| We have audited the accompanying financial statements of Sanghi
Corporate Services Limited, which comprise the Balance Sheet as at 31st
March, 2015, the Statement of Profit and Loss, the Cash Flow Statement
for the year then ended, and a summary of the significant accounting
policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Board of Directors of the Company is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ('the act') with
respect to the preparation of these financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of Companies
(Accounts) Rules,2014. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; design, implementation and maintenance of
adequate internal financial controls, that were operating effectively
for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act.Those Standards require that
we comply with the ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal control relevant to the
Company's preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial statements
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide 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
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March 2015, and its loss and its cash flows for the year ended
on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the
financial statements:
a) Point 7 (b) of Annexure to Audit Report & Sub Point No.1 of Point
(B) in Note 18 of the financial statements, 'which describes the
uncertainty related to the outcome of the Block Assessment by the
Income 'Pax authorities up to the period of search and ascertained the
liabilities to the extent of Rs.36,047,377/- which has been disputed by
the Company before the higher authorities.
b) Point 8 of Annexure to Audit Report, 'which indicates that the
Company has accumulated losses and its net 'worth has been fully
eroded, the Company has incurred a net cash loss during the current and
previous years and, the Company's current liabilities exceeded its
current assets as at the balance sheet date. These conditions, along
'with other matters set forth in Note 7, indicate the existence of a
material uncertainty that may cast significant doubt about the
Company's ability to continue as a going concern. However, the
financial statements of the Company have been prepared on a going
concern basis for the reasons stated in the said Note.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure a statement on the matters
specified 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 best of 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 the Company 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 Statement dealt with by this Report are in agreement with the
books of account;
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
e) The going concern matter described in sub-paragraph (b) under the
Emphasis of Matters paragraph above, in our opinion, may have as
adverse effect on the functioning of the Company;
f) On the basis of written representations received from the directors
as on March 31st, 2015, taken on record by the Board of Directors, none
of the directors is disqualified as on March 31st, 2015 from being
appointed as a director in terms of Section 164(2) of the Act;
g) In our opinion and to the best of our information and according to
the explanations given to us, we report as under with respect to other
matters to be included in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014:
i. The Company does not have any other pending litigation which would
impact its financial position except litigation mentioned in point no.
7 (b) to the annexure to audit report;
ii. The Company has made provision, as required under the applicable
law or Accounting Standards,for material foreseeable losses, if any, on
long term contracts including derivative contracts. However the Company
has recognised total loss on account of Derivative Trading of Equity
Futures of Rs. 11,245,810/- for the year including the loss of Rs.
39,54,875/-pertaining to prior years.
Annexure to the Independent Auditors' Report
(Referred to our Audit Report of even date to the members of Sanghi
Corporate Services Limited on the accounts of the Company for
the year ended 31st March, 2015)
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us during the course of
our audit, we report that:
1. In respect of its Fixed Assets:-
a. There is no Fixed Assets during the year.
b. This clause is not applicable in view of clause a above.
c. This clause is not applicable in view of clause a above.
2. In respect of its inventories:-
a. As explained to us, inventories have been physically verified by
the Management at regular intervals during the year.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c. The Company has maintained proper records of inventories. As
explained to us, there was no material discrepancies noticed on
physical verification of inventory.
3. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the Registered maintained
under Section 189 of the Companies Act, 2013.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with size of the Company and the nature of its business for the
purchase of inventory and fixed assets and the sale of goods and
services and during the course of our audit we have not observed any
major weakness in such internal control system.
5. According to information and explanations given to us, the Company
has not accepted any deposit during the year.
6. The Company does not required to maintained Cost Records as per
Section 148 (1) of the Companies Act, 2013.
7. In respect of statutory dues:
a. According to the information and explanations given to us and based
on the records of the Company examined by us, the Company is regular in
depositing the undisputed statutory dues including Provident Fund,
Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, value added tax, cess and other material
statutory dues, as applicable, with the appropriate authorities in
India for a period of more than six months from the date they became
payable;
b. According to the information and explanations given to us, there
are no dues of Sales Tax, custom duty, wealth tax, excise duty, value
added tax or cess which have not been deposited on account of any
disputes except dues on account of Income Tax aggregating to Rs.
36,047,377/- (dispute whereof is pending before Income Tax Appellant
Tribunal, Mumbai for the block assessment A. Y. 1988-1998);
c. The Company has been regular in transferring amounts to the
Investor Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and Rules made there
under within time. There was no such incidence which occurred during
the year.
8. The Company has accumulated losses at the end of the financial year
amounting to Rs.38,289,153/- and out of total accumulated losses at end
of the year Company has incurred cash losses in the financial year
amounting to Rs. 13,252,474/-.
9. The Company does not have any outstanding dues to financial
institutions, banks or debenture holders during the year.
10. In our opinion and according to the information and the
explanations given to us, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
11. The Company did not have any term loans outstanding during the
year.
12. According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For Vivek R. Agarwal & Co.
Chartered Accountants
Vivek Agarwal
Place: Mumbai (Proprietor)
Date: 18.07.2015 Membership No: 044372
FRN: 129058W | 