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Archit Organosys Ltd.

BSE: 524640 Sector: Industrials
NSE: N.A. ISIN Code: INE078I01011
BSE 16:01 | 18 Jun 8.00 0.26
(3.36%)
OPEN

7.69

HIGH

8.00

LOW

7.62

NSE 05:30 | 01 Jan Archit Organosys Ltd
OPEN 7.69
PREVIOUS CLOSE 7.74
VOLUME 8026
52-Week high 53.90
52-Week low 7.62
P/E
Mkt Cap.(Rs cr) 12
Buy Price 7.50
Buy Qty 200.00
Sell Price 8.00
Sell Qty 60.00
OPEN 7.69
CLOSE 7.74
VOLUME 8026
52-Week high 53.90
52-Week low 7.62
P/E
Mkt Cap.(Rs cr) 12
Buy Price 7.50
Buy Qty 200.00
Sell Price 8.00
Sell Qty 60.00

Archit Organosys Ltd. (ARCHITORGANOSYS) - Auditors Report

Company auditors report

To

The Members

ARCHIT ORGANOSYS LIMITED

Ahmedabad.

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Archit OrganosysLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2018 the Statement of Profit and Loss (including other comprehensive income) theStatement of Cash Flows and the Statement of Change in Equity for the year then ended anda summary of significant accounting policies and other explanatory information(hereinafter referred to as Rs.Ind AS financial statements').

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these Ind AS financial statements that give a true and fair view ofthe financial position financial performance including other comprehensive income cashflows and changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act read with relevant Rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding the assets of the Company andfor preventing and detecting 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 Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

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 Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by Company's Directors as well as evaluating the overallpresentation of the Ind AS financial statements.

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

Basis for Qualified Opinion

The company had entered into derivative contract for sale of foreign currency with HDFCBank Ltd. in financial year 2008-2009 which has resulted into loss to the tune ofRs.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 Rs. 2364200/- against thebalance loss of Rs. 14245769/- the liability on account of aforesaid loss as per bankstatement provided up to 31st January 2013 stands to Rs. 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 1st February2013 to 31st March 2018 has not been intimated to company the impact thereofon profit for the year under review could not be ascertained.

Had the observations made by us in Para above been considered there would have beenloss for the year amounting to Rs. 9539189/- as against reported profit of Rs.4977014/- current liabilities would have been Rs. 421636974/- as against reportedcurrent liabilities of Rs. 406929905/-.

Qualified Opinion

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 2018 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 (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub section (11) of section 143 ofthe Act we give in the "Annexure – A" a statement on the mattersspecified 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 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 the Statement of Cash Flowsand Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rules issuedthereunder.

(e) On the basis of written representations received from the directors as on 31 March2018 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2018 from being appointed as a director in terms of Section 164(2) of theAct.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its Ind AS financial statements - Refer note 45 to the Ind AS financialstatements.

(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 Chirag R. Shah & Associates
Chartered Accountants
(Chirag R Shah)
Date: May 30 2018 Proprietor
Place: Ahmedabad Membership No. 106139

Annexure - A to the Independent Auditors' Report of even date on financial statements

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

(b) The fixed assets have been physically verified by the management at reasonableintervals having regard to size of company and nature of its assets. According toinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) According to information and explanation given to us the Management of theCompany has conducted physical verification of inventory at reasonable intervals and nomaterial discrepancies were noticed on such physical verification during the year.

(iii) The Company has not granted any secured / unsecured loan to any parties coveredin the register maintained under section 189 of the Companies Act 2013. Accordingly theprovisions of Clause 3(iii) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans investments guarantees and securities.

(v) According to information and explanations given to us the Company has not acceptedany deposits asdefined in The Companies (Acceptance of Deposits) Rules 2014. Accordinglythe provisions of Clause 3(v) of the Order are not applicable 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 2018 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 31st March 2018 other than statedbelow:

Name of the Statute Nature of Dues Amount in Rs. Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 1077 F.Y. 2013-2014 CPC (Begaluru)

(viii) According to the information and explanations given to us the Company has notdefaulted in the repayment of loans and borrowings to financial institutions banksgovernment or dues to debenture holders during the year.

(ix) The Company has raised moneys by way of further public offer i.e Right offer(including debt instruments) and term loans during the year.

(x) According to the information and explanations given to us no fraud by company orany fraud on the company by its officers and employees have been noticed or reportedduring the year.

(xi) According to the information and explanations give to us the Company haspaid/provided for managerial remuneration in accordance with the provisions of section 197read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us transactions with therelated parties are in compliance with sections 177 and 188 of the Act and details oftransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us the Company has notentered into non-cash transactions with directors or persons connected with him.Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Chirag R. Shah & Associates
Chartered Accountants
(Chirag R Shah)
Date: May 30 2018 Proprietor
Place: Ahmedabad Membership No. 106139

Annexure - B to the Independent Auditors' Report of even date on the FinancialStatements

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 ARCHITORGANOSYS LIMITED ("the Company") as of 31 March 2018 in conjunction withour audit of 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 FinancialReportingissued by the Institute of Chartered Accountants of India (‘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 company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation 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 controls systemover 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 fraudmay occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Chirag R. Shah & Associates
Chartered Accountants
(Chirag R Shah)
Date: May 30 2018 Proprietor
Place: Ahmedabad Membership No. 106139