ARCHIT ORGANOSYS LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of ARCHIT ORGANOSYS LIMITED (theCompany) which comprise the Balance Sheet as at March 312015 the Statement ofProfit and Loss and Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 (the Act) with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provision of the Act for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial control that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the company has in place an adequate internal financialcontrols system over financial reporting and operating effectiveness of such control. Anaudit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by Companys Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on financial statements.
Basis for Qualified Opinion
(i) The company had entered into derivative contract for sale of foreign currency withHDFC Bank Ltd. in financial year2008-2009 which has resulted into loss to the tune off 19752367/- against which the sum of Rs.5506598/ - has already been paid to HDFCBank Ltd. and charged to Statement of Profit and Loss in the aforesaid financial year.Consequent upon adjustment of fixed deposits amounting to 72364200/- against the balanceloss of Rs. 14245769/- the liability on account of aforesaid loss as per bankstatement provided up to 31st January 2013 stands toRs. 14707069/-including interest which has not been provided for by the company. Such non provision ofliability has resulted into non compliance of Accounting Standard 29 issued by Instituteof Chartered Accountants of India and also resulted into understatement of currentliabilities. Since the interest/charges if any for the period from 1SIFebruary 2013 to 31s1 March 2015 has not been intimated to company theimpact thereof on profit for the year under review could not be ascertained.
(ii) The company has not yet compiled the requisite information related to supplierswho have registered themselves under the Micro Small And Medium Enterprises DevelopmentAct 2006. In the absence of relevant information the requisite disclosures are not madein the financial statements.
Had the observations made by us in Para (i) above been considered there would havebeen loss for the year amounting toRs. 6751340/- as against reported profit of Rs.7955729 /- current liabilities would have beenRs. 183450103/- as against reportedcurrent liabilities of Rs. 168743034/-.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the matter described in the basis for Qualified Opinionparagraph the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the company as at 31stMarch 2015 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2015 (theOrder) issued by the Central Government of India in terms of sub section (11) ofsection 143 of the Act we give in the Annexure a statement of the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
(d) Except for the matter described in the basis for Qualified Opinion paragraphin our opinion the aforesaid financial statements comply with the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
(e) On the basis of written representations received from the directors as on 31 March2015 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2015 from being appointed as a director in terms of Section 164(2) of theAct.
(f) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 and to our bestof our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer notes 30 to the financial statements.
(ii) The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
| ||For G. K. Choksi & Co. |
| ||Chartered Accountants |
| ||[Firm Registration No. 101895W] |
| ||(SANDIP PARIKH) |
|Place: Ahmedabad ||Partner |
|Date: 25hMay2015 ||Membership No. 40727 |
ANNEXURE TO THE AUDITORS REPORT
(Referred to in our Report of even date to the members of ARCHIT ORGANOSYS LIMITED)
(i) (a) The Company has not compiled fixed assets records to show full particularsincluding quantitative details
and situation of fixed assets.
(b) We were informed that the fixed assets were not physically verified by theManagement at reasonable intervals. Therefore we are unable to comment on materialdiscrepancies if any.
(ii) (a) In our opinion physical verification of inventory (excluding inventory lyingwith third parties) has been
conducted by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us theprocedure of physical verification of inventory followed by the management needs to bestrengthened in relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory in our opinion theCompany is maintaining proper records of inventory. No material discrepancy was noticed onphysical verification of the inventory.
(iii) The Company has not granted any loans secured or unsecured to any companiesfirms or other parties covered in the register maintained u/s. 189 of the Companies Act2013. Accordingly clause 3(iii)(a) and 3(iii)(b) of the order are not applicable.
(iv) In our opinion and according to information and explanation given to us; theinternal control system needs to be strengthened so as to commensurate with thesize of the Company and the nature of its business with regard to purchase of inventoryand fixed assets. However there is adequate internal control system with regard to thesale of goods and services. During the course of our audit we have not observed anycontinuing failure to correct major weakness in the internal controls.
(v) The Company has not accepted any deposits as defined in The Companies (Acceptanceof Deposits) Rules 2014. Accordingly the provisions of Clause 3(v) of the Order are notapplicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant torules made by the Central Government. We are of the opinion that prima facie theprescribed accounts and records have been maintained and being made. We have not howevermade a detailed examination of these records with a view to determine whether they areaccurate or complete.
(vii) (a) According to the information given to us the Company is generally regular indepositing with appropriate authorities undisputed statutory dues and Company had noarrears of such outstanding statutory dues as at 31st March 2015 for a periodmore than six months from the date they became payable.
(b) According to the information and explanations given to us the Company has nodisputed outstanding statutory dues as at to 31st March 2015.
(c) According to the information and explanations given to us there are no amountswhich are required to be transferred to the Investor Education and Protection Fund by theCompany.
(viii) The company does not have accumulated losses at year end. The company has notincurred any cash loss during the current financial year even after considering the effectof qualifications reported in Auditors Report. However there would have been cashloss to the tune of Rs. 2842763/- in the immediately preceding year.
(ix) According to the information and explanations given to us the Company has notdefaulted in the repayment of dues to financial institutions banks or debenture holdersduring the year.
(x) According to the information and explanation given to us the Company has not givenany guarantee for loans taken by others from banks or financial institutions during theyear.
(xi) According to the information and explanation given to us the term loan has beenapplied for the purpose for which it was obtained.
(xii) According to the information and explanations given to us no fraud on or by theCompany has been noticed or reported during the year under review.