| We have audited the accompanying financial statements of Avon Organics
Limited, which comprise the balance sheet as at 31 March 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 matters stated
in Section 134(5) of the Companies Act, 2013 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.
I. In so far as it relates to the Balance Sheet, of the statement of
affairs of the company as at 31st March 2015.
ii. In so far as it relates to the Profit & Loss Account , the Loss of
the company for the year ended on that date: and
iii. In so far as it relates to the Cash Flow Statement , of the Cash
flow of the Company for the year ended on that date: and
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 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 has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 11 to the
Significant Accounting Policy; ii. the provisions as required under
the applicable law or accounting standards for material foreseeable
losses if any on the long term contracts including derivative contracts
are not applicable to the company. iii. There has been no such
requirement for transferring amounts, required to be transferred the
Investor Education and Protection Fund transfer by the company.
Annexure to the Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the
members of the Company on the financial statements for the year ended
31 March 2015, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner at
regular intervals. In accordance with this programme, certain fixed
assets were verified during the year and no material discrepancies were
noticed on such verification. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the
Company and the nature of its assets.
(c) During the year, the company has not disposed of any substantial
part of its fixed assets and going concern status of the company not
affected.
(ii) In respect of its inventories:
(a) The inventories has been physically verified during the year by the
management at reasonable intervals. In our opinion the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanation
given to us, the procedure of physical verification of inventories
followed by the management is reasonable and adequate in relation to
the size of the company and nature of its business.
(c) On the basis of our examination of records of inventory, we are of
the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on physical verification between
the physical stocks and book stocks were not material.
(iii) (a) The Company has not granted any loans to the bodies corporate
covered in the register under section 189 of the Companies Act, 2013
('the Act').
(b) The company has given interest free loan to Associate Concern of
the company. In the said loans, the maximum amount outstanding at any
time during the year was Rs. 51,015 and the yearend balance was Rs.
51,015.
(c) The company has taken unsecured interest free loans from the bodies
corporate covered in the register maintained under section 189 of the
Act and the amount outstanding at the end of the year is Rs. 3171.40
lacs (Previous year Rs. 3171.40 lacs).
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets and sale of goods. During the
course of our audit, no major weakness has been noticed in the internal
control system and there is no continuing failure to correct any major
weakness in internal control.
(v) The Company has not accepted any deposits from the public.
(vi) The Central Government has prescribed the maintenance of cost
records under section 148(1) of the Act, to the company and such
accounts and records have been made and maintained by the company.
(vii) According to the records of the company, the company is not
regular in depositing the undisputed statutory dues including provident
fund, Employees' State Insurance, Profession Tax, Income Tax, TDS,
Sales tax, Excise Duty, Service Tax, Cess and any other statutory dues
with the appropriate govt and semi govt authorities. There are arrears
of outstanding such undisputed statutory dues at the last day of the
financial year concerned for a period of more than six months from the
date they became payable.
ESIC133333
Provident Fund 5,374,975
Professional Tax 804,850
TDS 2,368,180
Sales Tax 777,027
Service Tax 2,224,102
Excise Duty 1,497,195
Income Tax 32754530
(viii) The company has incurred cash losses of Rs. 2501.64 lacs
(previous year Rs. 2241.03 lacs) and accumulated
losses of Rs. 5167.09 (previous year Rs. 2141.49 lacs) in profit and
loss accounts. The company has eroded more than fifty percent of its
entire paid up share capital by way of debit balance in profit and loss
account.
(ix) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has delay /defaulted in repayment of dues along with the
interest thereon with the banks as at the end of the financial year.
(x) According to the records of the company and information and
explanations given to us, the company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xi) According to the records of the company and explanations given to
us, during the year the company has availed the term loans from banks/
financial institution and has been applied for the purpose for which
they have been obtained.
(xii) According to the information and explanations given to us, no
material fraud on or by the company has been noticed or reported during
the course of our audit.
For Mukesh Mehta & Associates
Chartered Accountants.
Sd/-
Mukesh Mehta
Proprietor
Membership No. 100407
FRN:116309W
Place: Mumbai
Date: 29.05.2015
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