Garodia Chemicals Limited
149/156 Garodia Shopping Centre
Garodia Nagar Ghatkopar (East)
Mumbai 400 077
Report on the Financial Statements:
1. We have audited the accompanying financial statements of Garodia Chemicals Limited("the Company") which comprise the Balance Sheet as at March 31 2015 and theStatement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements :
2. The Companys Board of Directors is responsible for the matters stated inSection 134(5) of the Companies Act 2013 ("the Companies Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Companies Act read with Rule 7 of the Companies(Accounts) Rules 2014.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Companies Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these financial statements based onour audit.
4. We have taken into account the provisions of the Companies Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Companies Act and the Rules made there under. We conducted our auditin accordance with the Standards on Auditing specified under Section 143(10) of theCompanies Act. Those Standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement.
5. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures 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 assessments the auditor considers internal financial controlrelevant to the Companys preparation of the financial statements that give a trueand fair view in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on whether the Company hasin place an adequate internal financial controls system over financial reporting and theoperating effectiveness of such controls. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Companys Directors as well as evaluating the overallpresentation of the financial statements.
6. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements
7. Basis for Qualified Opinion:
7.1 Attention is drawn to Note No. 20 of Notes on Financial Statements which isreproduced :
"In view of heavy accumulated losses and suspension of the manufacturingactivities no provision has been made for the interest payable on term loan 'facilitiesgranted by IDBI and now taken over by Aaskha Holdings Pvt Ltd. The estimated amount ofinterest payable till 31st March 2015 works out to Rs.165666039/- (previous yearRs.144830392/-). The company is pursuing the matter for one time settlement includingwaiver of interest. Balances of loans and interest payable are subject toconfirmation."
7.2 The non-provision of interest of Rs. 165666039 referred to in para 7.1 the lossfor the year is understated by Rs. .165666039/- and similarly the liability isunderstated by Rs. 165666039/-
7.3 Attention is drawn to Note No. 21 of Notes on Financial Statements which isreproduced:
"Financial statements have been prepared in accordance with the fundamentalaccounting assumption that the company is a going concern."
The above being intention of the management for continuation of the business and thetechnicalities involved therein we are unable to express any opinion on the above.
8. .In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in para 7- the basis forQualified Opinion paragraph the aforesaid financial statements give the informationrequired by the Companies Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the
Company as at 31st March 2015 and its loss and its cash flows for the year ended onthat date.
Report on Other Legal and Regulatory Requirements:
9. 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 Companies Act we give in the Annexure a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
10. As required by section 143(3) of the Companies 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 it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
d. Except for the/possible effects of the matters described in para 7- the basis for
Qualified Opinion paragraph in our opinion the aforesaid financial statements complywith the Accounting Standards specified under Section 133 of the Companies Act read withRule 7 of the Companies (Accounts) Rules 2014.
e. On the basis of the written representations received from the directors as on 31stMarch 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2015 from being appointed as a director in terms of Section164 (2) of the Companies Act.
f. With respect to the other matters in terms of Rule 11 of Companies (Audit and
Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich 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 M.K. MEHTA & CO
(Registration No. 129664W)
DATE: 30th May 2015
Re. : Garodia Chemicals Limited Annexure to the Independent Auditors Report(Referred to in Paragraph 9 of Our Report of Even Date)
(i) (a) The Company has not maintained proper records showing full particularsincluding quantitative details and situation of fixed assets. Attention is drawn to noteno. 18 of the Notes on Financial Statements.
(b) As per the information and explanations given to us these fixed assets have notbeen physically verified by the management. In view of the same we do not offer anycomment on any material discrepancy which may be noticed on physical verification.
(ii) (a)to(c) As per the information and explanations given to us the company has madefull provision for the diminution in the value of inventory. Hence no further comments aregiven in relation to the same.
(iii) (a)(b) The Company has not granted any loans secured or unsecured to companiesfirms or other parties covered in the register maintained under section 189 of theCompanies Act; As the company has not granted any Loans the clauses iii(a) and iii(b) ofPara 3 of the Order are not applicable to the company;
(iv) The Company has not made any transactions relating to purchase of inventoriesfixed assets and sale of goods and services during the year under reference. Hence clause(iv) of Para 3 of the Order is not applicable to the company.
(v) The Company has not accepted any deposits from the public. Hence clause (v) ofPara 3 of the Order is not applicable to the company.
(vi) In view of the suspension of the manufacturing operations the cost recordsspecified by the Central Government under sub-section (1) of section 148 of the CompaniesAct have not been made and maintained by the company.
vii) a) According to the records of the company the company is regular in depositingundisputed statutory dues including provident fund employees state insuranceincome-tax sales-tax wealth-tax service-tax duty of customs duty of excise valueadded tax cess and any other statutory dues with the appropriate authorities whichever isapplicable. According to the information and explanations given to us there were noundisputed statutory dues which have remained outstanding as at 31st March 2015 for aperiod more than six months from the date they became payable;
b) There are no dues of income tax or sales tax or wealth tax or service tax or duty ofcustoms or duty of excise or value added tax or cess payable by the company which have notbeen deposited on account of any dispute pending before any authorities; c) As per therecords of the company there is no amount which is required to be transferred to investoreducation and protection fund in accordance with the relevant provisions of the CompaniesAct 1956 ( 1 of 1956) and rules made there under.
viii) According to the information and explanations given to us the accumulated lossesas at 31st March 2015 are exceeding the net worth of the company and it has incurred cashlosses during the year under reference and in the immediately preceding financial year.
ix) As per the information and explanations given to us the company has defaulted inrepayment of dues to the financial institutions / banks. Attention is drawn to Note No. 20of "Notes on Financial Statements".
(x) As per the information and explanations given to us the company has not givenguarantees for loans taken by others from banks or financial institutions. Hence clause(x) of Para 3 of the Order is not applicable to the company.
(xi) As per the information and explanations given to us the company has not raisedany term loans during the year. Hence clause (xi) of Para 3 of the Order is notapplicable to the company.
(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 reference.
For M.K. MEHTA & CO
(Registration No. 129664W)
DATE: 30th May 2015