We have audited the accompanying financial statements of JD ORGOCHEM
LIMITED ('the Company'), which comprise the Balance Sheet as at March
31,2015, 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 the matter stated
in Section 134(5) of the Companies Act, 2013 (the "Act") with respect
to the preparation and presentation of the 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 from preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgements 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 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 ethical requirement 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 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 March 31,2015 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 without qualifying our opinion;
* Note 2 in the financial statements which indicates that the financial
statements of the Company have been prepared on a going concern basis.
However, the Company has accumulated losses and its net worth has been
fully eroded, the Company has incurred a net loss / net cash loss during
the current and previous year(s) and, the Company's liabilities exceeded
its assets as at the balance sheet date. These conditions, along with
other matters set forth in notes, indicate the existence of material
uncertainty that may cast significant doubt about the Comapny's ability
to continue as a going concern.
Report on the 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
purpose 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 March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31,2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
f) with the respect to the other matters to be included in the
Auditor's Report in accordance with the Rule 11 of the Companies (Audit
and Auditors) Rule, 2014, in our opinion and to the best of our
information and according to the information given to us:
i. The impact of the pending litigation with regards to employee
liabilities on its financial position is not ascertainable. However, in
the opinion of management of the Company the provision made in the
accounts in this regards in earlier year is adequate as referred to in
note 7 & 8 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 are no amount which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure to Independent Auditor's Report
The Annexure referred to in paragraph of the Our Report of even date to
the members of JD ORGOCHEM 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:
1. (a) The company has maintained proper records to show full
particulars including quantitative details and situation of its fixed
assets.
(b) As informed to us, the company had verified part of its fixed
assets in regular programme of periodical verification during the year.
According to the information and explanations given to us, no material
discrepancies have been noticed on such verificaton.
2 (a) As explained to us, inventories have been physically verified
during the year by the management.
(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.
3 The company has granted interest-free unsecured loan of Rs 178 lakhs
in earlier years to a party listed in the register maintained under
Section 189 of the Companies Act, 2013, for which, as informed to us,
no terms of repayment has been stipulated and hence overdue amount
cannot be ascertained. The said amount due is considered doubtful of
recovery for which provision has been made in the accounts in earlier
year as referred to in Note No.14.1 of the Notes to Financial
Statement.
4 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 & for sale of
goods and services. During the course of our audit, no major instance
of continuing failure to correct any weaknesses in the internal
controls has been noticed.
5 In our opinion and according to the information and explanations
given to us, the company has not accepted deposits from the public
except from an agent. Therefore, the provisions of Section 73 to 76 of
the Companies Act, 2013 and Rules there under are not applicable to the
company
6 The Central Government of India has not specified the maintenance of
cost record under sub-section (1) of Section 148 of the Act for any of
the products of the Company.
7 (a) According to the information and explanation given to us and as
per the records of the Company examined by us, undisputed statutory dues
of Provident Fund, Investor Education and Protection Fund, Employee's
State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of
Custom, Duty of Excise, Cess and other statutory dues other than
mentioned in (b) below have generally been regularly deposited with the
appropriate authorities.
(b) As per records of the Company, the following undisputed statutory
dues were outstanding as at the last day of the financial year
concerned for a period of more than six months from the date they
became payable.
Nature of Dues Period to which the amount relates (Rs in lacs)
Power (Electricity) 01.05.2001 to 28.02.2002 111.69
Sales Tax 01.06.2001 to 31.03.2004 86.59
Gram Panchayat Tax 01.04.2000 to 31.03.2011 105.76
(c) As per records of the company, the following disputed dues have
not been deposited.
Nature of Dues Forum where dispute is Pending (Rs in lacs)
Custom Duty (Shown as Commissioner of Customs - Mumbai 510.99
contingent liability)
Custom Duty Central Excise & Gold Appellate 53.99
Tribunal (CEGAT) - Mumbai
Gram Panchayat Tax Gram Panchayat , Vadgaon, 25.82
(Shown as contingent Taluka Khalapur, Dist. Raigad
Liability)
(d) No amount was required to be transferred to Investor Education and
Protection Fund (IEPF) in accordance with the Provision of Companies
Act 1956 and the rules made thereunder.
8 As per the accounts of the company, the company has accumulated
losses of Rs 8909.26 lakhs at the end of the financial year and the
accumulated losses of the company are not less than fifty percent of
its net worth.
As per the accounts of the company, the company has incurred cash loss
of Rs 37.39 lakhs during the financial year under reference and cash
loss of Rs 30.03 lakhs was incurred in the immediately preceding
financial year.
9 Based on our audit procedures and on the basis of 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, or bank or debenture holders.
10 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.
11 In our opinion, the term loans have been applied for the purpose for
which they were raised.
12 Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud on or by the Company
has been noticed or reported during the year, nor have we been informed
of such case by the management.
For MAGANLAL & AJAY MEHTA
Chartered Accountants
Firm Registration No. 105730W
(MAGANLAL THACKER)
Place : Mumbai Partner
Date : May 25, 2015 Membership No. 4549
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