The Members of AQUA LOGISTICS LIMITED
1. Report on the Financial Statements
We have audited the accompanying financial statements of Aqua Logistics Limited("the Company"), which comprise the Balance sheet as at 31st March 2013, theStatement of Profit and Loss and the Cash Flow Statement for the year then ended, and asummary of significant accounting policies and other explanatory information.
2. Managements Responsibility for the Financial Statements
The management is responsible for the preparation of these financial statements thatgive a true and fair view of the financial position, financial performance and cash flowsof the Company in accordance with the Accounting Standards referred to in sub-section (3C)of section 211 of the Companies Act, 1956. This responsibility includes the design,implementation and maintenance of internal control relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
3. Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment, including the assessment of the risks of material misstatementsof the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the Companyspreparation and fair presentation of the financial statements in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of the accountingestimates made by management, as well as evaluating the overall presentation of financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
Basis for qualified opinion
4. We draw attention to Point (r) forming part of Note 1 to the financial statementsregarding the accounting policy followed for treatment of advertisement expenditure asDeferred Revenue Expenditure, which is not in accordance with AS-26 on Intangible Assetsissued by the ICAI. Consequently, the profit for the year has been understated by Rs 99.93lakhs.
5. Parties Account Balances are subject to confirmation and reconciliation andthe consequential effects of the same on the profits, assets and liabilities of thecompany are not determinable.
6. Provision for interest on loan accounts with banks and financial institutions wherethere has been a default has been made based on contracted rates of interest withoutproviding for penal interest, liquidated damages and other charges (if any) and the samehas not been quantified.
7. We draw attention to Note 23 of notes to financial statements on the noncompletion of transfer formalities for change in ownership to the company for the minesacquired outside India.
In our opinion and to the best of our information and according to the explanationsgiven to us, except for the effect of the matter described in Para4,5,6 and 7 of the basisfor qualified opinion paragraph and the cumulative and consequential effects of the sameon the financial statements of the Company which are not determinable, the financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as atMarch 31, 2013;
(ii) in the case of the Statement of Profit and Loss, of the loss for the year ended onthat date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended onthat date.
9. Emphasis of Matter
We state that no actuarial valuation was made for the gratuity liability for the yearended 31.3.2013 and according to the information and explanations given to us and based onthe estimated gratuity liability due to present employees, the existing provision carriedin the books is adequate to cover the liabilities as at 31st March 2013. Our opinion isnot qualified in respect of this matter.
10. Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor's Report) Order, 2003 ("the Order")issued by the Central Government of India in terms of sub-section (4A) of section 227 ofthe Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and5 of the Order.
2) As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;
d) Except for the effects of the matter described in the basis for qualified opinionparagraph in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards referred to in subsection (3C) of section211 of the Companies Act, 1956; and
e) On the basis of written representations received from the directors as at March31,2013, and taken on record by the Board of Directors, none of the directors are primafacie disqualified as on March 31, 2013, from being appointed as a director in terms ofclause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to the rate at whichthe cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued anyRules under the said section, prescribing the manner in which such cess is to be paid, nocess is due and payable by the company.
|For ANIL NAIR & ASSOCIATES|
|(Registration No. 000175S)|
|Date: 30th May 2013||Partner|
|Membership No - 023022|
Annexure to the Auditors Report
The Annexure referred to in our report to the members of Aqua Logistics Limited("the Company") for the year ended March 31, 2013. We report that:
1) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.
b) As explained to us, the management during the year has physically verified all thefixed assets in a phased periodical manner, which in our opinion is reasonable, havingregard to the size of the company and nature of its assets. No material discrepancies werenoticed on such verification.
c) As per the information and explanations given to us, during the year, the Companyhas not disposed off any substantial part of the fixed assets that would affect the goingconcern status of the company.
2) The Company does not have any tangible inventory and accordingly the provisions ofclause 4 (ii) of the order are not applicable.
3) According to the information and explanations given to us the Company has not takenany loans secured or unsecured from parties listed in the Register U/s.301 of theCompanies Act, 1956 except short term advances not in the nature of loans arising out ofdisposal of collateral belonging to the Director by a financial institution.
b. The company has not granted any loans secured or unsecured to companies, firms orother parties listed in the Register maintained U/s.301 of the Companies Act, 1956 duringthe year under review except advances in the ordinary course of the business and not inthe nature of loans.
4) In our opinion and according to the information and explanations given to us, thereare adequate internal control systems commensurate with the size of the Company and thenature of its business for the purchase of fixed assets, for receiving of services and forrendering of services. During the course of our audit, we have not observed any continuingfailure to correct major weaknesses in the internal control system.
5) In respect of contracts or arrangements referred to in Section 301 of CompaniesAct,1956
a) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements that need to be entered in theregister maintained under Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations given to us, thereis no contract or agreement that needs to be entered in the register required to bemaintained under section 301 of the Act.
Accordingly sub clause (b) of clause 4(v) of CARO is not applicable
6) The company has not accepted any deposits from public and hence directives issued bythe Reserve Bank of India and the provisions of the sections 58A and 58AA of the CompaniesAct, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable forthe year under audit.
7) In our opinion, the Company has an internal audit system commensurate with its sizeand nature of its business.
8) In our opinion and according the information and explanations given to us theCentral Government has not prescribed the maintenance of cost records by the company undersection 209(1) (d) of the Companies Act, 1956.
9) In respect of statutory dues:
a) Based on the records of the company examined by us, the company has generally beenregular in depositing undisputed taxes like Service Tax and all other applicable statutorydues other than Income Tax Deducted at Source and Provident Fund where there has been adelay in depositing the same with the appropriate authorities and the following amountswere outstanding for a period exceeding six months as on 31st March 2013 from the date tobecame payable.
|Name of the statute||Nature of the dues||Amount Rs. (in. lakhs)||Period to which the amount relates||Date of payment|
|Income Tax Act||Tax deducted at source||107.31||FY 2011-2012 & FY 2013-2014||Not paid|
|Provident Fund Act||Provident fund contribution||3.43||FY 2013-2014||Not paid|
b) According to the information and explanations given to us, the following sums havenot been deposited on account of dispute.
|Name of the statute||Nature of the dues||Amount Rs. (in. lakhs)||Period to which the amount relates||Forum where the dispute is pending|
|Income Tax Act||Income Tax||158.88||Assessment Year 2009-2010||Income Tax Appellate Tribunal|
|Income Tax Act||Income Tax||274.54||Assessment Year 20102011||Commissioner of Income Tax (Appeals)|
10) The company does not have any accumulated losses as at 31st March, 2013 and eventhough the Company has incurred cash losses during the financial year covered by our auditand had posted profits in the immediately preceding financial year.
11) Based on the information and explanation given to us the company has defaulted inthe repayment of the following sums in respect of loans availed from banks and financialinstitutions. The default occurred on various dates and was not cleared till 31st March2013 aggregate to Rs. 3271.95 lacs. The over dues relate to the financial year 2011-2012and 2012 2013.
12) In our opinion and according to the information and explanations given to us, noloans and advances have been granted by the company on the basis of security by way ofpledge of shares, debentures and other securities.
13) In our opinion and to the best of our information and according to the explanationsprovided by the management, the Company is not a Chit Fund or a Nidhi / Mutual BenefitFund / Society. Therefore the provisions of Clause 4(xiii) of the Companies (AuditorsReport) Order 2003 (as amended) do not apply to the Company.
14) As per the records of the Company examined by us and the information andexplanations given to us by the management, the company is not dealing or trading inshares, securities, debentures and other investments, therefore in our opinion Clause4(xiv) of the Companies (Auditors Report) Order 2003 is not applicable to the company.
15) According to the information and explanations given to us, the company has extendedguarantees for loans taken by a company under the same management from a Bank of India. Weare of the opinion that the terms and conditions thereof are not prima facie prejudicialto the interests of the company.
16) According to the information and explanations given to us and in our opinion, thecompany has not taken any term loans during the year.
17) According to the information and explanations given to us and an overallexamination of the balance sheet of the Company, we are of the opinion that the fundsraised on a short term basis have not been used for long term investments.
18) The Company has not made any preferential allotment of shares to parties andcompanies covered in the Register maintained under Section 301 of the Companies Act, 1956during the year.
19) During the period covered by our audit report the company has not issued anydebentures.
20) According to the information and explanations given to us company has not raisedmoney from the public.
21) Based upon the audit, procedures performed and information and explanation given bythe management, we report that no fraud on or by the company has been noticed or reportedduring the year.
|For ANIL NAIR & ASSOCIATES|
|(Registration No. 000175S)|
|Date: 30th May 2013||Membership No - 023022|