| We have audited the accompanying financial statements of IO System
Limited ('the Company'), which comprise the balance sheet as at 31
March 2015, the statement of profit and loss and the cash flow
statement for the year 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 the matters stated
in Section 134(5) 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 the 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; and 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.
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(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 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 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 controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the 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 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 31 March 2015 and its losses 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, 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 the 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 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) on the basis of the written representations received from the
directors as on 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
(f) 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 does not have any pending litigations which would impact
its financial position.
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 REFERRED TO IN PARAGRAPH OF OUR REPORT OF EVEN DATE
The comments are in seriatim of the order
(i) (a) The company is maintaining proper records of its Fixed Assets
showing full particulars including quantitative details and situation
thereof.
(b) As informed, the fixed assets were physically verified by the
management at reasonable intervals. No discrepancy on such verification
noticed by the management and reported to us.
(ii) (a) The company is carrying non moving inventories valuing Rs.
2.25 lacs which have been physically verified at the year-end by the
management. A provision of Rs. 2.00 lacs had already been made for
diminution in value/ obsolesce.
(b) The procedures followed by the management were reasonable.
(c) The company is maintaining proper records of inventory. No
discrepancy noticed on verification.
(iii) As per the information and explanations given to us and certified
by the management and verified from the books of account, the company
has not granted any loans secured or unsecured to companies, firms or
other parties covered in the register maintained in pursuance of
Section 189 of the Companies Act, 2013, as such there are no comments
on sub clauses a) and b).
(iv) The company has adequate internal control system in commensuration
with its size and nature of its business for the purchase of inventory,
fixed assets and for the sale of goods and services. We did not observe
any weakness in the internal control system.
(v) The Company has not accepted any deposits from the public and as
such the clause is not applicable.
vi) As per information and explanation given to us, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, employees' state insurance fund, income-tax, wealth-tax, service
tax, customs duty, excise duty, value added tax, cess and other
material statutory dues applicable to it.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance fund, income-tax, wealth-tax, service tax, duty of
customs, duty of excise, value added tax, cess and other material
statutory dues were outstanding at the period end, for a period of more
than six months from the date they became payable.
(b) According to information and explanations given to us, there are no
dues of income tax, sales tax, wealth tax, service tax, duty of
customs, duty of excise, value added tax and cess which have not been
deposited with the appropriate authorities on account of any dispute.
(c) Details of dues of Sales Tax, Income Tax, Custom Duty, Excise Duty
which have not been deposited as on 31st March, 2015 on account of
disputes are attached as Annexure A.
(d) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
(viii) The net worth of the company (paid-up capital free reserve),
which is Rs.16.90 Crores, has been completely eroded as the accumulated
losses are Rs. 20.12 Crores as on 31st March 2015. The company has
suffered a cash loss of Rs. 52.06 Lacs in the financial year ended on
31.03.2014 as against cash loss of Rs. 52.54 lacs in the immediate
preceding year.
ix) The company has not defaulted in repayment of dues to any financial
institution, Bank or debenture-holder.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions, and as such clause is not applicable.
(xi) The Company does not have any term loans outstanding during the
period, and as such clause is not applicable .
(xii) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of audit.
List of disputed cases of Sales Tax/Income Tax/ Custom Duty/Excise
Duty, authority with whom pending and the amount involved is detailed
as under:-
S.
No. Name of Statute Assessment Nature of Dues Amount
Year
1 U.P. Sales Tax 1997-98 Sales Tax 116,536
2 U.P.(Central/ 1998-99 Sales Tax 45,254
Local)
3 Delhi Sales Tax 2000-01 Sales Tax 71,789
4 Delhi Sales Tax 2001-02 Sales Tax 2,572,528
5 Delhi Sales Tax 2003-04 Sales Tax 1,865,674
6 Delhi Sales Tax 2004-05 Sales Tax 230,073
7 T.N. Sales Tax 2000-01 Sales Tax 184,849
8 T.N. Sales Tax 2002-03 Sales Tax 140,111
9 West Bengal 1999-2000 Sales Tax 288,098
Sales Tax
10 West Bengal 2000-01 Sales Tax 90,650
Sales Tax
11 West Bengal 2002-03 Sales Tax 1,011,106
Sales Tax
12 Central Excise
Act 1992-00 Penalty and 2,387,500
demand
13 Central Excise
Act 1999-01 Interest and 69,969
penalty
14 Central Excise
Act 2002-03 Interest and 19,427
penalty
15 Central Excise
Act valuation
case Excise Duty 1,509,876
16 Income Tax
Act 2002-03 Penalty 1,700,000
1961
17 Income Tax
Act 1996-97 Addition on 45,61,777
1961 Account of
Sale cum
Lease back
transaction.
Name of statue Forum Where dispute is pending
U.P. Sales Tax JT commissioner of Trade Tax Nodia
U.P.(Central/Local) JT Commissioner of Trade Tax Nodia
Delhi Sales Tax Asst. Comm.ix, Delhi Sales Tax
Delhi Sales Tax Addii. Comm. ii, Delhi Sales Tax
Delhi Sales Tax Addii. Comm. ii, Delhi Sales Tax
Delhi Sales Tax STO Delhi Sales Tax
T.N. Sales Tax CT iii, T.N.S. Tax Appeal Asstt. Comm
T.N. Sales Tax CTii, T.N.S. Tax Appeal Astt. Comm.
West Bengal Sales Tax Astt. Comm.Soth circle Directorate of
commercial West bengal
West Bengal Sales Tax Asst. Comm. South circle, Directorate of
commercial West Bengal
West Bengal Salax Asst.Comm. South Circle, Directorate
Commercial West Bengal
Central Excis Act demand CEGAT New Delhi
Central Excise Act CEGAT New Delhi
penalty
Central Excise Act
penalty CEGAT New Delhi
Central Excise Act CEGAT New Delhi
Income Tax Act 1961 High court Allahabad
Income Tax Act1961 High court Allahabad
It is hereby certified that there are no cases other than the above in
which company is continently Habile
For GUPTA GARG & AGRAWAL
CHARTERED ACCOUNTANTS
FRN 505762C
(B.B.GUPTA)
Place : Noida PARTNER
Date : 30.5.2015 M. No. 012399 |