ADARSH CHEMICLAS AND FERTILIZERS LIMITED
ANNUAL REPORT 2007-2008
The Shareholders of
Adarsh Chemicals & Fertilizers Limited,
1. We have audited the attached Balance Sheet of Adarsh Chemicals &
Fertilizers Limited as at 31st March 2008 and also Profit & Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) order 2003 issued by the
Central Government of India in terms of sub-section (4A) of Section 227 of
the Companies Act, 1956, we enclose in the Annexure, a statement on the
matters specified in paragraph 4 and 5 of the said order, to the extent
applicable to the company.
4. Further, to our comments in the Annexure referred to in para 3 above we
[i](a) No provision is made for liability for penalty amounting to
Rs.13,33,84,605/- [Refer Note No. 1(B)].
(b) Liability for interest has not been ascertained nor provided for in
respect of Fixed Deposits and the Inter Corporate Deposits. [Refer Note
(c) Bank balance with SBI in Allotment money account of Rs. 33,375/- is
subject to conformation Refer Note No. 4].
(d) Non disclosure of dues to Small Scale Industries [Refer Note No. 5].
The effect of Para (a) above has resulted in the under statement of the
loss and Current Liabilities by Rs. 13,33,84,605/-. Where as the effect of
note nos. (c), and (d) cannot be quantified.
[ii] We have obtained all the information and explanations,which to the
best of our knowledge and belief were necessary for the purpose of our
[iii] Subject to what is stated in para 4 (i) herein above, in our
opinion, proper books of account as required by law have been kept by the
Company so far as appears from our examination of the books.
[iv] The Balance Sheet and the Profit & Loss Account referred to in this
report are in agreement with the books of account.
[v] In our opinion, except AS 22 'Accounting for taxes on income' as
stated in Note No. 8, the profit and loss account and Balance Sheet comply
with the accounting standards referred to in sub section (3C) of section
211 of the Companies Act, 1956 to the extent applicable.
[vi] As per the expert opinion obtained by the company, the directors on
the Board of the company are not disqualified for being appointed as
directors of the company in terms of section 274(1)(g) of the Act (Refer
[vii] In our opinion and to the vest of our information and according to
the explanations given to us, because of the effects of the matters
discussed in Paragraphs 4 (i) above, the financial statement do not 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 2008.
(b) In the case of Profit & Loss Account of the 'Loss' for the year ended
on that date; and
(c) In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
FOR N.N. SHAH & ASSOCIATES
Membership No.: 031351
Annexure to the Auditors' Report
[i] The company has maintained the fixed assets register showing full
particulars including quantitative details and location of fixed assets,
etc. Fixed Assets of the company have not been physically verified by the
management during the year and hence the discrepancies, if any, cannot be
[ii] None of the fixed assets have been re-valued during the year.
[iii] The Company has taken interest free loans from the parties covered
under the register maintained under section 301 and the companies under the
same management as defined under section 370 (1-B) of the Companies Act,
1956. The other terms and conditions are not prejudicial to the interest of
[iv] The Company has not granted loans to the companies, firms or other
parties covered under the register maintained under section 301 and the
companies under the same management as defined under section 370 (1-B) of
the Companies Act, 1956.
[v] The Company has accepted deposits from the Public. However, the
company has not complied with the provisions made under section 58A and the
rules made there under in regard to the maintenance of Liquid Assets,
repayment of interest and principal amount of fixed deposits, issue of
advertisement, rate of interest.
[vi] The Company does not have an Internal Audit System.
[vii] According to the records of the Company, undisputed statutory dues
including Provident Fund, Employees State Insurance and Other statutory
dues wherever applicable have been generally regularly deposited with the
[viii] According to the books and records examined by us and as per the
information and explanations given to us, no undisputed amounts payable in
respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty and Excise Duty
were outstanding as at 31st March 2005 for a period exceeding six months
from the date they became payable.
[ix] During the course of our audit of the books of account carried out in
accordance with generally accepted auditing practices, we have not come
across any personal expenses which have been charged to Profit & Loss
Account other than those payable under contractual obligations or in
accordance with generally accepted business practices.
[x] The Company is a sick Industrial Company within the meaning of Clause
'O' of Sub-section  of Section '3' of the Sick Industrial Companies
[Special Provisions] Act, 1985. However, the reference has not been made to
the Board for Industrial and Financial Reconstruction under section 15 of
[xi] The Company has not carried out manufacturing activity during the
year and hence the sub-clauses x, xi, xii, xiv and xvi of Clause A of
Paragraph 4 have not been reported.
FOR N.N. SHAH & ASSOCIATES
Membership No.: 031351