To The Members of
Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of NATURA HUE CHEMLIMITED ("the Company") which comprise the Balance Sheet as at March 312017 and the Statement of Profit and Loss and Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory informationwhich we have signed under reference to this report.
Managements Responsibility for the Standalone 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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on 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 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 andthe 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 assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
Basis of Qualified Opinion
The Company has not complied in respect of the following Accounting Standard notifiedVide Companies (Accounting Standards) Rules 2014:
a) The accounting policy as referred to in note No.38(b) of the financial statementswith respect to the liability on account of Gratuity Liability is not recognized insteadof recognizing the liability for the same as the present value of the defined benefitobligation at the balance sheet date calculated on the basis of actuarial valuation inaccordance with the notified Accounting Standard 15 on Employee Benefits. Theconsequential impact of adjustment if any owing to this non compliance on thefinancial statements is presently not ascertainable.
b) b)Note No.30 draws attention for non provision of bad debts on debtors outstandingover a period of more than 1 yearrecovery of which is doubtful.There are risks anduncertainities that is inevitably attached over the debtors which shall call for properprovisioning to show the debtors at its true and fair value as per"AS-29Provisionscontingent Liabilitiescontingent assets". In our view thedebtors are overstated to he amount of provision which shall be made on them.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects/possible effects of the matters described in the Basisfor Qualified Opinion paragraph the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31 March 2017and its profit and its cash flows for the year ended on thatdate.
Emphasis of Matters
We draw attention to the following matters in the notes to the financial statements:-
Note No.39 to the Standalone financial statements which describes regarding certaindisclosure relating to Micro / Small / Medium Enterprises
Our opinion is not qualified / modified in respect of other matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of subsection (11) ofsection 143 of the Act we give in the Annexure A a statement on the matters specified inthe 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 theCompany so far as it appears from our examination of those books
c) In our opinion the balance sheet the statement of profit and loss and the cash flowstatement dealt with by this Report are in agreement with the books of account.
d) Except for the effects/ possible effects of the matters described in the paraof Basis of Qualified Opinion paragraphin our opinion the aforesaid standalone financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014
e) on the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act; and
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) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditors Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014
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;the question of commenting on any material foreseeable losses thereon does not arise
iii. There has not been an occasion in case of the Company during the year under reportto transfer any sums to the
Investor Education and Protection Fund. The question of delay in transferring such sumsdoes not arise iv. The company had made requisite disclosure in its financial statements[Refer Note No 42 of standalone financial statement]as to holdings as well as dealings inspecified bank notes during the period from 8th November 2016 to 30th December 2016 andare in accordance with the books of accounts maintained by the company.
For Madhuresh Gupta and Co
FRN 005910 C
(CA M K GUPTA)
ANNEXURE A TO THE AUDITORS REPORT
The annexure referred to in Independent Auditors report to the members of theCompany on the Standalone financial statements for the year ended 31st March 2017 wereport that:
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The Company has a program for the physical verification of fixed assets at periodicintervals. In our opinion the period of verification is reasonable having regard to thesize of the company and nature of its assets. No significant discrepancies were noticed onsuch verification.
c) We have inspected the original deeds of the immovable properties of the company heldas fixed assets which are in the custody of the Company. Based on our audit procedures andthe information and explanation received by us we report that all title deeds ofimmovable properties of the company held as fixed assets are held in the name of theCompany However we express no opinion on the validity of the title of the Company tothese properties.
(ii) The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material.
(iii) The Company has not granted any loans or advances in the nature of Loans toparties covered in the register maintained under section 189 of the Companies Act 2013.Hence the question of reporting whether the terms and conditions of such loans areprejudicial to the interest of the Company whether reasonable steps for recovery ofoverdue of such loans are taken does not arise.
(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 and advances made
(v) The Company has not accepted any deposits from public.
(vi) According to the information and explanations provided by the management theCompany is not engaged in production of any such goods or provision of any such servicesfor which Central Govt. has prescribed particulars relating to utilization of material orlabour or other items of cost. Hence the provisions of section 148(1) of the Act do notapply to the Company. Hence in our opinion no comment on maintenance of cost recordsunder section 148(1) of the Act is required.
(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccounts in respect of undisputed statutory dues including income tax sales tax wealthtax service tax custom duty excise duty cess Provident Fund and other materialstatutory dues applicable to it have been regularly deposited during the year by theCompany with the appropriate authorities. As informed to us the Employees State InsuranceAct Investor Education & Protection Fund Act are not applicable to the Company andhence they do not have any dues on these account.
b) According to the records of the company there are no dues of income-tax Sales TaxService Tax custom duty wealth tax excise duty / cess which have not been deposited onaccount of any dispute except that an amount of Rs.2309964.5 is showing as demand of TDSin Traces Site.
(viii) According to the records of the Company the Company has not borrowed fromfinancial institutions or banks or government issued debentures till 31st March 2017.Hence in our opinion the question of reporting on defaults in repayment of loans orborrowing to a financial institutions bank government or dues to debenture holders doesnot arise.
(ix) The Company did not raise any money by way of initial public offer of furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3(ix) of the order is not applicable.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India we haveneither come across any instance of fraud on or by the Company noticed and reportedduring the year nor have we been informed of such case by the Management.
(xi) According to the records of the Company the Company has not paid or provided forManagerial remuneration for the financial year ended 31st March 2017. Accordinglyparagraph 3(xi) of the order is not applicable.
(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 and based on outexamination of the records of the Company transactions with the related party are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations given 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 and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected to him. Accordingly paragraph 3(xv) ofthe 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 Madhuresh Gupta and Co || |
|Chartered Accountants || |
|FRN 005910 C || |
|(CA M K GUPTA) || |
|Proprietor ||PLACE: RAIPUR |
|M.No.074636 ||DATED: 30.05.2017 |
ANNEXURE B TO THE AUDITORS REPORT
[Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" of our Report of even date to the members of NATURA HUE CHEM LIMITEDon the accounts of the company for the year ended 31st March 2017]
We have audited the internal financial controls over financial reporting of NATURAHUE CHEM LIMITED ("the Company") as of March 31 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Companys 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 India".] These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to companys policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors judgement including the assessment of the risks of materialmisstatement 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 Companys 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.
According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified as at March 2017:-
a. The Company did not have an appropriate internal control system for theidentification of Micro / Small / Medium Enterprises Development and SSI Units as per therequirements of the MSMED Act. These could potentially result in the Companysaccount balances and Interest expenses not charged on account of non compliance of theabove Act. b. The Company did not have an appropriate internal control system for relatingto provision on noncurrent assets which seems to be irrecoverable.
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 Companys annual financial statementswill not be prevented or detected on a timely basis.
In our opinion except for the effects/possible effects of the material weaknessdescribed above on the achievements of the objectives of the control criteria the Companyhas maintained in all material respects an adequate internal financial controls systemover financial reporting and such internal financial controls over financial reportingwere operating effectively as at March 31 2017 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. We have considered the material weakness identified and reported above indetermining the nature timing and extent of audit tests applied in our audit of theMarch 31 2017 financial statements of the Company and the material weakness does notaffect our opinion on the financial statements of the Company.
|For Madhuresh Gupta and Co || |
|Chartered Accountants || |
|FRN 005910 C || |
|(CA M K GUPTA) || |
|Proprietor ||PLACE: RAIPUR |
|M.No.074636 ||DATED: 30.05.2017 |