repayment have not been stipulated and hence the
question of any overdue amount does not arise.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of inventory, fixed assets and for the sale
of goods During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in 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 contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceed the value of rupees five lacs in respect of each party
during the year have been made at prices which appear reasonable as per
information available with the company.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Companies Act,
1956 and the rules framed there under with regard to the deposits
accepted from the Public.
7. Internal audit is carried out by a firm of Chartered Accountants.
On the basis of the reports made by them to the management, in our
opinion, the Internal Audit System is commensurate with the size and
nature of its business.
8. We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub- section (1) of Section 209 of the
Act, and are of the opinion that prima facia, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. According to the information and explanations given to us in
respect of statutory and other dues:
(a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, sales-tax, customs duty, excise
duty, income-tax, wealthtax, service-tax, cess and other material
statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income-tax, sales-tax,
wealth-tax, servicetax, custom duty and excise duty were in arrears as
at 31 st March, 2012 for a period of more than six months from the date
they became payable.
(c) According to the information and explanations given to us, details
of disputed sales tax, income tax, customs duty, wealth tax, excise
duty and cess which have not been deposited as on 31st March, 2012 on
account of any dispute are given below:
Period to
Sr. Name of the Nature of which the Forum were Amount
No. Statute dues amount dispute is
pending (Rs.)
relates
1. Income Tax
Act, 1961 Income Tax 1999-2000 Income tax 44,03,292
and Interest Applet
Tribunal
2. Income Tax
Act, 1961 Income Tax 2000-2001 Income tax 20,51,781
and Interest Applet
Tribunal
3. Income Tax
Act, 1961 Interest u/s 2004-2005 Income tax 2,429
234D Applet
Tribunal
4. Income Tax
Act, 1961 Income Tax 2005-2006 Income tax 8,59,646
and Interest Applet
Tribunal
5. Income Tax
Act, 1961 Fringe 2005-2006 ITO 8,040
Benefits Tax
TOTAL 73,25,188
10. The company has no accumulated losses as at 31/03/2012 and it has
not incurred any cash losses in the financial year ended on that date
or in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in the repayment
of term loans from bank.
12. According to the information and explanations given to us, the
Company has not given any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The provisions of special statute applicable to chit fund,
Nidhi/Mutual Benefit fund/societies are not applicable to the company.
14. The company is not dealing or trading in shares, securities,
debentures and other investments accordingly, the provisions of clause
4(xiv) of the Companies (Auditor's Report) Order 2003 are not
applicable to the company.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. According to the information and explanations given to us, term
loans availed by the Company were, prima facie, applied by the Company
during the year for the purposes for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, and after
placing reliance on the reasonable assumptions made by the company for
classification of long term and short term usages of funds, we are of
the opinion that, prima-facie, funds raised on short term basis to the
extent of Rs.73.85 lacs have been used for long term investment in
fixed assets including capital work- inprogress.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. No debentures have been issued by the Company and hence the
question of creating securities or charges in respect thereof does not
arise.
20. During the year the Company has not raised money by public issue.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
financial year.
Place : Ahmedabad For Jhaveri Shah & Co
Date : 26th May, 2012 Chartered Accountants
FRN : 127390W
Ronak Shah
Partner
M No: 102249
Mar 31, 2011
1. We have audited the attached Balance Sheet of M/s. Adi Finechem
Limited (Formerly known as H. K. Finechem Limited) as at 31st March,
2011, the Profit & Loss Account and Cash Flow Statement 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
presenta- tion. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
Order.
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 purposes of our
audit;
(ii) in our opinion, proper books of account as required by law have
been kept by the company
so far as appears from our examinations of those books; (iii) the
Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt
with by this
report are in agreement with the books of account;
(iv) in our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
(v) on the basis of written representations received from the directors
as on 31st March, 2011 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with notes thereon
give the information required by the Companies Act, 1956, in the manner
so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of the affairs of the
Company as at 31st March, 2011;
b) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our report of even date)
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of
fixed assets.
(b) As explained to us, the Company has designed a phased program of
verification of fixed assets to cover all the items over a period of
three years which in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. Pursuant to the
program, some part of fixed assets was physically verified by the
management during the year. According to information and explanations
given to us, no material discrepancies were noticed by the man- agement
on such verification.
(c) The Company has not disposed off a substantial part of fixed assets
during the year.
2. (a) Physical verification of inventory has been conducted during
the year by the management at reasonable intervals.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and nature of its business.
(c) The Company is maintaining proper records of inventory. As
explained to us there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. (a) The Company has not granted any loans to companies, firms or
other parties listed in the Register maintained under section 301
of the Companies Act, 1956.
(b) The Company has taken loans from six companies covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year and the year-end balance of
such loans aggregates to Rs. 440 lacs and Rs. 375 lacs respectively.
(c) In our opinion, the rate of interest and other terms and conditions
on which such loans have been taken are not, prima facie, prejudicial
to the interest of the Company.
(d) The terms of repayment have not been stipulated and hence the
question of any overdue amount does not arise.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its busi-
ness for the purchase of inventory, fixed assets and for the sale of
goods and services. During the course of audit, we have not observed
any continuing failure to correct major weaknesses in internal control
system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in 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 contracts or arrangements entered
in the register maintained under section 301 of the Compa- nies Act,
1956 do not exceed the value of rupees five lacs in respect of such
parties during the year.
6. In our opinion and according to the information and explanations
given to us, the company has com- plied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Companies Act,
1956 and the rules framed there under with regard to the deposits
accepted from the Public.
7. Internal audit is carried out by a firm of Chartered Accountants.
On the basis of the reports made by them to the management, in our
opinion, the Internal Audit System is commensurate with the size and
nature of its business.
8. The Company is not required to maintain Cost Records under section
209 (1) (d) of the Companies Act, 1956 and therefore clause (viii)
relating to its maintenance is not applicable.
9. According to the information and explanations given to us in
respect of statutory and other dues: (a) The Company is generally
regular in depositing with appropriate authorities undisputed statu-
tory dues including provident fund, investor education and protection
fund, sales-tax, customs duty, excise duty, income-tax, wealth-tax,
service-tax, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income-tax, sales-tax,
wealth-tax, service-tax, custom duty and excise duty were in arrears as
at 31st March, 2011 for a period of more than six months from the date
they became payable.
(c) According to the information and explanations given to us, details
of disputed sales tax, income
st tax, customs duty, wealth tax, excise duty and cess which have not
been deposited as on 31
March, 2011 on account of any dispute are given below:
Period to Forum where
Sr. Nature of Amount
Name of Statue which the dispute is
No. Dues (Rs.)
amount
relates pending
1. Income Tax Act,
1961 Income Tax 1999-2000 Income tax 44,03,292
and Interest Applet
Tribunal
2. Income Tax Act,
1961 Income Tax 2000-2001 Income tax 20,51,781
and Interest Applet
Tribunal
3. Income Tax Act,
1961 Interest u/s 2004-2005 Income tax 2,429
234D Applet
Tribunal
4. Income Tax Act,
1961 Income Tax 2005-2006 Income tax 8,59,646
and Interest Applet
Tribunal
5. Income Tax Act,
1961 Fringe
Benefits 2005-2006 ITO 8,040
Tax
TOTAL 73,25,188
10. The company has no accumulated losses as at 31/03/2011 and it has
not incurred any cash losses in the financial year ended on that date
or in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in the repayment
of term loans from bank.
12. According to the information and explanations given to us, the
Company has not given any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The provisions of special statute applicable to chit fund,
Nidhi/Mutual Benefit fund/societies are not applicable to the company.
14. The company is not dealing or trading in shares, securities,
debentures and other investments ac- cordingly, the provisions of
clause 4(xiv) of the Companies (Auditors Report) Order 2003 are not
applicable to the company.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. According to the information and explanations given to us, term
loans availed by the Company were, prima facie, applied by the Company
during the year for the purposes for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the bal- ance sheet of the Company, and after
placing reliance on the reasonable assumptions made by the company for
classification of long term and short term usages of funds, we are of
the opinion that, prima-facie, funds raised on short term basis have
been used for long term investment in fixed assets including capital
work-in-progress amounting to Rs. 447.72 lacs.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. No debentures have been issued by the Company and hence the
question of creating securities or charges in respect thereof does not
arise.
20. During the year the Company has not raised money by public issue.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
financial year.
For, JHAVERI SHAH & COMPANY
Chartered Accountants
Firm Regn. No. : 127390 W
RONAK SHAH
AHMEDABAD
Partner
DATED : 12th May, 2011 Membership No. : 102249
Mar 31, 2010
1. We have audited the attached Balance Sheet of M/s. H. K. Finechem
Limited as at 31 st March, 2010, the Profit & Loss Account and Cash
Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Companys manage-
ment. 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
presenta- tion. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
Order.
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 purposes of our
audit;
(ii) in our opinion, proper books of account as required by law have
been kept by the com- pany so far as appears from our examinations of
those books;
(iii) the Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the Balance Sheet, Profit & 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 31 st March, 2010 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2010 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with notes thereon
give the information required by the Compa- nies Act, 1956, in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of the affairs of the
Company as at 31 st March, 2010;
b) in the case of the Profit and Loss Account, of the loss for the year
ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our report of even date)
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the Company has designed a phased program of
verification of fixed assets to cover all the items over a period of
three years which in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. Pursuant to the
program, some part of fixed assets was physically verified by the
management during the year. According to information and explanations
given to us, no material discrepancies were noticed by the man- agement
on such verification.
(c) The Company has not disposed off a substantial part of fixed assets
during the year.
2. (a) Physical verification of inventory has been conducted during
the year by the management at reasonable intervals.
(b) The procedures of physical verification of inventory followed by
the management are reason- able and adequate in relation to the size of
the Company and nature of its business.
(c) The Company is maintaining proper records of inventory. As
explained to us there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. (a) The Company Kas not granted any loans to companies, firms or
other parties listed in the Register maintained under section 301 of
the Companies Act, 1956.
(b) The Company has taken loans from six companies covered in the
Register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year and the year-end balance of
such loans aggregates to Rs. 275 lacs and Rs. 125 lacs respectively.
(c) In our opinion, the rate of interest and other terms and conditions
on which such loans have been taken are not, prima facie, prejudicial
to the interest of the Company.
(d) The terms of repayment have not been stipulated and hence the
question of any overdue amount does not arise.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its busi-
ness for the purchase of inventory, fixed assets and for the sale of
goods and services. During the course of audit, we have not observed
any continuing failure to correct major weaknesses in internal control
system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in 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 contracts or arrangements entered in
the register maintained under section 301 of the Com- panies Act, 1956
do not exceed the value of rupees five lacs in respect of such parties
during the year.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Com- panies Act,
1956 and the rules framed there under with regard to the deposits
accepted from the Public.
7. Internal audit is carried out by a firm of Chartered Accountants.
On the basis of the reports made by them to the management, in our
opinion, the Internal Audit System is commensurate with the size and
nature of its business.
8. The Company is not required to maintain Cost Records under section
209 (1) (d) of the Companies Act, 1956 and therefore clause (viii)
relating to its maintenance is not applicable.
9. According to the information and explanations given to us in
respect of statutory and other dues:
(a) The Company is generally regular in depositing with appropriate
authorities undisputed statu- tory dues including provident fund,
investor education and protection fund, sales-tax, customs duty, excise
duty, income-tax, wealth-tax, service-tax, cess and other material
statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income-tax, sales-tax,
wealth-tax, service-tax, custom duty and excise duty were in arrears as
at 31 st March, 2010 for a period of more than six months from the date
they became payable.
(c) According to the information and explanations given to us, details
of disputed sales tax, income tax, customs duty, wealth tax, excise
duty and cess which have not been deposited as on 31st March, 2010 on
account of any dispute are given below :
Period to Forum where
Sr. Name of
Statue Nature of which the dispute is Amount
No. Dues (Rs.)
amount relates pending
1 Income Tax
Act, 1961 Income Tax 1999-2000 CIT (Appeals) 44,03,290
and Interest
2 Income Tax
Act, 1961 Income Tax 2000-2001 CIT (Appeals) 20,51,785
and Interest
3 Income Tax
Act, 1961 Interest u/s 2004-2005 CIT (Appeals) 2,429
234D
4 Income Tax
Act, 1961 Income Tax 2005-2006 CIT (Appeals) 8,59,646
and Interest
5 Income Tax
Act, 1961 Fringe
Benefit 2005-2006 I.T.0. 8,040
Tax
TOTAL 73,25,190
10. The Company has no accumulated losses at the end of the financial
year. The company has not incurred cash losses in the financial year
under report but has incurred cash losses in the immedi- ately
preceding financial year.
11. In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in the repayment
of term loans from bank.
12. According to the information and explanations given to us, the
Company has not given any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The provisions of special statute applicable to chit fund,
Nidhi/Mutual Benefit fund/societies are not applicable to the company.
14. The company is not dealing or trading in shares, securities,
debentures and other investments ac- cordingly, the provisions of
clause 4(xiv) of the Companies (Auditors Report) Order 2003 are not
applicable to the company.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. According ûthe information and explanations given to us, term
loans availed by the Company were, prima facie, applied by the Company
during the year for the purposes for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, and after
placing reliance on the reasonable assumptions made by the company for
classification of long term and short term usages of funds, we are of
the opinion that, prima-facie, funds raised on short term basis have
been used for long term investment in fixed assets including capital
work-in-progress amounting to Rs.419.59 lacs.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. No debentures have been issued by the Company and hence the
question of creating securities or charges in respect thereof does not
arise.
20. During the year the Company has not raised money by public issue.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
financial year.
For, SHAH & SHAH ASSOCIATES
Firm Regn. No. : 113742 W
Chartered Accountants
AHMEDABAD Partner
SUNIL K. DAVE
DATED : 15th May, 2010 Membership No. : 047236