Mar 31, 2016
Report on the Financial Statements
I have audited the accompanying financial statements of INDOKEM LIMITED, which comprises Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss Account for the year ended 31st March 2016, Cash Flow Statement for the year ended 31st March 2016 and a summary of Significant Accounting Policies and other explanatory information.
Managementâs 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 (âthe Actâ) with respect to the presentation of these financial statements that give a true and fair view of the financial position and financial performance 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 accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
I have conducted the audit in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation 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 adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors as well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified audit opinion.
Basis for Qualified Opinion
The inventories of the Ankelshwar Plant brought to Mumbai amounting to '' 186.25 lakhs at the year end is as valued and certified by the management only (Refer Para No 2 (c) of Note No 28 of Notes to Accounts)
Qualified Opinion
In my opinion and to the best of the information and according to the explanations given to me, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2016.
(b) In the case of the Profit and Loss Account, of the loss for the year ended on that date.
(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Disclaimer of Opinion
According to the information and explanation given to me, the Company has not established its internal financial control over financial reporting on criteria based on or 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. Because of this reason, I am unable to obtain sufficient appropriate audit evidence to provide a basis for my opinion whether the Company had adequate internal financial controls over financial reporting and whether such internal financial controls were operating effectively as at 31st March 2016.
I have considered the disclaimer reported above in determining the nature, timing and extent of my audit tests applied in my audit of the financial statements of the Company and the disclaimer does not affect my opinion on the financial statements of the Company.
Emphasis of Matter
1. As referred in Para No 2(a) of Note No 28 of Notes to Accounts, the Company has repaid loan outstanding of Rs. 1410 lakhs in the current financial year and impact of additional interest of Rs.164.06 lakhs and gain on settlement of principal amount of such loan Rs.68.15 lakhs is accounted in the current year.
2. As referred in Para No 2(b) of Note no 28 of Notes to Accounts, there are old debtors of Rs.306.52 lakhs which in the opinion of the management are good for recovery and no provision for doubtful debts is required.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) order, 2016 (âThe Orderâ) issued by the Central Government in terms of sub section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that :
a. I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of audit .
b. In my opinion proper books of accounts as required by law have been kept by the Company so far as appears from my examination of those books .
c. The Balance Sheet, Statement of Profit and Loss and other notes thereon dealt with by this report are in agreement with the books of accounts.
d. In my opinion, the Balance Sheet and Statement of Profit and Loss comply with the accounting standards referred to in the Section 133 of the Companies Act, 2013 and read with Rule No 7 of the Companies Accounting Rules 2014.
e. On the basis of representations received from the directors as on March 31, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164(2) of the Act.
f. There are no other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,2014.
(REFERRED TO IN THE REPORT OF EVEN DATE OF THE AUDITOR TO THE MEMBERS OF INDOKEM LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31st March 2016)
1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
b) As explained to me major portion of the fixed assets have been physically verified by the management at the year end, 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) According to the information and explanations given to me and on the basis of examination of the records of the Company, the title deeds of immoveable properties are held in the name of the Company other than those disclosed in the table below:
Asset Class |
No of cases |
Gross Block (Rs. In lakhs) |
Net Block (Rs. In lakhs) |
Remarks |
Building at Essel House Delhi Branch |
1 |
28.40 |
16.80 |
Pending completion of the relevant formalities, pursuant to the scheme of amalgamation, the title remains to be vested in the Company. Such assets continue in the name of erstwhile amalgamated Company. |
2. a) Inventories have been physically verified during the year by the management at reasonable intervals. In my opinion, the frequency of verification is reasonable.
b) The discrepancies noticed on verification between physical stocks and book records are not material and have been adequately dealt with in books of the Company.
3. According to the information and explanations given to me, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013 (''the Actâ), except for unsecured loan to a Company amounting to Rs.271.63 lakhs for which no terms and conditions and repayments schedule is stipulated.
4. In my opinion and according to the information and explanations given to me, the Company has not granted any loans, or made any investments or provided any guarantee or security to the parties covered under Section 185 of the Act,
5. In my opinion and according to the information and explanations given to me, the Company has not accepted any deposits from the public within the meaning of provisions of sections 73 to 76 and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.
6. As the turnover of the products to which the cost records, as per provisions of the Section 148 of the Companies Act 2013 are applicable, is below threshold limit, the Company is of opinion that provisions of maintenance of cost records as per the said section are not applicable to the Company.
7. a) According to the information and explanations given to me and on the basis of examination
of the records of the Company, the amounts deducted / accrued in the books of account in respect of undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, income tax, sales tax, service tax, value added tax, custom duty, excise duty, cess and other statutory dues, as applicable, have been generally regularly deposited during the year by the Company with the appropriate authorities except for delay in few cases. According to the information and explanations given to me, there were no undisputed amounts payable in respect of above dues at the year end for the period of more than six months from the date they become payable. There are dues of Rs.100.83 lakhs towards property tax, land revenue tax, provident fund damages, professional tax etc. outstanding for more than six months which in the opinion of the management is of disputed nature and provided only as prudent norms of accounting.
b) On the basis of my examination of the documents and records there are disputed statutory dues which remain to be deposited with the appropriate authorities at year end.
Nature of Dues |
Amount (Rs. in lakhs) |
Period to which amount relates |
Forum where the dispute is pending |
Income Tax |
2.09 |
2006-07 |
Income Tax Appellet Tribunal |
32.76 |
2009-10 |
Commissioner Of Income Tax (Appeals) |
|
430.30 |
2011-12 |
Commissioner Of Income Tax (Appeals) |
|
36.25 |
2013-14 |
Commissioner Of Income Tax (Appeals) |
|
Income Tax |
30.13 |
2001-02 |
Commissioner Of Income Tax (Appeals) |
28.06 |
2002-03 |
Commissioner Of Income Tax (Appeals) |
|
32.51 |
2003-04 |
Commissioner Of Income Tax (Appeals) |
|
30.60 |
2004-05 |
Commissioner Of Income Tax (Appeals) |
|
42.17 |
2005-06 |
Commissioner Of Income Tax (Appeals) |
|
41.68 |
2006-07 |
Commissioner Of Income Tax (Appeals) |
|
11.92 |
2007-08 |
Commissioner Of Income Tax (Appeals) |
|
22.18 |
2008-09 |
Commissioner Of Income Tax (Appeals) |
|
28.73 |
2009-10 |
Commissioner Of Income Tax (Appeals) |
|
8.59 |
2010-11 |
Commissioner Of Income Tax (Appeals) |
|
Sales Tax |
9.92 |
1990-91 |
Sales Tax Tribunal |
11.53 |
1995-96 |
Assistant Commissioner (Appeals) |
|
7.50 |
2002-03 |
Sales Tax Tribunal |
|
1.54 |
2004-05 |
Assistant Commissioner (Appeals) |
|
Service Tax |
2.78 |
2004-05 |
Service Tax and Excise Tribunal |
8. According to the information and explanations given to me and on the basis of examination of the records, the Company has not defaulted during the year in repayment of loans and borrowings from banks except for the sum of Rs. 1410 lakhs due to a bank which was in default in the earlier years and settled during the year and the Company has fully repaid the same( Refer Para No 2(a) of Note no. 28 to the Notes to Accounts).The Company does not have any loans or borrowings from financial institutions or government or dues to debenture holders during the year except for vehicle loan from a bank where no default in repayment is found.
9. According to the information and explanations given to me and on the basis of examination of the records, the Company has not raised any monies by way of initial public offers (including debt instruments) and has not obtained any term loans during the year. Accordingly paragraph 3(ix) of the Order is not applicable to the Company.
10. During the course of my examination of the books and records of the Company, carried out in the accordance with the generally accepted audit practices in India, and according to the information and explanations given to me, I 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 I have been informed of any such case by the management.
11. In my opinion and according to the information and explanations given to me, 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 of the Act.
12. In my opinion and according to the information and explanations given to me, the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicable to it. Accordingly paragraph 3(xii) of the Order is not applicable to the Company.
13. In my opinion and according to the information and explanations given to me, the Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act where applicable and the details of such related party transactions have been disclosed in the financial statements as required by Accounting Standard (AS)18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014.
14. According to the information and explanations given to me and based on the examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.
15. According to the information and explanations given to me and based on the examination of the records of the Company, the Company has not entered into non cash transactions with directors or persons connected with them. Accordingly paragraph 3(xv) of the Order is not applicable to the Company.
16. In my opinion and according to the explanations given to me, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.
For Sheth Doctor and Associates
Chartered Accountants
Firm Regn. No. 124822W
Paresh S. Doctor
Place: Mumbai Proprietor
Date: 12th May, 2016 Membership No. 36056
Mar 31, 2015
I have audited the accompanying fnancial statements of INDOKEM LIMITED,
which comprises Balance Sheet as at 31st March, 2015, the Statement of
Proft and Loss Account for the year ended 31st March 2015, Cash Flow
Statement for the year ended 31st March 2015 and a summary of
Signifcant Accounting Policies and other explanatory information.
Managements ' 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 presentation of these financial statements that give a true and fair
view of the financial position and financial performance in accordance
with the accounting principles generally ac- 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 account- in 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 accounting records, relevant
to the preparation and presentation of the financial state- mints that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
My responsibility is to express an opinion on these financial statements
based on my audit. I have taken into account the provisions of the Act,
the accounting and auditing standards and matters which are required to
be included in the audit report under the provisions of the Act and the
Rules made there under.
I have conducted the audit in accordance with the Standards on Auditing
specified under Section 143 (10) of the Act. Those Standards require
that I comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the fnancial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on
whether the Company has in place 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 Company's Directors as well as evaluating the
overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and
appropriate to provide a basis for my qualifed audit opinion.
Basis for Qualified Opinion
The inventories of the Ankelshwar Plant brought to D. M. godown in the
last year amounting to Rs. 333.26 lacs at the year end is as valued and
certifed by the management only (Refer Para No 2 ( c ) of Note No 27 of
Notes on Accounts).
Qualifed Opinion
In my opinion and to the best of the information and according to the
explanations given to me, except for the effects of the matters
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India :
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2015.
(b) In the case of the Proft and Loss Account, of the Proft for the
year ended on that date.
(c) In the case of the Cash Flow Statement , of the cash fows for the
year ended on that date.
Emphasis of Matter
1. As referred in Para No 2(a) of Note No 27 of Notes on Accounts, the
Company has repaid loan outstanding of Rs. 1410 lacs in the current
financial year of 2015-16 and impact of additional interest of Rs. 164.06
lacs and gain on settlement of principal amount of such loan Rs. 67.39
lacs is accounted in the current year.
2. As referred in Para No 2(b) of Note no 27 of Notes on Accounts
,there are old debtors of Rs. 306.52 lacs which in the opinion of the
management are good for recovery and no provision for doubtful debts is
required.
3. As referred in Para No 3 of Note No 27 of Notes on Accounts, a sum
of Rs. 1.73 lacs has been debited to the opening balance of Proft and
Loss Account as per transitional provisions due to change in the method
of providing depreciation on fxed assets.
4. The accounts of the Company for the current year includes those of
amalgamated companies namely M/s invoked Exports Ltd. and M/s Khatau
Capacitors Pvt. Ltd. ( Transferor companies) in pursuance to the Scheme
of Amalgamation with such adjustments and details as given in Para No
16 of Note No 27 of Notes on Accounts.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) order, 2015 ("The
Order") issued by the Central Government of India in terms of sub
section (11) of section 143 of the Act, I give in the Annexure a
statement on the matters specified in the paragraphs 3 and 4 of the
Order.
2. As required by Section 143(3) of the Act, I report that :
a. I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purpose of audit
.
b. In my opinion proper books of accounts as required by law have been
kept by the Company so far as appears from my examination of those
books .
c. The Balance Sheet, Statement of Proft and Loss and other notes
thereon dealt with by this Report are in agreement with the books of
accounts.
d. In my opinion, the Balance Sheet and Statement of Proft and Loss
comply with the accounting standards referred to in the Section 133 of
the Companies Act,2013 and read with Rule No 7 of the Companies
Accounting Rules 2014.
e. On the basis of representations received from the directors as on
March 31, 2015 and taken on record by the Board of Directors, none of
the directors is disqualified as on March 31,2015 from being appointed
as a director in terms of Section 164(2) of the Act.
f. There are no other matters to be included in the Auditor's Report
in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules,2014.
ANNEXURE TO THE AUDITORS' REPORT
(REFERRED TO IN THE REPORT OF EVEN DATE OF THE AUDITORS TO THE MEMBERS
OF INDOKEM LIMITED ON THE ACCOUNTS FOR THE PERIOD ENDED 31st March
2015)
1] a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) As explained to me major portion of the fixed assets have been
physically verified by the management at the year end, which in my
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] a) The inventories have been physically verified by the management at
the year end. In my opinion the frequency of verifcation is reasonable.
b) In my opinion the procedures of physical verifcation of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company has maintained proper records of inventories. The
discrepancies noticed on physical verifcation of stocks as compared to
book records were not material and the same have been properly dealt
with in the books of accounts.
3] The Company has granted interest free loans, secured or unsecured
amounting to Rs. 301.63 lacs (Includes amount receivable on account of
reinstatement of Interest etc. amounting to Rs. 294.77 lacs) to
Companies, forms and other parties listed in the register maintained
under Section 189 of the Companies Act 2013. There are no terms
stipulated as to its repayment.
4] In my opinion and according to the information and explanations
given to me, there are adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchases of fxed assets and for the sale of services. During the
course of my audit I have not observed any continuing failure to
correct major weaknesses in internal controls system.
5] The Company has not accepted any deposits from the public within the
meaning of provisions of sections 73 to 76 and rules framed there
under.
6] Maintenance of cost records under section 148 (1) of the Act are not
applicable to the Company.
7] a) In my opinion and according to the information and explanations
given to me, the Company is generally regular in depositing undisputed
statutory dues including provident fund, employees state insurance,
income tax, custom duty excise duty etc with the appropriates
authorities. There are no arrears of outstanding statutory dues, as on
31st March, 2015 for a period of more than six months from the date
they became payable.
b) As on 31st March, 2015, according to the records of the Company,
there are no disputed dues on account of sale tax, excise duty and
income tax, except those mentioned below.
Nature of
Dues Amount Period to which Forum where the
dispute ispending
(Rs.in lacs) the amount relates
Income Tax 267.98 2001-02 to Commissioner of Income
Tax (Appeals)
2009-10
Income Tax 343.84 2006-07 Commissioner of Income
Tax (Appeals)
2009-10 Commissioner of Income
Tax (Appeals)
2011-12 Commissioner of Income
Tax (Appeals)
Sales Tax 9.92 1990-91 Sales Tax Tribunal
11.53 1995-96 Assistant Commissioner
(Apepal)
7.50 2002-03 Sales Tax Tribunal
1.54 2004-05 Assistant Commissioner
(Apepal)
Service Tax 2.78 2004-05 Service Tax & Excise
Tribunal
8] The accumulated losses of the Company exceeds ffty per cent of its
net worth at the year end. However the Company has not incurred cash
loss during the year.
9] The Company has defaulted in repayment of dues to a bank amounting
to Rs. 17.80 crores at the year end, however they have been paid in full
in subsequent year (Refer Note No 2(a) of Note No 27 )
10] According tothe information and explanations given to me, the
Company has not given any guarantee for loans taken by others from
banks and financial institutions.
11] To the best of my knowledge and belief and according to the
information and explanations given to me, the term loans have been
utilized for the purpose for which they were obtained.
12] To the best of my knowledge and belief and according to the
information and explanations given to me, no fraud on or by the Company
was noticed or reported during the year.
For Sheth Doctor and Associates
Chartered Accountants
Firm Regn. No. 124822W
Paresh S Doctor
Proprietor
Membership No. 36056
Place : Mumbai
Date : 3rd November 2015
Mar 31, 2014
1. I have audited the accompanying financial statements of INDOKEM
LIMITED (the "company"), which comprises Balance Sheet as at 31st
March, 2014, the Statement of profit and Loss Account and also the Cash
Flow Statement of the Company for the year then ended, and a summary of
significant accounting policies and other explanatory information, which
I have signed under reference to this report.
Managements'' Responsibility for the Financial Statements
2. 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 fow of the Company in accordance with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act,1956 (ÂThe Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
3. My responsibility is to express an opinion on these financial
statements based on my audit. I have conducted the audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that I comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the management, as well as evaluating the overall
presentation of the financial statements.
5. I believe that the audit evidence I have obtained is suffcient and
appropriate to provide a basis for my qualified opinion.
Basis for qualified Opinion
6. The Inventories of the Company at Ankleshwar Plant have been
evaluated at Rs. 367.61 lacs against its book value of Rs. 412.17 lacs as
certified by the Company and the said inventories have been transferred
to Dahisar Mori godown of the Company at Mumbai. (Refer Note No.3(b) of
Note No.26). Ankleshwar Plant operations have already been discontinued
for since 16th July, 2009 and currently the same is under process of
dismantling Further there are no records or physical verifcation of
Fixed Assets lying at the said Plant amounting to Rs.468.49 Lacs and the
same has been accepted as certified by management only.
Qualified Opinion
7. In our opinion and to the best of our information and according to
the explanations given to us, except for the effect of the matter
described in the Basis for qualified Opinion paragraph,
the financial statements 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 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.
Emphasis of Matter
8. I draw attention to following Notes given in Note No.26 of the
financial statements , which describe the uncertainty related to the
final outcome of the respective events:
a) No.4a Re: No provision is made for further penal interest on Loan
balance from the bank as already settled pursuant to One Time
Settlement in last year for failure to repay the same as per terms of
settlement.
b) No.4b Re: Unadjusted old debit balances under debtors amounting to Rs.
247.10 lacs are not provided for since the company is in the process of
recovering these amounts.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor''s Report) Order, 2003, as
amended by Âthe Companies (Auditor''s Report) (Amendment) Order, 2004''
("The Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act and on the basis of such
checks as I considered appropriate and according to information and
explanation given to me, I give in the Annexure a statement on the
matters specified in the paragraphs 4 and 5 of the Order.
10. As required under provisions of section 227(3) of the Companies
Act, 1956 I report that :
a) I have obtained all the information and explanations which to the
best my knowledge and belief were necessary for the purpose of audit;
b) In my opinion proper books of accounts as required by law have been
kept by the Company so far as appears from my examination of those
books.
c) The Balance Sheet, Statement of profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
accounts.
d) In my opinion, the Balance Sheet, Statement of profit and Loss and
Cash Flow statement comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Act.
e) On the basis of representations received from the directors as on
March 31, 2014 and taken on record by the Board of Directors, none of
the directors is disqualified as on March 31,2014 from being appointed
as a director in terms of clause (g) of sub-section of Section 274 of
the Act.
ANNEXURE TO THE AUDITORS'' REPORT (REFERRED TO IN THE REPORT OF EVEN
DATE OF THE AUDITORS TO THE MEMBERS OF INDOKEM LIMITED ON THE ACCOUNTS
FOR THE YEAR ENDED 31st MARCH 2014)
1. Except for fixed assets at Ankleshwar plant as separately referred
in Sl.no.3(a) of Note no.26, The Company has maintained fixed assets
register during the year. The Company has programme for physical
verifcation of its fixed assets which in my opinion is reasonable having
regard to the size of the Company and the nature of its fixed assets.
2. Inventories:
a) Inventories have been physically verifed at the year end by the
management. In my opinion, the frequency of verifcation is reasonable.
b) In my opinion, the procedures of physical verifcation of inventories
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. The
discrepancies noticed on verifcation between the physical stocks and
book records were not material.
3. a) The Company had taken loan from three (three) Directors
amounting to Rs. 827.03 Lacs (Rs. 768.03 Lacs) covered in the register
maintained under section 301 of the Companies Act, 1956. The Company
has granted loans to five (five) Companies covered in the register
maintained u/s. 301 of the Companies Act, 1956 amounting to Rs. 127.53
lacs (Rs. 127.02 lacs), Maximum outstanding amount Rs. 127.53 lacs (Rs.
127.02 Lacs) during the year. However out of the same, amount of Rs.
127.51 has since been adjusted.
b) In my opinion, the rate of interest and other terms and conditions
on which loans have been taken from directors listed in the register
maintained under section 301 of the Companies Act, 1956 are not, prima
facie, prejudicial to the interest of the Company. The Company has not
charged interest on the Loans given to Companies.
c) There are no stipulations, attached to the loans for its repayment.
4. In my opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of stores, raw materials including
components, packing materials, plant and machinery, equipment and other
assets and with regards to sale of goods. During the course of my
audit we have not observed any continuing failure to correct major
weakness in the internal control procedures.
5. a) According to the information and explanations given to me, I am
of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered. b) In my opinion and
according to the information and explanation given to me, the
transactions made in pursuance of such contracts or arrangements and
exceeding the value of rupees five lakhs in respect of any party during
the year have been made at prices which are reasonable having regard to
the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public within
the meaning of sections 58A & 58AA of the Act and the rules framed
thereunder.
7. The Company has no internal audit system during the year.
8. The Company, according to the information and explanations given to
me, is maintaining accounts and records prescribed by the Central
Government under section 209 (1)(d) of the Companies Act, 1956, and I
am of the opinion that, prima facie, the prescribed accounts and
records have been made and maintained. I have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. a) Regarding depositing of undisputed statutory dues including
Provident Fund, Employees State Insurance, Income Tax, Sales Tax,
Service Tax, Professional Tax and Property tax with appropriate
authorities, there were delays. Arrears outstanding in respect of all
such statutory dues as at the last day of the financial year concerned
for a period of more than six months from the date they became payable
amounts to Rs. 103.98 lacs (Rs. 154.22 lacs). b) As at March 31 2014,
according to the records of the Company and the information and
explanations given to me, the following are the particulars of disputed
dues (provided / considered contingent liability as appropriate) on
account of sales tax, income tax, customs duty, wealth tax, excise duty
and cess matters that have not been deposited.
Name of the Nature of Dues Amount involved Forum where the
Statute (Rs. in Lacs) dispute is
pending
Sales Tax Act Sales Tax 17.42 Tribunal
13.07 Commissioner (Appeals)
Income Tax Act Income Tax 446.77 Commissioner (Appeals)
Service Tax Act Service Tax 2.78 Commissioner (Appeals)
10. The Company has incurred cash loss in the current year as also in
the immediately preceeding financial year and the accumulated losses are
more than 50% of its net worth as at 31st March 2014.
11. Based on the examination of books of accounts and related records
and according to the information and explanations provided to me, the
Company has defaulted in repayment of dues to Bank and Financial
Institutions. Out of total dues, a sum of Rs. 1410.00 lacs (Rs. 1410.00
lacs) and interest Rs. 222.07 lacs (Rs. 74.02 lacs) is found overdue and in
default.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In my opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund / nidhi / mutual benefit fund / societies are
not applicable to the Company.
14. In my opinion and according to the information and explanations
given to me, the Company is not a dealer or trader in securities.
15. The Company has given guarantees amounting to Rs. nil (Rs. 570 lacs)
for loans taken by others from banks and financial institution (as
referred in Note No. 26 (1e) of Annual Accounts) and terms and
conditions are not prima facie prejudicial to the interest of the
Company.
16. In my opinion and according to the information and explanations
given to me, no term Loan has been raised during the year.
17. According to the information and explanations given to me and on
an overall examination of the Balance Sheet of the Company, I report
that no funds raised on short-term basis have been used for long-term
investment. No long-term funds have been used to finance short-term
assets.
18. The Company has not made any preferential allotment of shares
during the year to parties and Companies covered in the register
maintained under Section 301 of the Act.
19. The Company has not raised any funds by the way of debenture
during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. During the course of my examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to me, I have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor have I been
informed of such case by the management.
For Sheth Doctor and Associates
Chartered Accountants
(Firm Regn No. 124822W)
Paresh S Doctor
Place : Mumbai. Proprietor
Dated : 15th May, 2014 Membership No. 36056
Mar 31, 2013
Report on the Financial Statements
1. I have audited the accompanying fnancial statements of INDOKEM
LIMITED(the ''company"), which comprises Balance Sheet as at 31st March,
2013, the Statement of Proft and Loss Account and also the Cash Flow
Statement of the Company for the period then ended, and a summary of
signifcant accounting policies and other explanatory information, which
I have signed under reference to this report.
Managements'' Responsibility for the Financial Statements
2. 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 fow of the Company in accordance with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act,1956 (''The Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the fnancial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
3. My responsibility is to express an opinion on these fnancial
statements based on my audit. I have conducted the audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that I comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the fnancial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the fnancial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the fnancial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the fnancial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the management, as well as evaluating the overall
presentation of the fnancial statements.
5. I believe that the audit evidence I have obtained is suffcient and
appropriate to provide a basis for my qualifed opinion.
Basis for Qualifed Opinion
6. The Inventories of the company at Ankleshwar Plant are subject to
physical verifcation and has been valued at Rs. 412.17 Lacs after making
provision of Rs. 45.11 Lacs for obsolescence etc. as certifed by
management only(Refer Sl. No. 3(b) of Note No.26). In the absence of
stock records, physical verifcation, or any audit evidence for such
inventory, the same has been accepted as certifed by management only
even though Ankleshwar Plant operations have already been discontinued
since 16th July, 2009 and currently the same is under process of
dismantling. Further there are no records or physical verifcation of
Fixed Assets lying at the said Plant amounting to Rs. 481.23 Lacs and the
same has been accepted as certifed by management only.
Qualifed Opinion
7. In our opinion and to the best of our information and according to
the explanations given to us, except for the effect of the matter
described in the Basis for Qualifed Opinion paragraph, the fnancial
statements 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 Proft and Loss Account, of the Loss for the
period ended on that date : and
(c) In the case of the Cash Flow Statement, of the cash fows for the
period ended on that date.
Emphasis of Matter
8. I draw attention to following Sl. Nos. given in Note No.26 of the
fnancial statements, which describe the uncertainty related to the fnal
outcome of the respective events:
a) No.4a Re: No provision is made for further penal interest on Loan
balance from the bank as already settled pursuant to One Time
Settlement in last year for failure to repay the same as per terms of
settlement.
b) No.4b Re: Unadjusted old debit balances under debtors amounting to
Rs.346.19 lacs are not provided for since the company is in the process
of recovering these amounts.
Our opinion is not qualifed in respect of this matter.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor''s Report) order ,2003,as
amended by ''the Companies (Auditor''s Report) (Amendment)Order,2004''
(''The Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act and on the basis of such
checks as I considered appropriate and according to information and
explanation given to me, I give in the Annexure a statement on the
matters specifed in the paragraphs 4 and 5 of the Order.
10. As required under provisions of section 227(3) of the Companies
Act, 1956 I report that :
a) I have obtained all the information and explanations which to the
best my knowledge and belief were necessary for the purpose of audit;
b) In my opinion proper books of accounts as required by law have been
kept by the Company so far as appears from my examination of those
books.
c) The Balance Sheet, Statement of Proft and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
accounts.
d) In my opinion, the Balance Sheet, Statement of Proft and Loss and
Cash Flow statement comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Act.
e) On the basis of representations received from the directors as on
March 31, 2013 and taken on record by the Board of Directors, none of
the directors is disqualifed as on March 31,2013 from being appointed
as a director in terms of clause (g) of sub-section of Section 274 of
the Act.
ANNEXURE TO THE AUDITORS'' REPORT
(REFERRED TO IN THE REPORT OF EVEN DATE OF THE AUDITORS TO THE MEMBERS
OF INDOKEM LIMITED ON THE ACCOUNTS FOR THE PERIOD ENDED 31st MARCH
2013)
1. Except for fxed assets at Ankleshwar plant as separately referred
in Sl.no.3(a) of Note no.26,
The Company has maintained fxed assets register during the year. The
Company has programme for physical verifcation of its fxed assets which
in my opinion is reasonable having regard to the size of the Company
and the nature of its fxed assets.
2. Inventories:
Except for Inventories at Ankleshwar Plant as separately referred in Sl
No.3(b) of Note No 26
a) Inventories have been physically verifed at the year end by the
management. In my opinion, the frequency of verifcation is reasonable.
b) In my opinion, the procedures of physical verifcation of inventories
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. The
discrepancies noticed on verifcation between the physical stocks and
book records were not material.
3. a) The Company had taken loan from three (three) Directors
amounting to Rs. 768.03 lacs (Rs. 768.53 lacs) covered in the register
maintained under section 301 of the Companies Act, 1956. The Company
has granted loans to fve (fve) Companies covered in the register
maintained u/s. 301 of the Companies Act, 1956 amounting to Rs. 127.02
lacs (Rs.159.00 lacs), Maximum outstanding amount Rs. 127.02 lacs (Rs.159.00
lacs) during the year.
b) In my opinion, the rate of interest and other terms and conditions
on which loans have been taken from directors listed in the register
maintained under section 301 of the Companies Act, 1956 are not, prima
facie, prejudicial to the interest of the Company. The Company has not
charged interest on the Loans given to Companies.
c) There are no stipulations, attached to the loans for its repayment.
4. In my opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of stores, raw materials including
components, packing materials, plant and machinery, equipment and other
assets and with regards to sale of goods. During the course of my audit
we have not observed any continuing failure to correct major weakness
in the internal control procedures.
5. a) According to the information and explanations given to me, I am
of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered.
b) In my opinion and according to the information and explanation given
to me, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of rupees fve lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public within
the meaning of sections 58A & 58AA of the Act and the rules framed
thereunder.
7. In my opinion and according to the information & explanations given
to me, the company has internal audit system during the period.
However, the same is not commensurate with the size of the business of
the Company and needs to be strengthened.
8. The Company, according to the information and explanations given to
me, is maintaining accounts and records prescribed by the Central
Government under section 209 (1)(d) of the Companies Act, 1956, and I
am of the opinion that, prima facie, the prescribed accounts and
records have been made and maintained. I have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. a) Regarding depositing of undisputed statutory dues including
Provident Fund, Employees State Insurance, Income Tax, Sales Tax,
Service Tax, Professional Tax and Property Tax with appropriate
authorities, there were delays. Arrears outstanding in respect of all
such statutory dues as at the last day of the fnancial year concerned
for a period of more than six months from the date they became payable
amounts to Rs. 154.22 lacs (Rs. 111.66 lacs),
b) As at March 31 2013, according to the records of the Company and the
information and explanations given to me, the following are the
particulars of disputed dues (provided / considered contingent
liability as appropriate) on account of sales tax, income tax, customs
duty, wealth tax, excise duty and cess matters that have not been
deposited.
Name of the
Statute Nature of Dues Amount
involved Forum where the dispute
is pending
(Rs. in Lacs)
Sales Tax
Act Sales Tax 17.42 Tribunal
Sales Tax
Act Sales Tax 13.07 Commissioner (Appeals)
Income Tax Act Income Tax 115.41 Commissioner (Appeals)
Service Tax Act Service Tax 2.78 Commissioner (Appeals)
10. The Company has incurred cash loss in the current year as also in
the immediately preceeding fnancial year and the accumulated losses are
more than 50% of its net worth as at 31st March 2013.
11. Based on the examination of books of accounts and related records
and according to the information and explanations provided to me, the
Company has defaulted in repayment of dues to Bank and Financial
Institutions. Out of total dues, a sum of Rs. 1410.00 lacs (Rs. 1410.00
lacs) and interest Rs. 74.02 is found overdue and in default.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In my opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund / nidhi / mutual beneft fund / societies are
not applicable to the Company.
14. In my opinion and according to the information and explanations
given to me, the Company is not dealer or trader in securities.
15. The Company has given guarantees amounting to Rs. 570 lacs ( Rs. 1030
lacs) for loans taken by others from banks and fnancial institution (as
referred in Note No. 26 (1e) of Annual Accounts) and terms and
conditions are not prima facie prejudicial to the interest of the
company.
16. In my opinion and according to the information and explanations
given to me, no Term Loan has been raised during the year.
17. According to the information and explanations given to me and on
an overall examination of the Balance Sheet of the Company, I report
that no funds raised on short-term basis have been used for long-term
investment. No long-term funds have been used to fnance short-term
assets.
18. The Company has not made any preferential allotment of shares
during the year to parties and Companies covered in the register
maintained under Section 301 of the Act.
19. The Company has not raised any funds by way of debentures during
the year.
20. The Company has not raised any money by way of public issue during
the year.
21. During the course of my examination of the books of accounts
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to me, I have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor have I been
informed of such case by the management.
For Sheth Doctor & Associates
Chartered Accountants
(Firm Regn No. 124822W)
Paresh S Doctor
Proprietor Membership No. 36056
Place : Mumbai.
Dated : 13th May, 2013
Sep 30, 2012
We have audited the attached Balance Sheet of INDOKEM LIMITED as at
30th September, 2012, the Profit and Loss Account and also the Cash
Flow Statement of the Company for the period 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.
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.
As required by the Companies (Auditor's Report) Order, 2003, issued
by the Government of India in terms of sub-section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to in paragraph above,
we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit except for Inventory Records of Ankleshwar Plant as mentioned in
SINo.5(b) of Note No. 26;
b) In our opinion, the Company has kept proper books of accounts as
required by law so far as appears from our examination of those books;
c) The Balance Sheet, Profit and Loss Account anjl Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
d) In our opinion, the Balance Sheet, the Profit & Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Section 211 (3C) of the Companies
Act, 1956;
e) On the basis of the written representation received from the
directors of the Company as at the date of the Report and taken on
record by the Board of Directors we report that no director is
disqualified from being appointed as a director of the company under
clause (g) of sub-section (1) of Section 274 of the of the Companies
Act, 1956;
f) Value of the Inventory at Ankleshwar Plant amounting to Rs. 457.28
lacs being accepted as certified by the management only as referred in
SI No. 5(b) of Note No. 26;
g) Subject to above, the said accounts, in our opinion and to the best
of our information and according to the explanations given the said
accounts read together with the significant accounting policies and
notes thereon give the information required by the Companies Act, 1956,
in the manner so required, and present a true and fair view, in
conformity with the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs as at 30*1
September 2012,
ii) In the case of the profit and loss account, of the loss for the
period ended on that date; and
iii) In the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(REFERRED TO IN THE REPORT OF EVEN DATE OF THE AUDITORS TO THE MEMBERS
OF INDOKEM LIMITED ON THE ACCOUNTS FOR THE PERIOD ENDED 30st SEPT 2012)
1. The Company has maintained fixed assets register during the period.
The Company has programme for physical verification of its fixed assets
which in our opinion is reasonable having regard to the size of the
Company and the nature of its fixed assets. The Company has disposed
off factory building and plant at Ankleshwar during the period.
2. Inventories:
Except for Inventories at Ankleshwar Plant as separately referred in SI
No.5(b) of Note No. 26:
a) Inventories have been physically verified at the year end by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification of
inventories 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. The
discrepancies noticed on verification between the physical stocks and
book records were not material.
3. a) The Company had taken loan from three (three) Directors
amounting to Rs. 768.53 Lacs (Rs. 688.83 Lacs) covered in the register
maintained under section 301 of the Companies Act, 1956. The Company
has granted loans to five Companies covered in the register maintained
u/s. 301 of the Companies Act, 1956 amounting to Rs. 159 lacs (Rs. 127.02
lacs), Maximum amount outstanding during the period Rs. 159 lacs
(127.02) lacs.
b) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from directors listed in the register
maintained under section 301 of the Companies Act, 1956 are not, prima
facie, prejudicial to the interest of the Company. The Company has not
charged interest on the Loans given to Companies.
c) There are no stipulations, attached to the loan for its repayment.
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 with regard to purchase of stores, raw materials including
components, packing materials, plant and machinery, equipment and other
assets and with regards to sale of goods. During the course of our
audit we have not observed any continuing failure to correct major
weakness in the internal control procedures.
5. a) All the transaction with parties covered under section 301 of
the Companies Act, 1956 have been properly entered in the register
maintained under Section 301 of the Act.
b) In our opinion and according to the information and explanation
given to us, the transaction made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act, and exceeding the value of five lakh rupees in respect of any
party during the year have been made at prices which are not comparable
in the absence of similar transactions with other parties.
6. The Company has not accepted any deposits from public during the
period.
7. The Company has no internal audit system during the period.
8. The Company, according to the information and explanations given to
us, is maintaining accounts and records prescribed by the Central
Government under section 209 (1)(d) of the Companies Act, 1956. We have
not examined the contents of these accounts and records. Ã
a) Regarding depositing of undisputed statutory dues including
Provident Fund, Employees State Insurance, Income Tax, Sales Tax, and
Professional Tax with appropriate authorities, there were delays,
arrears outstanding in respect of all such statutory dues as at the
last day of the financial year concerned for a period of more than six
months from the date they became payable amounts to Rs. 111.66 lacs (Rs.
165.95 lacs).
b) As at Sept 30, 2012 according to the records of the Company and the
information and explanations given to us, the following are the
particulars of disputed dues (provided / considered contingent
liability as appropriate) on account of sales tax, income tax, customs
duty, wealth tax, excise duty and cess matters that have not been
deposited.
Name of the
Statute Nature of
Dues Amount
involved Forum where the dispute
is pending
(Rs.in Lacs)
Sales Tax Act Sales Tax 30.49 Commissioner (Appeals)
Income Tax Act Income Tax 21.89 Commissioner (Appeals)
Service Tax Act Service Tax 2.78 Commissioner (Appeals)
10. The Company has incurred cash loss in the current period as also
in the immediately preceding financial year and the accumulated losses
are more than 50% of its net worth as at 30th Sept 2012.
11. Based on the examination of books of accounts and related records
and according to the information and explanations provided to us, the
Company has defaulted in repayment of dues to Bank and Financial
institutions. Out of total repayments made during the year, a sum of Rs.
20 lacs (99.92) lacs is found delayed on various dates as compared to
its schedule of repayments agreed upon in pursuance to loan agreements
(excluding delays which has been regularized by further arrangements).
Out of total dues, a sum of ^1410.00 lacs (740.65) lacs is found
overdue and in default.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion, considering the nature of activities carried on by
the Company during the period, the provisions of any special statute
applicable to chit fund / nidhi / mutual benefit fund / societies are
not applicable to the Company.
14. In our opinion and according to the information and explanations
given to us, the Company is not dealer or trader in securities.
15. The Company has given guarantees (including counter guarantees)
amounting to Rs. 1030 lacs (Rs. 1030 lacs) for loans taken by others from
banks and financial institution (as referred in SI.No.1(e) of Note No.
26) and terms and conditions are not prima facie prejudicial to the
interest of the Company.
16. In our opinion and according to the information and explanations
given to us, no Term Loan has been raised during the period.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment. No long-term funds have been used to finance short-term
assets. '
18. The Company has not made any preferential allotment of shares
during the period to parties and Companies covered in the register
maintained under Section 301 of the Act.
19. The Company has not raised any funds by the way of debenture
during the period.
20. The Company has not raised any money by way of public issue during
the period.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instance of fraud on or by
the Company, noticed or reported during the period, nor have we been
informed of such case by. the management.
For Sheth Doctor & Associates
Chartered Accountants
(Firm Registration No. 124822W)
Mumbai Paresh S. Doctor
Dated: 9th November, 2012 Membership No. 36056
Mar 31, 2010
We have audited the attached Balance Sheet of INDOKEM LIMITED as at
31st March 2010, the Profit and Loss Account and also the Cash Flow
Statement of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
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.
As required by the Companies (Auditors Report) Order, 2003, issued by
the Government of India in terms of sub-section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to in paragraph above,
we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose ofour
audit except for Stores and Inventory Records ofAnkleshwar Plant for
the reasons as mentioned in Note No. 2 of Sen. 20 Notes on Accounts.
b) In our opinion, the Company has kept proper books of accounts as
required by law so far as appears from our examination of those books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
d) In our opinion, the Balance Sheet, the Profit & Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Section 211 (3C) of the Companies
Act, 1956;
e) On the basis of the written representation received from the
directors of the company as at the date of the Report and taken on
record by the Board of Directors we report that no director is
disqualified from being appointed as a director of the company under
clause (g) of sub-section (1) of Section 274 of the of the Companies
Act, 1956; and
f) Value of the Inventory at Ankleshwar Plant amounting to Rs.624.74
lacs Is accepted as certified by the management only for the facts and
reasons mentioned in Note No. 2 ofSch - 20 of Notes on Accounts. In the
absence of details of the original values of the Inventories, we are
unable to report the impact of the same on Profit and Loss Account of
the Company. Subject to above, the said accounts, in our opinion and
to the best our information and according to the explanations given the
said accounts read together with the significant accounting policies
and notes thereon give the information required by the Companies Act,
1956, in the manner so required, and present a true and fair view, in
conformity with the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs as at 31
st March 2010,
ii) In the case of the Profit and Loss Account, of the loss for the
year ended on that date; and
iii) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(REFERRED TO IN THE REPORT OF EVEN DATE OF THE AUDITORS TO THE MEMBERS
OFINDOKEMLIMITED ON THEACCOUNTS FORTHEYEARENDED31stMARCH,2010)
1. The Company should update Fixed Assets Register, so as to show
item-wise details along with its cost and written down values. The
Company has programme for physical verification of its fixed assets
which in our opinion is reasonable having regard to the size of the
Company and the nature of its fixed assets. The Company has disposed
off residential property at Bharuch Colony and Office premises at
Khatau House at Mumbai during the year.
2. Inventories:
Except for Inventories at Ankleshwar Plant as separately referred in
Note No. 2 of Sen- 20 on Note on Accounts:
a) Inventories have been physically verified at the year end by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification of
inventories 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. The
discrepancies noticed on verification between the physical stocks and
book records were not material.
3. a) The Company had taken loan of from a Director amounting to Rs.
594.80 Lacs (Rs. 397.23 Lacs) covered in the register maintained under
section 301 of the Companies Act, 1956. The Company has not granted
loans to Companies, firms or other parties covered in the register
maintained u/s. 301 of the Companies Act, 1956.
b) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from companies listed in the register
maintained under section 301 of the Companies Act, 1956 are not, prima
facie, prejudicial to the interest of the Company.
c) There are no stipulations, attached to the loan for its repayment.
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 with regard to purchase of stores, raw materials including
components, packing materials, plant and machinery, equipment and other
assets and with regards to sale of goods. During the course of our
audit we have not observed any continuing failure to correct major
weakness in the internal control procedures.
5. a) All the transaction with parties covered under section 301 of
the Companies Act, 1956 have been properly entered in the register
maintained under Section 301 of the Act.
b) In our opinion and according to the information and explanation
given to us, the transaction made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act, and exceeding the value of five lakh rupees in respect of any
party during the year have been made at prices which are not comparable
in the absence of similar transactions with other parties.
6. The Company has not accepted any deposits from public during the
year.
7. In our opinion, the scope and coverage of internal audit is not
commensurate with the size of the Company and needs to be strengthened.
8. The Company, according to the information and explanations given to
us, is maintaining accounts and records prescribed by the Central
Government under section 209 (1 )(d) of the Companies Act, 1956. We
have not examined the contents of these accounts and records.
9. a) Regarding depositing of undisputed statutory dues including
Provident Fund, Employees State Insurance, Income Tax, Sales Tax, and
Professional Tax with appropriate authorities, there were delays.
Arrears outstanding in respect of all such statutory dues as at the
last day of the financial year concerned for a period of more than six
months from the date they became payable amounts to Rs 224.96 lacs (Rs.
484.80 lacs),
b) As at March 31, 2010 according to the records of the company and the
information and explanations given to us, the following are the
particulars of disputed dues (provided / considered contingent
liability as appropriate) on account of sales tax, income tax, customs
duty, wealth tax, excise duty and cess matters that have not been
deposited.
Name of the Statute Nature of Dues Amount
involved Forum where the
dispute is pending
(Rs. in Lacs)
Sales Tax Act Sales Tax 100.94 Commissioner
(Appeals)
Income Tax Act Income Tax 11.98 Commissioner
(Appeals)
10. The Company has incurred cash loss in the current year, but not in
the immediately preceding financial year and the accumulated losses are
not more than 50% of its net worth as at 31 st March 2010.
11. Based on the examination of books of accounts and related records
and according to the information and explanations provided to us, the
company has defaulted in repayment of dues to Bank and Financial
institutions. Out of total repayments made during the year, a sum of Rs
243.04 lacs is found delayed on various dates as compared to its
schedule of repayments agreed upon in pursuance to loan agreements
(excluding delays which has been regularized by further arrangements).
Out of total dues, a sum of Rs. 496.47 lacs is found overdue and in
default.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion, considering the nature of activities carried on by
the company during the year, the provisions of any special statute
applicable to chit fund / nidhi / mutual benefit fund / societies are
not applicable to the Company.
14. In our opinion and according to the information and explanations
given to us, the Company is not dealer or trader in securities.
15. The Company has given guarantees (including counter guarantees)
amounting to Rs. 1,816 lacs (Rs. 2,052 lacs) for loans taken by others
from banks and financial institution, (as referred in Note No. 1(e) of
schedule 20 of Annual Accounts) and terms and conditions are not prima
facie prejudicial to the interest of the company except for the fact
that it includes a sum of Rs. 786.00 lacs worth guarantee given on
behalf of subsidiary company viz. Kapsales Electricals Ltd., which has
been registered u/s 15(1) of Sick Industrial Companies (Special
Provisions) Act, 1985.
16. In our opinion and according to the information and explanations
given to us, no Term Loan has been raised during the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment. No long-term funds have been used to finance short-term
assets.
18. The Company has not made any preferential allotment of shares
during the year to parties and Companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
19. The Company has not raised any funds by the way of debenture
during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor have we been
informed of such case by the management.
For Sheth Doctor & Associates
Chartered Accountants
(Firm Registration No. 124822W)
Mumbai Paresh S. Doctor
Dated : 13th August, 2010 Membership No.36056
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