Mar 31, 2015
We have audited the accompanying financial statements of S.S. Organics
Limited ("the Company"), which comprises the Balance Sheet as at March
31,2015, and the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of directors is responsible for matters stated in
sub-section (5) of section 134 of the Companies Act, 2013 ('the act')
with respect to the preparation and presentation 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 Companies (Accounts) Rules, 2014. This responsibility
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
judgements and estimates that are reasonable and prudent; design,
implementation and maintenance adequate internal financial controls,
that are operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143 subsection 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 an adequate internal financial control
system over financial reporting and other operating effectiveness of
such controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company's Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Basis for Qualified Opinion
1. Debtors balance amounts to Rs.64,25,418/- in the financial
statement. Management has not obtained any confirmation of balances
from the debtors for amount Rs.14,69,117./-. In the absence of Debtors
confirmations for our verification we are unable to comment on the
appropriateness of the carrying values of such amount and its
consequential effects, if any, on the financial statements are
presently not ascertainable. Our audit report on the financial
statements for the year ended March 31,2014 was also qualified for the
same matter.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the 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 March 31,2015;
b) in the case of the Statement of Profit and Loss , 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
a) We draw attention to our comments to the financial statements which
describe the uncertainty related to the outcome of the 21 lawsuits
filed against the Company by various Statutory Authorities and Non
Statutory concerns. Our opinion is not qualified in respect of these
matters.
b) Attention is drawn to Note No.9 of the Notes to the Accounts of the
Company, relating to major fire accident occurred on 07-Jan-2015, which
damaged the Plant & Machinery, Buildings, QC Lab equipments, Furniture
& Fixtures and Office Equipments, installed in one of the Blocks. We
are of the opinion that the damage of the fixed assets during the
financial year will not affect the Going Concern status of the Company
due to the measures taken.
Management could not ascertain the damage of individual asset
components. Based on the available information and the claim submitted
with the Insurance Company, damaged assets were removed from the net
block.
Management and the Insurance Company are in the process of evaluating
the claim / loss occurred due to fire.
Actual outcome of the Insurance claim is not ascertained and due to
lack of information loss could not be recognised in the current
financial year 2014-15. On actual receipt of the claim, loss or profit
if any will be accounted.
Report on other Legal and Regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2015("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
b) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above, in our opinion, proper books of
account as required by law have been kept by the Company so far as it
appears from our examination of those books
c) The Company does not have any branches; hence reporting under this
clause is not applicable.
d) 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;
e) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet,
Statement of Profit and Loss, and Cash Flow Statement comply with the
Accounting Standards under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014.
f) The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, may not have an adverse effect on the
functioning of the Company.
g) On the basis of written representations received from the directors
as on March 31,2015, and taken on record by the Board of Directors, none
of the directors are disqualified as on March 31,2015, from being
appointed as a director in terms of sub-section (2) of section 164 of
the Act.
h) The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above.
i) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, 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 20 (c) to
the financial statements;
II. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
III. There were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company
Annexure to the Auditor's Report
The Annexure referred to in paragraph 7 of our report of even date to
the members of S.S. Organics Limited, on the accounts of the company
for the year ended 31st March, 2015.
On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that:
i.
(a) The company has maintained proper records showing full particulars,
including quantitative details and situation of its fixed assets.
(b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.
ii.
(a) As explained to us, inventories have been physically verified
during the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion and on the basis of our examination of the records,
the Company is generally maintaining proper records of its inventories.
No material discrepancy was noticed on physical verification of stocks
by the management as compared to book records.
iii. According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
not granted any loans, secured or unsecured, to companies, firms or
other parties listed in the register maintained under section 189 of
Act.
iv. In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventories & fixed assets and payment
for expenses & for sale of goods. During the course of our audit, no
major instance of continuing failure to correct any weaknesses in the
internal controls has been noticed.
v. The Company has not accepted any deposits from the public covered
under section 73 to 76 of the Companies Act, 2013.
vi. As per information & explanations given by the management,
maintenance of cost records has been prescribed by the Central
Government under sub-section (1) of section 148 of the Act and we are
of the opinion that prima facie the prescribed accounts and records
have been made and maintained.
vii. (a) The company is not regular in depositing the undisputed
statutory dues including Income-tax, Sales-tax, Service Tax, cess with
the appropriate authorities and there have been serious delays in a
large number of cases. According to the information and explanation
provided to us, arrears of undisputed amount outstanding as on 31st
March, 2015 for a period more than six months from the date they became
payable are as follows :
Statement of Arrears of Statutory Dues Outstanding for more than 6
Months
Nature of the Dues Amount (Rs.)
Sales Tax 33,01,137
Professional Tax 2,07,300
Service Tax 10,61,046
TDS 36,59,414
ESI 26,373
b) Statement of Disputed dues as required by the clause are as given
under:
Name of Authority Nature of Dues Amount in Rs.
Customs Customs Duty Rs.62,40,052/-
Department
Office of the Recovery Provident Fund Rs.29,94,301/-
officer - Employees
Provident Fund
Organization
Income Tax Income Tax Rs.11,84,817/-
Department
Income Tax Income Tax Rs.1,36,88,740/-
Department
Income Tax Income Tax Rs.89,24,820/-
Department
Income Tax Income Tax Rs.61,270/-
Department
Name of Authority Financial year to Forum where
which the amount disputes are pending
relates
Customs 1996-97 Hon'ble Customs,
Department Excise, Gold(Control)
Appellate Tribunal,
Bangalore
Office of the Recovery ----- Stay granted by High
officer - Employees Court of Judicature
Provident Fund - Hyderabad For the State
Organization of Telangana &
Andhra Pradesh
Income Tax 2004-05 Income Tax, Circle -
Department 1(1), Hyderabad
Income Tax 2005-06 Asst. Commissioner of
Department Income Tax, Circle - 8(1),
Hyderabad
After reassessment dues
as on date is of
Rs.32,34,522/-.
Income Tax 2005-06 Dy. Commissioner of
Department Income Tax, Circle -
1(1), Hyderabad
Income Tax 2008-09 CPC - Bangalore
Department
(c) According to the information and explanation given to us, there
were no amounts which were required to be transferred to the Investor
Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules there
under.
viii. The accumulated losses of the company at the end of the
accounting period are more than the fifty percent of its net worth. The
company has incurred cash loss of Rs.4,31,96,124/- during the financial
year and Rs. 3,23,99,809/- immediately preceding financial year.
ix. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
x. According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.
xi. Based on our audit procedures and on the information given by the
management, the term loans have been applied for the purpose which they
were raised.
xii. Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud has been noticed or
reported during the course of audit.
For VDNR & Associates
Chartered Accountants
FRN:011251S
(Venkateswarlu D)
Place: Hyderabad Partner
Date:30-May-2015 M.No.028488
Mar 31, 2014
We have audited the accompanying financial statements of S.S. Organics
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 2014. and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor ''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified opinion.
Basis for Qualified Opinion
1. The Company''s fixed assets are carried at historical cost basis.
Management has not charged depreciation for the period 1st April,2007
to 30th June,2013. Has depreciation of amount to Rs.5,97,79,393/- would
have been provided in the books of accoount, the loss after taxes would
be Rs. 10,26,62,648/- as against reported loss of the Rs.
4,28,83,255/-. Our audit report on the financiall statements for the
year ended March 31, 2013 was also qualified for the same matter.
2. Debtors balance amounts to Rs. 84,77,283/- in the financial
statement. Management has not obtained any confirma- tion of balances
from the debtors for amount of Rs. 37,48,991/-. In the absence of
debtors confirmations for our verification we are unable to comment on
the appropriateness of the carrying values of such amount and its
conse- quential effects, if any, on the financial statements are
presently not ascertainable. Our audit report on the financial
statements for the year ended March 31, 2013 was also qualified for the
same matter.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the 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 March 31, 2014;
b) in the case of the Statement Profit and Loss, 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
We draw attention to our comments to the financial statements which
describes the uncertainty related to the outcome of the 29 lawsuits
filed against the Company by various Statutory Authorities and Non
Statutory concerns. Our opinion is not quali- fied in respect of these
matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in para- graphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.;
c) the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.;
d) except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet,
Statement of Profit and Loss and Cash Flow Statement comply with the
accounting standards re- ferred to in sub-section (3C) of section 211
of the Companies Act, 1956;
e) on the basis of written representations received from the Directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure to the Auditor''s Report
The Annexure referred to in paragraph 1 of the Our report of even date
to the members of S.S.Organics Limited, on the accounts of the Company
for the year ended 31st March, 2014.
On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that :
(i)
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
(b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no mate- rial discrepancies
were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, there was no disposal of a substantial part of fixed
assets. Howerer, during the year a part of Land has been disposed in
the process of road widening and a compensation of Rs. 10,73,340/- has
been received from National Highway Authority of India (NHAI), this
does not affect the going concern assumption.
(ii)
(a) As explained to us, inventories (stores & consumables) have been
physically verified during the year by the manage- ment at reasonable
intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedurers of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and on the basis of our examination of the records,
the Company is generally maintaining proper records of its inventories.
No material discrepancy was noticed on physical verification of stocks
by the management as compared to book records.
(iii)
(a) According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
not granted any loan, secured or unsecured to Companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956. Consequently, the provisions of iii (b), iii (c),
iii (d) of the of the order are not applicable to the Company.
(b). According to the information and explanations provided, the
Company has taken loans from parties covered in the register to be
maintained under section 301of the Companies act, 1956. The amount
involved during the year was for Rs.2,26,42,081/- and the closing
balance with respect to such parties stood at Rs.7,87,40,104/-.
(c). These amounts are interest free loans and other terms & conditions
of loans taken by the Company which are unsecured are prima facie not
prejudical to the interests of the Company.
(d). The amounts brought in are not having any specific period of
repayment.
(iv) In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventories & fixed assets and payment
for expenses & for sale of goods. During the course of our audit, no
major instance of countinuing failure to correct any weaknesses in the
internal controls has been noticed.
(v)
(a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, the
particulars of contracts or arrangements referred to in section 301 of
the Act has been entered in the register required to be maintained
under that section.
(b) As per information & explanations given to us and in our opinion,
the transaction entered into by the Company with parties covered u/s
301 of the Act and exceeding five lakh rupees in respect of any party
during the year have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public covered
under sections 58A and 58AA of the Compa- nies Act, 1956.
(vii) As per information & explanations given by the management, the
Company has an internal audit system commensu- rate with its size and
the nature of its business.
(viii) As per information & explanations given by the management,
maintenance of cost records has been prescribed by the Central
Government under clause (d) of sub-section (1) of section 209 of the
Act and we are of the opinion that prima facie the prescribed accounts
and records have been made and maintained.
(ix) (a). The Company is not regularly in depositing the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income Tax, Sales-Tax,
Welth Tax, Service Tax, Cus- toms Duty, Excise Duty, Cess to the extent
applicable with the appropriate authorities. According to the
information and explanation provided to us, arrears of undisputed
amount outstanding as on 31st March, 2014 for a period more than six
months from the date they became payable are as follows :
Particulars of Dues Amount in Rs.
(i). Sales Tax 96,98,287.00
(ii). Professional Tax 1,53,800.00
(iii). Service Tax 1,18,155.00
(iv). Tax Deducted at Source 38,79,901.50
(v) Employees State Insurance 54,852.00
(vi) Providnet Fund 738.00
(b). The Statement of Disputed dues as required by the clause are as
given under
Name of the Authority Nature of Dues Amount in Rs.
Customs Department Customs Duty Rs.62,40,052/-
Assistant Commissioner
of Provident Fund,
Pattancheru, Medak District Provident Fund Rs.13,74,918/-
Income Tax Department Fringe Benefit Rs.16,36,230/-
Tax
Income Tax Department Income Tax Rs.89,24,820/-
Income Tax Department Income Tax Rs.47,63,920/-
Name of the Authority Financial Year to Forum where disputes
whichthe amount are pending.
relates
Customs Department 1996-97 Hon''ble Customs, Excise,
Gold (Control) Appellate
Tribunal, Bangalore
Assistant Commissioner of Employees Provident Fund
Provident Fund, Appellate Tribunal,
Pattancheru, Medak District New Delhi.
Income Tax Department 2005-06 Dy. Commissioner of
Income Tax, Circle - 1(1)
Hyderabad.
Income Tax Department 2005-06 Dy. Commissioner of
Income Tax, Circle - 1(1)
Hyderabad.
Income Tax Department 2005-06 Asst. Commissioner of
Income Tax, Circle - 8 (1)
Hyderabad.
(x) The accumulated losses of the Company at the end of the accounting
period are more than the fifty percent of its net worth. The Company
has incurred cash loss of Rs. 3,23,99,809/- during the financal year
and immediately preced- ing financial year is of Rs.1,66,96,301/-.
(xi) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture hold- ers.
(xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debebtures and other securites.
(xiii) The Company is not a chit fund or a nidhi / mutual benefit funds
/ society. Therefore, the provision of this clause of the Companies
(Auditor''s Report) Order, 2003 (as amended) is not applicable to the
Company.
(xiv) According to information and explanations given to us, the
Company is not trading in Shares, Mutual funds & other Investments.
Therefore, the provision of this clause of the Companies (Auditor''s
Report) Order, 2003 (as amended) is not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.
(xvi) Based on our audit procedures and on the information given by the
management, we report that the Company has not raised any term loans
during the year.
(xvii) Based on the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company as at 31st
March, 2014, we report that no funds raised on short-term basis have
been used for long-term investment by the Company.
(xviii) Based on the audit procedures performed and the information and
explanations given to us by the management, we report that the Company
has not made any preferential allotment of shares during the year.
(xix) The Company has no outstanding debentures during the period under
audit.
(xx) The Company had not raised any money by public issues during the
year.
(xxi) Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud on or by the Company
has been noticed or reported during the year, nor have we been informed
of such case of the management.
Place: Hyderabad
Date : 26-05-2014 for VDNR & ASSOCIATES
Chartered Accountants
Firm Reg. No. 011251S
Sd/-
(Venkateswarlu .D)
Partner
Membership No.: 028488
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of S.S. Organics
Limited ("the company"), which comprise the Balance Sheet as at March
31, 2013, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and fair presentation of the financial statements
that are free from material misstatement, whether due to fraud or
error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
In the financial year 2006-07, dispute was arisen between its Board of
Directors and B Subba Reddy one of the share holder regarding the
management of the company. Mr B Subba Reddy has taken the possession of
the company forcibly and illegally on 20-10-2006, Mr. VN Sunanda Reddy
aggrieved by the actions of Mr. B Subba Reddy approached the Hon''ble
Company Law Board by filing Company Petition No: 14 of 2007. The
Hon''ble CLB vide its judgement dt. 14.08.2009 allowed the company
petition and held that all the actions of Mr. B Subba Reddy are Null
and Void. Mr. B Subba Reddy has challenged the Hon''ble CLB order by
filing a company application no: 22/09 before Hon''ble High Court ofA.P.
The company application was dismissed upholding the orders of Hon''ble
CLB on 22.02.2012. Mr. VN Sunanda Reddy has taken re-possession of the
company on 16.05.2012 and started re-novating of the company.
1. The Company''s fixed assets are carried at historical cost basis.
Management has not charged depreciation in its books of account
amounting to Rs.96,48,790/-,which constitutes a departure from the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Act. If depreciation would have been provided in the books of
account then loss after taxes would be Rs.2,63,45,091/- as against
reported loss ofRs. 1,66,96,301/-.
2. Management has not estimated and provided for Employee Benefit
Liability which constitutes a departure from the Accounting Standards
(AS-15) referred to in sub-section (3C) of section 211 of the Act.
3. Non Confirmation of Debtors Balances.
4. Non confirmation and reconciliation of Current Assets and Current
Liabilities.
5. Non Identification of small scale industrial undertakings whose
outstanding is more than one lakh rupees for more than 30 days.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the 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 March 31, 2013;
b) in the case of the Profit and Loss Account, of the profit/ 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
We draw attention to our comments to the financial statements which
describes the uncertainty related to the outcome of the 27 lawsuits
filed against the Company by various Statutory Authorities and Non
Statutory concerns. Our opinion is not quali- fied in respect of these
matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in para- graphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.;
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agree- ment with the books
of account.;
d) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our 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) We have not received any written representations form the directors,
as on 31st March,2013. So we are unable to comment whether any of those
directors are disqualified from being appointed as a director as on
31s,March,2013 in terms of clause(g) of sub-section(l) of section 274
of the companies act, 1956;
Annexure to the Auditor''s Report Re: S.S.ORGANICS LIMITED
Refer to para 1 Report on Other Legal and Regulatory Requirements of my
report of even date.
(i)
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the management
during the year, and there is also a regular programme of verification
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, the Company has not disposed off any substantial part of
its Fixed Assets so as to affect its going concern status.
(ii)
(a) According to the information and explanations given to us, the
Company has no Inventories through out the Year. Hence the Clauses (b)
& (c) are not applicable for the Current Financial Year. (iii)
(a) According to the information and explanations given to us, the
company has not granted any loan, secured or unse- cured to companies,
firms or other parties covered in the register maintained under section
301 of the companies Act, 1956. Accordingly the provisions of (iii)
(b), (iii) (c), (iii) (d) of the Companies (Auditors Report) Order 2003
(as amended) are not applicable to the Company.
(e). As per information provided, the company has taken loans from
parties covered in the register to be maintained under section 301of
the companies act, 1956. The maximum amount involved during the year
was Rs.4,73,66,287/- and the year end balance taken from such persons
was Rs.4,44,62,160/-.
(f). These amounts are interest free and other terms and conditions of
loans taken by the company which are unsecured are prima facie not
prejudicial to the interests of the company. (g). The amounts brought
in are having no specific repayment period.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
(v)
(a) According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 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 prevailing market prices at the relevant
time.
(vi) In our opinion and according to the information and explanations
given to us, The company has outstanding unse- cured loans as on the
balance sheet date Rs. 5,60,98,024/- which were accepted by the company
during the period prior to and subsequent to the reference to the
Hon''ble BIFR under SICA. Any shortfall of funds in the implementation
of the scheme should be met by the company/promoters as per sanctioned
scheme of the Hon''ble BIFR. In this scenario, we are not in a position
to express our views with regard to applicability of provisions of
Sections 58 A and 58AAof the Act and the rules framed there under as on
31st March 2013.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business. (viii)
According to the information and explanations given to us, there are no
production activities carried out during the
financial year. Therefore Cost records to be maintainable under section
209 (1) (d) of the Companies Act 1956 are not maintained. (ix) (a).
The Company is generally not regular in depositing Statutory dues
including Provident Fund, Employees State Insurance, Income Tax, Sales
Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other
statutory dues with appropriate authorities. According to the
information and explanation given to us, Arrears of undisputed amount
outstanding as at 31st March 2013 for a period of more than six months
from the date they became payable are as follows
(x) The company is Sick Industrial Company with in the meaning of
clause (o) of sub-section 3 of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA). The accumulated losses of the company at
the end of the ac- counting period are more than the fifty percent of
its net worth. Further, the Company has incurred cash losses during the
financial year is Rs. 1,66,96,301/- covered by our audit and the
immediately preceding financial year is Rs.23,59,496/-.
(xi) As per the information received and explanations given to us, the
Company has no outstanding dues to any Banks or financial institutions
or debenture holders.
(xii) As explained to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities and the Company is not required to
maintain any records thereof.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund/society. Therefore, the provisions of clause 4
(xiii) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in 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.
(xv) In our opinion, the Company has not given any guarantees for loans
taken by others from banks or financial institu- tions.
(xvi) The company has not obtained any Term Loans during the period
under review.
(xvii) According to the information and explanations given to us, the
funds raised during the period under review on short term basis have
not been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Act.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Com- pany had not issued
any debentures.
(xx) The Company had not raised any money by public issues during the
period covered by audit.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Place: Hyderabad
Date: 29 May 2013 for VDNR & ASSOCIATES
Chartered Accountants
Firm Reg. No. 011251S
Sd/-
(D. Venkateswarlu)
Partner
Membership No.: 028488
Mar 31, 2012
1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED,
as at 31st March, 2012 the Profit and Loss Account and also the Cash
Flow Statement for the year ended on that date annexed thereto. These
Financial State- ments are the responsibility of the Company''s
Management. Our responsibility is to express an opinion on the
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
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 paragraph 4 and 5 of the said
order.
4. Attention is drawn to our comments on the accounts as under:
- Dispute was arisen among its Board of Directors regarding the
Management of the company and a Case was filed before the Hon''ble
High Court by its Board of Directors. The Hon''ble High Court in its
order dated 22-2-2012 has given a favorable orders to the Present
Management of the Company by declaring that the Transations of Previous
Manage- ment was declared as Null and void. So while preparing the
Audited Financial of the Current financial year we have considered the
Transactions purely done by the Present Management of the Company.
- Accounting policy number ''5'' & Notes No.8.1 regarding
Non-provision of Gratuity on Actuarial Valuation and Leave encashment
Salary as per Accounting Standard-15.
- Note No. 17(a) Regarding non- availability of statutory records
pertaining to Finance, Central Excise, sales and pur- '' chases,
Commercial Taxes, PF, ESI, Secretarial records etc.
- Note No. 12.1 Regarding non-confirmation of Debtors Balances.
- Note No. 17(b) Regarding non-confirmation and reconciliation of
certain Current Assets and Current Liabilities.
- Note No 16.1 Regarding Non-identificationof Small scale industrial
Undertakings whose outstanding is more than Rupees on lakh for more
than 30 days.
- Note No. 11.1 regarding inclusion of amount paid to Central Excise
Department consequent to Search proceedings by the said Department.
Pending information of outcome of the said proceedings, the liability,
if any cannot be ascertained and provided for in these accounts.
- Note No. (1) (a) of accounting policies regarding preparation of
accounts on principles applicable to the going concern.
- Note No. 17(i) Regarding Non-Provisiion of Depreciation on Fixed
assets
- Note No. 17(j) Regarding Pending Legal cases against the company
5. Further to our comments in the annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii) The balance sheet, the profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
accounts;
iv) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 except in clause 4 above.
v) We have not received any written representations from the directors,
as on 31st March, 2012, So we are unable to comment whether any of
those Directors are disqualified from being appointed as a Director as
on 31st March, 2012 in terms of clause (g) of sub-section (1) of Sec.
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 subject to our comment
in Para 4 above, read in conjunction with the Notes annexed there with
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 balance sheet, of the state of affairs of the
company as at 31st March, 2012;
(b) in the case of 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 Auditor''s Report
Re: S S ORGANICS LIMITED
Referred to in paragraph 3 of my report of even date.
(i)
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the management
during the year, and there is also a regular programme of verification
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 verification.
(c) In our opinion and according to the information and explanations
given to us, the company has not disposed off any substantial part of
its Fixed Assets so as to affect its going concern status.
(ii)
(a) According to the information and explanations given to us, the
company has no Inventories through out the year. Hence the clauses (b)
& (c) are not applicable for the Current Financial Year.
(iii)
(a) According to the information and explanations given to us, the
register under Section 301 of the Companies Act, 1956 is not traceable.
The Management has informed that, the Company has not granted any
loans, secured or unsecured to companies, firms and others in the
Register maintained under Section 301 of the Companies Act 1956.
Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the
Companies (Auditors Report) Order 2003 (as amended) are not applicable
to the Company.
(b). As per information provided, the company has taken loans from
parties covered in the register to be maintained under section 301 of
the companies act, 1956. The maximum amount involved during the year
was Rs.71,10,591/- and the year end balance taken from such persons was
Rs.71,10,591/-
(c). These amounts are interest free and other terms and conditions of
loans taken by the company which are unsecured are prima facie not
prejudicial to the interests of the company.
(d). The amounts brought in are having no specific repayment period.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
(v)
(a) According to the information and explanations given to us, the
register under section 301 of the Companies Act 1956 is not traceable.
We are unable to comment on the same in the absence of such register
furnished to us.
(b) We are unable to comment whether any transactions exceeding the
value of rupees five lakhs in respect of any party during the year were
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time, in the absence of such register.
(vi) In our opinion and according to the information and explanations
given to us, The company has outstanding unsecured loans as on the
balance sheet date Rs. 1,84,08,455/- which were accepted by the company
during the period prior to and subsequent to the reference to the
Hon''ble BIFR under SICA. Any shortfall of funds in the implementation
of the scheme should be met by the company/promoters as per sanctioned
scheme of the Hon''ble BIFR. In this scenario, we are not in a
position to express our views with regard to applicability of
provisions of Sections 58 A and 58AAoftheAct and the rules framed there
under as on 31st March, 2012.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us, the
Cost records to be maintainable under section 209 (1)
(d) of the Companies Act 1956 are not traceable. Hence We are unable to
comment on the same in the absence of such register furnished to us.
(ix) (a). The Company is generally not regular in depositing Statutory
dues including Provident Fund, Employees State Insurance, Income Tax,
Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other
statutory dues with appropriate authorities. According to the
information and explanation given to us, arrears of undisputed amount
out- standing as at 31st March 2012 for a period of more than six
months from the date they became payable are as follows
Nature of Dues Due Amount in Rs.
(i). Provident Fund Rs.89,285/-
(ii). Employees State Insurance Rs.25,997/-
(iii). Tax deducted at source Rs.28,81,678/-
(iv). Fringe Benefit Tax Rs.3,31,799//-
(v). Sales Tax Rs.55,90,096/-
(vi) Professional Tax Rs. 1,37,450/-
(b). The Statement of Disputed dues as required by the clause are as
given under
Name of the Authority Nature of Dues Amount in Rs.
Customs Duty Department Customs Duty Rs.62,40,052/-
Assistant Commissioner
of Provident Fund,
Pattancheru, Medak
District Provident Fund Rs.13,74,918/-
Name of the Authority Financial Year
to which Forum where disputes
the amount
relates are pending.
Customs Duty Department FY: 1996-97 Hon''ble Customs, Excise,
Gold (Control) Appellate
Tribunal, Bangalore
Assistant Commissioner
of Provident Fund,
Pattancheru, Medak
District - Employees Provident Fund
Appellate Tribunal,New Delhi.
(x) The company is Sick Industrial Company with in the meaning of
clause (o) of sub-section 3 of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA). The accumulated losses of the company at
the end of the account- ing period are more than the fifty percent of
its net worth. Further, the Company has incurred cash losses during the
financial year is Rs.23,59,496/- covered by our audit and the
immediately preceding financial year is Rs. 15,05,310/-
(xi) As per the information received and explanations given to us, the
Company has no outstanding dues to any Banks or financial institutions
or dentures holders.
(xii) As explained to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities and the Company is not required to
maintain any records thereof.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in 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.
(xv) In our opinion, the Company has not given any guarantees for loans
taken by others from banks or financial institutions.
(xvi) The company has not obtained any Term Loans during the period
under review.
(xvii) According to the information and explanations given to us the
funds raised during the period under review on short term basis have
not been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Act.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company had not issued any
debentures.
(xx) The Company had not raised any money by public issues during the
period covered by audit.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Place: Hyderabad
Date: 28-03-2013 VDNR & ASSOCIATES
Chartered Accountants
Sd/-
D. Venkateswarlu
Partner
Membership No.: 028488
Firm Reg. NO.011251S
Mar 31, 2011
1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED,
as at 31st March, 2011 the Profit and Loss Account and also the Cash
Flow Statement for the year ended on that date annexed thereto. These
Financial State- ments are the responsibility of the Company''s
Management. Our responsibility is to express an opinion on the
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
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 paragraph 4 and 5 of the said
order.
4. Attention is drawn to our comments on the accounts as under:
- Dispute was arisen among its Board of Directors regarding the
Management of the company and a Case was filed before the Hon''ble
High Court by its Board of Directors. The Hon''ble High Court in its
order dated 22-2-2012 has given a favorable orders to the Present
Management of the Company by declaring that the Transations of Previous
Manage- ment was declared as Null and void. So while preparing the
Audited Financial of the Current financial year we have considered the
Transactions purely done by the Present Management of the Company.
- Accounting policy number ''5'' & Notes No.3 in schedule number
''J'' regarding Non-provision of Gratuity on Actuarial Valuation and
Leave encashment Salary as per Accounting Standard-15.
- Note No. (1) Regarding non- availability of statutory records
pertaining to Finance, Central Excise, sales and pur- chases,
Commercial Taxes, PF, ESI, Secretarial records etc.
- Note No. 2 Regarding non-confirmation of Debtors Balances.
- Note No.4 Regarding non-confirmation and reconciliation of certain
Current Assets and Current Liabilities.
- Note No 5 Regarding Non-identificationof Small scale industrial
Undertakings whose outstanding is more than Rupees on lakh for more
than 30 days.
- Note No. 13 regarding the amount paid to Central Excise Department
consequent to Search proceedings by the said Department. Pending
information of outcome of the said proceedings, the liability, if any
cannot be ascertained and provided for in these accounts.
- Note No. (1) (a) of accounting policies regarding preparation of
accounts on principles applicable to the going concern.
- Note No. 14 Regarding Non-Provisiion of Depreciation on Fixed
assets
- Note No. 15 Regarding Pending Legal cases against the company
5. Further to our comments in the annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii) The balance sheet, the profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
accounts;
iv) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 except in clause 4 above.
v) We have not received any written representations from the directors,
as on 31sl March, 2011, So we are unable to comment whether any of
those Directors are disqualified from being appointed as a Director as
on 31st March, 2011 in terms of clause (g) of sub-section (1) of Sec.
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 subject to our comment
in Para 4 above, read in conjunction with the Notes annexed there with
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 balance sheet, of the state of affairs of the
company as at 31st March, 2011;
(b) in the case of 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 Auditor''s Report
Re: S S ORGANICS LIMITED
Referred to in paragraph 3 of my report of even date.
(i)
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) Since the Management has not physically verified the fixed assets
of the company during the year, we are uanble to comment on the
reasonability of the verification regarding to the size of the company
and material discrepancies of fixed assets.
(c) Though the Company has not disposed off any substantial part of its
Fixed Assets during the year. In our opinion and according to the
information and explanations given to us, during the previous years,
the plant and equipment are went to dilapidated condition. This affects
the going concern status.
(ii)
(a) According to the information and explanations given to us, the
company has no Inventories through out the year. Hence the clauses (b)
& (c) are not applicable for the Current Financial Year.
(iii)
(a) According to the information and explanations given to us, the
register under Section 301 of the Companies Act, 1956 is not traceable.
The Management has informed that, the Company has not granted any
loans, secured or unsecured to companies, firms and others in the
Register maintained under Section 301 of the Companies Act 1956.
Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the
Companies (Auditors Report) Order 2003 (as amended) are not applicable
to the Company.
(b). As per information provided, the company has taken loans from
parties covered in the register to be maintained under section 301 of
the companies act, 1956. The maximum amount involved during the year
was Rs.5,405,251/- and the year end balance taken from such persons was
Rs.5,405,251/-
(c). These amounts are interest free and other terms and conditions of
loans taken by the company which are unsecured are prima facie not
prejudicial to the interests of the company.
(d). The amounts brought in are having no specific repayment period.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
(v)
(a) According to the information and explanations given to us, the
register under section 301 of the Companies Act 1956 is not traceable.
We are unable to comment on the same in the absence of such register
furnished to us.
(b) We are unable to comment whether any transactions exceeding the
value of rupees five lakhs in respect of any party during the year were
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time, in the absence of such register.
(vi) In our opinion and according to the information and explanations
given to us, The company has outstanding unsecured loans as on the
balance sheet date Rs. 1,64,61,5151- which were accepted by the company
during the period prior to and subsequent to the reference to the
Hon''ble BIFR under SICA. Any shortfall of funds in the implementation
of the scheme should be met by the company/promoters as per sanctioned
scheme of the Hon''ble BIFR. In this scenario, we are not in a
position to express our views with regard to applicability of
provisions of Sections 58 A and 58AA of the Act and the rules framed
there under as on 31s March, 2011.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us, the
Cost records to be maintainable under section 209 (1)
(d) of the Companies Act 1956 are not traceable. Hence We are unable to
comment on the same in the absence of such register furnished to us.
(ix) (a). The Company is generally not regular in depositing Statutory
dues including Provident Fund, Employees State Insurance, Income Tax,
Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other
statutory dues with appropriate authorities. According to the
information and explanation given to us, arrears of undisputed amount
out- standing as at 31st March 2011 for a period of more than six
months from the date they became payable are as follows
Nature of Dues Due Amount in Rs.
(i). Provident Fund Rs.89,285/-
(ii). Employees State Insurance Rs.25,997/-
(iii).Tax deducted at source Rs.27,41,860/-
(iv). Fringe Benefit Tax Rs.3,31,799/-
(v). Sales Tax Rs.42,18,688/-
(vi) Professional Tax Rs. 1,37,450/-
(b). The Statement of Disputed dues as required by the clause are as
given under
Name of the Authority Nature of Dues Amount in Rs.
Customs Duty Department Customs Duty Rs.62,40,052/-
Assistant Commissioner of
Provident Fund,
Pattancheru, Medak
District Provident Fund Rs.13,74,918/-
Name of the Authority Financial Year
to which Forum where disputes
the amount
relates are pending.
Customs Duty Department FY: 1996-97 Hon''ble Customs, Excise,
Gold (Control) Appellate
Tribunal, Bangalore
Assistant Commissioner of
Provident Fund,
Pattancheru, Medak
District - Employees Provident Fund
Appellate Tribunal,
New Delhi.
(x) The company is Sick Industrial Company with in the meaning of
clause (o) of sub-section 3 of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA). The accumulated losses of the company at
the end of the account- ing period are more than the fifty percent of
its net worth. Further, the Company has incurred cash losses during the
financial year is Rs.15,05,310/-covered by our audit and the
immediately preceding financial year is Rs. 15,55,218/-
(xi) As per the information received and explanations given to us, the
Company has no outstanding dues to any Banks or financial institutions
or dentures holders.
(xii) As explained to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities and the Company is not required to
maintain any records thereof.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in 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.
(xv) In our opinion, the Company has not given any guarantees for loans
taken by others from banks or financial institutions.
(xvi) The company has not obtained any Term Loans during the period
under review.
(xvii) According to the information and explanations given to us the
funds raised during the period under review on short term basis have
not been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Act.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company had not issued any
debentures.
(xx) The Company had not raised any money by public issues during the
period covered by audit.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Place: Hyderabad
Date: 28-03-2013 VDNR & ASSOCIATES
Chartered Accountants
Sd /-
D. Venkateswarlu
Partner
Membership No.: 028488
Firm Reg. No. 011251S
Mar 31, 2010
1. We have audited the attached Balance Sheet of SS ORGANICS LIMITED,
as at 31st March, 2010 the Profit and Loss Account and also the Cash
Flow Statement for the year ended on that date annexed there to. These
Financial Statements are the responsibility of the Company''s
Management. Our responsibility is to express an opinion on the
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
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 paragraph 4 and 5 of the said
order.
4. Attention is drawn to our comments on the accounts as under:
- Dispute was arisen among its Board of Directors regarding the
Management of the company and a Case was filed before the Humble
High Court by its Board of Directors. The Humble High Court in its
order dated 22-2-2012has given a favorable orders to the Present
Management of the Company by declaring that the Transitions of Previous
Management was declared as Null and void. So while preparing the
Audited Financial of the Current financial year we have considered the
Transactions purely done by the Present Management of the Company.
- Accounting policy number Â5'' & Notes No.3 in schedule number
''J'' regarding Non-provision of Gratuity on Actuarial Valuation and
Leave encashment Salary as per Accounting Standard-15.
- Note No. (1) Regarding non- availability of statutory records
pertaining to Finance, Central Excise, sales and purchases,
Commercial Taxes, PF, ESI, Secretarial records etc.
- Note No. 2 Regarding non-confirmation of Debtors Balances.
- Note No.4 Regarding non-confirmation and reconciliation of certain
Current Assets and Current Liabilities.
- Note No 5 Regarding Non-identification of Small scale industrial
Undertakings whose outstanding is more than Rupees on lakh for more
than 30 days.
- Note No. 13 regarding the amount paid to Central Excise Department
consequent to Search proceedings by the said Department. Pending
information of outcome of the said proceedings, the liability, if any
cannot be ascertained and provided for in these accounts.
- Note No. (1) (a) of accounting policies regarding preparation of
accounts on principles applicable to the going concern.
- Note No. 14 Regarding Non-Provision of Depreciation on Fixed assets
- Note No. 15 Regarding Pending Legal cases against the company
5. Further to our comments in the annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii) The balance sheet, the profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
accounts;
iv) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 except in clause 4 above.
v) We have not received any written representations from the directors,
as on 31st March, 2010, So we are unable to comment whether any of
those Directors are disqualified from being appointed as a Director as
on 31st March, 2010 in terms of clause (g) of sub-section (1) of Sec.
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 subject to our comment
in Para 4 above, read in conjunction with the Notes annexed there with
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 balance sheet, of the state of affairs of the
company as at 31st March, 2010;
(b) in the case of 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:
(i)
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) Since the Management has not physically verified the fixed assets
of the company during the year, we are unable to comment on the
reasonability of the verification regarding to the size of the company
and material discrepancies of fixed assets.
(c) Though the Company has not disposed off any substantial part of its
Fixed Assets during the year. In our opinion and according to the
information and explanations given to us, during the previous years,
the plant and equipment are went to dilapidated condition. This affects
the going concern status.
(ii)
(a) According to the information and explanations given to us, the
company has no Inventories throughout the year. Hence the clauses (b)
& (c) are not applicable for the Current Financial Year.
(iii)
(a) According to the information and explanations given to us, the
register under Section 301 of the Companies Act, 1956 is not traceable.
The Management has informed that, the Company has not granted any
loans, secured or unsecured to companies, firms and others in the
Register maintained under Section 301 of the Companies Act 1956.
Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the
Companies (Auditors Report) Order 2003 (as amended) are not applicable
to the Company.
(b). As per information provided, the company has taken loans from
parties covered in the register to be maintained under section 301 of
the companies act, 1956. The maximum amount involved during the year
was Rs.46,52,875/- and the yearend balance taken from such persons was
Rs.46,52,875/-
(c). These amounts are interest free and other terms and conditions of
loans taken by the company which are unsecured are prima facie not
prejudicial to the interests of the company.
(d). The amounts brought in are having no specific repayment period.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
(v)
(a) According to the information and explanations given to us, the
register under section 301 of the Companies Act 1956 is not traceable.
We are unable to comment on the same in the absence of such register
furnished to us.
(b) We are unable to comment whether any transactions exceeding the
value of rupees five lakhs in respect of any party during the year were
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time, in the absence of such register.
(vi) In our opinion and according to the information and explanations
given to us, The company has outstanding unsecured loans as on the
balance sheet date Rs. 1,55,55,339/- which were accepted by the company
during the period prior to and subsequent to the reference to the
Hon''ble BIFR under SICA. Any shortfall of funds in the implementation
of the scheme should be met by the company/promoters as per sanctioned
scheme of the Hon''ble BIFR. In this scenario, we are notin a position
to express our views with regard to applicability of provisions of
Sections 58 A and 58AAofthe Act and the rules framed there under as on
31s March, 2010.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us, the
Cost records to be maintainable under section 209 (1)
(d) of the Companies Act 1956 are not traceable. Hence We are unable to
comment on the same in the absence of such register furnished to us.
(ix) (a). The Company is generally not regular in depositing Statutory
dues including Provident Fund, Employees State Insurance, Income Tax,
Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other
statutory dues with appropriate authorities. According to the
information and explanation given to us, arrears of undisputed amount
out- standing as at 31s! March 2010 for a period of more than six
months from the date they became payable are as follows
Nature of Dues Due Amount in Rs.
(i). Provident Fund Rs.89,285/-
(ii). Employees State Insurance Rs.25,997/-
(iii).Tax deducted at source Rs.25,94,004/-
(iv). Fringe Benefit Tax Rs.3,31,799/-
(v). Sales Tax Rs.41,29,770/-
(vi) Professional Tax Rs. 1,37,450/-
(b). The Statement of Disputed dues as required by the clause are as
given under
Name of the
Authority Nature of Dues Amount in
Rs. Financial
Year to which Forum
where disputes
the amount
relates are pending.
Customs Duty
Department Customs Duty Rs.62,40,
052/- FY: 1996-
97 Humble
Customs,
Excise,
Gold (Control)
Appellate
Tribunal,
Bangalore
Assistant
Commissioner of
Provident Fund,
Pattancheru,
Medak
(x) The company is Sick Industrial Company within the meaning of
clause (o) of sub-section 3 of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA). The accumulated losses of the company at
the end of the account- ing period are more than the fifty percent of
its net worth. Further, the Company has incurred cash losses during the
financial year is Rs. 15,55,218/- covered by our audit and the
immediately preceding financial year is Rs. 20,65,205/-
(xi) As per the information received and explanations given to us, the
Company has no outstanding dues to any Banks or financial institutions
or dentures holders.
(xii) As explained to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities and the Company is not required to
maintain any records thereof.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in 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.
(xv) In our opinion, the Company has not given any guarantees for loans
taken by others from banks or financial institutions.
(xvi) The company has not obtained any Term Loans during the period
under review.
(xvii) According to the information and explanations given to us the
funds raised during the period under review on short term basis have
not been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Act.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company had not issued any
debentures.
(xx) The Company had not raised any money by public issues during the
period covered by audit.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Place: Hyderabad
Date: 28-03-2013 VDNR & ASSOCIATES
Chartered Accountants
Sd/-
D. Venkateswarlu
Partner
Membership No.: 028488
Firm Reg. No. 011251S
Mar 31, 2009
1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED,
as at 31st March, 2009 the Profit and Loss Account and also the Cash
Flow Statement for the year ended on that date annexed there to. These
Financial Statements are the responsibility of the Company''s
Management. Our responsibility is to express an opinion on the
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
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 paragraph 4 and 5 of the said
order.
4. Attention is drawn to our comments on the accounts as under:
- Dispute was arisen among its Board of Directors regarding the
Management of the company and a Case was filed before the Hon''ble
High Court by its Board of Directors. The Hon''ble High Court in its
order dated 22nd February 2012 has given a favorable orders to the
Present Management of the company by declaring that the Transactions of
Previous Management was declared as Nuli and void. So while preparing
the Audited Financials of the Current financial year, we have
considered the Transactions purely done by the Present Management of
the Company.
- Accounting policy number ''5'' & Notes No.3 in schedule number
''K'' regarding Non-provision of Gratuity on Actuarial Valuation and
Leave encashment Salary as per Accounting Standard-15.
- Note No. (1) Regarding non- availability of statutory records
pertaining to Finance, Central Excise, sales and pur- chases,
Commercial Taxes, PF, ESI, Secretarial records etc.
- Note No. 2 Regarding non-confirmation of Debtors Balances.
- Note No.4 Regarding non-confirmation and reconciliation of certain
Current Assets and Current Liabilities.
- Note No 5 Regarding Non-identificationof Small scale industrial
Undertakings whose outstanding is more than Rupees on lakh for more
than 30 days.
- Note No. 13 regarding inclusion of amount paid to Central Excise
Department consequent to Search proceedings by the said Department.
Pending information of outcome of the said proceedings, the liability,
if any cannot be ascertained and provided for in these accounts.
- Note No. (1) (a) of accounting policies regarding preparation of
accounts on principles applicable to the going concern.
- Note No. 14 Regarding Non-Provisiion of Depreciation on Fixed
assets ,
- Note No. 15 Regarding Pending Legal cases against the company
5. Further to our comments in the annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii) The balance sheet, the profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
accounts;
iv) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 except in clause 4 above.
v) We have not received any written representations from the directors,
as on 31st March, 2009, So we are unable to comment whether any of
those Directors are disqualified from being appointed as a Director as
on 31st March, 2008 in terms of clause (g) of sub-section (1) of Sec.
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 subject to our comment
in Para 4 above, read in conjunction with the Notes annexed there with
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 balance sheet, of the state of affairs of the
company as at 3151 March, 2009;
(b) in the case of 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 Auditor''s Report
Re: S S ORGANICS LIMITED
Referred to in paragraph 3 of my report of even date.
(i)
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) Since the Management has not physically verified the fixed assets
of the company during the year, we are uanble to comment on the
reasonability of the verification regarding to the size of the company
and material discrepancies of fixed assets.
(c) Though the Company has not disposed off any substantial part of its
Fixed Assets during the year. In our opinion and according to the
information and explanations given to us, during the year, the plant
and equipment are went to dilapidated condition. This affects the going
concern status.
(ii)
(a) According to the information and explanations given to us, the
company has no Inventories through out the year. Hence the clauses (b)
& (c) are not applicable for the Current Financial Year.
(iii)
(a) According to the information and explanations given to us, the
register under Section 301 of the Companies Act, 1956 is not traceable.
The Management has informed that, the Company has not granted any
loans, secured or unsecured to companies, firms and others in the
Register maintained under Section 301 of the Companies Act 1956.
Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the
Companies (Auditors Report) Order 2003 (as amended) are not applicable
to the Company.
(b). As per information provided, the company has taken loans from
parties covered in the register to be maintained under section 301 of
the companies act, 1956. The maximum amount involved during the year
was Rs.40,01,838/- and the year end balance taken from such persons was
Rs. 40,01,838/-.
(c). These amounts are interest free and other terms and conditions of
loans taken by the company which are unsecured are prima facie not
prejudicial to the interests of the company.
(d). The amounts brought in are having no specific repayment period.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
(v)
(a) According to the information and explanations given to us, the
register under section 301 of the Companies Act 1956 is not traceable.
We are unable to comment on the same in the absence of such register
furnished to us.
(b) We are unable to comment whether any transactions exceeding the
value of rupees five lakhs in respect of any party during the year were
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time, in the absence of such register.
(vi) In our opinion and according to the information and explanations
given to us, The company has outstanding unsecured loans as on the
balance sheet date Rs. 1,48,18,903/- which were accepted by the company
during the period prior to and subsequent to the reference to the
Hon''ble BIFR under SICA. Any shortfall of funds in the implementation
of the scheme should be met by the company/promoters as per sanctioned
scheme of the Hon''ble BIFR. In this scenario, we are not in a
position to express our views with regard to applicability of
provisions of Sections 58 A and 58AAof the Act and the rules framed
there under as on 31st March, 2009.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us, the
Cost records to be maintainable under section 209 (1)
(d) of the Companies Act 1956 are not traceable. Hence We are unable to
comment on the same in the absence of such register furnished to us.
(ix) (a). The Company is generally not regular in depositing Statutory
dues including Provident Fund, Employees State Insurance, Income Tax,
Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other
statutory dues with appropriate authorities. According to the
information and explanation given to us, arrears of undisputed amount
out- standing as at 31st March 2009 for a period of more than six
months from the date they became payable are as follows
Nature of Dues Due Amount, in Rs.
(i). Provident Fund Rs.89,285/-
(ii). Employees Stale insurance Rs.25,997/-
(iii).Tax deducted at source Rs.24,39,472/-
(iv). Fringe Benefit Tax Rs.3,27,163/-
(v). Sales Tax Rs.40,36,587/-
(vii) Professional Tax Rs. 1,37,450/-
(b). The Statement of Disputed dues as required by the clause are as
given under
Name of the Authority Nature of Dues Amount in Rs.
Customs Duty Department Customs Duty Rs.62.40,052/-
Assistant Commissioner
of Provident Fund,
Pattancheru, Medak
District Provident Fund Rs.13,74,918/-
Name of the Authority Financial Year
to which Forum where disputes
the amount
relates are pending.
Customs Duty Department FY:1996-97 Hon ble Customs, Excise,
Gold (Control) Appellate
Tribunal, Bangalore
Assistant Commissioner
of Provident Fund,
Pattancheru, Medak
District - Employees Provident Fund
Appellate Tribunal,
New Delhi.
(x) The company is Sick industrial Company with in the meaning of
clause (o) of sub-section 3 of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA) The accumulated losses of the company at
the end of the account- ing period are more than the fifty percent of
its net worth. Further, the Company has incurred cash losses during the
financial year is Rs.20,65,205/- covered by our audit and the
immediately preceding financial year is Rs. 30,31,700/-
(xi) As per the information received and explanations given to us, the
Company has no outstanding dues to any Banks or financial institutions
or dentures holders.
(xii) As explained to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities and the Company is not required to
maintain any records thereof.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in 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.
(xv) In our opinion, the Company has not given any guarantees for bans
taken by others from banks or financial institutions.
(xvi) The company has not obtained any Term Loans during the period
under review.
(xvii) According to the information and explanations given to us the
funds raised during the period under review on short term basis have
not been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has net made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Act.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company had not issued any
debentures.
(xx) The Company had not raised any money by public issues during the
period covered by audit.
(xxi) According to the information and explanations given to us, no
fraud or or by the Company has been noticed or reported during the
course of our audit.
Place: Hyderabad VDNR & ASSOCIATES
Date: 28-03-2013 Chartered Accountants
Sd/-
D. Venkateswarlu
Partner
Membership No.: 028488
Firm Reg. No. 011251S
Mar 31, 2008
1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED,
as at 31st March, 2008 the Profit and Loss Account and also the Cash
Flow Statement for the year ended on that date annexed there to. These
Financial Statements are the responsibility of the Company''s
Management. Our responsibility is to express an opinion on the
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
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 paragraph 4 and 5 of the said
order.
4. Attention is drawn to our comments on the accounts as under:
- Dispute was arisen among its Board of Directors regarding the
Management of the company and a Case was filed before the Hon''ble
High Court by its Board of Directors. The Hon''ble Company Law Board,
Chennai,in its order dated 14-08-2009 held that all the actions of Mr,
B. Subba Reddy management as Null and Void. The Hon''ble Company Law
Board orders are upheld by the Hon''ble High Court of A.R in its order
dated 22-2-2012 . So while preparing the Audited Financials of the
Current financial year, we have considered the Transactions purely done
by the Present Management of the Company.
- Accounting policy number ''5'' & Notes No.3 in schedule number
''O'' regarding Non-provision of Gratuity on Actuarial Valuation and
Leave encashment Salary as per Accounting Standard-15.
- Note No. (1) Regarding non- availability of statutory records
pertaining to Finance, Central Excise, sales and pur- chases,
Commercial Taxes, PF, ESI, Secretarial records etc.
- Note No. 2 Regarding non-confirmation of Debtors Balances.
- Note No.4 Regarding absence of Closing Inventory Values
- Note No 5 Regarding non-confirmation and reconciliation of certain
Current Assets and Current Liabilities.
- Note No. 14 regarding inclusion of Rs. 15,00,000/- under Loans and
advances which was paid to Central Excise Department consequent to
Search proceedings by the said Department. Pending information of
outcome of the said proceedings, the liability, if any cannot be
ascertained and provided for in these accounts.
- Note No. (1) (a) of accounting policies regarding preparation of
accounts on principles applicable to the going concern.
- Note No. 16 Regarding Pending Legal cases against the company
5. Further to our comments in the annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii) The balance sheet, the profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
accounts;
iv) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 except in clause 4 above.
v) We have not received any written representations from the directors,
as on 31st March, 2008, So we are unable to comment whether any of
those Directors are disqualified from being appointed as a Director as
on 31st March, 2007 in terms of clause (g) of sub-section (1) of Sec.
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 subject to our comment
in Para 4 above, read in conjunction with the Notes annexed there with
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 generallyaccepted in India:
(a) in the case of balance sheet, of the state of affairs of the
company as at 31st March, 2008;
(b) in the case of 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 Auditor''s Report
Re: S S ORGANICS LIMITED
Referred to in paragraph 3 of my report of even date.
(i)
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) Since the Management has not physically verified the fixed assets
of the company during the year, we are uanble to comment on the
reasonability of the verification regarding to the size of the company
and material discrepancies of fixed assets.
(c) Through the Company has not disposed off any substantial part of
its Fixed Assets, In our opinion and according to the information and
explanations given to us, during the year, the plant and equipment are
went to dilapidated condition. This affects the going concern status.
(ii)
(a) According to the information and explanations given to us, the
company has no Inventories through out the year. Hence the clauses (b)
& (c) are not applicable for the Current Financial Year.
(iii)
(a) According to the information and explanations given to us, the
register under Section 301 ofthe Companies Act, 1956 is not traceable.
The Management has informed that, the Company has not granted any
loans, secured or unsecured to companies, firms and others in the
Register maintained under Section 301 ofthe Companies Act 1956.
Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the
Companies (Auditors Report) Order 2003 (as amended) are not applicable
to the Company.
(b). As per information provided, the company has taken loans from
parties covered in the register to be maintained under section 301 of
the companies act, 1956. The maximum amount involved during the year
was Rs.31,30,339/-. and the year end balance taken from such persons
was Rs.31,30,339/-.
(c). These amounts are interest free and other terms and conditions of
loans taken by the company which are unsecured are prima facie not
prejudicial to the interests ofthe company.
(d). The amounts brought in are having no specific repayment period.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size ofthe Company and the nature of its business
with regard to purchases of inventory, fixed assets and with regard to
the sale of goods and services. During the course of our audit, we have
not observed any continuing failure to correct major weaknesses in
internal control system of the Company.
(v)
(a) According to the information and explanations given to us, the
register under section 301 ofthe Companies Act 1956 is not traceable.
We are unable to comment on the same in the absence of such register
furnished to us.
(b) We are unable to comment whether any transactions exceeding the
value of rupees five lakhs in respect of any party during the year were
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time, in the absence of such register.
(vi) In our opinion and according to the information and explanations
given to us, The company has outstanding unsecured loans as on the
balance sheet date Rs. 1,37,79,203/- which were accepted by the company
during the period prior to and subsequent to the reference to the
Hon''ble BIFR under SICA. Any shortfall of funds in the implementation
ofthe scheme should be met by the company/promoters as per sanctioned
scheme ofthe Hon''ble BIFR. In this scenario, we are not in a position
to express our views with regard to applicability of provisions of
Sections 58 A and 58AAof the Act and the rules framed there under as on
31s March, 2008.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us, the
Cost records to be maintainable under section 209 (1)
(d) of the Companies Act 1956 are not traceable. Hence We are unable to
comment on the same in the absence of such register furnished to us.
(ix) (a). The Company is generally not regular in depositing Statutory
dues including Provident Fund, Employees State Insurance, Income Tax,
Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other
statutory dues with appropriate authorities. According to the
information and explanation given to us, arrears of undisputed amount
outstanding as at 31st March 2008 for a period of more than six months
from the date they became payable are as follows
Nature of Dues Due Amount in Rs.
(i). Provident Fund Rs.89,285/-
(ii). Employees State Insurance Rs.25,997/-
(iii).Tax deducted at source Rs.22,48,139/-
(iv). Fringe Benefit Tax Rs.3,12,853/-
(v). Sales Tax Rs.39,93,397/-
(vii) Professional Tax Rs.1,37,450/-
(b). The Statement of Disputed dues as required by the clause are as
given under
Name of the Authority Nature of Dues Amount in Rs.
Customs Duty Department Customs Duty Rs.62,40,052/-
Assistant Commissioner
of Provident Fund,
Pattancheru, Medak District Provident Fund Rs.13,74,918/-
Name of the Authority Financial Year
to which Forum where disputes
the amount
relates are pending.
Customs Duty Department FY: 1996-97 Hon''ble Customs, Excise,
Gold (Control) Appellate
Tribunal, Bangalore
Assistant Commissioner
of Provident Fund,
Pattancheru, Medak District - Employees Provident Fund
Appellate Tribunal,
New Delhi.
(x) The company is Sick Industrial Company with in the meaning of
clause (o) of sub-section 3 of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA). The accumulated losses of the company at
the end of the account ing period are more than the fifty percent of
its net worth. Further, the Company has incurred cash losses during the
financial year is Rs. 30,31,700/- covered by our audit and the
immediately preceding financial year is Rs.560,93,766/-
(xi) As per the information received and explanations given to us, the
Company has no outstanding dues to any Banks or financial institutions
or dentures holders.
(xii) As explained to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities and the Company is not required to
maintain any records thereof.
(xiii) In our opinion, the Company is not a chit fund ora nidhi/mutual
benefit fund/society. Therefore, the provisions of clause
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accord ingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report)
Order, 2003 are not applicable to the Company.
(xv) In our opinion, the Company has not given any guarantees for loans
taken by others from banks or financial institutions.
(xvi) The company has not obtained any Term Loans during the period
under review.
(xvii) According to the information and explanations given to us the
funds raised during the period under review on short term basis have
not been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Act.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company had not issued any
debentures.
(xx) The Company had not raised any money by public issues during the
period covered by audit.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Place: Hyderabad
Date: 28-03-2013 VDNR & ASSOCIATES
Chartered Accountants
Sd /-
D. Venkateswarlu
Partner
Membership No.: 028488
Firm Reg. No.011251S
Mar 31, 2007
1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED,
as at 31st March, 2007 the Profit and Loss Account and also the Cash
Flow Statement for the year ended on that date annexed thereto. These
Financial State- ments are the responsibility of the Company''s
Management. Our responsibility is to express an opinion on the
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
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 paragraph 4 and 5 of the said
order.
4. Attention is drawn to our comments on the accounts as under:
- Dispute was arisen among its Board of Directors regarding the
Management of the company and a Case was filed before the Hon''ble
High Court by its Board of Directors. The Hon''ble Company Law Board,
Chennai,in its order dated 14-08-2009 held that all the actions of Mr,
B. Subba Reddy management as Null and Void. The Hon''ble Company Law
Board orders are upheld by the Hon''ble High Court of A.R in its order
dated 22-2-2012 . So while preparing the Audited Financials of the
Current financial year, we have considered the Transactions purely done
by the Present Management of the Company.
- Accounting policy number ''5'' & Notes No.3 in schedule number
''O'' regarding Non-provision of Gratuity on Actuarial Valuation and
Leave encashment Salary as per Accounting Standard-15.
- Note No. (1) Regarding non- availability of statutory records
pertaining to Finance, Central Excise, sales and pur- chases,
Commercial Taxes, PF, ESI, Secretarial records etc.
- Note No. 2 Regarding non-confirmation of Debtors Balances.
- Note No.4 Regarding absence of Closing Inventory Values
- Note No5 Regarding non-confirmation and reconciliation of certain
Current Assets and Current Liabilities.
- Note No. 6 Regarding Non-identification of Small scale industrial
Undertakings whose outstanding is more than Ru- pees one lakh for more
than 30 days.
- Note No. 11 & 12 Regarding Non-Furnishing of Quantitative details
of Raw materials and production, stocks of finished goods details.
- Note No. 18 regarding inclusion of Rs. 15,00,000/- under Loans and
advances which was paid to Central Excise Department consequent to
Search proceedings by the said Department. Pending information of
outcome of the said proceedings, the liability, if any cannot be
ascertained and provided for in these accounts.
- Note No. (1) (a) of accounting policies regarding preparation of
accounts on principles applicable to the going concern.
- Note No. 20 Regarding Pending Legal cases against the company
5. Further to our comments in the annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii) The balance sheet, the profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
accounts;
iv) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 except in clause 4 above.
v) We have not received any written representations from the directors,
as on 31st March, 2007, So we are unable to comment whether any of
those Directors are disqualified from being appointed as a Director as
on 31st March, 2007 in terms of clause (g) of sub-section (1) of Sec.
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 subject to our comment
in Para 4 above, read in conjunction with the Notes annexed there with
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 generallyaccepted in India:
(a) in the case of balance sheet, of the state of affairs of the
company as at 31st March, 2007;
(b) in the case of 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 Auditor''s Report
Re: S S ORGANICS LIMITED
Referred to in paragraph 3 of my report of even date.
(i)
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) Since the Management has not physically verified the fixed assets
of the company during the year, we are uanble to comment on the
reasonability of the verification regarding to the size of the company
and material discrepancies of fixed assets.
(c) Through the Company has not disposed off any substantial part of
its Fixed Assets, In our opinion and according to the information and
explanations given to us, during the year, the plant and equipment are
went to dilapidated condition. This affects the going concern status.
(ii)
(a) According to the information and explanations given to us, the
Inventories has not been physically verified during the year. Hence we
are unable to comment on reasonability of frequency of verification of
Inventories.
(b) In the absence of information relating to physical verification of
inventories by the Management, we are unable to comment whether the
procedures 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 not furnished records of its inventories and
material discrepancies, if any between the physical stocks and the book
records is not ascertainable.
(iii)
(a) According to the information and explanations given to us, the
register under Section 301 of the Companies Act, 1956 is not traceable.
The Management has informed that, the Company has not granted any
loans, secured or unsecured to companies, firms and others in the
Register maintained under Section 301 of the Companies Act 1956.
Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the
Companies (Auditors Report) Order 2003 (as amended) are not applicable
to the Company.
(b). As per information provided, the company has taken loans from
parties covered in the register to be maintained under section 301of
the companies act, 1956. The maximum amount involved during the year
was Rs.22,53,339/-. and the year end balance taken from such persons
was Rs.22,53,339/-.
(c). These amounts are interest free and other terms and conditions of
loans taken by the company which are unsecured are prima facie not
prejudicial to the interests of the company.
(d). The amounts brought in are having no specific repayment period.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company.
(v)
(a) According to the information and explanations given to us, the
register under section 301 of the Companies Act 1956 is not traceable.
We are unable to comment on the same in the absence of such register
furnished to us.
(b) We are unable to comment whether any transactions exceeding the
value of rupees five lakhs in respect of any party during the year were
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time, in the absence of such register.
(vi) In our opinion and according to the information and explanations
given to us, The company has outstanding unsecured loans as on the
balance sheet date Rs. 1,30,51,828/- which were accepted by the company
during the period prior to and subsequent to the reference to the
Hon''ble BIFR under SICA. Any shortfall of funds in the implementation
of the scheme should be met by the company/promoters as per sanctioned
scheme of the Hon''ble BIFR. In this scenario, we are notin a position
to express our views with regard to applicability of provisions of
Sections 58 A and 58AAoftheAct and the rules framed there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us, the
Cost records to be maintainable under section 209 (1) (d) of the
Companies Act 1956 are not traceable. Hence We are unable to comment on
the same in the absence of such register furnished to us.
(ix) (a). The Company is generally not regular in depositing Statutory
dues including Provident Fund, Employees State Insurance, Income Tax,
Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other
statutory dues with appropriate authorities. According to the
information and explanation given to us, arrears of undisputed amount
outstanding as at 31st March 2007 for a period of more than six months
from the date they became payable are as follows
Nature of Dues Due Amount in Rs.
(i). Provident Fund Rs.89,285/-
(ii). Employees State Insurance Rs.25,997/-
(iii).Tax deducted at source Rs.19,99,895/-
(iv). Fringe Benefit Tax Rs. 1,99,427/-
(v). Sales Tax Rs.39,86,317/-
(vi) Excise Duty Rs. 10,44,653/-
(vii) Professional Tax Rs. 1,37,450/-
(b). The Statement of Disputed dues as required by the clause are as
given under
Name of the Authority Nature of Dues Amount in Rs.
Customs Duty Department Customs Duty Rs.62,40,052/-
Assistant Commissioner of
Provident Fund,
Pattancheru, Medak District Provident Fund Rs.13,74,918/-
Name of the Authority Financial
Year to which Forum where disputes
the amount
relates are pending.
Customs Duty Department FY: 1996-97 Hon''ble Customs, Excise,
Gold (Control) Appellate
Tribunal, Bangalore
Assistant Commissioner of
Provident Fund,
Pattancheru, Medak District - Employees Provident Fund
Appellate Tribunal,
New Delhi.
(x) The company is Sick Industrial Company with in the meaning of
clause (o) of sub-section 3 of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA). The accumulated losses of the company at
the end of the account- ing period are more than the fifty percent of
its net worth. Further, the Company has incurred cash losses during the
financial year covered by our audit and the immediately preceding
financial year.
(xi) As per the information received and explanations given to us, the
Company has no outstanding dues to any Banks or financial institutions
or dentures holders.
(xii) As explained to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities and the Company is not required to
maintain any records thereof.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in 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.
(xv) In our opinion, the Company has not given any guarantees for loans
taken by others from banks or financial institutions.
(xvi) The company has not obtained any Term Loans during the period
under review.
(xvii) According to the information and explanations given to us the
funds raised during the period under review on short term basis have
not been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Act.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company had not issued any
debentures.
(xx) The Company had not raised any money by public issues during the
period covered by audit.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Place: Hyderabad VDNR & ASSOCIATES
Date: 28-03-2013 Chartered Accountants
Sd/-
D. Venkateswarlu
Partner
Membership No.: 028488