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Blue Chip India Ltd.

BSE: 531936 Sector: Financials
NSE: BLUECHIP ISIN Code: INE657B01025
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Blue Chip India Ltd. (BLUECHIP) - Auditors Report

Company auditors report

To

The Members of

Blue Chip India Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Blue Chip India Limited("the Company") which comprise the Balance Sheet as at March 312016 theStatement of Profit and Loss and Cash flow Statement forthe yearthen ended and a summaryof significant accounting policies and other explanatory information.

Management’s Responsibility forthe Financial Statements

The Company’s Board of Directors is responsible forthe 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 position andfinancial performance of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor’s Responsibility

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 thereunder.

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 performingprocedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor’s judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalcontrol relevant to the Company’s preparation and fair presentation of the financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany’s management as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us 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 March31st 2016 and its profits and its cash flows forthe year ended on that date.

The financial statements of the company as at 31st March 2105 and forthe yearthen endedwere audited by another firm of Chartered Accountants who vide their report dated 29thMay 2015 expressed an unmodified opinion on those financial statements.

Emphasis of Matters :

(a) Attention is drawn to Note No. 22 of financial statements related to non provisionof 0.25% of standard assets as per RBI guidelines.

(b) Attention is drawn to Note No. 23 of financial statements related to Loans &advances of Rs. 23468629/- given by the company which are outstanding since long andthe management is of the opinion that the amount is fully recoverable and no provision isrequired.

(c) Attention is drawn to Note No. 30 of financial statements related to income taxdemand of Rs. 458936/- for several years for which no provision has been made in theaccounts.

Our opinion is not modified in respect of this matter.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) order 2016 (‘theorder") issued by the Central Government of India in terms of subsection (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure A" statement onthe matters specified in paragraph 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 theCompanyso far as appears from our examination of those books.

c) The Balance Sheet and the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified 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 of the Companyas on March 312016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2016 from being appointed as a director in terms ofsub-section (2) of section 164 of Companies Act 2013.

f) With respect to the adequacy of the internal financial control over financialreporting of the company and the operating effectiveness of such controls refertoourseparate report in "Annexure-B".

g) With respect to the other matters to be included in the Auditor’s Report inaccordance with the rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us :

i. The impact of pending litigations on the financial position is disclosed under note30 contingent liabilities to financial statements.

ii. The Company did not have any long-term contracts including derivatives contracts asat 31st March 2016 for 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.

Place : Kolkata

Dated : the 28th day of May 2016

For DEOKI BI JAY & CO.

Chartered Accountants

Firm Regn. No. 313105E

CA. D. N. Agrawal

Partner

Membership No. 051157

Annexure A to the Independent Auditor’s Report

Referred to in paragraph 1 of our Report of even date on the financial statements ofthe Blue Chip India Limited for the year ended 31st March 2016.

On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:

i. (a) The Company records for fixed assets are not updated.

(b) Fixed assets of the Company are not physically verified by the management duringthe year.

(c) Details about land are not available. Hence we are unable to comment under thisclause.

ii. As explained to us physical verification of inventory has been conducted atreasonable intervals by the management and no material discrepancies were noticed on suchverification.

iii. According to the information and explanations given to us the Companyhasnotgranted any loans secured or unsecured to companies firms Limited Liability partnershipor other parties covered in the register maintained under section 189 of the CompaniesAct 2013. Hence clause (iii) (a) (b) and (c) of the said order are not applicable.

iv. Accordingto the information and explanation given to us the Company has not givenany Loans Guarantees and Security as per provisions of section 185 and 186 of the Act.The company has investments in other body corporates and as per the information andexplanation given to us and based on our examinationof the records of the Company thecompany has complied with provisions of section 185 and 186 of the Act.

v. According to the information and explanation given to us the Company has notaccepted any deposits from the public.

vi. Maintenance of cost records is not specified by the Central Government under subsection (1) of section 148 of Companies Act 2013 and hence this clause is not applicableto the Company.

vii. a) According to the records of the Company and as per the information andexplanation given to us it has been regular in depositing undisputed statutory dues likeProvident Fund Employee State Insurance Income Tax and other statutory dues to theextent applicable with the appropriate authorities. The provisions related to Sales TaxValue Added Tax Cess Duty of Custom Duty of Excise are not applicable to the Company.

According to the information and explanations given to us no undisputed amount payablein respect of statutory dues other than Income Tax of Rs. 458936/- were outstanding atthe year end for a period of more than six months from the date they become payable.

b) Details of dues of income tax which have not been deposited as on 31st March 2016on account of disputes are given below :

Name of the statue Nature of dues Amount (Rs.) Period to which the amount relates Forum
Income Tax Act 1961 Income Tax Demands 725990/- F.Y. 2011 - 12 CIT (Appeals)
Income Tax Act 1961 Income Tax Demands 287130/- F.Y. 2012 - 13 CIT (Appeals)

viii. On the basis of records examined by us and the information and explanation givento us the Company has no borrowing from financial institutions Banks and debentureholders. Hence comment on this clause of the said order is not applicable

ix. The Company has not raised any money by way of initial public offer orfurtherpublic offer or term loan during the year. Hence this clause is not applicable.

x. During the courses of our examination of the books and record of the Companycarried out in accordance with the generally accepted audit practice in India andaccording to the information and explanation given to us we have neither come acrossinstance of fraud on or by the Company noticed or reported during the year nor have webeen informed of such by the management.

xi. According to the information and explanation given to us no managerialremuneration has been paid by the Company so provision of section197 of Companies Act2013 is not applicable to the Company.

xii. The Company is not a Nidhi Company and hence this clause is not applicable to theCompany.

xiii. According to the information and explanation given to us and based onourexamination of the records of the Company the company has complied with provisions ofsection 177 and 188 of the Companies Act 2013 in relation to all transactions enteredinto with the related parties and the details havebeen disclosed as required by theapplicable accounting standards in the financial statements.

xiv. As per information & explanation given to us the Company has not made anypreferential allotment or private placement of shares nor fully partly convertibledebentures during the year under review; as such provisions of section 42 of the CompaniesAct 2013 are not applicable to the company.

xv. To the best of our knowledge and belief and as per the information and explanationgiven to us the Company has not entered into any non cash transactions with directors orpersons connected with him.

xvi. The Company is registered under section 45-IA of the Reserve Bank of India Act1934.

Place : Kolkata

Dated : the 28th day of May 2016

For DEOKI BIJAY&CO.

Chartered Accountants

Firm Regn. No. 313105E

CA. D. N. Agrawal

Partner

Membership No. 051157

Annexure B to the Independent Auditor’s Report

Referred to in paragraph 2(f) of our Report of even date on the financial statements ofthe Blue Chip India Limited for the year ended 31st March 2016.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Blue ChipIndia Limited ("the Company") as of March 312016 in conjunction with our auditof the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on "the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of lndia"(ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material Misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Adverse Opinion

According to the information and explanation given to us and based on our audit thefollowing material weaknesses has been identified in the operating effectiveness of theCompany’s Internal Financial Control Over Financial Reporting as at March 31 2016 :

i. The Company’s Internal Control System for updating fixed assets records andphysical verification thereof were not operating effectively which could potential resultin material misstatement of the company’s fixed assets balances.

ii. The Company’s Internal Control System for reconciliation of income tax dueswere not operating effectively which could potentially result in material misstatement ofCompany’s tax payable/ receivable account balances.

A ‘material weakness’ is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company’s annual or interim financialstatements will not be prevented or detected on a timely basis.

In our opinion the company hasin all material respects maintained adequate internalfinancial Controls over financial reporting as of March 312016 based on the internalcontrol over financial reporting criteria established by the company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India and because of the possible effects of the material weaknessesdescribed above on the achievement of the objectives of the control criteria theCompany’s internal financial control over financial reporting were not operatingeffectively as of March 312016.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2016financial statement of the company and these material weaknesses do not affect ouropinion on the financial statements of the company.

Place : Kolkata

Dated : the 28th day of May 2016

For DEOKI BIJAY&CO.

Chartered Accountants

Firm Regn. No. 313105E

CA. D. N. Agrawal

Partner

Membership No. 051157