| We have audited the accompanying financial statements of S.S. Organics
Limited ("the Company"), which comprises the Balance Sheet as at March
31,2015, and the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of directors is responsible for matters stated in
sub-section (5) of section 134 of the Companies Act, 2013 ('the act')
with respect to the preparation and presentation 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
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
judgements and estimates that are reasonable and prudent; design,
implementation and maintenance adequate internal financial controls,
that are 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.
Auditor's 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
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143 subsection 10 of the Act. Those standards
require that we comply with 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 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 internal financial control relevant to the Company's
preparation of the financial statements, that give a true and fair
view, in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on
whether the company has in place an adequate internal financial control
system over financial reporting and other operating effectiveness of
such controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company's Directors, 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.
Basis for Qualified Opinion
1. Debtors balance amounts to Rs.64,25,418/- in the financial
statement. Management has not obtained any confirmation of balances
from the debtors for amount Rs.14,69,117./-. In the absence of Debtors
confirmations for our verification we are unable to comment on the
appropriateness of the carrying values of such amount and its
consequential effects, if any, on the financial statements are
presently not ascertainable. Our audit report on the financial
statements for the year ended March 31,2014 was also qualified for the
same matter.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion paragraph, the 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:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2015;
b) in the case of the Statement of Profit and Loss , of the loss for
the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
a) We draw attention to our comments to the financial statements which
describe the uncertainty related to the outcome of the 21 lawsuits
filed against the Company by various Statutory Authorities and Non
Statutory concerns. Our opinion is not qualified in respect of these
matters.
b) Attention is drawn to Note No.9 of the Notes to the Accounts of the
Company, relating to major fire accident occurred on 07-Jan-2015, which
damaged the Plant & Machinery, Buildings, QC Lab equipments, Furniture
& Fixtures and Office Equipments, installed in one of the Blocks. We
are of the opinion that the damage of the fixed assets during the
financial year will not affect the Going Concern status of the Company
due to the measures taken.
Management could not ascertain the damage of individual asset
components. Based on the available information and the claim submitted
with the Insurance Company, damaged assets were removed from the net
block.
Management and the Insurance Company are in the process of evaluating
the claim / loss occurred due to fire.
Actual outcome of the Insurance claim is not ascertained and due to
lack of information loss could not be recognised in the current
financial year 2014-15. On actual receipt of the claim, loss or profit
if any will be accounted.
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
sub-section (11) of section 143 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
purpose of our audit;
b) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above, 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 Company does not have any branches; hence reporting under this
clause is not applicable.
d) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts;
e) Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet,
Statement of Profit and Loss, and Cash Flow Statement comply with the
Accounting Standards under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014.
f) The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, may not have an adverse effect on the
functioning of the Company.
g) On the basis of written representations received from the directors
as on March 31,2015, and taken on record by the Board of Directors, none
of the directors are disqualified as on March 31,2015, from being
appointed as a director in terms of sub-section (2) of section 164 of
the Act.
h) The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above.
i) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and 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
financial position in its financial statements - Refer Note 20 (c) to
the financial statements;
II. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
III. There were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company
Annexure to the Auditor's Report
The Annexure referred to in paragraph 7 of our report of even date to
the members of S.S. Organics 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 explanation given to us during the course of our
audit, we report that:
i.
(a) The company has maintained proper records showing full particulars,
including quantitative details and situation of its fixed assets.
(b) As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.
ii.
(a) As explained to us, inventories have been physically verified
during the year by the management at reasonable intervals.
(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 the nature of its business.
(c) In our opinion and on the basis of our examination of the records,
the Company is generally maintaining proper records of its inventories.
No material discrepancy was noticed on physical verification of stocks
by the management as compared to book records.
iii. According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
not granted any loans, secured or unsecured, to companies, firms or
other parties listed in the register maintained under section 189 of
Act.
iv. In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventories & fixed assets and payment
for expenses & for sale of goods. During the course of our audit, no
major instance of continuing failure to correct any weaknesses in the
internal controls has been noticed.
v. The Company has not accepted any deposits from the public covered
under section 73 to 76 of the Companies Act, 2013.
vi. As per information & explanations given by the management,
maintenance of cost records has been prescribed by the Central
Government under sub-section (1) of section 148 of the Act and we are
of the opinion that prima facie the prescribed accounts and records
have been made and maintained.
vii. (a) The company is not regular in depositing the undisputed
statutory dues including Income-tax, Sales-tax, Service Tax, cess with
the appropriate authorities and there have been serious delays in a
large number of cases. According to the information and explanation
provided to us, arrears of undisputed amount outstanding as on 31st
March, 2015 for a period more than six months from the date they became
payable are as follows :
Statement of Arrears of Statutory Dues Outstanding for more than 6
Months
Nature of the Dues Amount (Rs.)
Sales Tax 33,01,137
Professional Tax 2,07,300
Service Tax 10,61,046
TDS 36,59,414
ESI 26,373
b) Statement of Disputed dues as required by the clause are as given
under:
Name of Authority Nature of Dues Amount in Rs.
Customs Customs Duty Rs.62,40,052/-
Department
Office of the Recovery Provident Fund Rs.29,94,301/-
officer - Employees
Provident Fund
Organization
Income Tax Income Tax Rs.11,84,817/-
Department
Income Tax Income Tax Rs.1,36,88,740/-
Department
Income Tax Income Tax Rs.89,24,820/-
Department
Income Tax Income Tax Rs.61,270/-
Department
Name of Authority Financial year to Forum where
which the amount disputes are pending
relates
Customs 1996-97 Hon'ble Customs,
Department Excise, Gold(Control)
Appellate Tribunal,
Bangalore
Office of the Recovery ----- Stay granted by High
officer - Employees Court of Judicature
Provident Fund - Hyderabad For the State
Organization of Telangana &
Andhra Pradesh
Income Tax 2004-05 Income Tax, Circle -
Department 1(1), Hyderabad
Income Tax 2005-06 Asst. Commissioner of
Department Income Tax, Circle - 8(1),
Hyderabad
After reassessment dues
as on date is of
Rs.32,34,522/-.
Income Tax 2005-06 Dy. Commissioner of
Department Income Tax, Circle -
1(1), Hyderabad
Income Tax 2008-09 CPC - Bangalore
Department
(c) According to the information and explanation given to us, there
were no amounts which were required to be transferred to the Investor
Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules there
under.
viii. The accumulated losses of the company at the end of the
accounting period are more than the fifty percent of its net worth. The
company has incurred cash loss of Rs.4,31,96,124/- during the financial
year and Rs. 3,23,99,809/- immediately preceding financial year.
ix. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
x. According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.
xi. Based on our audit procedures and on the information given by the
management, the term loans have been applied for the purpose which they
were raised.
xii. Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud has been noticed or
reported during the course of audit.
For VDNR & Associates
Chartered Accountants
FRN:011251S
(Venkateswarlu D)
Place: Hyderabad Partner
Date:30-May-2015 M.No.028488
|