INDEPENDENT AUDITOR
To
The Members of AQUA LOGISTICS LIMITED
Mumbai
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, 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.
2. Management’s Responsibility for the Financial Statements
The 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. 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.
3. Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit. We conducted our audit in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India. 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 misstatements
of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers 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 management, as well as evaluating the overall presentation of 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
4. We draw attention to Point (r) forming part of Note 1 to the financial statements
regarding the accounting policy followed for treatment of advertisement expenditure as
Deferred Revenue Expenditure, which is not in accordance with AS-26 on Intangible Assets
issued by the ICAI. Consequently, the profit for the year has been understated by Rs 99.93
lakhs.
5. Parties’ Account Balances are subject to confirmation and reconciliation and
the consequential effects of the same on the profits, assets and liabilities of the
company are not determinable.
6. Provision for interest on loan accounts with banks and financial institutions where
there has been a default has been made based on contracted rates of interest without
providing for penal interest, liquidated damages and other charges (if any) and the same
has not been quantified.
7. We draw attention to Note – 23 of notes to financial statements on the non
completion of transfer formalities for change in ownership to the company for the mines
acquired outside India.
8. Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effect of the matter described in Para4,5,6 and 7 of the basis
for qualified opinion paragraph and the cumulative and consequential effects of the same
on the financial statements of the Company which are not determinable, 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:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at
March 31, 2013;
(ii) in the case of the Statement of Profit and Loss, of the loss for the year ended on
that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on
that date.
9. Emphasis of Matter
We state that no actuarial valuation was made for the gratuity liability for the year
ended 31.3.2013 and according to the information and explanations given to us and based on
the estimated gratuity liability due to present employees, the existing provision carried
in the books is adequate to cover the liabilities as at 31st March 2013. Our opinion is
not qualified in respect of this matter.
10. 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 sub-section (4A) of section 227 of
the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and
5 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 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 appears from our 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) 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 referred to in subsection (3C) of section
211 of the Companies Act, 1956; and
e) On the basis of written representations received from the directors as at March
31,2013, and taken on record by the Board of Directors, none of the directors are prima
facie disqualified as on March 31, 2013, from being appointed as a director in terms of
clause (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 which
the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any
Rules under the said section, prescribing the manner in which such cess is to be paid, no
cess is due and payable by the company.
|
For ANIL NAIR & ASSOCIATES |
|
Chartered Accountants |
|
(Registration No. 000175S) |
| Place: Mumbai |
R.MOHAN |
| 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 including
quantitative 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 the
fixed assets in a phased periodical manner, which in our opinion is reasonable, having
regard to the size of the company and nature of its assets. No material discrepancies were
noticed on such verification.
c) As per the information and explanations given to us, during the year, the Company
has not disposed off any substantial part of the fixed assets that would affect the going
concern status of the company.
2) The Company does not have any tangible inventory and accordingly the provisions of
clause 4 (ii) of the order are not applicable.
3) According to the information and explanations given to us the Company has not taken
any loans secured or unsecured from parties listed in the Register U/s.301 of the
Companies Act, 1956 except short term advances not in the nature of loans arising out of
disposal of collateral belonging to the Director by a financial institution.
b. The company has not granted any loans secured or unsecured to companies, firms or
other parties listed in the Register maintained U/s.301 of the Companies Act, 1956 during
the year under review except advances in the ordinary course of the business and not in
the nature of loans.
4) In our opinion and according to the information and explanations given to us, there
are adequate internal control systems commensurate with the size of the Company and the
nature of its business for the purchase of fixed assets, for receiving of services and for
rendering of services. During the course of our audit, we 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 Companies
Act,1956
a) In our opinion and according to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements that need to be entered in the
register 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, there
is no contract or agreement that needs to be entered in the register required to be
maintained 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 by
the Reserve Bank of India and the provisions of the sections 58A and 58AA of the Companies
Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable for
the year under audit.
7) In our opinion, the Company has an internal audit system commensurate with its size
and nature of its business.
8) In our opinion and according the information and explanations given to us the
Central Government has not prescribed the maintenance of cost records by the company under
section 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 been
regular in depositing undisputed taxes like Service Tax and all other applicable statutory
dues other than Income Tax Deducted at Source and Provident Fund where there has been a
delay in depositing the same with the appropriate authorities and the following amounts
were outstanding for a period exceeding six months as on 31st March 2013 from the date to
became 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 have
not 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 2010–2011 |
Commissioner of Income Tax (Appeals) |
10) The company does not have any accumulated losses as at 31st March, 2013 and even
though the Company has incurred cash losses during the financial year covered by our audit
and had posted profits in the immediately preceding financial year.
11) Based on the information and explanation given to us the company has defaulted in
the repayment of the following sums in respect of loans availed from banks and financial
institutions. The default occurred on various dates and was not cleared till 31st March
2013 aggregate to Rs. 3271.95 lacs. The over dues relate to the financial year 2011-2012
and 2012 – 2013.
12) In our opinion and according to the information and explanations given to us, no
loans and advances have been granted by the company on the basis of security by way of
pledge of shares, debentures and other securities.
13) In our opinion and to the best of our information and according to the explanations
provided by the management, the Company is not a Chit Fund or a Nidhi / Mutual Benefit
Fund / Society. Therefore the provisions of Clause 4(xiii) of the Companies (Auditors
Report) Order 2003 (as amended) do not apply to the Company.
14) As per the records of the Company examined by us and the information and
explanations given to us by the management, the company is not dealing or trading in
shares, securities, debentures and other investments, therefore in our opinion Clause
4(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 extended
guarantees for loans taken by a company under the same management from a Bank of India. We
are of the opinion that the terms and conditions thereof are not prima facie prejudicial
to the interests of the company.
16) According to the information and explanations given to us and in our opinion, the
company has not taken any term loans during the year.
17) According to the information and explanations given to us and an overall
examination of the balance sheet of the Company, we are of the opinion that the funds
raised 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 and
companies covered in the Register maintained under Section 301 of the Companies Act, 1956
during the year.
19) During the period covered by our audit report the company has not issued any
debentures.
20) According to the information and explanations given to us company has not raised
money from the public.
21) Based upon the audit, procedures performed and information and explanation given by
the management, we report that no fraud on or by the company has been noticed or reported
during the year.
|
For ANIL NAIR & ASSOCIATES |
|
Chartered Accountants |
|
(Registration No. 000175S) |
|
R.MOHAN |
| Place: Mumbai |
Partner |
| Date: 30th May 2013 |
Membership No - 023022 |
+91-9892691696
