| I have audited the accompanying Financial Statements of Caprolactam
Chemicals Limited ("the Company") which comprise the Balance Sheet as
at 31st March, 2014, the Statement of Profit and Loss and Cash Flow
Statement for the year ended on that date and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for 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 Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control 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
My responsibility is to express an opinion on these financial
statements based on my audit. I conducted my audit in accordance with
the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that I 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. 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. I believe that the audit
evidence I have obtained is sufficient and appropriate to provide a
basis for my audit opinion.
Opinion
In my opinion and to the best of my information and according to the
explanations given to me, 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 31st March, 2014.
a) In the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date, and
b) In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies [Auditors report] Order 2003 ("the
Order") issued by the Central Government of India in terms of section
227(4A) of the Act, I give in the Annexure a statement on the matters
specified in the paragraph 4 and 5 of the said Order
2. As required by Section 227(3) of the Act, I report that:
a) I have obtained all the information and explanations which to the
best of my knowledge and belief were necessary for the purpose of my
audit;
b) In my opinion, proper books of account as required by law have been
kept by the Company, so far as it appears from my examination of those
books.
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
d) In my opinion, the Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
sub section (3C) of Section 211 of the Act.
e) On the basis of written representations received from the directors
as on 31st March, 2014 taken on record by the Board of Directors, none
of the directors is disqualified as on 31st March, 2014 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
Annexure to Independent Auditor's Report
Referred to in Paragraph 1 under the heading of "Report on Other Legal
and Regulatory requirements" of my report of even date
(1) In respect of Fixed Assets
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of Fixed Assets.
(b) As explained to me, these fixed assets have been physically
verified by the management in a phased periodical manner. In my
opinion the frequency of verification is reasonable. No material
discrepancies were noticed on such physical verification.
(c) The Company has not disposed off any substantial part of it's fixed
assets so as to affect is going concern status.
(2) In respect of it's Inventories;
(a) As explained to me, inventories have been physically verified by
management at reasonable intervals during the year. In my opinion,
the frequency of such verification is reasonable.
(b) In my opinion and according to the information and explanations
given to me, 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) The Company has maintained proper records of inventory and
discrepancies noticed on physical verification as compared to the
book records have been properly dealt with in the books of accounts.
(3) In respect of the Loans, secured or unsecured, granted or taken by
the Company to/from Companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956;
(a) According to the information and explanation given to me, the
Company has not granted any loans, secured or unsecured to
company, firms and other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, paragraph 4
(iii) (b), (c) and (d) of the order are not applicable.
(b) The Company has taken unsecured loans from one party whose name is
to be covered In the register maintained under section
301 of the Act. The Maximum amount involved during the year was Rs.
23,16,965/-and the balance outstanding as on 31st March, 2014 was
8,66,965/-.
(c) The rate of interest and other terms and conditions of the loan are
not prima facie prejudicial to the interest of the Company.
(d) The Company has been regular in repaying principal amount wherever
stipulated and the Company is also regular in payment of
interest wherever applicable.
(4) There is an adequate internal control procedure commensurate with
the size of the Company and the nature of its business, for the
purchase of the inventory and fixed assets and for the sale of goods &
services. During the course of my audit, I have not observed any
continuing failure to correct major weaknesses in the internal control
system.
(5) In respect of contracts or arrangements referred to in section 301
of the Companies act, 1956;
(a) According to the information and explanation provided by the
management, I am of the opinion that all the particulars of contracts
or arrangements that need to be entered into a register in pursuance of
section 301 of the Act have been so entered.
(b) According to the information and explanation provided by the
management, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956. and exceeding the value of Rs. Five Lacs in
respect of each party during the year, have been made at prices which
are reasonable having regard to the prevailing market prices at the
relevant time.
(6) In my opinion and according to the information and explanations
given to me, the Company has not accepted any deposits from the public.
(7) The Company has an adequate internal audit system, which in my
opinion is commensurate with the size of the Company and the nature of
its business however the company does not have a formal internal audit
system.
(8) According to information/explanation given to me, the rules made by
Central Government under clause (c) of Sub-section (1) of section 209
of the Companies Act 1956, are not applicable to the company.
(9) In respect of Statutory dues;
(a) According to the information & explanation given to me and the
records of the company examined by me, In my opinion, the company is
generally regular in depositing undisputed statutory dues including
Provident fund, Employee State Insurance, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty Excise Duty, Cess & other statutory dues
as applicable with appropriate authorities. According to the
information & explanation given to me, no undisputed amounts payable in
respect of the aforesaid dues were outstanding as at 31st March 2014
for a period of more than six months from the date they becoming
payable.
(b) According to the information & explanation given to me there are no
disputed amount of statutory dues towards Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty Excise Duty, Cess that have not been paid
to concerned authorities.
(10) The company has accumulated losses as at 31st March 2014 and has
incurred cash losses during the financial year ended on that date but
not in the immediately preceding financial year.
(11) According to the records of the company examined by me and
information & explanation given to me and based on the audit procedure
applied by me, the company has not defaulted in repayment of its dues
to any financial institution or bank, as at the Balance Sheet date.
(12) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(13) The provisions of any special statute applicable to chit find /
nidhi / mutual benefit/ societies are not applicable to the company.
(14) In my opinion and according to the information and explanations
given to me, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of Paragraph 4 of the Companies (Auditor's
Report) Order, 2003 are not applicable to the Company.
(15) According to information & explanation given to me, the Company
has not given any guarantee for loans taken by others from banks or
financial institutions.
(16) According to information & explanation given to me, on an overall
basis, prima facie, term loans were applied for the purpose for which
the loans were obtained.
(17) According to the information & explanation given to me, and based
on the examination of Balance Sheet of the Company, prima facie, the
funds raised on short term basis have not been used for long term
investment.
(18) According to the information and explanations given to me, the
Company has not made preferential allotment of shares to parties and
companies covered in the register maintained under Section 301 of the
Companies Act, 1956 during the year.
(19) The company has not issued any secured debentures during the year,
and accordingly, no securities were required to be created.
(20) The company has not raised any funds by way of a public issue
during the year.
(21) During the course of my examination of the books of the accounts
and records of the company and according to the information
&explanation given to me, no material fraud on or by the Company, has
been noticed or reported during the year.
JATIN SHAH
Place: Mahad (CHARTERED ACCOUNTANT)
Date: 30th May, 2014 MEMBERSHIP NO. 103858
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